Dechra chief hails robust performance in final results before takeover
Pre-tax profits at veterinary pharma company Dechra have dipped in the group’s final results before the business goes private in a takeover by private equity investors.
Unveiling annual underlying audited profits of £183.7m on turnover of £761.5m chief executive Ian Page said the performance was “resilient” despite “unprecedented changes within the supply chain” in the second half of the reporting period to the end of June 2023.
Though the business has presented the results in different ways, the business has revealed a pre-tax loss of £27.9m.
He added: “We enter the next chapter of our history well positioned to continue executing our strategy in an animal healthcare market set to benefit from numerous structural growth drivers for many years to come.”
In June this year the board of Dechra has accepted a bid by Swedish private equity fund EQT and Luxinva, a wholly-owned subsidiary of the Abu Dhabi Investment Authority, which values the Cheshire-headquartered veterinary supplies business at £4.45 billion.
Page acknowledged that the deal had consumed enormous amounts of executive time but said group revenue growth of 5.5% to £761.5 million, including growth of 4.3% in EU Pharmaceuticals was “robust” amidst the most eventful year in the company’s history.
“We delivered a robust performance in the first half against tough comparators from the prior year as the global companion animal market returned to more normalised levels of growth following the COVID-19 pandemic, before a second half that proved challenging,” Page said.
De-stocking has had a one-off adverse impact on the North American side of the business.
Page also said he had “mixed feelings” as he filed his last report as chief executive of a listed company.
“Since the Initial Public Offering in 2000 and my appointment as chief executive officer in 2001, being a listed company has served Dechra well due to the help and support demonstrated by our shareholders throughout this period. I am very grateful for the personal support and guidance provided to me by many stakeholders, not least shareholders, and would like to thank everyone who has contributed to Dechra’s success over this time.
“Despite a challenging period, we ended the last financial year strongly and have started the new one on a secure footing. I look forward to the challenges ahead as a private company and remain confident in our people, strategy and future prospects.”
Cheshire-based Dechra has grown by acquisition since Page took over the business in 2001. Even in the last year the business has integrated Piedmont Animal Health, which it bought in July 2022, and Med-Pharmex which completed in August 2022.
Dechra paid a combined $474.1 million for the two businesses.
The accepted offer price for the whole of Dechra is less than what EQT first bid for the business, but recent stocking issues in the US and the UK have hit the expected prospects. The deal is expected to complete by the end of the year.
The bid implies an enterprise value of £4,882 million and a multiple of approximately 25.9 times Dechra’s EBITDA for the twelve months ended 31 December 2022 of £188 million.
EQT was formed by trustees of the Wallenberg family, one of Europe’s most powerful banking and industrial dynasties.
