inVentiv profits tumble while sales rise
profits dive in 2005 by 37 per cent after being hit by higher
interest expenses and an income tax provision, however, the company
managed to increase its sales for the quarter by 49 per cent to
generate $175.3m (€146m) in revenue, driven primarily by growth in
its sales teams and patient assistance business.
inVentive, a global provider of commercialisation services to the pharma and life sciences industries, also saw its net income for Q4 in 2005 decrease to $9m from $14m in 2004.
The company's profits were hit by a $6m tax provision, compared to a $5m tax benefit received in 2004. In addition, inVentiv's interest expense increased nine-fold in the 2005 Q4 to reach $2.9m.
The company's income from continuing operations was reduced to $9.8m compared to $15.2m on the same quarter last year due to a tax benefit of $9.1m included in the 2004 figure.
However, while profits were down, the company increased its Q4 sales to generate $175.3m in revenue compared to $117.4 in 2004.
For the full year of 2005, total sales increased 58 per cent to $556.3m for 2005, compared to $352.2m for 2004, while net income only reached $43.9m due to a 14.2m tax provision and a four-fold jump in interest expense.
The company's strong sales were fuelled by inVentiv Commercial, where annual revenue and profitability increased 19 per cent and 34 per cent, respectively, thanks to a rise in business in its sales teams and patient assistance programs.
The acquisition in August 2005 of PRS, a leading provider of regulatory compliance management and marketing support services, further strengthened inVentiv Commercial's sales performance.
The company has also since acquired Adheris, a US-based provider of patient compliance programs; JSAI, Canada's leading healthcare marketing and communications company; and Synergos, a US-based clinical services provider, in a bid to drive further growth.
Following the acquisitions, Ventiv Health also changed its name to inVentiv Health.
InVentiv has also been actively reducing its reliance on only a few key businesses and clients, with the contribution of sales teams to inVentiv's total operating profit decreasing from approximately 80 per cent in the first half of 2004 to less than 30 per cent expected for 2006.
Furthermore, inVentiv's five largest client contracts have decreased from two-thirds of total company revenues in the first half of 2004 to less than one quarter expected for 2006.
Looking forward, inVentiv predicts 2006 revenues of $705m-$725m, with analysts forecasting revenue of $707m.
