Eco Animal Health Share Discussion Threads

[audigger] 18/7/2018 11:40

Old mutual off-loading. Will we finally see the start of a recovery? Am pondering a top-up.

[audigger] 12/7/2018 21:37

Well I have to say that the recent share price movement is not what I expected. Topvest presents a very rational explanation as to the reasons why we are languishing, and its hard to disagree with the fundamentals. For me, things haven't quite progressed at the rate or scale I expected in the US. An excellent analysis of why this may be was posted by rzbrdbe on 28th Oct 17 (post 836). The management of this company has been excellent but I now wonder if PL and colleagues who have reaped significant rewards from the growth in the business and SP(and so they should) still have the same drive and enthusiasm to take this forward. I always believed EAH would be acquired by a bigger player but their strategy appeared to shift last year to one of growing organically and potentially through acquisition and thus become a big player themselves. They are cash rich so I guess this creates both opportunity and threat. The whole chemicals industry is still consolidating so again this will present EAH with opportunities but they are an attractive proposition themselves. My gut tells me that they are still more likely to be acquired than not. At what price? I have no idea as I'm not a number cruncher. My conclusion therefore is that I should be adding at this relatively low price. The downside has to be minimal aside from some bigger picture risks like antibiotic resistance and alternative technologies. So what's stopping me piling in? Only my preference for investing in earlier stage life science start-ups which are far riskier than EAH!

[aimingupward2] 02/7/2018 12:55

Re Aivlosin the results statement includes the following encouraging words:

"Substantial on-going product development covering more formulations, species and diseases is expected to substantially further increase it's revenue generating potential."

[cascudi] 02/7/2018 11:24

Good results imo

[audigger] 02/7/2018 09:45

Only blue on my screen amongst a see of red. Would be good to see stronger sales in the US in second half and anything that could improve margins would also be good! More importantly, it will be interesting to see what strategy they adopt for spending the cash. A move in to vaccines may be good in terms of the size of the opportunity but they will need to acquire the necessary expertise. And as they mention there is indeed a lot of consolidation in the chemicals sector so will they be a target?

[topvest] 02/7/2018 08:10

Share price seems to have gone up a little at the bell though, so results seem to have gone down OK.

[topvest] 02/7/2018 08:07

I suppose it explains the recent weakness in the share price though. On an actual trailing P/E of 35 maybe moving down to 27 if they now achieve 20p EPS in current financial year. A quality business, but hardly cheap. Dividend yield is 2% though which is not bad.

[topvest] 02/7/2018 08:02

"Net profit in China increased by more than 61 per cent over the same period last year, once again reflecting the effectiveness of our overall strategy."....only about half their profit whereas some other key markets that they own 100% of were softer. It's always been a bit volatile on that front, so I would tend to agree that these numbers better reflect the underlying position....

9.4% increase in sales to £67.2m (2017: £61.4m)
12% increase in operating profit to £14.1m (2017: £12.6m)
15% increase in adjusted EBITDA to £19.6m (2017: £17.1m)
30% increase in dividend to 9.2p (2017: 7.1p)
Strong cash generation from operations leaving net cash of £21.3 million at year end (2017: £20.6)

Aivlosin® sales up almost 14%

[topvest] 02/7/2018 07:52

It's two things from what I can see: higher tax charge and mix of profits which are more in their non-wholly owned subsidiaries this year, particularly China. Look at the NCI number!

[aimingupward2] 02/7/2018 07:43

I would say an excellent and welcome increase in the dividend payment at 30%. What I don’t understand, yet anyway, is why the eps has come in below last year’s figure. I’ve seen any comment on that on first skim reading, but the cash flow and outlook are still good.

[topvest] 02/7/2018 07:39

Yes, only solid is how I would describe it. Headline numbers are good. Higher tax charge and minority interest profits have negatively impacted the EPS number though which is only 14p and seems to be much lower than the consensus of 20p. Looks like the currency tailwind in the prior year was more of a headwind in the current year. Underlying growth seems to have moderated to 15% or so. Happy to hold though as still growing nicely overall.

[audigger] 02/7/2018 07:11

And here they are! Solid. Looks like they will use cash for acquisition of molecules, companies or both. Reasonable uplift in the divi

[pireric] 28/6/2018 20:13

Yes that's the mix of the 16 and the near 24. Quite rare to find a spread that big I find. I wonder what has gone on in terms of expectations setting. A bit concerned that many institutional investors will be looking for the 24 and the 20 or below may be disappointing

[jimbowen30] 28/6/2018 08:45

Well eps last year was 16.35p, so would have thought closer to 24p is likely. It looks like the consensus eps is 20p for 2018.

[pireric] 27/6/2018 20:38

My one concern is what the brokers have. Peel Hunt are way ahead of N+1 on EPS and yet both of them seem to actively cover Eco. I'm talking 23p+ for Peel Hunt and yet N+1 are way back at 16p EPS....

Anyone got the foggiest which one looks most reasonable? I don't have access to the full models so can't see why there is a divergence.

If it is the 16p one that would be desperately disappointing IMO, and the PE would be well over 30x. If it's 23p then very different story altogether.

Split the difference - if it came in at 20p, that's probably good to neutral

[aimingupward2] 27/6/2018 09:21

Buying in, or topping up, ahead of the results would seem to be a pretty safe bet then.

[audigger] 26/6/2018 23:05

I'd be surprised if the results aren't record breaking again. Hopefully they will prompt a re-rating to 800 plus!

[pireric] 26/6/2018 19:28

I'd have thought next week. Pattern seems to be right at the end of June to right at the start of July. 2nd/3rd July sounds about right to me so next Monday or Tuesday I guess

[jimbowen30] 26/6/2018 08:41

Results must be due this week?

[pireric] 25/6/2018 20:40

Just an uncrossing auction trade. They always reverse on the trading session after as its not a fair reflection of the market. Same can happen on the upside as on the downside. Happens on lots of illiquid stocks

[steve3sandal] 25/6/2018 11:15

Some after hours transactions at 482p on Friday. Someone who knows what this means might be able to explain. I was beginning to think there was a leaky results ship about. Been hit a few times lately where the price dropped away ahead of poor results...hope it doesn’t happen again here!

[audigger] 25/6/2018 08:46

Some very strange movements in the share price When did it drop 25p? Thought it finished flat on Friday? Anyhow, it seems to have jumped straight back on zero volume today. Weird!

[aimingupward2] 20/6/2018 15:41

I, too, am looking forward to encouragingly good results, but would also like to learn more about:

- the gradual replacement of distributors by EAH's own staff, which would increase
margins.

- a possible second factory for the production of Aivlosin, reducing dependence on a
single unit in China.

- increasing prices achieved for Aivlosin and improving EBIDTA margins.

- an update on the authorisation of Aivlosin for 'other species'.

_ more about the ECO-PHARM joint venture and the business scope and opportunities for
their range of vaccine products.

[pireric] 19/6/2018 20:24

Back down to the trough of early this year. Results should be out soon and show nice numbers. To add further, or not, that's the question

Expecting EPS of 20p, so +25% y/y, obviously this being negatively impacted by registration costs needing to be amortised extremely quickly, and so EBITDA the more telling figure. Should be good and £ weakness hopefully already flowing into an extra tailwind for this financial year.

[steve3sandal] 05/6/2018 12:02

If history is our guide I think PL will be pleased to see the cash pile increase. Mostly reinvest cashflows, pay out a little, save a little. Same story at Anpario. Been watching this play out for years, since Amati VCT Investment. I try to do the same!