Dechra Pharmaceuticals plc (LON:CPH) has issued the following unaudited Trading Update covering the Group’s financial year ended 30 June 2022 ahead of the announcement of its Preliminary Results.
Overview
The Board is pleased to report that the Group’s strong trading performance continued throughout the Period and remains in line with expectations. The Group delivered excellent year on year organic revenue growth, supplemented by the previously announced product acquisitions.
Highlights
| · Reported Group revenue for the Period increased strongly by c.14% at constant exchange rate (CER) (c. 12% at actual exchange rate (AER)) |
| · European Pharmaceuticals revenue growth was c. 8% at CER (AER c.5%) |
| · North American Pharmaceuticals revenue growth was c.24% at CER (AER c.25%) |
| · Supply chain remains robust |
| · Six minor product acquisitions for the North American market plus the worldwide rights to verdinexor, branded Laverdia®, a novel treatment of all forms and stages of canine lymphoma in dogs, providing access to a new niche therapy area |
| · Launch of Zenalpha®, a novel therapeutic product that is safe and effective for sedation in dogs |
Ian Page, Chief Executive Officer, said:
“We are delighted that the financial year just ended was another record year for Dechra and in line with expectations, with Group revenue growth slowing to more normal levels as expected in H2 as the impact of the pandemic on our markets unwinds. Whilst we expect current macroeconomic uncertainties to continue, the veterinary pharmaceutical market remains resilient and in growth. Our global trading continues to be strong and we continue to outperform the market, particularly in North America.
The complementary product acquisitions we made during the period strengthen our existing portfolio and are performing in line with initial expectations; there are a number of acquisition opportunities that we are assessing. We continue to believe in the ability of our people to execute our strategy and remain confident in our future prospects.”
Operational Review
European Pharmaceuticals
In the Period, our total European Pharmaceuticals Segment revenue increased by c.8% at CER (AER c.5%), including the contribution from Tri-Solfen® ANZ (acquired 5 February 2021) and Osurnia® (acquired 27 July 2020).
Existing net revenues increased by c.6% at CER (AER c.3%).
North American Pharmaceuticals
Our total North American Pharmaceutical Segment growth increased by c.24% at CER (AER c.25%), despite increased generic competition. Revenue also included the contribution from the various product rights acquisitions we made during the period and Osurnia (July sales).
Existing net revenues increased strongly by c.21% at CER (AER c.22%).
Selling, General and Administrative Expenses
Our cost base normalised as expected, as COVID-19 restrictions reduced, and has increased further as a result of global inflationary pressures that we believe we are well placed to proactively manage.
In light of the clarification from the IFRS Interpretations Committee (IFRIC) regarding how companies should account for configuration and customisation costs relating to cloud computing arrangements, including Software as a Service (SaaS), which has led to a change in accounting policy in the application of IAS38 Intangible Assets, we have expensed c.£1.5 million of costs through our income statement in the Period which would previously have been capitalised.
Notice of Results
Dechra Pharmaceuticals will announce its Preliminary Results for the Period on Monday, 5 September 2022.
Notes:
1) Foreign Exchange Rates:
FY2022 Average: EUR 1.1807: GBP 1.0; USD 1.3316: GBP 1.0
FY2022 Closing: EUR 1.1652: GBP 1.0; USD 1.2103: GBP 1.0
FY2021 Average: EUR 1.1287: GBP 1.0; USD 1.3466: GBP 1.0
FY2021 Closing: EUR 1.1654: GBP 1.0; USD 1.3850: GBP 1.0
2) Acquisitions:
2 July 2021: Isoflurane® and Sevoflurane® product rights
20 September 2021: ProVetTM system rights
11 October 2021: Rompun® and Butorphanol product rights
28 October 2021: Sucromate® product rights
10 January 2022: Laverdia® product rights
3) Existing Revenue is revenue including the impact of acquisitions where there is a comparative period and therefore growth rates are stated on a like for like basis
