Trading update confirms progress on track
Dechra Pharmaceuticals (LONDON:DECP) has delivered another solid quarter with revenue growth up 6.0% (14.3% CER), resulting in nine-month growth of 6.6% (12.3% CER). Although boosted by phasing of pre-Easter ordering and competitor stock shortages in the US, the underlying growth confirms progress is on track and we leave our estimates unchanged. The core CAP products in Europe, coupled with the US product launches, more than offset the continuing weakness in FAP.
In Europe, reported sales fell 3.3% (+7.3% CER), resulting in a reported nine-month drop of 0.9% (+5.7% CER). Phasing of wholesale orders around the Easter break helped boost sales, with Companion Animal Products (CAP) up 13.5% CER and Equine rising by 30.2% (driven by the launch of Osphos). The Diets franchise was affected, as expected, by the transfer of production to a new contract manufacturer. Meanwhile, the well-flagged slowdown of antibiotic sales saw Food Producing Animal (FAP) revenues continuing to decline (-12.8% CER).
North American sales in the quarter increased 76.4% (66.8% CER), with nine-month growth being 69.0% (67.2% CER). This was driven by the launches of Phycox joint supplement, Osphos for navicular syndrome, and the re-launch of two Ophthalmology products after long-term supply issues were resolved. The dermatology product range also performed well as a competitor experienced stock problems. The Canadian subsidiary became fully operational in January 2015 and is included in these results. US revenues grew by 67.9% (57.7% CER) in the quarter and 65.7% (63.8% CER) for the nine months.
To Read the Entire Report Please Click on the pdf File Below