Dechra reiterates guidance despite supply chain issues
By Iain Gilbert
Date: Monday 24 Feb 2020
(Sharecast News) - Veterinary products manufacturer Dechra Pharmaceuticals kept its full-year outlook unchanged on Monday despite warning that North American trading would remain challenging due to some persistent supply chain issues.
Dechra reported a 7.1% year-on-year increase in interim reported revenues to ?248.5m, while pre-tax profits surged 116.6% to ?19.5m and operating profits increased 37% to ?23.3m. Diluted earnings per share grew 15.8% to 12.80p
The FTSE 250-listed group declared an interim dividend of 10.29p per share for the six months ended 31 December, representing a year-on-year improvement of 8.3%.
Despite the improved numbers, Dechra's first half was adversely affected by supply chain problems, principally in North America during the first quarter. While the firm said significant progress had been made in the second quarter and that supply issues had been largely rectified, the problems meant that trading would be more second-half weighted than was typical.
In terms of potential impacts from the Wuhan coronavirus outbreak, Dechra said it had "no direct or indirect" revenues in China and stated that it had "sufficient inventory" of Chinese-sourced materials to deal with near-term supply needs. However, the group did note that a "prolonged period of interruption" would lead to certain products being out of stock.
Chief executive Ian Page said: "Our strategy remains robust and we are creating more opportunities than at any time in our history."
As of 0830 GMT, Dechra shares were down 3.36% at 2,706p.
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