IDT boosts profit on 26% revenue gain

A revenue increase of 26 per cent has helped Melbourne-based Institute of Drug Technology (IDT) push its net profit up nine per cent to $AUD2,077,053 in the half year ending December 31, 2002.

The company has also increased its dividend by 25 per cent to $2.50 fully franked, said CEO Dr Graeme Blackman. "The fact we pay a dividend and increased it for the first half of the year sends a good message to investors," he said.

Blackman noted that IDT's business model was substantially different to many other companies in the sector, in that it was focused on building a profitable company driven by a positive cash flow, rather than investing money into R&D.

"Strong growth in revenue is attributable to a combination of increased demand for a number of our products and new activities associated with our CMAX [clinical trials] operations," said Blackman.

"The result is particularly strong considering the difficult business conditions experienced by the pharmaceutical/biotechnology sector due to the cessation of government Start grants, demand and price pressures on generic active pharmaceutical ingredients and low levels of investment."

Blackman said the company was pleased to see the reintroduction of the R&D Start grant scheme, as its freeze had significantly affected a number of customers.

IDT is currently completing validation of new manufacturing facilities, which should be in use towards the end of the 2002-03 financial year. The new plants would add significant additional capacity to the company's manufacturing and development facilities, said Blackman, and were responsible in part for a nine per cent increase in net tangible assets.

The company is also focused on completing the integration of the CMAX clinical trials operations into IDT, as well as expanding the formulations business, giving the company a comprehensive set of drug development services to market to the local and international biotechnology and pharmaceutical sector.