Animalcare to beat expectations

The York-based firm said that despite the uncertainty of Brexit, the ​b​oard took the decision to accelerate investment in new products and this has paid off.

T​he group said that t​rading during the ​last six months of 2016 ​was ahead of expectations​,​ both ​in ​sales and profit​. It reported revenue growth of 12​ per cent to​ ​£8m​, up from £7.1m.

​It said that its​ Licensed Veterinary Medicines ​division​ continued to grow strongly in the first half with revenues ​rising 17​ per cent​ to £5.​4​m, driven by ​UK ​growth of ​15 per cent and overseas growth of 38 per cent.

Gross margins improved through a combination of favourable sales mix and cost initiatives.

Sales from the Animal Welfare Products ​division rose 13​ per cent​ to £1.5m​.

The Companion Animal Identification ​division saw a 9 per cent fall in revenue to £1.1m.

​Animalcare’s CEO Iain Menneer​ said: “Following the implementation of compulsory micro-chipping of dogs in the United Kingdom in April 2016, we expected and have observed a reduction in microchip volumes, which we expect to last into the medium-term. Database services however have continued to grow.​“​

Four products were launched in the first half​ -​ three as part of a range of ear cleaners and treatments and one new product from ​its​ in-house development pipeline, Acecare (a ​pet ​sedative). It expect​s​ ​to launch another two products in the second half.

A​nalyst Mike Mi​tchell at Panmure Gordon said: “A positive ​first half​ trading update from Animal​c​are sees continued​ ​momentum building within the business, with strong trading for the first six​ ​months​.

​“Second half​ revenues are anticipated to be​ ​in-line with the strong first-half performance, indicating an expected £15.9m​ ​top-line performance ​versus​ our previous £15.1m expectation.

​“​Our confidence in​ ​the company’s continued progress is reflected in our new target price of 385p​. We remain buyers.​”