Steady progress, expected acceleration
Stratec (DE:SBSG), the German designer and builder of automated OEM diagnostic systems, is poised for rapid growth in 2016 and 2017 due to the intensive level of activity on new systems in the late-development and pre-launch, ramp-up stages. A new development area of liquid cancer biopsy analysis is being developed plus smaller, flexible systems. Revenue CAGR guidance remains at 8-12% for 2013-17, so growth should be stronger from 2016. Management expects FY15 EBIT margin over 17.9%. It is considering acquisitions that may affect dividends; Q3 cash was €54.7m.
Design them...
Stratec projects require software, engineering and electronic expertise with systems becoming more complex; Stratec retains critical IP. The emerging liquidbiopsy diagnostic area is one of several new development activities. In 2015 ytd, Stratec incurred €15.8m of development expenditure and capitalised €10.2m. Capitalised amounts are recognised as revenues as projects progress. Stratec plans to expand its development activities due to client demand.
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