Dechra speeds growth in third quarter thanks to US bounce

30th Apr 2014 09:28

- Q3 sales up 4.7 per cent- US sales up 16.3 per cent- Europe up 3.3 per cent - European CAP up but FAP flat and antibiotics downStrong sales growth in the US helped veterinary products maker Dechra Pharmaceuticals accelerate revenues in a strong third quarter, in line with management expectations. Revenue for the quarter ending March 31st was 4.7% ahead of last year's weak comparatives, 4.9% at constant currencies, meaning revenue growth for the nine month of the year so far was up 2.8% at reported currency and 1.3% at constant currency. Sales growth in the US was particularly strong, up 16.3% on the same period last year and 22.4% at constant currency, but poor weather in Europe meant revenues increased by just 3.3%, or 2.9% at constant currency.Last year's trading statement at this juncture was a warning due to a 15.4% decline in the US, so this year's statement was hailed by analysts at Panmure Gordon as "a revelation" by contrast.Sales of companion animal products (CAP) in Europe were strong at 9% but there was a continued decline of bulk antibiotic products, with food producing animal products (FAP) sales were flat and improved performance of equine products offsetting a 5% decrease of large animal antibiotics products. Geographic expansion continued, with the opening of an Italian subsidiary on March 1st and a new Canadian subsidiary on track to open this coming autumn. "By establishing our own brand within these markets, we should deliver additional margin and growth in the future," the company said in a statement. Dechra also noted that it continued to make "significant progress" on its pipeline and anticipates being able to give an update prior to the year end, and that it was making "good progress with our key strategic growth drivers".Broker Shore Capital said it suspected this last reference referred to progress of the pipeline particularly in the companion animal segment. Shore noted that previous guidance suggested that pressure on bulk antibiotics will ameliorate "although it is important to look out for any signs of similar pressure elsewhere". "The company has previously noted that H1 was affected by ordering patterns which became more obvious as the pharma business was separated from the legacy services business. We expect these to reverse in the second half."Shares in Dechra were up 0.25% to 698.75p at 09:55 on Wednesday.OH