Half-year profits slipped at veterinary product specialist, Animalcare - that reflected production problems relating to animal painkiller, Buprecare, sliding consumer spending and the discontinuation of microchip activated cat flaps. Still, those pressures were partially offset by a shift towards more profitable vet products and medicines as management focused on delivering better margins.
Chief executive Stephen Wildbridge said problems with a contract manufacturer explained the Buprecare difficulties and had meant a £323,000 sales shortfall. However, a new supplier has been found and Buprecare should be available again by the year-end. Moreover, and even after taking that disruption into account, reported sales of Animalcare's licensed medicines still rose 3 per cent. The company is shifting focus towards higher-margin products, too: "We can't differentiate much between different types of bandages and profits here will always come under pressure, but with diagnostic machines and licensed medicines, we can achieve margins of between 35 per cent and 70 per cent," said Mr Wildbridge. Management think that the company will hit its targets and that no consistent trend in the animal care sector has emerged so far this year.
Broker Brewin Dolphin forecasts adjusted pre-tax profit of £2.9m for 2012, giving EPS of 11.3p (£3m and EPS 11.2p in 2011).
ANIMALCARE (ANCR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 156p | MARKET VALUE: | £32.0m | |
| TOUCH: | 148-163p | 12-MONTH HIGH: | 176p | LOW: 132p |
| DIVIDEND YIELD: | 2.88% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 79p* | NET DEBT: | £1.75m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 5.99 | 1.38 | 4.8 | 1.0 |
| 2011 | 5.40 | 1.09 | 4.3 | 1.5 |
| % change | -10 | -21 | -10 | +50 |
Ex-div: 4 Apr Payment: 4 May *Includes intangible assets of £14.5m, or 71p a share | ||||
