Dales site to play key role in Dechra expansion

The veterinary pharmaceuticals business is considering acquisitions, after revealing that its total revenue and profits rose in the last financial year.

Dechra sees growing opportunities in the market for farm animal drugs, which it entered by buying Eurovet in 2012. The company’s expansion is expected to create opportunities for its Dales manufacturing plant in Skipton, North Yorkshire, which employs 215 people.

In the year ended June 30, the company’s total revenue was £522.4m, compared with £440m the year before. Total underlying profit before tax was £44.6m, compared with £32.9m in the previous year. The company’s European pharmaceuticals division continued “to show progress” and achieved sales of £168.7m, an increase of 66.3 per cent, at constant exchange rates (CER), over the previous year.

Revenues in the US totalled £20.5m, which was growth of 4.7 per cent (at CER), year-on-year.

Ian Page, Dechra’s chief executive, said yesterday: “Strategically, it has been a momentous year with the successful integration of Eurovet, acquired in May 2012, and with the transformational effect of the £87.5m divestment of the services businesses.

“Dechra is now entirely focused on developing, manufacturing and marketing high margin, cash generative specialist veterinary pharmaceuticals and related products for global markets.”

Mr Page added: “Skipton is a big part of our history and a key site strategically.”

According to Mr Page, the acquisition of Eurovet has fulfilled Dechra’s expectations. He said it had expanded Dechra’s geographical coverage, especially in Germany, enhanced its manufacturing capabilities, and added complementary products to its companion animal (or pet) portfolio.

He added: “The food producing animal sector is particularly important as we look at opportunities to extend internationally. Furthermore, the ever increasing demand for high quality meat protein from emerging markets is creating a strong global livestock market.”

Mike Redmond, the company’s non-executive chairman, added: “This has been a transformational year for Dechra.

“The disposal of the services segment represents a major step forward in the board’s strategy to create a specialist veterinary pharmaceuticals business.

“We expect the quality of the group’s business and its prospects to be enhanced as a result of the disposal.

“The divestment will enable management to focus exclusively on the areas of the business with the strongest margin, cash conversion and growth prospects.

“We intend to increase our focus on, and investment in, research and development to ensure the value of our pipeline is delivered and we continue to assess selective, strategic acquisitions which would add new products or geographies.”

He said the board remained committed to building a cash generative specialist veterinary pharmaceuticals business which would expand its “geographical footprint”, maximise opportunities with its existing products and deliver its “promising” product pipeline.

The company confirmed that current trading is ahead of last year, and in line with management’s expectations.

In a statement, the company said: “The board is confident that the group will continue to perform well, despite a challenging environment, and that our strategy will deliver enhanced shareholder value.”