It seems that soaring sales of Eco Animal Health’s (EAH) key antibiotic product – Aivlosin – are no longer enough to satisfy the market. Despite a 14 per cent increase in revenues from the drug in the year to March 2018, and further regulatory approvals that will allow its sale in new markets, the group’s share price has fallen 13 per cent since it reported its last set of annual results – a sharp reversal from the 110 per cent share price growth in the two years to July 2017.
Fortunately, management is working to reduce Eco’s reliance on the product. “We are actively seeking to acquire or develop drugs that fit comfortably in our portfolio,” said chairman and founder Peter Lawrence. Internal product development is currently focused on vaccines, while the group has expanded its commercial partnership with US veterinary group Pharmgate, which will allow it to sell the latter’s vaccine products in the UK, EU and Commonwealth.
With operating cash inflows of £14m – equivalent to 100 per cent operating cash conversion – Eco has plenty of fire power to fund acquisitions. The group ended the period with £21.3m of net cash, £0.7m more than at March 2017, even after paying £6m of dividends – a 42 per cent increase on the previous financial year.
| ECO ANIMAL HEALTH (EAH) | ||||
| ORD PRICE: | 545p | MARKET VALUE: | £ 360m | |
| TOUCH: | 530-560p | 12-MONTH HIGH: | 680p | LOW: 492p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 159p* | NET CASH: | £21.3m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 31.9 | 3.7 | 4.4 | 4.2 |
| 2015 | 39.0 | 5.1 | 6.8 | 4.8 |
| 2016 | 47.1 | 7.7 | 9.7 | 5.7 |
| 2017 | 61.4 | 13.5 | 16.4 | 7.1 |
| 2018 | 67.2 | 13.9 | 14.2 | 9.2 |
| % change | +9 | +3 | -13 | +30 |
| Ex-div: | 27 Sep | |||
| Payment: | 17 Oct | |||
| *Includes intangible assets of £57.6m, or 87p a share | ||||
