The company’s latest trading update has boosted investor confidence. We take a closer look…
The post Why the Probiotec (ASX:PBP) share price is surging 7% today appeared first on The Motley Fool Australia. –
The Probiotec Limited (ASX: PBP) share price is on the move during late afternoon trade. This comes after the pharmaceutical products company provided investors with a trading update and earnings guidance for FY21.
At the time of writing, Probiotec shares are up 7.18% to $2.09.
How is Probiotec performing in FY21?
Investors are snapping up Probiotec shares following the company’s trading update and strong earnings outlook.
According to its release, Probiotec announced it is continuing to deliver on its strategy, increasing value for shareholders. Both existing and new customers have inquired about the company’s onshore manufacturing capability.
The company stated that its pharmaceutical product categories affected by COVID-19 are beginning to recover. It is anticipated that this will progressively improve throughout the first-half of FY22, with normal levels returning in H2 FY22.
Although, the current lockdown in Victoria is expected to have a slight impact on the overall group’s earnings for FY21.
Pleasingly, Probiotec’s recent acquisition of Multipack-LJM in January this year has performed in line with expectations for the 6 months. The business’ earnings are weighted more towards the second-half end of the year (July to December). With that in mind, the company is focused on using Multipack-LJM’s toolkit to attract more customers and drive revenue growth.
Looking ahead, Probiotec is forecasting revenue to be in the range of $118 million to $122 million. This is a minimum increase of 10% on FY20’s result of $107 million.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is projected to come between $21 million and $22 million. When compared against the prior corresponding period ($16.9 million in FY20), this is around a 25% jump.
Underlying earnings per share (EPS) is predicted to drop from FY20’s result (11.1 cents per share). This metric is assumed to fall somewhere between 10 cents and 11 cents per share.
Probiotec share price snapshot
In November, Probiotec shares raced higher following notice of its planned acquisition of contract packing specialist, Multipack-LJM. The company’s share price reached an all-time high of $2.50 when the takeover was completed in January.
Since then, Probiotec shares have been on a downhill trend, posting a loss of 12% on year-to-date share price performance.
Based on today’s price, Probiotec has a market capitalisation of roughly $163 million, with 78 million shares on its registry.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Probiotec Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.