Company sees no let-up in pet lovers' devotion

Growth in vet medicines was driven by new product development at the Ripon-based company.

The group said the companion animal business continues to deliver good revenue and profit growth, with both the core business and the recently introduced licensed veterinary medicines making strong progress.

Sales of Benazecare, Buprecare and Cephacare continued to grow in line with expectations.

Benazecare is a dog heart failure drug, Buprecare is a morphine based pain relief for dogs and Cephacare is a new antibiotic for treating skin conditions in dogs and cats.

The pipeline for new products remains strong with at least two new products expected to launch in the spring and a further six to ten due to launch over the next couple of years.

The group's chief executive Simon Riddell said there was no sign of the downturn hitting spending.

"We saw a downturn in January because of the snow as people weren't able to get to the vets, but it has since picked up," he said.

He added that Britain's animal lovers may be struggling with recession and high unemployment, but they remain devoted to their pets.

The companion animal identification market was underpinned by the Identichip companion animal microchip.

The group said that while the market for its key livestock products is challenging, it anticipates trading will improve in the second half of the year.

Licensed veterinary medicines are expected to deliver revenue and profit growth in line with expectations.

In the six months to December 31 the group reported revenues of 8.93m, up 15 per cent, and pre-tax profits of 800,000, up from 90,000 the previous year.

The livestock business delivered modest revenue growth, but suffered a loss due to one-off costs and pressure on profit margins.

Most of the loss related to the withdrawal from non-core, low-margin activities.

In addition the business suffered a modest loss due to higher product costs arising from the strength of the New Zealand dollar and a decline in sheep identification market volumes ahead of new identification rules.

In line with previous years, the company is not declaring an interim dividend. Mr Riddell said the group might pay a dividend this time next year.

The group's shares rose 2.7 per cent last night, to close up 3.25p at 123.25p.

Analysts at Brewin Dolphin said in a note: "Animalcare continues to make sound strategic progress and has again delivered against expectations, with veterinary medicines the key driver of growth.

"New products continue to make progress in the UK and Europe and the pipeline remains strong."

The group said that trading in the second half is in line with market expectations.

Chairman James Lambert said: "We are confident that our livestock business is well placed to deliver an improved performance in the traditionally stronger second half of our financial year.

"Your board will continue to focus on delivering strong profit growth behind organic sales growth and, in line with our strategy, will consider acquisitions that will strengthen our market position and enhance earnings."

Mr Riddell said there is a willingness among pet owners to fund complex procedures, and an increased take-up of pet insurance.

The group has an ambitious strategy to more than double the size of the company.

Finance director to step down

Animalcare has announced the departure of group finance director and company secretary John Tobin.

The group said that Mr Tobin was leaving in order to pursue an independent business career.

His leaving date has not yet been finalised, but is likely to be around May or June.

The process of finding a replacement for Mr Tobin has begun and the group will announce further updates in due course.

In a statement, the board said it would like to thank Mr Tobin for his contribution to the development of the group and for his strong financial stewardship over the last two years.

Mr Tobin helped the group through the merger process between Ritchey and Animalcare and the AIM admission.