- Full year sales and profit up 21% and 27% respectively
- Plans for primary US listing
- 2024 outlook above consensus estimates
Shares in Indivior (INDV) surged 18% to top the FTSE mid-cap index after the Opioid-use disorder treatment specialist reported full year sales and profit towards the top end and guided for stronger than expected profit growth in 2024.
Also giving the shares a boost was the news Indivior plans to move its primary stock exchange listing to the US where it may achieve a higher valuation. The company listed its shares on Nasdaq in 2023.
The shares are up 36% year to date compared with a 2% fall in the FTSE 250 index. They remain below the £20 mark they traded at a year ago when Indivior made an unexpected $290 provision to cover legacy litigation cases.
In October 2023 the company agreed to pay $385 million to settle certain legacy cases.
HOW DID INDIVIOR PERFORM?
Net revenue for the year to 31 December jumped 21% to $1.09 billion which was above consensus estimates, while adjusted operating profit grew 32% to $223 million.
Sales of Sublocade, the group’s treatment for opioid-use disorder, surged 54% year-on-year to $630 million, at the top end of prior expectations.
Indivior’s schizophrenia treatment Perseris generated net revenue growth of 50% to $42 million.
CEO Mark Crossley commented: ‘At our December 2022 Capital Markets Day, we laid out Indivior's strategy and medium-term financial goals targeting double-digit top line growth, operating margin expansion and strengthened cash flow.
‘By executing against our strategic priorities, we delivered strongly against these goals in 2023.’
STRONG GUIDANCE IMPLIES UPGRADES
Management expects 2024 net revenue to grow by 18% at the midpoint of the range ($1.29 billion) and to generate an adjusted operating profit of between $330 million and $380 million.
Analysts’ consensus revenue forecasts sit approximately 3% below the midpoint of the range but the expected margin expansion announced today means profit forecasts are around 12% shy of the midpoint range, implying upward revisions.
EXPERT VIEW
Russ Mould, investment director at AJ Bell commented: ‘Indivior is currently the forty-seventh largest company on the FTSE 250 index. One would expect it to receive a higher valuation on the US market and that’s a key reason why many companies switch listing location.
‘The company has nearly half of its shares owned by US investors and the US is one of its major sales regions so there is logic in having a US stock listing. However, it would be yet another blow to the reputation of the London Stock Exchange as a listing venue.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor of the article (James Crux) own shares in AJ Bell.
