Four acquisitions since the start of 2015 have had a marked impact on half-year numbers at Dechra (DPH). At actual exchange rates, the group reported double-digit sales growth across all five of its product categories, with a particularly impressive performance in North America, where revenue more than doubled.
But even after stripping out the contributions from newly acquired companies and favourable currency movements, revenue increased 6.9 per cent. According to chief executive Ian Page, this strong underlying performance is crucial to the continued growth of Dechra as it's "highly unlikely we'll see the acquisitive activity witnessed last year".
The veterinary pharma market is, however, undergoing a period of consolidation. This, alongside the rise in the number of companies developing un-branded veterinary medicines, has created a competitive marketplace. But Dechra remains in a good position, with a number of strong brands and an impressive development pipeline of around 45 new products.
Dechra's new businesses are trading ahead of previous expectations, prompting analysts at Investec to upgrade forecasts for the year to June 2017. Adjusted pre-tax profit of £73.7m are now forecast, giving EPS of 61p (from £49.7m and 42.7p in FY2016).
DECHRA PHARMACEUTICALS (DPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,601p | MARKET VALUE: | £1.49bn | |
| TOUCH: | 1,591-1,601p | 12-MONTH HIGH: | 1,609p | LOW: 811p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 106 | |
| NET ASSET VALUE: | 307p* | NET DEBT: | 48% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 (restated) | 111 | 14.2 | 12.9 | 5.55 |
| 2016 | 173 | 16.3 | 13.7 | 6.11 |
| % change | +56 | +15 | +7 | +10 |
Ex-div: 9 Mar Payment: 7 Apr *Includes intangible assets of £398m, or 427p a share | ||||
