North America continues to drive growth for veterinary pharmaceuticals specialist Dechra (DPH). In the year to June 2017, stateside revenue nearly doubled at constant currencies after “exceptional” sales from recently acquired businesses were added to the 16.5 per cent underlying growth. North America now makes up more than a third of total group revenue, up from 24 per cent in 2016.
Europe also benefited from acquisitions completed within the last 18 months. A modest 3.6 per cent uptick in underlying revenue was boosted by the first full year contribution from Croatian group Genera and eight months' of sales from Australian business, Apex.
Looking ahead, however, it's unlikely that acquisitions will have such a big impact on overall performance. Dechra may have the financial firepower to keep shopping – it generated £94m in net cash last year and reduced its leverage ratio to 1.4 times – but the global veterinary market is already highly consolidated and acquisition opportunities are becoming few and far between. Instead, sales growth is likely to come from the new product pipeline, which received £15m of research and development (R&D) investment in the reported period.
For the year ending June 2018, broker Numis has forecast pre-tax profit and EPS of £90m and 73.5p (from £77m and 64.3p in FY2016).
| DECHRA PHARMACEUTICALS (DPH) | ||||
| ORD PRICE: | 1,970p | MARKET VALUE: | £1.84bn | |
| TOUCH: | 1,970-1,973p | 12-MONTH HIGH: | 1,995p | LOW: 1,225p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 70 | |
| NET ASSET VALUE: | 323p* | NET DEBT: | 40% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 189 | 12.5 | 12.5 | 14.0 |
| 2014 | 194 | 21.4 | 22.2 | 15.4 |
| 2015 | 203 | 25.8 | 22.1 | 16.9 |
| 2016 | 248 | 14.5 | 14.0 | 18.5 |
| 2017 | 359 | 28.6 | 28.1 | 21.4 |
| % change | +45 | +96 | +101 | +16 |
| Ex-div: | 26 Oct | |||
| Payment: | 17 Nov | |||
| *Includes intangible assets of £396m, or 425p a share | ||||
