News blog

Animalcare Group

  • BY: Andrew Hore |
  • POSTED: 05/10/2009 |

Shares in Animalcare Group jumped by more than 25% after the publication of another strong set of figures.

At 110p a share, up 22.5p on the day, Animalcare is valued at £21.7m. The share price is exactly double the level at which the veterinary medicines and livestock products joined Aim in January 2008.

The eponymous Animalcare business was acquired when the group joined Aim so this year’s figures are not strictly comparable with last year’s numbers. Revenues grew from £11.8m to £17.6m in the year to June 2009. Underlying profits rose from £1.21m to £2.01m.

On a pro-forma basis the revenues of the core veterinary medicines division grew by two-fifths. This business generated the main growth in profits.

Adverse foreign exchange movements hit the profits of the animal identification chip business. The introduction of electronic tagging of sheep should help sales to grow.

The loss of a low margin helped to improve the gross margins of the animal welfare division. This is a commodity business so growth is likely to be more modest than in the other businesses. Exchange rates will have a negative effect this year.

Net debt was £3.92m at the end of June 2009 and the cash generative nature of the business means that borrowings will continue to reduce. Net debt should fall below £3m by June 2010. There are no worries about the banking covenants. The majority of the debt lasts until December 2012, with the rest in the form of 12 year mortgage of £1m.

Animalcare is on course to make profits of at least £2.5m in 2009-10. That would put the shares on 13 times prospective earnings for the year to June 2010. That rating reflects the strong growth prospects for earnings. 

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