BioPharma Credit PLC, an investment trust, primarily invests in interest-bearing debt assets. Its assets are secured by royalties or other cash flows derived from the sales of approved life sciences products. The company was incorporated in 2016 and is based in Exeter, the United Kingdom.

BioPharma Credit PLC

Financial Services

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends quarterly, which may appeal to investors valuing a regular income stream. 

BPCR.L reported revenue of USD 124mn in the last 12 months, down 8% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 25% from FY23 to USD 0.10.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 3ppts over past six months and grown 2ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 52.7% in the last 12 months, up from 0.0% in FY23. 

Historically, BPCR.L has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 80.2%, down from 98.2% in FY23. 

BioPharma Credit PLC reported a return on equity (RoE) of 8.7% in the last 12 months, down from 9.1% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 8.6%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to 8.6% in the last 12 months, a decrease from 9.0% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.1 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

BPCR.L has average trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is usually stable and is unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is minimal. We note robust profitability and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to slow historical revenue growth.

In highly turbulent market conditions, BPCR.L is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, BPCR.L is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to mild. 

Considering past and projected metrics, the stock is 'cheaper' than its peers. Specifically, the stock is fairly valued on P/E, overvalued on EV/EBITDA, underpriced on P/FCF. 

BioPharma Credit PLC

$ 0.89

5

BioPharma Credit PLC

$ 0.89

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.89

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