Acquisitions fuel Dechra growth
PHARMACEUTICAL group Dechra, which has a major base in Yorkshire, has seen a 1.5% increase in interim pre-tax profit driven by strong organic growth and two major acquisitions.
In the six months to December 31, 2010 group revenue increased by 4% to £192.2m, compared with £184.8m in 2009. Underlying operating profit increased by 13% to £14.5m, as against £12.8m in the same period in 2009.
Pre-tax profit was £13.9m, up from £13.7m in 2009. The group said the figure reflected a negative swing of £1.8m on foreign exchange gains compared to the corresponding period last year.
Dechra’s Dales Pharmaceuticals base in Skipton forms the manufacturing division of the group and employs around 200 staff.
The company said its pharmaceutical operations were continuing to make strong progress and the group was continuing its strategy of building a high margin international veterinary products business.
This strategy was boosted in October with the £40m acquisition of Florida-based DermaPet, followed a month later by the £5.4m takeover of West Sussex veterinary pharmaceuticals company Genitrix.
Dechra said both had been earnings enhancing.
In addition, it said it had reached agreements to extend its geographical reach, while its product development pipeline continued to deliver new products which were in turn, helping to open up new markets.
It added that despite continued economic uncertainty and December’s poor weather-related trading, the group’s Services arm had proved resilient.
In a statement to accompany the results, the firm said: “The strong growth in our Pharmaceutical segments underpins the confidence in our strategy of building a high margin veterinary product business.
“The continuing general economic weakness has resulted in competitive markets, especially for the group’s services businesses within the UK, which were also adversely affected by poor weather related trading conditions in December.
“The second half will benefit from cost synergies from our recent acquisitions and from the additional products created by our pipeline.”
The overall economic environment would continue to pose some challenges in the short to medium term, it added, however, it remained confident in its strategy.
“The group is well placed to continue to deliver a solid performance through the current conditions and will continue to provide growth in shareholder value,” added the statement.
