Having ended its financial year to June on a high, veterinary specialist Dechra Pharmaceuticals (DPH) enjoyed a good start to the fresh year. Exchange rate headwinds kept a lid on reported revenue growth, but after adjusting for these sales actually increased by 11 per cent to more than £100m.
This was driven by strong sales of equine and companion animal products, particularly in the US, where sales rose 60 per cent year on year. European revenues grew just 6 per cent at constant currencies, as sales of products for food-producing animals continued to stall. There's "ongoing pressure" on European vets to limit the number of antibiotic prescriptions, says chief executive Ian Page. Sales in Germany and the Netherlands were hit hardest. But Mr Page says "this is not a new issue", and he believes the sales decline has "bottomed out" in certain jurisdictions.
After the period-end, Dechra opened a new Canadian office that generated its first revenues at the end of January. Next on the agenda is a new office in Poland and the commercial launch of equine product Osphos in continental Europe. The group will also hopefully launch a new product for Addison's disease next year.
Brokerage Numis expects pre-tax profits of £42.9m this year, giving EPS of 38.8p (from £39.9m and 36.3p in 2013-14).
| DECHRA PHARMACEUTICALS (DPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 925p | MARKET VALUE: | £813m | |
| TOUCH: | 923-925p | 12-MONTH HIGH: | 925p | LOW: 655p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 231p* | NET CASH: | £3m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 95.9 | 10.3 | 8.8 | 4.75 |
| 2014 | 101 | 12.6 | 11.8 | 5.12 |
| % change | +5 | +22 | +34 | +8 |
Ex-div: 12 Mar Payment: 7 Apr *Includes intangible assets of £187m, or 212p a share | ||||
