(Alliance News) - Dechra Pharmaceuticals PLC on Thursday said outlook for its 2021 financial year now exceeds management expectations as its stronger than expected first quarter performance continued into the second.
For its half-year ended December 31, net revenue was approximately 21% higher than the year before at constant exchange rates and around 20% higher at actual exchange rates.
Within this was an approximately 21% rise in European Pharmaceuticals net revenue at constant currency, around 22% actual, including its USD135.0 million acquisition of the Osurnia product portfolio from Elanco Animal Health Inc on July 28.
The half-year rise also includes around 21% constant currency North American Pharmaceuticals net revenue growth, or about 17% actual, including the USD30 million acquisition of Ampharmco on August 29, Osurnia, and its USD43.0 million Mirataz buy on April 16. The latter of these also includes a royalty on future sales.
Of the Osurnia and Mirataz acquisitions, Dechra said they are performing better than expected and integration of both has completed, with the European Mirataz launch now "imminent".
Excluding the acquisitions, existing net revenue climbed around 14% at constant currency, about 10% actual. Dechra noted that this result "should be considered against a soft comparator period which was adversely impacted by supply issues."
The revenue rise reflected a continuation of the firm's "stronger than expected trading performance" in the first quarter into the second and means Dechra's outlook for financial 2021 is now ahead of management expectations despite ongoing macro uncertainty.
Looking ahead, the company expects to continue benefitting from "strong market fundamentals" plus lower than expected underlying selling, general and administration costs resulting from Covid-19.
Nonetheless, Dechra predicts the strong pre-Brexit inventory build by its customers, which led to an estimated GBP7 million net revenue increase for the half-year, will unwind in the second half. Given this, the firm's balance of trading is likely to be first half weighted.
Chief Executive Ian Page said: "Our progress in the first half has been excellent despite the uncertainties arising as a result of Covid-19 and Brexit. Trading globally has been strong as the business benefitted from favourable market conditions, further good progress on supply chain and excellent customer engagement through our motivated commercial teams. We are delighted with the performance of our recent product acquisitions, Osurnia and Mirataz. With our continuing belief in the capability of our people during these difficult times and our ability to execute our strategy we remain confident in our prospects for the future."
The company will post its half-year results on February 22.
Shares in Dechra were up 1.9% at 3,580.00 pence in London on Thursday morning.
By Anna Farley; annafarley@alliancenews.com
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