Dechra Pharmaceuticals Share Discussion Threads

[shedloads.com] 05/9/2001 08:19

COMPANIES & FINANCE UK: Dechra up 12% as spending by vets continues
Financial Times; Sep 5, 2001
By CARLOS GRANDE



Dechra Pharmaceuticals, the veterinary products supplier, yesterday shrugged off fears of the impact of the foot-and-mouth disease to report a 12 per cent rise in full-year pre-tax profits.

The company, which targets the pet sector, said that although the outbreak was not over, foot-and-mouth had not affected spending by large vet practices.

Gary Evans, chief executive, added: "Sales of some products such as disinfectant and animal euthanasia products have gone up. Foot-and-mouth isn't over yet, but, fortunately, we haven't seen any negative effects."

The company, which floated last year, is pressing ahead with a Pounds 2m plan to expand production at its Skipton factory.

This investment, to be spread over 18 months, will step up manufacture of higher margin, branded pharmaceutical products.

Sales of Hypercard, its feline cardiac product, are running at Pounds 100,000 a year, and it has achieved pre-marketing authorisation for a dog cancer treatment.

Mr Evans said Dechra had five other products in its portfolio, including one for blood transfusions for dogs.

He said: "We are taking existing compounds for humans and use them for animals, so the risks are fairly low. Our research and development budget is about Pounds 400,000 and we don't expect them to change much."

Pre-tax profits rose from Pounds 6.14m to Pounds 6.85m in the year to June 30 on turnover of Pounds 156m (Pounds 145.5m). This included a Pounds 1.1m exceptional charge relating to flotation costs.

A final dividend of 2.5p, makes 3.75p for the year. Earnings per share were 9.66p (8.58p). The shares closed up 1p at 179 1/2p.

[shedloads.com] 04/9/2001 21:35

From todays Citywire..........

Take a dekko at Dechra
(Citywire research report update) Shares in Dechra Pharmaceuticals nudged ahead today after the group hit full-year forecasts despite foot and mouth and some red tape that pushed new products back.

For the year to June Dechra, which operates three core subsidiaries: National Veterinary Services (NVS), Arnolds Veterinary Products (AVP) and Dales Pharmaceuticals, made a pre-tax profit of £4.77 million, more than double last time's £2.09 million.

Turnover increased 7.5% to £156 million and basic earnings per share were up 13% to 9.66p. A final dividend of 2.5p has been declared which together with the interim dividend, makes a total of 3.75p for the year.

Paul Jones, an analyst at independent broker Numis Corporation, told Citywire today: 'The figures are bang in line, the outlook is good and the dividend was generous for a first-year payment.'

'The impact of foot and mouth and a delays in launching new pet-pharmaceuticals, were offset by a better mix of business and stronger margins.'

While foot and mouth disease caused some short-term problems (valued at about 3% of turnover a month), Dechra capitalised on some of the opportunities that also arose.

'It is one of the key suppliers of foot and mouth treatments which were flying off the shelf during the year,' said Jones.

He added: 'Dechra is also seeing growing demand for its products in the companion animal sector as vets look to boost their otherwise reduced incomes from farm work.'

The margins on cat, dog and horse products are often much greater than those on products for cows and pigs for example.

Dechra's pharmaceutical products require regulatory approval, which is supposedly a faster (rather than easier) process relative to human drugs because they are often based on the equivalent human treatment.

Applications should be processed within 60 days but the process is put on hold after every additional question asked by the regulators. 'Its more a problem of red tape than any fundamental issues with the products and that's why the group's canine cancer treatment Vetoryl will be launched a bit later than originally intended,' said Jones.

'The veterinary world is then obliged to use these treatments rather than use mild doses of human drugs and that means the company should have instant demand,' he added.

The UK leads the way in animal drugs, but Dechra is already talking to European distributors about potential business.

In addition, the group should benefit this year from the recent reorganisation of its distribution hub and increased capacity at the pharmaceuticals manufacturing facilities.

The company has a dominant share of the UK's veterinary service market and strong brands in Dales and Arnolds, with few significant rivals. The nearest quoted rival in the UK is probably Genus, which issued a strong AGM trading statement last week.

Numis's Jones is expecting a pre-tax profit this year of £8.9 million and earnings per share of 12.5p. He rates the shares a buy with the prospect of a significant re-rating when sales of canine and feline pharmaceuticals products gather momentum.

Dechra (DPH) joined the market in mid-September at 120p raising a net £26.4 million to repay debt and fund the company's development. Citywire recommended a buy at 145.5p and we remain positive at 181p, up 2.5p on the day.

[obarmoth] 03/9/2001 23:30

Got into this one about three months ago, and have been waiting patiently for the action. Looking at recent buying patterns, I have a hunch that tomorrow's results are going to be quite special... ;-)

[chester] 27/2/2001 11:26

Results tomorrow.

[dutchy] 27/1/2001 20:41

Looking to buy Dechra pharmaceuticals any opinions cheers dutchy