Dechra shares jump on strong revenue
New products and territories plus the acquisition of an Eastern European chicken vaccinations company helped Dechra Pharmaceuticals deliver a big jump in revenues in the six months to December 31.
The London Stock Exchange-listed veterinary pharmaceuticals company, which has one of its most important bases at Sansaw Business Park near Shrewsbury, has released half year results for 2015.
They show that revenue grew by 9.7 per cent to £110.7 million over the period, while underlying earnings were 15.7 per cent up to £28.7 million.
The growth was also slightly depressed by the strength of the pound, and if exchange rates had remained constant over the period, growth would have been higher still, at 14.9 per cent for revenue and 24.6 per cent for underlying earnings.
"All our business units are performing well, we are in the process of launching several new products, our international expansion plans are progressing as expected and we have made two strategic acquisitions," said chief executive Ian Page.
"We remain in a strong position to continue to grow the business and deliver returns to our shareholders."
The group attributed the growth in the first half to four areas of improvement.
It said focus on its portfolio helped it expand in all its key sectors, and that new products were approved across several species and geographies.
During the period it completed the acquisition of Croatian chicken vaccination company Genera, adding to its product portfolio and its geographical reach, while it also added another new company, the Mexican business Brovel, after the period end.
Finally, new subsidiaries, acquisitions and product registrations have helped it extend its geographical reach during the course of the period.
Dechra employs more than 20 people on the Sansaw Business Estate to the north of Shrewsbury, where its regulatory team works on getting new products into the UK market. The Shropshire base for the firm also has a marketing operation.
Genera's addition to the business in October added £3.4 million revenue to the business, but also contributed a £0.2 million underlying operating loss.
Investors were pleased with Dechra's performance, with its share price spiking by 102p, or 9.6 per cent, in early trading in London.
Analyst Chris Glasper from London firm N+1 Singer slapped a "hold" rating on the shares, because of their "premium valuation", but said investors should buy when the price dips.
He said: "Dechra's results are customarily solid, despite a strong currency headwind in the first half."
