Pharmaceutical company sees Group revenues rise to £194m
Veterinary pharmaceutical business Dechra has reported a “strong” half-year performance to 31 December, with Group revenues growing to £194m.
The firm, which has its manufacturing base in Skipton, North Yorkshire, and its head office in Northwich, Cheshire, said the performance was driven by solid revenue growth in its European and North American pharmaceuticals divisions. Group revenue in the Period was £194.1m, a growth of 11.2% at CER (12.5 % at AER).
The firm reported an underlying operating profit growth of 22.3% at CER (22.6% at AER). However, Dechra said it had also made foreign exchange transactional losses of £500,000 on trading activities, compared to a gain of £800,000 in the previous period.
Ian Page, chief executive, said: “The Group has delivered a strong performance during the Period. The Board remains confident that we can continue to implement our strategy and meet our expectations for the current financial year, and deliver further growth in the future.”
A small acquisition was completed in the period, which the firm said provided access to the New Zealand market. But more significantly a major acquisition was completed post the period end on 13 February, when the firm announced it was to acquire AST Farma and Le Vet, both based in the Netherlands, for €340m.
Dechra said that progress had been made on its five year plan to rationalise and improve efficiency within manufacturing sites. The firm said: “Good progress has been made in the Period as we continue to reduce our low value third party business and drive ongoing efficiencies within our key sites. The cost associated with this footprint reorganisation of £0.4 million is included within non-underlying expenses.”
The firm said it had been impacted by volatility in exchange rates. Dechra said: “We are an international business that trades in many currencies and are therefore exposed to volatility in exchange rates. The Euro and US dollar are two of the major currencies in which we trade and given the current global political and economic environment, we expect continued currency volatility that could impact our results. In the first six months of the year we made foreign exchange transactional losses of £0.5 million on trading activities (compared to a gain of £0.8 million in the previous period).
“Our external debt is denominated in both Euros and US dollars. The foreign exchange risk associated with this is mitigated through net investment hedging or similar instruments which result in the foreign exchange impact being included in other comprehensive income.”
Dechra added: “Dechra has performed well in the Period with solid revenue growth in EU pharmaceuticals and strong revenue growth in NA Pharmaceuticals from the existing business. This has been delivered through the consistent application of our successful strategy, converting pipeline opportunities, leveraging our strong portfolio, and expanding our geographic presence. The acquisitions of AST Farma, Le Vet and RxVet will supplement our opportunities further.
“Current trading continues in line with management expectations and the initial phase of integration of the AST Farma/Le Vet acquisition is progressing well. The Board remains confident that we can continue to implement our strategy and meet our expectations for the current financial year, and deliver further growth in the future.”
