A major concern in healthcare is that the prolific use of antibiotics in food production makes the bacteria that infect humans more resistant. This is helpful for Eco Animal Health (EAH), whose Aivlosin product contains the antibiotic tylvalosin and treats respiratory and intestinal diseases in pigs and poultry. Demand is soaring for the drug because its low dosage rate and ability to move quickly through the animals' systems - before the meat enters the food chain - allays fears about microbial resistance.
First-half sales of Aivlosin grew 32 per cent, with strong performances in all major territories. In North America, one of Eco's major markets, even mild weather and low disease rates couldn't stop Aivlosin sales rising 16 per cent. This helped push global sales of all products up 28 per cent at constant currencies. Adjusted cash profit rose 36 per cent on the same basis to £4.3m, paving the way for a big increase in the dividend.
Analysts at Peel Hunt expect pre-tax profit of £9.6m for the year ending March 2016, giving EPS of 12.1p, compared with £8.2m and 11.8p in FY2015.
| ECO ANIMAL HEALTH (EAH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 318p | MARKET VALUE: | £203m | |
| TOUCH: | 310-325p | 12-MONTH HIGH: | 320p | LOW: 191p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 125p* | NET CASH: | £17m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 17.0 | 2.0 | 2.7 | 1.5 |
| 2015 | 21.5 | 2.7 | 3.5 | 1.9 |
| % change | +27 | +33 | +31 | +27 |
Ex-div: 10 Mar Payment: 4 Apr *Includes intangible assets of £47.2m, or 74p a share | ||||
