- Record year as revenues jump 14%
- Despite macro uncertainties, market remains resilient
- Company continues to outperform the market
Specialist veterinary pharmaceuticals company Dechra Pharmaceuticals (DPH) said it traded in line with expectations throughout the period to the financial year to 30 June 2022.
The group delivered strong revenue growth of around 14% year-on-year in constant currencies and 12% at actual exchange rates. This is higher than current market expectations, which sit at £667 million, around 10% ahead of 2021.
Despite the small revenue beat and confident outlook, the shares fell 2% to £36.78, in part reflecting continued derating of highly valued growth stocks in response to higher interest rates.
At the beginning of 2022, the shares traded at 44-times expected 2022 earnings compared with the current 32-times.
UNDERLYING STRENGTH
Revenues in North America were 25% ahead on constant currencies driven by six minor product acquisitions. The US accounts for around 38% of total revenues.
The company also benefitted from the acquisition of the worldwide rights to verdinexor, branded Laverdia®, a novel treatment for all forms and stages of canine lymphoma in dogs.
In Europe, revenues grew around 8% in constant currencies and 5% in actual currencies, including contributions from the acquisitions of Tri-Solfen and Osurnia.
‘We are delighted that the financial year just ended was another record year for Dechra and in line with expectations, with group revenue growth slowing to more normal levels as expected in the second half as the impact of the pandemic on our markets unwinds,’ said chief executive officer Ian Page.
Page doesn't see an end to the current macroeconomic uncertainties but talked-up the resilience of the veterinary pharmaceutical markets growth potential.
‘Our global trading continues to be strong and we continue to outperform the market, particularly in North America,’ he said.
‘We continue to believe in the ability of our people to execute our strategy and remain confident in our future prospects.’
WELL PLACED
The company said its cost base had normalised as Covid-19 restrictions were relaxed and has increased further as global inflationary pressures bite.
However, the group believes it is ‘well placed’ to proactively manage rising costs while the supply chain remains robust.
Full-year results are expected to be announced on 5 September 2022.
