Dechra sees healthy profits rise
VETERINARY products supplier Dechra Pharmaceuticals today announced a 6.7% revenue rise for the past six months while significantly reducing its net borrowing.
The Staffordshire company saw revenue increase to £184.8m from £173.2m, while adjusted pre-tax profit during the period rose 30.4% to £13.7m.
Earnings per share stood at 10.85p, an increase of 2.92p compared with same period in 2008. It announced an interim dividend of 3.3p per share, compared with 3.0p in 2008, an increase of 10%.
Net borrowings at December 31 stood at £18.5m compared with £15.5m at June 30, but were well down on the comparable period in 2008 when borrowing stood at £31.9m.
Ian Page, chief executive, said: It has been a very solid performance in what continues to be a challenging market.
“We would expect the situation to difficult but there are opportunities for tentative growth and we have a very strong development pipeline with five new products for the dog, cat and horse market all progressing.”
He said that January’s bad weather had seen footfall in UK veterinary practices reduce compared with previous periods but long-term, this was not expected to impact too severely on the business.
Dechra (DPH) will also be rolling out its expansion into new markets, looking at opportunities across Western Europe, the United States and Japan.
Mr Page said there would also be no further UK consolidation following the decision last month to close a UK distribution centre in Shrewsbury and move operations to Denmark.
Dechra’s strategy now is to build an own brand international veterinary products business while retaining its pre-eminence in the UK veterinary wholesale sector.
It aims to self-fund the development of pharmaceutical and specialist pet diet portfolios, while growing profits and dividends.
R & D expenditure charged to the income statement was £2.1m, a 57.0% increase over the corresponding period last year.
In addition, a payment of £0.4m was made to acquire technology for its product development programme. Both were in line with management expectations.
In product development, the completed dossier for Equidone Gel, a specialist equine product for the US market, has been submitted to the Federal Drug Administration for approval.
The efficacy protocol for a further equine product has also been agreed with the FDA and the trial has been initiated.
The company has taken on an extra 20 staff in the US to enable the work to take place.
The three remaining opportunities are progressing to schedule, while further products are being identified, said the firm.
