The resolution of supply chain problems and the launch of several new products last year helped animal pharmaceutical specialist Animalcare (ANCR) return to sustained organic revenue growth during the half. The new management team has been in place since January and the challenge will be to apply higher value and more complex techniques to reformulating pharmaceuticals for treatment of pets so that the company can maintain its market niches.
It was impressive double-digit sales growth in licensed veterinary medicines that formed the core of the results. These products are also more profitable, which is why gross profit margins improved by more than 1 percentage point to 55.7 per cent. The companion animal identification division felt the effect of competition and sales were 5.4 per cent lower at £1.13m. However, management noted signs of recovery in the division, with insurance commissions and the Locate pet-finding services showing particular improvement - dognapping has risen substantially over the past three years and the government has now ruled that all dogs in England must be microchipped.
Chief executive Iain Meneer said the company will increase its development spending from £250,000 to £1m a year out of its existing cash flow to support new product launches.
N+1 Singer forecasts full-year pre-tax profits of £2.6m and EPS of 9.7p (from £2.3m and 9.2p in 2012), rising to 32.8m and 10.4p, the year after.
ANIMALCARE (ANCR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 141p | MARKET VALUE: | £29.2m | |
| TOUCH: | 135-147p | 12-MONTH HIGH: | 176p | LOW: 120p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 83p* | NET CASH: | £2.95m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 5.20 | 1.09 | 4.30 | 1.50 |
| 2012 | 6.10 | 1.34 | 5.20 | 1.50 |
| % change | +17 | +23 | +21 | - |
Ex-div: 10 Apr Payment: 3 May *Includes intangible assets £14.3m, or 69p a share | ||||
