US Edition Dechra Pharmaceuticals
441¼+3¼
Questor says BUY
In the year ending June, revenues rose 5.4pc to £389.2m and pre-tax profits rose 4.4pc to £18.5m. When one-offs and amortisation are stripped out, "underlying" profits rose 15.4pc. Gross margins rose by 90 basis points to 22.7pc.
The final dividend was increased by 16.7pc to 8.4p, making a total dividend for the year of 12.1p, up 15.2pc. It will be paid on November 25 and new shareholders need to buy the share before November 9 to qualify. The total dividend is covered by profit 2.6 times and the prospective yield is 2.9pc, rising to 3.1pc.
This marked the fifth-consecutive year of double-digit, underlying-earnings growth and two acquisitions last year will boost earning this year too. Current forecasts see a 16pc increase in earnings per share this year.
Although footfall through veterinary practices has declined and the general economic climate remains uncertain, the group's outlook statement was relatively upbeat.
The company said it was continuing to see solid growth in markets in which it trades and its all-important branded product range continues to grow strongly. The group is also in an investment cycle in the US, which should reap solid dividends in the future.
The two acquisitions last year included Dermapet, a Florida-based animal dermatology business, and UK-based animal pharmaceutical group Genitix.
The shares are trading on a June 2012 earnings multiple of 10.9 times, falling to 10.1 in 2013, which does not seem overstretched. There are also some new product launches in the next two years that look very interesting.
First recommended on October 25 2009 at 427.9p and, following recent falls, the shares are now up just 3pc compared with a FTSE 100 up 2pc. Buy.