Recommended at: 40.5p
Spread now: 180-193p
Market Capitalisation: £13
million
Ticker: LSI
Website: http://lifeline-scientific.com/
Contact: David
Kravitz, CEO tel. +1 847 294 0300
Lifeline Scientific - Trading Statement
Organ transport specialist Lifeline Scientific has issued a very brief stating that revenue for the first half of the year to 30 June 2010 is expected to be "at least in line" with current market expectations while operating profit is expected to be "significantly ahead" of last year's maiden interim operating profit. The company expects to announce interim results in September.
Financials
| Year to 31st December | Sales | Pre-Tax Profits/(Losses) | Normalised Earnings (loss) Per Share | PE Ratio |
| 2007A | $6m | ($21.9m) | (139.8 cents) |
N/A |
| 2008A | $8.3m | ($4.6m) | (29.2 cents) | N/A |
| 2009A | $18.3m | $2.8m | 17.4 cents | 16.7 |
| 2010E | $20.7m | $3.6m | 19.6 | 14.8 |
| 2011E | $22.7m | $4.8m | 26.5 | 11 |
Assessment
Lifeline has been a strong performer over the past year (we are now sitting on gains of 360% since our May 2009 tip) but the shares remain good value. One point in particular that's worth picking up on is that LifePort units are already used by 45 of the 56 US organ procurement organisations, but for only c.26% of US deceased donor kidneys. Higher use rates should steadily boost growth as users migrate to the newer technology and the broker estimates there is $27 million of additional US potential. There are also opportunities opening up for the group in other locations, with the company having recently made its entry into Italy, Portugal, Poland and Saudi Arabia, with regulatory clearance also granted in Australia and New Zealand. However, the real excitement for investors lays in the potential for LifePort technology to be applied in other areas. Lifeline has already designed LifePort systems for the liver, heart, pancreas and lungs - respectively the first, second, third and fourth most common transplanted organs in the US other than the kidney. This huge future upside potential deserves a premium rating in our view. VERY STRONG HOLD.
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