Animalcare’s share price has hit a five-year high and with good reason - and it’s not just because of its maiden interim dividend. It sold its marginally profitable agriculture products (feeding buckets to weighing machines) business last September and the proceeds have eliminated net debt. Now it can concentrate on developing generic veterinary medicines while reporting much faster revenue growth than the 2 per cent or so achieved in the year to end-September 2010 - source National Office of Animal Health.
It’s clear that new vet medicines accounted for much of the rise in sales in the six months to end-December 2010 while operating profits from continuing operations rose 35 per cent to £1.43m. That offset poor demand in European markets - notably Spain.
The key to Animalcare’s prosperity is the number and success of its new drugs introduced - some of which are European generics. In the latest half year the company launched Phenoleptil to combat epilepsy in dogs and a vaccine against rabbit haemorrhagic disease - far worse than myxomatosis. Also now available is an antibiotic to fight pneumonia in calves.
Animalcare says its remaining £1m debt will be repaid by end-March and believes that current half year trading is in line “with market expectations”. Broker Brewin Dolphin interprets this statement as meaning that 12 months adjusted sales will rise from £11.2m to £12.3m while adjusted profits advance £600,000 to £3.1m.
ANIMALCARE (ANCR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148.5p | MARKET VALUE: | £30.1m | |
| TOUCH: | 142-155p | 12-MONTH HIGH: | 148.5p | LOW: 86.5p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 72p* | NET CASH: | £425,000 | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 5.37 | 0.94 | 2.8 | nil |
| 2010 | 5.99 | 1.38 | 4.8 | 1.0 |
| % change | +12 | +47 | +71 | - |
Ex-div: 11 May Payment: 6 June Aim:Healthcare supplies. *Including £14,590 intangibles, or 72p a share | ||||
