Shares in Hikma Pharmaceuticals PLC jumped on Thursday after it lifted the dividend by 29% amid better-than-expected annual profit.

In early exchanges on Thursday, shares in Hikma traded 4.0% higher at 2,078.00 pence each in London.

The London-based pharmaceutical company reported that operating profit in 2023 rose by 30% to $367 million from $282 million the year prior.

Revenue climbed by 14% to $2.88 billion from $2.52 billion.

Core operating profit increased by 19% to $707 million from $596 million.

Liberum analyst Seb Jantet said this profit growth, ahead of the $689 million market consensus, was primarily driven by better than expected margins in the group’s Branded and Generic divisions.

Basic earnings per share edged up by 2% to $0.86 from $0.84.

The improved financial performance was reflected in a bumper increase to the dividend, with more rises pledged.

Hikma lifted the annual payout by 29% to $0.76 per share from $0.56 in 2022.

Hikma said it intends to progressively increase the dividend, with a payout ratio in the range of 30% to 40% reflecting confidence in the long-term growth prospects.

Chief Executive Riad Mishlawi said that 2023 had been a year of ‘significant progress,’ with growth in three of the company’s businesses.

Injectables revenue rose 6% with a core operating margin of 36.9%, slightly lower than 2022’s 38.3%.

Branded revenue improved by 3% reflecting a good performance across the majority of its markets, offsetting the impact of halting our operations in Sudan, Hikma said. The core operating margin of 23.8% advanced from 21.1% in 2022.

In Generics, revenue leapt by 39% with a core operating margin of 20.5%, improving from 15.3% in 2022.

This reflected a good recovery in the base business and a strong contribution from the authorised generic of sodium oxybate.

For 2024, Hikma forecast revenue growth in the range of 4% to 6% and core operating profit in the range of $660 million to $700 million.

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