The veterinary pharma specialist reports strong trading and a potential US tax benefit
Thursday 11 Jan 2018 Author: Lisa-Marie Janes

Dechra Pharmaceuticals (DPH) £20.58

Gain to date: 19%

Original entry point: Buy at £17.29, 27 July 2017

Veterinary products developer Dechra Pharmaceuticals (DPH) continues to deliver strong trading with a 10.5% jump in sales in the second half of 2017.

The upbeat performance was driven by a 20% increase in North American sales and a return to growth in Europe of 5.5%.

Dechra has registered poultry vaccine Avishield IB H120 and released all dosage sizes of dog antibiotic Amoxi-Clav tablets in the US.

It also launched Vetoryl to treat excess hormone production in dogs and Osphos to help lameness in horses in Mexico. This should drive growth and margins according to stockbroker Cantor Fitzgerald.

There is also a potentially positive impact from sweeping US tax reforms, which cut the corporate tax rate from 35% to 21%.

Dechra expects the reform to be beneficial and provide a material one-off non-cash credit. Analysts anticipate earnings upgrades, but await more details when Dechra reports its results (26 Feb).

Cantor Fitzgerald’s Brian White says the US performance is ‘noteworthy’ and believes 2016’s Putney acquisition is proving to be a good fit as it delivers scale and a pipeline of companion animal generics.


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