MDY Healthcare to return cash to shareholders

published 14 February 2012

Investment firm MDY Healthcare is planning to make a return of 52p per ordinary share to shareholders, as a result of funds received from realisation of the Medivance investment.

The funds gave the firm a much-needed boost, returning pre-tax profits to the black despite falling revenues during the year ended September 30th.

Revenue dipped from £0.14m to £0.1m year-on-year, but the movement in the fair value of the company's investment in Medivance led to a return to the black for pre-tax profits at £8.75m, compared to a loss of £3.6m the previous year.

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Chairman Grahame Cook said: "I am pleased that the board's strategy to restructure overheads to a minimum and to realise the company's key investments has been highly successful. The proposed return is significantly more than the share price of 25.5 pence at the time of the appointment of the current board. We anticipate at least one further return to shareholders in the next 18 months from the Medivance consideration retention and the realisation of our investment in Stanmore."

Of the total $25m gross cash consideration, $20m (c.£12.8m) was received by the company in November 2011. The balance of the Medivance proceeds, which is being held in escrow in accordance with the terms of the agreement, is due to be paid out to MDY by the end of May 2013.

Total investments during the year were valued at £16.4m (2010: £7.3m) as a result of the revaluation of the investment in Medivance.

Cash and cash equivalents reduced to £0.1m compared to £0.3m at the same date the previous year.