Broker Peel Hunt expected these numbers from Eco Animal Health (EAH) to “be taken well” – particularly against a difficult market backdrop – but investors clearly weren’t all that impressed. Instead, the recent outbreak of African Swine Flu in China and the threat of potential trade wars overshadowed strong sales of antibiotic product Aivlosin, pushing the shares down on results day. But, including a £400,000 currency exchange rate boost, pre-tax profits grew comfortably, while a decent level of cash generation – rising to £8.9m from £7.2m this time last year – made room for a special dividend worth 3.5p a share.
Geographically, the group did well in the UK, Canada and parts of Latin America, particularly as Mexico and Brazil showed signs of recovery. Progress was harder in the US as pork prices remained depressed, and in continental Europe, where audits on third-party manufacturers and distribution restructuring held back growth. But the second half is off to a good start, with analysts estimating that the order book could be as much as 10 per cent ahead of last year.
Analysts at Peel Hunt still expect pre-tax profits of £21m for the year ending March 2019, giving EPS of 24.1p, up from £18.1m and 20.4p in FY2018.
| ECO ANIMAL HEALTH (EAH) | ||||
| ORD PRICE: | 425p | MARKET VALUE: | £ 286m | |
| TOUCH: | 410-440p | 12-MONTH HIGH: | 603p | LOW: 367p |
| DIVIDEND YIELD: | 2.4%** | PE RATIO: | 28 | |
| NET ASSET VALUE: | 158p* | NET CASH: | £24.7m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 29.2 | 5.9 | 6.4 | 3.20 |
| 2018 | 31.7 | 6.8 | 7.6 | 4.00 |
| % change | +9 | +15 | +19 | +25 |
| Ex-div: | 28 Feb | |||
| Payment: | 12 Apr | |||
| *Includes intangible assets of £59.8m, or 89p a share **Excludes special dividend of 3.5p (Paid: 9 Jan Ex-div: 20 Dec) | ||||
