The awful weather in the third quarter put consumers off seeing a vet, but animal medicines specialist Dechra Pharmaceuticals (DPH) looks to have ridden out the worst problems to post sales growth in its core divisions. In any case, the results had a transitional feel and were over-shadowed somewhat by the post-period disposal of Dechra's services segment a fortnight ago.
Operationally, the first full-year contribution from the Eurovet acquisition explains the 66 per cent rise in revenues in the European pharmaceuticals division to £169m, which represents like-for-like sales growth of 5 per cent - the division's operating profits surged from £28.9m to £45.8m this time. Dechra's product sales did well in the core European markets, helping to offset a weaker perfomance in the Netherlands and Nordic countries. However, US revenue growth was held back by third-party supply problems relating to Dechra's opthalmic and dermatology products which management hopes will be resolved by the end of this financial year.
Chief executive Ian Page said the priority now is to cut net debt with the £87.5m proceeds from the services business and to boost the company's research & development capability now that Dechra is focused on higher margin pharmaceutical products.
Brokerage Investec forecasts current year adjusted pre-tax profits of £38.8m and EPS of 32.6p, up from £33.5m and 29.1p in 2013.
DECHRA PHARMACEUTICALS | ||||
|---|---|---|---|---|
| ORD PRICE: | 698p | MARKET VALUE: | £609m | |
| TOUCH: | 698-699p | 12-MONTH HIGH: | 792p | LOW: 492p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 56 | |
| NET ASSET VALUE: | 200p* | NET DEBT: | 46% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 350 | 16.1 | 15.9 | 8.1 |
| 2010 | 369 | 17.7 | 18.4 | 9.6 |
| 2011 | 389 | 18.5 | 19.5 | 11.1 |
| 2012** | 124 | 6.1 | 5.2 | 12.2 |
| 2013 | 189 | 12.5 | 12.5 | 14.0 |
| % change | +52 | +105 | +140 | +14 |
Ex-div: 6 Nov Payment: 22 Nov *Includes intangible assets of £220m, or 252p a share **Restated | ||||
