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LONDON (Alliance News) - Veterinary medicine supplier Animalcare Group PLC Wednesday reported a 3.5% increase in its pretax profit for the first-half of the year, lifted by a 5.9% increase in revenues, driven by a sales jump in its licensed veterinary medicines products, but the group kept its dividend unchanged at 1.5 pence per share.
For the six months to the end of December 2013, the group's pretax profit rose to GBP1.4 million, up 3.5% from GBP1.3 million a year earlier, on the back of a 5.9% increase in revenue to GBP6.5 million.
Animalcare said it remains on target to perform in line with management expectations in the second-half of the year and for the full-year, but warned that the market remains challenging and it is seeing continued pressure on margins. To help protect its margins, the group has been moving away from uncompetitive and less profitable animal welfare products, it said, to focus on higher margin licensed veterinary medicines. The group reported gross margins at 55.6% for the period, compared with 55.7% a year earlier.
It said the strong revenue growth from licensed veterinary medicines was boosted by three new product launches in the period, while group revenue was also helped by sales of its companion animal identification products and services returning to growth.
The group said it maintained a strong cash position during the period, providing investment capital for its product development pipeline, which it said it will ramp up over the next few years, and so far is progressing on schedule.
"The board has taken a strategic decision to substantially increase the investment in our product development pipeline over the next five years, focusing primarily on enhanced generic medicines whilst continuing to launch generic veterinary pharmaceuticals to complement our existing portfolio," said Chairman James Lambert in a statement.
Shares in Animalcare Group were trading at 158.80 pence per share Wednesday morning, 2.8% higher.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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