Dechra Pharmaceuticals (DPH) revealed adjusted operating profits of £80.8m at the half-year mark, a one-third increase at constant currencies. The underlying margin was up 220-basis points, while operating net cash-flow came in 15 per cent to the good at £58.1m.
Trade receivables increased as a proportion of adjusted profits since the group’s June year-end, but the outcome was favourable compared to the previous half-year. At any rate, the veterinary products developer is starting to see the pre-Brexit inventory build unwind – a positive sign. Our departure from the European Union has not had a dramatic effect on trading, though the group expects that results for the year will be weighted towards the first-half.
Trading levels remain encouraging and there are promising clinical developments in train, including submissions linked to a new canine sedative for the US, and there are positive signs linked to concept studies for a diabetes drug for cats, developed in partnership with Akston Biosciences Corporation. Hold.
Last IC view: Hold, 3,276p, 07 Sep 2020
| DECHRA PHARMACEUTICALS (DPH) | ||||
| ORD PRICE: | 3,466p | MARKET VALUE: | £ 3.75bn | |
| TOUCH: | 3,462-3,466p | 12-MONTH HIGH: | 3,840p | LOW: 2,030p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 83 | |
| NET ASSET VALUE: | 578p* | NET DEBT: | 33% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 249 | 19.5 | 12.9 | 10.3 |
| 2019 | 300 | 35.4 | 21.6 | 11.1 |
| % change | +20 | +82 | +68 | +8 |
| Ex-div: | 04 Mar | |||
| Payment: | 07 Apr | |||
| *Includes intangibles of £735m, or 680p a share | ||||
