Dechra Pharmaceuticals (DPH) sales are going gang-busters in the US. Last year the manufacturing and retailer of various pharmaceutical pet and veterinary products saw revenue soar 93% in the States, if you strip out currency fluctuations.
Actual growth, including dollar/sterling oscillations, was 125% in the year to 30 June 2017.
Overall sales growth was 28%. The drag came in Europe, by far its biggest market, where progress is far less dynamic, up 7% at constant currency. A detailed breakdown was not released today, investors will have to wait for full year results proper in September.
As a guide, in the first half Europe accounted for close on two-thirds of its £172.6m interim sales, and it would have been more were it not for US-based acquisitions.
ACQUISITION BOOSTED
Acquisitions are clearly important. The purchase of Genera, a pet and horse drugs specialist in Europe, helped the performance.
Product aimed at food producing herds remain under regulatory pressure to reduce antibiotic prescriptions.
Analysts at N+1 Singer are forecasting £71m of adjusted pre-tax profit for the past 12 months from £339.6m of revenue. That is expected to rise to £372.4m of sales and £82.7m pre-tax profit this year to June 2018.
The implies, on today's flat share price of £16.93, that Dechra shares are trading on a price to earnings ratio of around 24-times, depending on the 68.4p or 71.7p earnings per share figure estimated by N+1 or Investec.
‘Dechra looks expensive on near-term metrics,’ says Investec analyst Dr Andrew Whitney. But ‘we see a robust earnings story, an improving cash flow yield and a rich pipeline defending that premium.’
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