Cynics may have believed that Eco Animal Health's (EAH) performance in its 2016 financial year was tough to beat. But the group has managed to report yet another record set of numbers in the first half of FY2017. Even stripping out the foreign-exchange boost and other one-off items, adjusted earnings rose 46 per cent to £6.3m. As a result, cash generated from operations reached £5.4m, almost four times that reported in the past comparable period.
Demand for the group's flagship drug Aivlosin - which is only used in animals - has grown enormously outside of the UK as more global governments take a stand against the threat of antibiotic resistance. Currently, Eco's products are sold in more than 60 countries worldwide. Standout performances were recorded in the US, with sales up 60 per cent, and China, up almost 90 per cent. And Latin America did well in spite of economic difficulties in Brazil.
In Europe, Aivlosin has recently been granted marketing authorisation for use in egg-laying chickens; another huge market that should help the group enhance sales. Eco has begun to submit files to gain the same approval in key egg producing markets globally.
Prior to these results, broker Peel Hunt forecast pre-tax profit of £12.4m for the financial year to March 2017 (from £10.7m in FY2016), giving EPS of 15.4p.
ECO ANIMAL HEALTH (EAH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 515p | MARKET VALUE: | £335m | |
| TOUCH: | 505-525p | 12-MONTH HIGH: | 518p | LOW: 305p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 43 | |
| NET ASSET VALUE: | 141p* | NET CASH: | £18.5m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 21.5 | 2.7 | 3.5 | 1.9 |
| 2016 | 26.9 | 5.3 | 5.7 | 2.5 |
| % change | +25 | +97 | +61 | +32 |
Ex-div: 16 Mar Payment: 7 Apr *Includes intangible assets of £52m, or 80p a share | ||||
