Trading for Eco Animal Health (EAH) has proved resilient in the face of an outbreak of African swine fever (ASF) in China, where around 30 per cent of the country’s aggregate pig herd has been culled. An encouraging set of full-year numbers was largely a consequence of a 14 per cent rise in sales for the group’s patented Aivlosin molecule, which targets "economically important diseases" in pigs and poultry.
The ASF outbreak, like foot and mouth in the UK, also resulted in movement restrictions for farmers and suppliers, but Eco’s subsidiary in China “found new and innovative ways to reach customers”. Nevertheless, although revenues held firm, margins softened and credit terms were "adjusted" to retain business. A subsequent 250 basis point reduction in the group gross margin, and an increase in receivables as a proportion of revenue, came as no surprise.
N+1 Singer forecasts adjusted profits of £17.3m and EPS of 18.1p for the year to March 2020, rising to £20.5m and 21.1p in FY2021.
| ECO ANIMAL HEALTH (EAH) | ||||
| ORD PRICE: | 372p | MARKET VALUE: | £251m | |
| TOUCH: | 364-380p | 12-MONTH HIGH: | 540p | LOW: 347p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 167p* | NET CASH: | £18m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2019 | 74.6 | 15.2 | 17.6 | 11.04 |
| % change | +11 | +10 | +24 | +20 |
| Ex-div: | 26 Sep | |||
| Payment: | 16 Oct | |||
| *Includes intangible assets of £62.7m, or 93p a share | ||||
