The share price of Eco Animal Health (EAH) advanced 12.5 per cent on the release of full-year figures detailing another period of solid financial growth. Investors may have also been encouraged by the resilience of the animal medicines specialist in the face of post-Brexit depreciation as, thanks to Eco's international presence, less than 3 per cent of sales are invoiced in sterling.
Eco continues to benefit from growing health concerns surrounding the human food chain through the misuse of antibiotics in livestock, which has helped to drive strong demand for flagship product Aivlosin across all geographies. This was particularly noticeable in China, where sales - also boosted by the recent high price of pork - were up by over a third. In the Japanese market, sales benefited from an increase in volumes. And even in the US, where mild weather has lowered the incidence of disease, revenue was up 11 per cent. These factors contributed to a 29 per cent surge in adjusted cash profit to £11.1m, while cash generation from operations remained positive at £3.2m despite increased investment in both technology and stock.
House broker Peel Hunt has upgraded its forecasts on the back of these results and now expects 2017 adjusted pre-tax profit of £12.4m, up from £10.7m in the reported period.
ECO ANIMAL HEALTH (ECO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 430p | MARKET VALUE: | £275m | |
| TOUCH: | 420-440p | 12-MONTH HIGH: | 430p | LOW: 260p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 44 | |
| NET ASSET VALUE: | 133p* | NET CASH: | £16m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 28.3 | 2.3 | 4.2 | 3.8 |
| 2013 | 29.0 | 3.3 | 5.1 | 4.0 |
| 2014 | 31.9 | 3.7 | 4.4 | 4.2 |
| 2015 | 39.0 | 5.1 | 6.8 | 4.8 |
| 2016 | 47.1 | 7.7 | 9.7 | 5.7 |
| % change | +21 | +51 | +43 | +20 |
Ex-div: 8 Sep Payment: 5 Oct *Includes intangible assets of £49.3m, or 77p a share | ||||
