Dechra (DHP) continued its expansion in the North American pet health market during the first-half of FY2019, hiring more sales representatives to make more one-to-one contact with veterinarians. That, together with the temporary absence of a market competitor to the animal medicine specialist’s endocrinology product, helped boost revenue across North America by almost a fifth at constant exchange rates.
Acquiring vaccine specialist Venco for £33.2m in October also marked the group’s entry into Brazil, the fourth largest market for food producing animal products globally. Management plans to invest in increasing the business’s presence throughout Latin America over the next three years. However, amortising intangibles acquired with the two bolt-on purchased made during the period pushed down statutory pre-tax profits by more than half. There was an accompanying contraction in pre-tax profit margins to 3.9 per cent, from 9.8 per cent the prior year. However, after stripping out exceptional items, including Brexit-related expenses, adjusted profits were up by 22 per cent to £54m.
Analysts at Investec expect adjusted pre-tax profits of £113m for the year to June 2019, giving EPS of 86.7p (from £93.8m and 76.5p last year).
| DECHRA PHARMACEUTICALS (DPH) | ||||
| ORD PRICE: | 2,470p | MARKET VALUE: | £ 2.53bn | |
| TOUCH: | 2,468-2,470p | 12-MONTH HIGH: | 3,180p | LOW: 1,992p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 105 | |
| NET ASSET VALUE: | 491p* | NET DEBT: | 46% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 194 | 19 | 28.8 | 7.33 |
| 2018 | 231 | 9.0 | 15.1 | 9.5 |
| % change | +19 | -53 | -48 | +30 |
| Ex-div: | 07 Mar | |||
| Payment: | 08 Apr | |||
| *Includes intangible assets of £715m, or 696p a share | ||||
