25th Feb 2014 10:30
LONDON (Alliance News) - Dechra Pharmaceuticals PLC Tuesday raised its interim dividend and expressed confidence in meeting its full-year expectations, as it saw pretax profit rise in the half year ended December 31, 2013.
The pharmaceuticals company posted an interim dividend of 4.75 pence, up from 4.34 pence in the previous year. Dechra expressed confidence that it would meet full-year expectations, but remained cautious regarding the overall economic environment and ongoing concerns about the use of antimicrobial products in veterinary medicine.
Revenue rose to GBP95.9 million from GBP92.0 million in the previous year. This, combined with lower sales costs, lifted pretax profit to GBP10.3 million from GBP5.8 million in the previous year.
The devaluation of the sterling against the euro compared to the previous year helped Dechra's half year results, since at constant currencies revenue actually declined 0.7%, Dechra said.
Revenue was hit by a "disappointing" performance from the company's Netherlands operations and the phasing of export orders and continuing supply issues in the US. However this was offset by a strong gross profit margin, cost management, and synergies derived from its acquisition from Eurovet Animal Health B.V.
In the company's European operations, revenue rose to GBP86.0 million from GBP81.9 million in the previous year. Revenue was impacted by the phasing of export orders and ongoing pressure to reduce antimicrobial usage in animal medicine, due to concerns over the potential cross-over resistance from animals to humans by overusing antibiotics. The company's Dutch operations were hit by the introduction of new dispensing guidelines a year ago.
Dechra said it expects sales on a like-for-like basis to show a slower reduction in the second half.
In the US, revenue declined to GBP9.9 million from GBP10.0 million. A strong performance from Dechra's key products Vetoryl, for the treatment of Cushing's syndrome in Dogs, Felimazole, for the treatment of hyperthyroidism in cats, and its dermatology range were offset by ongoing supply issues with veterinary technology Animax, and supply issues in its range of sterile ophthalmics range.
The company said that following the sale of its Services Segment in August 2013, it has refocused to become purely a veterinary pharmaceutical and related products business.
Dechra shares were up 1.6% Tuesday mid-morning at 689.54 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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