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Disposal of Biodose Services and Trading Update

26 June 2017

Quantum Pharma Plc (AIM: QP.), the service-led niche pharmaceutical developer, manufacturer and supplier, announces the disposal of Total Medication Management Services Limited, the Group's homecare dispensary and delivery business which trades as Biodose Services ('Biodose Services'), to HealthNet Homecare Limited (the 'disposal').

The disposal represents a major step in transitioning Quantum's focus to its core Specials and Niche Pharmaceuticals divisions and improving the Group's quality of earnings. It follows the strategic review of the Medication Adherence ('MA') division which we reported in the final results announcement issued on 3 May 2017. Following the disposal the MA division will cease to exist, with Protomed being accounted for within the Specials division.

The initial cash consideration on disposal is £1.75m with a maximum additional contingent consideration of £0.2m, which will become payable on the future utilisation of tax losses of Biodose Services. The initial consideration net of working capital adjustments, arising following the exit of Biodose Services from the Group, will be applied to reduce Group borrowings. The effect on the Group's balance sheet is positive through a reduction in net debt.

The disposal improves the Group's gross and adjusted EBITDA margin by eliminating low margin turnover. In the year ended 31 January 2017 Biodose Services contributed £22.4m of Group revenues and recorded an adjusted EBITDA loss of £0.1m. Internal projections for Biodose Services in the current financial year anticipate a modest EBITDA profit. Biodose Services had net liabilities of £0.2m as at 31 January 2017.

Trading Update

Trading across the combined Niche and Specials divisions in the early months of the year has been ahead of plan and the Board expect this outperformance to offset the majority of the disposed contribution from Biodose Services in the current financial year.

Commenting on the strategic disposal, Chris Rigg, Chief Executive Officer of Quantum, said:

"The sale of Biodose Services positions Quantum as a simplified and focussed pharma business with a higher quality of earnings. It is particularly pleasing that we have been able to demonstrate a quick path to profitability for Biodose Services and exit it to a buyer who can bring greater emphasis and better synergies to that business.

The strong trading performance in the first few months of the year means that we expect to be slightly ahead of management expectations for the remaining Group and look forward to providing a further trading update on 9 August 2017."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

 

For further information:

Quantum Pharma Plc  
Chris Rigg, Chief Executive Officer Tel: +44 (0) 1207 279 404
Gerard Murray, Chief Financial Officer www.quantumpharmagroup.com
ir@quantumpharma.co.uk  
   
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(Nominated Advisor & Broker)
 
Sandy Fraser / Nick Owen / James White Tel: +44 (0) 20 7496 3000
   
Media enquiries:  
Buchanan  
Henry Harrison-Topham / Sophie Cowles Tel: +44 (0) 20 7466 5000
quantumpharma@buchanan.uk.com www.buchanan.uk.com

 

Notes to Editors

Quantum Pharma Plc is a service-led, niche pharmaceutical developer, manufacturer and supplier to the retail pharmacy, pharmaceutical wholesale and hospital markets. Quantum Pharma Plc operates through two divisions - Specials and Niche Pharmaceuticals - offering a portfolio of innovative and complementary products and services.

For further information, please visit www.quantumpharmagroup.com.

 

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