Investment summary

Animalcare's revenues fell by 10% to £5.4 during H112 largely because a supplier stopped making the drug Buprecare (5.5% of FY11 sales) in July and there were weak pet identification sales. This also led to an 18% fall in underlying operating profit to £1.2m. However, Animalcare should return to growth in H212, despite the challenging market conditions. It has started selling a new version of Buprecare, launched four new products in the last six months, has a robust pipeline and has finished upgrading its database, which should increase cross-selling opportunities from its identity chips. The company has a strong balance sheet (net cash of £1.75m at H112) and has signalled its confidence by increasing its interim dividend by 50% to 1.5p.

Last updated on 23/04/2012

Industry outlook

The companion animal market, which was previously growing at c 5% in the UK, is now flat. Future market growth will probably depend on the development of innovative treatments and products to offset the impact of the government's debt reduction measures.

Last updated on 23/04/2012