Animalcare benefits from disposals as sales rise at core business

The York-based company said revenues from new products rose 28 per cent while revenues from other products were up six per cent.

Analysts at Brewin Dolphin welcomed the update. They said in a note: "This is even more impressive in the context of a very difficult December due to the adverse weather, without which revenue growth would have been even higher."

The group's shares closed up 12.37 per cent last night at 144p.

Animalcare said that following the disposal of its agriculture business and the loss-making cleaning products division last September, the group has significantly reduced its level of outstanding loans.

These now stand at 1m, down from 4.5m at the end of June, and the business was net cash positive at the end of December.

"The disposal of the low-margin agricultural businesses has left the group in a much stronger position financially and cleaner in terms of strategy and outlook," said Brewin Dolphin.

The group said the short and medium-term pipeline of new products is strong and it is confident the business will make good progress in the remainder of the financial year.

It said that new product development continues to meet targets following the launch of two new products in September 2010, Anivac and Florgane.

Anivac is a vaccine for Viral Haemorrhagic Disease (VHD) in pet rabbits. VHD, one of the biggest killers of rabbits in the UK and Europe, is a very serious infectious disease with high death rates.

Florgane is designed to treat respiratory disease in cattle, for example pneumonia in calves. It is easier to syringe than rival treatments, especially at low temperatures, and leaves less marks at the injection site.

Animalcare plans to launch two third party distributed products in the first quarter of 2011. The development programme for three other key products is on track with one product now at the half-way stage in its European regulatory evaluation.

The other two regulatory dossiers have progressed to the point of completion and final internal review before regulatory submission.

The company's half year results for the year to December 31 will be announced on February 17.

Chief executive Stephen Wildridge said: "The disposal of the agriculture and related businesses has brought clarity to the group's strategy and helped to continue the strong performance of the veterinary medicines business."

2010 pre-tax profits rose from 2m to 3m, boosted by a 16 per cent increase in revenues from the companion animal division.