Future looks bright for Dechra as sales growth carries on

The group, which makes and develops own-branded drugs as well as products for human drug manufacturers, said sales grew about 6.5 per cent during the six months to the end of December, which analysts said suggests turnover of about 184.5m.

However, this was down on the 9.5 per cent like-for-like sales growth achieved during the same period a year earlier.

"Trading in the first half of the financial year has been in line with management's expectations," the group said. "Despite continuing economic uncertainty, there are indications of volume growth starting to return to the market.

"This growth, together with the continued penetration of our own branded products, impending new product launches in the EU and a robust development pipeline, enables the board to look to the future with optimism."

Dechra has its Dales Pharmaceuticals manufacturing plant in Skipton, where it employs more than 200 people.

The group said its pharmaceuticals division grew sales by 12.6 per cent on a year ago, with Dales making "good progress", thanks to growing third-party manufacturing.

Dechra added sales of its flagship Vetoryl drug continue to show good growth in all markets. The drug, which treats Cushings disease in dogs, was launched a year ago in the US, where sales over the six months hit $2.5m (1.5m). It has penetrated more than a quarter of veterinary practices in the US, with about 7,000 now having bought the product.

Its diets range, branded Specific, delivered "solid growth" across Europe.

The group's services division, which supplies vets in the UK, grew sales 4.6 per cent, with growth accelerating later in the period. It added it has kept a close eye on costs at its distribution arm, NVS, helping maintain margins on its last financial year.

Analyst Keith Redpath at stockbroker FinnCap reiterated a buy recommendation and said: "Dechra continues to demonstrate its growth qualities and its defensive nature."

He added the group historically has a stronger second half so his full year sales forecasts look "achievable, if possibly light".