Eco Animal Health Share Discussion Threads

[pireric] 05/6/2018 11:02

Take that as a no :0). Happy enough if these are in line with expectations as last year was a very strong base period to perform against (FX tailwinds turning to headwinds etc).

Still wondering what on earth they're going to do with the cash pile, any thoughts anyone? What would you like to see them do?

[pireric] 02/6/2018 09:22

Anyone seen the Peel hunt note from weds/thurs where they reiterated their buy rating?

[pireric] 26/5/2018 12:28

Possibly; unless results are in line then I guess they don't need to release one.

I need to do some synergy work around this, Genus and Anpario. I'm wondering if a deal between any two of them is a possibility. Know some of the board members are scattered around (e.g. P Lawrence sits on the ANP board).

[jimbowen30] 25/5/2018 11:47

Interesting post pireric.

Last year ECO released a trading statement on 15th May (before the FY results), so aren't we due one now?

[audigger] 23/5/2018 18:08

Post 836 by rzbrdbe was the one, very informative

[audigger] 23/5/2018 18:00

My plea for a surge towards 700p appears to have had the opposite effect. Over the years I've called the share price movement quite well but not in recent times. I really didn't expect it to pull back from 680 to here given the solid growth in revenues and bottom line. Assuming margins are still ok and the demand is still there, then so long as they can make enough Aivlosin all should be good. Somebody posted an insightful analysis last year as to why they may be meeting some challenges, worth another read when I can find it.

[pireric] 23/5/2018 14:32

Getting cheaper!

Wish management here come out with a strategy for their excess cash at the FY results. It's a big unknown but should really be a positive. Wouldn't say a buyback given the liquidity of the stock, but special Divi, acquisition, or turbocharging r+d would be appreciated!!

[audigger] 21/5/2018 20:08

Good spot pireric. Long overdue a wave of good news to propel this to 700p!

[pireric] 20/5/2018 15:22

Some of you might know that Ecuphar, a company that reversed into Animalcare has a major part of its production animals pharma business distributing Aivlosin. It's one of their top 10 products for that segment.

So potentially some decent read through from ANCRs recent results commentary:

"The £13.2m year-on-year increase is attributable to an additional £7.6m of sales derived from acquisition growth, with the balance generated through organic growth within the Ecuphar business.

Organic growth was driven by a number of factors including a very strong performance from sales into the Production Animals market, as well as strong growth from Companion Animals.

In the division our top 20 pharmaceutical products, which account for 51% of this division's total sales grew by 15.1% in 2017."

[audigger] 11/5/2018 16:04

Above expectations would be most welcome!

[pireric] 11/5/2018 15:02

Next week for a pre-release definitely a possibility. In-line + confident outlook what I'm expecting

[aimingupward2] 11/5/2018 14:48

Somebody has just put well over £100,000 into a purchase - shows a lot of confidence.

I wonder if we will get any announcement ahead of the results which are due in about four weeks time.

[pireric] 24/4/2018 20:53

Standard Life taking up some slack stock by the looks of it

[pireric] 20/4/2018 19:08

Indeed. Looking spritely :0)

[sspurt] 19/4/2018 16:30

370k traded at 545p today. Might clear the tubes a bit.

[pireric] 03/4/2018 18:57

Absolutely not impossible if I'm right....

Annual report 2016, Pharmgate LLC - the US operations. Bear in mind 50:50 JV.
Sales £4.224m
Expenses £0.892m

Canadian version of the JV, 2016
Sales £2.681m
Expenses £0.247m

Both very profitable ventures, clearly. So looks like very solid good news. Margins are excellent and 2016 wasn't a one-off year either.

So if they scale this right and execute well, looks like it could be 10-15% accretive to EBITDA within 3 years or so

[topvest] 03/4/2018 17:57

Well it won’t be bad. Happy to hold and wait.

[aimingupward2] 03/4/2018 08:23

Good to learn of something positive coming along, although it’s near impossible to judge quite what impact this will have on the overall business.

[audigger] 03/4/2018 07:52

Looks to be a good JV which helps provide a more integrated offer to farmers. About time the share price behaved itself and stopped the long, slow drift!

[pireric] 03/4/2018 07:36

Another JV with Pharmgate announced today, a distribution agreement for their vaccine products for Europe this time. Hopefully will be as successful as the North American distribution agreement!

[pireric] 27/3/2018 21:40

Whisper quiet!

Trying to do some work on who the major rivals are here; thinking along the lines of Dechra, Bayer, Animal Medics, Zoetis and Elanco. Any other big ones I'm missing?

The industry is pretty consolidated at the upper end. Eco is valued in an attractive echelon IMO. Did some ROIC analysis if a couple of those big players bought EAH and get some very interesting results. As stated before, they can buy this using Eco's own rock-solid balance sheet. I also reckon they could cut Eco's own costs, particularly distribution and leverage their own.

Nice backstop to a stock when the economic case for it being acquired makes a lot of financial sense.

Separately, I find it interesting that Eco has hired Stephen Wilson as the new Global Vaccines Project Leader. He used to work at Benchmark until March 2018 and before that has been a clinical manager at both Zoetis and Pfizer

[pireric] 09/3/2018 22:28

I would dearly hope so. Having so much cash sitting on the balance sheet is a poor use of capital, but that in fact is one reason why this attracted me. Ex out that cash and this is trading on around 20x next year's earnings. But the market almost gives a discount multiple-wise to stocks that are just sitting on cash.

Eco are increasingly getting the distribution. This is now getting to the point where I think this company needs to acquire or be acquired. You can effectively now buy Eco and use its balance sheet to fund the transaction and it's not really all that expensive.

[ettienne1951] 09/3/2018 09:53

One interesting piece of information in the annual report was that as global consolidation in the animal health industry continues, the board was "actively seeking to acquire new drugs that fit comfortably in the portfolio and markets they serve" etc. Clearly, they want to obtain better returns from the surplus cash currently generated and held as working capital, and are looking for opportunities. Something to watch for in the months / years ahead.

[pireric] 06/3/2018 20:46

I've bought in here today. The lack of analyst research here makes this a bit of a hidden story in my opinion.

But as soon as you look at the financial statements it's hard not to be impressed. Clearly growing extremely strongly with a great balance sheet. Not actually as expensive as it looks. Only on around 20x 2019 without rolling the cash by my calcs.

Moreover that's a significant derating on where it peaked at so not actually buying at valuation highs here. Forward forecasts look a little conservative to me and the rollout potential is still pretty enormous as far as I've been able to tell.

To me this makes this stock actually very good value. So I'm in. Let's see how it goes.