CLINICAL TRIALS company Icon has said that it expects to return to growth in the second half of the year after reporting a 5 per cent rise in net revenue for the first quarter.
The company said yesterday it delivered income from operations of $16 million in the first three months of the year before one-off restructuring charges, compared to $26.8 million in the same period last year.
Income after tax was $12.8 million before charges compared to $22.2 million in March 2010. After restructuring charges, net income was $8.3 million.
The company took a $5 million restructuring charge in the period. Of this $1 million related to its decision to close an operation in Edinburgh following a review. The balance went in redundancy payments, mostly for staff reductions in the US.
“2011 has started in line with expectations,” said chief executive Peter Gray. “With strong gross bookings of $329 million, a strengthening pipeline of new opportunities and the Central Lab progressing as planned, we believe we are on track for a return to growth in the second half.”
The Irish-based company said Europe accounted for close to half of net revenues in the first three months of the year with the United States (40.4 per cent) and the rest of the world (11.4 per cent) making up the balance.
Income from operations slipped to 4.8 per cent of net revenue in the first quarter of 2011 compared to 12.2 per cent in the same period last year, according to the company’s filings with the Securities and Exchange Commission in the United States.
The largest jump in costs, according to the company, was a 10 per cent increase in staff and project-related expenses to $131.3 million.
The results show that Icon paid £20.5 million upfront for the 80 per cent of UK pharma research business Oxford Outcomes it acquired during the first quarter. The price could rise to £30.2 million if certain targets are met.
Icon retains an option to acquire the outstanding 20 per cent of the business for up to £5.3 million.
The company said its backlog – potential future net revenue from projects awarded by clients – at the end of the quarter was about $2 billion, although it noted that this was subject to cancellations or delay.
Icon has a primary listing on the Nasdaq market and a secondary listing in Dublin. At lunchtime yesterday, the shares were trading close to 6 per cent higher on $24.19 in the US.
Icon employs more than 7,700 people in 39 countries.
