Half Yearly Report- to 31 December 2012
Issued by TooleyStreet Communications
Date: 26 February 2013
Dechra® Pharmaceuticals PLC
("Dechra" or the "Company")
Half-Yearly Financial Report
for the six months ended 31 December 2012
|
|
Half-Year ended 31 December 2012 |
Half-Year ended 31 December 2011
|
Reported |
At constant currency** |
|
Group revenue |
£252.2m |
£209.5m |
20.4% |
23.5% |
|
Underlying operating profit* |
£24.3m |
£16.2m |
50.1% |
60.2% |
|
Underlying profit before taxation* |
£21.0m |
£14.3m |
46.9% |
54.2% |
|
Operating profit |
£15.1m |
£11.0m |
37.3% |
|
|
Profit before tax |
£11.5m |
£8.9m |
29.2% |
|
|
|
|
|
|
|
|
Underlying earnings per share* |
18.03p |
14.57p† |
23.7% |
|
|
Earnings per share |
9.91p |
9.27p† |
6.9% |
|
|
Interim dividend per share |
4.34p |
3.77p† |
15.1% |
|
|
Net borrowings |
£102.0m |
£46.1m |
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· Eurovet® integration in line with plan and delivering expected synergies |
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· Solid growth across all trading segments |
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· Own branded products delivering strong revenue growth |
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· Two US product in-licensing deals completed |
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· Increase in interim dividend of 15.1% |
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Note:
* Non-underlying items comprise amortisation of acquired intangibles, acquisition expenses, rationalisation costs, loss on extinguishment of debt and the unwinding of discounts on deferred and contingent consideration.
** The Company produces its accounts in Sterling. To give the reader better visibility of the performance of the Group, it also produces certain measures at constant exchange rates. This information is calculated by applying the exchange rates used in the translation of consolidated results in the prior year to retranslate the results for the current year.
† Restated to reflect the bonus element of the Rights Issue.
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Results Presentation: Today, Tuesday 26 February, 9.15am at Investec Bank, 2 Gresham Street, London EC2. Dial in details: 0808 2370030 or +44 (0) 20 3139 4830. Pin Number: 28868769# |
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Enquiries: |
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Dechra Pharmaceuticals PLC Ian Page, Chief Executive |
TooleyStreet Communications Ltd Fiona Tooley |
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Paul Sandland, Group Financial Controller |
Graeme Cull |
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Today: 8am-noon |
+44 (0) 20 7597 5970 (Investec - Room 506) |
Today: |
+44 (0) 20 7597 5970 (7.45am-noon) |
|
Mobile: |
+44 (0) 7775 642222 (IP) or |
Mobile: |
+44 (0) 7785 703523 (FMT) |
|
|
+44 (0) 7507 845130 (PS) |
|
+44 (0) 7976 228397 (GC) |
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Thereafter: |
+44 (0) 1782 771100 |
Office |
+44 (0) 121 309 0099 |
Forward-Looking Statements
This document contains certain forward-looking statements which reflect the knowledge and information available to the Company during the preparation and up to the publication of this document. By their very nature, these statements depend upon circumstances and relate to events that may occur in the future thereby involving a degree of uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the Company.
-2-
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Dechra Pharmaceuticals PLC |
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Half-Yearly Financial Report 2012 for the six months ended 31 December 2012
|
Introduction
The Group has delivered strong growth in the first six months of the financial year. This has been driven by solid revenue growth and prudent cost control across all our trading segments and also from the continuing successful integration of Eurovet Animal Health B.V. ("Eurovet"), acquired in May 2012. Our key strategic segments, European Pharmaceuticals and US Pharmaceuticals, have shown good revenue growth from our own licensed branded veterinary products and specialist pet diets. Contract manufacturing has seen double digit revenue growth and our Services segment has seen robust revenue growth and a modest improvement in operating margin over the corresponding period last year.
Financials
In the six months ended 31 December 2012, Group revenue increased by 20.4% to £252.2 million (2011: £209.5 million). Underlying operating profit rose to £24.3 million (2011: £16.2 million), an increase of 50.1%. Underlying profit before taxation was up 46.9% (an increase of 54.2% at constant currency) to £21.0 million compared to the £14.3 million achieved in 2011. Operating profit was £15.1 million (2011: £11.0 million). Profit before taxation was £11.5 million (2011: £8.9 million).
Underlying basic earnings per share was 18.03 pence (2011: 14.57 pence, adjusted for the bonus element of the Rights Issue). Basic earnings per share was 9.91 pence (2011: 9.27 pence, adjusted for the bonus element of the Rights Issue).
Cash generated from operating activities was £11.6 million compared to the £1.4 million achieved in 2011. In accordance with our normal cash flow cycle, we expect a strong cash inflow in the second half of the financial year. During the period US$16.0 million (£10.1 million) was paid in relation to deferred and contingent consideration under the terms of the DermaPet® acquisition, with a further US$1.5 million (£0.9 million) paid in respect of an in-licence agreement in the US outlined later in this report.
The Group had a working capital outflow in the period of £14.3 million (2011: £17.0 million) which partly reflects the requirement for NVS® to hold additional inventory as a result of supplier shut downs over the Christmas period.
Net borrowings at 31 December 2012 were £102.0 million compared to £86.7 million at 30 June 2012 and £46.1 million at 31 December 2011 (half year before the Eurovet acquisition was completed in May 2012 which was partly funded by £60.0 million of new debt).
Total available bank facilities are currently £130.0 million of which £10.0 million, currently not utilised, is renewable within the next three months.
Interest cover on underlying operating profit was 9.2 times (2011: 12.9 times) excluding gains and losses on foreign exchange movements and derivative contracts.
Dividend
The Board is pleased to declare an interim dividend of 4.34 pence per share (2011: 3.77 pence, restated after being adjusted for the bonus element of the Rights Issue), an increase of 15.1%. The interim dividend is covered 4.1 times by underlying profit after taxation (2011: 3.9 times).
The dividend is payable on 9 April 2013 to Shareholders on the Register of Members at close of business on 15 March 2013. The ordinary shares will become ex dividend on 13 March 2013.
continued…
-3-
Review
Pharmaceutical Products
The main operational focus within the European Pharmaceuticals segment has been the ongoing integration of Eurovet. The first phase of the integration has progressed in line with our strategy and is delivering the expected cost and revenue synergies. A change to the third party Eurovet distribution agreement in France was implemented in January 2013; the Eurovet brands are now marketed directly through Dechra's French subsidiary. We have also amended our distribution and marketing agreement for Germany and have already begun to realise incremental margin in this territory by selling Dechra products through our new German subsidiary, acquired as part of the Eurovet acquisition. The rationalisation and integration of the duplicate sales offices in the UK, Benelux and Denmark has been successfully completed and the integrated sales and marketing functions are performing well.
This segment grew revenues in the first half by 69.7% (83.1% at constant currency) over the corresponding period last year. Excluding Eurovet, sales increased by 0.8% (an increase of 8.3% at constant currency), reflecting an exceptional increase last year of £1.2 million in the production of Vetoryl® for the US market to ensure continuity of supply whilst we implemented manufacturing changes. This was reversed in the consolidated Group figures. The changes to the distribution arrangements in France and Germany also had an adverse effect on revenue as the previous distributors ran down their inventories, the effect of which will be reversed by incremental sales and margin in the second half of the financial year.
The underlying performance of our key strategic licensed veterinary products was robust. Our own branded pharmaceuticals grew by 10.2%; growth was delivered across all key therapeutic sectors. Farm animal antibiotic usage remains under review in a number of EU markets due to concerns regarding antimicrobial resistance; however, we still saw overall growth in this sector in all markets other than Benelux. Our Specific® pet diets grew by 6.1%; this growth was assisted by the re-launch of a new presentation of our wet diet range and also by the introduction of a new recovery diet for animals in rehabilitation.
Manufacturing
Following the acquisition of Eurovet, all three manufacturing sites were re-branded as Dechra Manufacturing. After a detailed review of our capabilities we have decided to close the manufacturing facility in Uldum, Denmark. Significant annual cost savings will be made by the transfer of the two licensed pharmaceuticals manufactured at this site into our Skipton facility and by the outsourcing of the unlicensed care products to a third party manufacturer. This rationalisation is expected to be completed by the end of this financial year.
Our external contract manufacturing continues to perform well with revenues at the Skipton site 15.8% ahead of the corresponding period last year; a strong order book has already been secured for the second half.
Following last year's successful US Food and Drug Administration ("FDA") approval of our encapsulation facility, we have now commenced the upgrade of our Skipton injections suite. This will facilitate the global manufacturing of a major product in our development pipeline.
US Pharmaceuticals
Dechra Veterinary Products US ("DVP US")
DVP US revenues were ahead of the corresponding period last year by 8.7% (9.0% at constant currency). This performance, driven by strong growth of our key product lines, DermaPet, Vetoryl and Felimazole®, was partly offset by ongoing supply problems with our in-licensed dermatological range. These supply problems are expected to be resolved in the second half of the financial year.
In December 2012 we completed an agreement to in-licence three new companion animal products: A-Cyst®, Polyglycan® SA and PolyChews®. Whilst none of these products will make an immediate material impact, they complement our existing range of specialist companion animal products and will make a contribution to the growth of our US business.
The transfer of our veterinary licensed ophthalmic products into a new manufacturer is progressing well and we anticipate a re-launch in 2013. It is unlikely, however, that these products will make a material difference to the current financial year.
continued…
-4-
Services
Services revenue increased by 5.2% compared to the corresponding period last year. Although pressure remains on discount allowed, operational efficiencies, gross margin improvement and the additional sales volume resulted in a slight margin improvement over the corresponding period last year.
The new ERP system, implemented in July 2011, is now functioning well and is allowing us to offer new services to veterinary practices. Our product, New Indices, has been rolled out to existing and prospective accounts; this software allows veterinary practices to monitor their purchases and benchmark their performance against their peers. The evening ordering time has been extended to 8pm; this service has been well received by veterinary practices who themselves offer evening surgeries. A number of other new IT and logistics services are at an advanced stage of development and will be launched at the British Small Animal Veterinary Association ("BSAVA") Congress in April 2013.
Dechra Laboratories has delivered 8.2% revenue growth over the corresponding period last year. They have successfully implemented a new laboratory IT system and have also fully integrated their logistics collection service with the NVS fleet, which reduces costs and provides an improved service to their customers.
Product Development
There has been no material change to the progress of our product development pipeline, which remains on track to deliver our key novel products and differentiated generics. Additionally a wide range of life cycle and international registrations projects are ongoing.
There have been a number of successful registrations in the period:
· Methoxasol, an antimicrobial for swine and poultry in the EU;
· Soludox®, an existing antibiotic, has a new indication for turkeys in the EU;
· Comfortan®, a small animal analgesic has received an extension of its approval for use in cats;
· Libromide®, used in the treatment of canine epilepsy, has had its EU registration extended into France, Austria, Portugal and Switzerland; and
· Felimazole, for feline hyperthyroidism, has been approved in Australia.
The Regulatory team has also been involved in the integration of Eurovet; Dechra's pharmacovigilance reporting system has been implemented across the Group and the re-branding of Eurovet products into Dechra livery is ongoing.
Acquisition and In-Licence Agreement
We have completed a licensing, supply and distribution agreement for a branded veterinary generic pharmaceutical product for the US market from a US pharmaceutical development company; this will potentially be the first entrant in a significant market segment. Under the terms of the agreement Dechra has paid US$1.5 million upon signing and will pay a further US$3.0 million on approval. There is a potential further contingent payment of US$2.0 million based on achieving US$20.0 million cumulative sales. The product, which is expected to be available to market in 2013, represents a significant growth opportunity for DVP US. Due to commercial sensitivities, further product details will not be released until final marketing approval has been received.
We announced in September 2012 that we had entered into an exclusive licence agreement with SCYNEXIS® Inc. for the development and commercialisation of SCY‑641, used for the treatment of canine keratoconjunctivitis sicca ("KCS"). Under the terms of the agreement, Dechra is granted worldwide animal health rights and will be responsible for the remaining clinical development and commercialisation of SCY-641 (SCYNEXIS retains the human health rights to the compound). SCYNEXIS received an upfront fee from Dechra and is eligible to receive further payments based on development milestones and royalties. This worldwide agreementstrengthens the Group's novel product development pipeline. The ophthalmic market is a key therapeutic sector for Dechra; the application of SCY-641 in the animal health market offers significantly improved clinical treatment of dry eye in animals and is an excellent commercial opportunity.
continued…
-5-
People
PLC Board
On 31 January 2013 we announced the appointment of Anne-Francoise Nesmes as Chief Financial Officer. She will join the Group and the Board from GlaxoSmithKline PLC ("GSK") on 22 April 2013. Anne-Francoise is a high calibre finance professional with international pharmaceutical, manufacturing and commercial experience. Her skills, energy and experience are exactly in line with the Group's requirements in this key role to take us to the next strategic level.
Tony Griffin, formerly Chief Executive Officer of the Eurovet Group, was appointed as a Director of Dechra on 1 November 2012. Tony has played a key role in the integration of the Eurovet business into Dechra. In addition to his PLC Board responsibilities Tony's principal responsibility is his role as the Managing Director of Dechra Veterinary Products Europe ("DVP EU").
Two new Independent Non-Executive Directors have been appointed to the Board. Julian Heslop commenced his role on 1 January 2013 and Ishbel Macpherson on 1 February 2013. Julian served as Chief Financial Officer of GSK between 2005 and 2011, having previously held senior roles in both GSK and Grand Metropolitan PLC. Ishbel currently holds a number of Non-Executive roles and has previously had 20 years' experience as an investment banker specialising in mid-market corporate finance.
Senior Management
At a senior management level there have been three subsidiary board appointments: Chris Ashcroft has been appointed as Operations Director of Dechra Manufacturing, Skipton; Chris Hunter has been appointed as Operations Manager of Dechra Laboratories and, following 16 successful years within NVS, Naomi McCallum has been promoted to the role of Buying Director.
Outlook
Trading within our veterinary products segment continues to be robust; however, we remain cautious regarding the overall economic environment and are also conscious of the pressure on European veterinarians to self-regulate a reduction in antibiotic usage; we continue to monitor closely the situation.
A solid first half performance in our Services segment will be offset by poor sales in January 2013 due to bad weather during which footfall through veterinary practices saw a significant decline. This should not, however, detract from an overall recovery in this segment following a soft performance in the previous financial year.
The Group continues to deliver its strategic objectives; with additional synergies from the Eurovet acquisition, new product introductions, improved efficiency and international expansion we remain well positioned to maintain our strong growth.
Principal Risks and Uncertainties
The Group, like every business, faces risks and uncertainties in both its day-to-day operations and through events relating to the achievement of its long term strategic objectives. The Board has ultimate responsibility for risk management within the Group and ensures that there is an ongoing and embedded process of assessing, monitoring, managing and reporting on significant risks faced by the separate business units and by the Group as a whole.
continued…
-6-
The principal risks and uncertainties, as identified by the Board, which could impact the remaining six months of the current financial year, are as follows:
|
Strategy
|
Risk |
How we mitigate the risk |
|
To develop an international high growth, cash generative specialist veterinary products business |
Competitor product launched against one of our leading brands which could lead to erosion/loss of value and market share |
· Product improvement plans and marketing strategies are reviewed on a regular basis · Where competitor products are launched a response strategy is established and followed by our marketing team to highlight any unique selling points or competitive advantages or to position our products defensively to minimise competitor impact · Market research is conducted in order to allow the marketing team to better understand customer needs and ensure that our products fulfil the identified requirements · Any product patents are monitored and consideration given to the formulation of a defensive strategy towards the end of the life of the patent
|
|
Industry wide focus on reduction of antibiotic use in animal heath leading to a reduction of sales in our Farm Animal Products sector
|
· Regular contact is made with all relevant veterinary authorities to ensure that we have a comprehensive understanding of anticipated regulatory changes; thereby ensuring we closely monitor the situation and can react quickly to any new market/regulatory developments · Focus is placed on developing new markets with existing products where our current market share is low and ensuring that we increase market share in territories where there is pressure to reduce antibiotic use · Programme of development of new products that minimise antimicrobial resistance concerns
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|
|
Slow down of growth/decline in key European markets
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· A European wide database has been established in order to allow us to monitor market development closely · Alongside this a five year strategic plan is being developed which will be monitored by the DVP EU Board on a regular basis
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Loss of key products in Europe due to regulatory pressures
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· Regular contact is maintained with all relevant regulatory bodies in order to build and/or strengthen relationships and ensure good communication lines · The regulatory and legal teams remain constantly updated in respect of proposed/actual changes in order to ensure that the business is equipped to deal with and adhere to such changes · Where any changes are identified which could affect our ability to continue to market and sell any of our products a response team is created in order to mitigate such risk and to retain effective communication with the relevant regulators
|
|
|
To sustain growth and innovate in our Services business |
The failure of a major customer or supplier* |
· The business units monitor the financial status of both key customers and suppliers and maintain regular contact with them (including face to face meetings) · Where it becomes evident that issues in relation to manufacturing/supply may arise alternative suppliers are identified and detailed plans drafted. Where a manufacturing transfer is required stock is built up in order to avoid/mitigate an out of stock situation · In respect of manufacturing, a 'second sourcing' project for key materials has been established and maintained · All contracts with key suppliers and customers are reviewed from both a commercial and legal perspective to ensure that assignment of the contract is allowed should there be a change of control of either of the contracting parties
|
|
Increasingly competitive UK veterinary market place (resulting in margin pressure) |
· The NVS management team are committed to providing high levels of service and are developing innovative solutions to support veterinary practices to differentiate ourselves from our competitors
|
* this risk applies across both the Services and Pharmaceuticals segments
|
Michael Redmond |
Ian Page |
|
Non-Executive Chairman |
Chief Executive |
26 February 2013
-7-
|
Dechra Pharmaceuticals PLC |
|
Half-Yearly Financial Report 2012 for the six months ended 31 December 2012 |
Responsibility Statement of the Directors in Respect of the Half-Yearly Financial Report
We confirm that to the best of our knowledge:
· the condensed consolidated set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
· the interim management report (this comprises the half-yearly financial report) includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that could do so.
By Order of the Board:
Ian Page, Chief Executive
26 February 2013
-8-
|
Dechra Pharmaceuticals PLC |
|
Half-Yearly Financial Report 2012 for the six months ended 31 December 2012 |
|
Condensed Consolidated Income Statement
|
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|
|
|
Six months ended |
Year ended |
|
|
|
|
31.12.12 |
31.12.11 |
30.06.12 |
|
|
Note |
£'000 |
£'000 |
£'000
|
|
Revenue |
2 |
252,223 |
209,511 |
426,041 |
|
Cost of sales |
|
(189,443) |
(163,038) |
(326,782) |
|
Gross profit |
|
62,780 |
46,473 |
99,259 |
|
Distribution costs |
|
(9,745) |
(8,877) |
(17,979) |
|
Administrative expenses |
|
(37,969) |
(26,607) |
(60,390) |
|
Operating profit |
2 |
15,066 |
10,989 |
20,890 |
|
Underlying operating profit |
8 |
24,287 |
16,179 |
36,601 |
|
Non-underlying items* |
8 |
(9,221) |
(5,190) |
(15,711) |
|
Operating profit |
|
15,066 |
10,989 |
20,890 |
|
Finance income |
3 |
84 |
290 |
219 |
|
Underlying finance expense |
4 |
(3,395) |
(2,136) |
(3,854) |
|
Non-underlying items* |
4 |
(226) |
(199) |
(435) |
|
Finance expense |
|
(3,621) |
(2,335) |
(4,289) |
|
Profit before taxation |
2 |
11,529 |
8,944 |
16,820 |
|
Underlying profit before taxation |
8 |
20,976 |
14,333 |
32,966 |
|
Non-underlying items* |
8 |
(9,447) |
(5,389) |
(16,146) |
|
Profit before taxation |
|
11,529 |
8,944 |
16,820 |
|
Income tax expense |
5 |
(2,917) |
(2,236) |
(5,071) |
|
Profit for the period attributable to owners of the parent |
|
8,612 |
6,708 |
11,749 |
|
|
|
|
|
|
|
Underlying profit after taxation |
|
15,669 |
10,548 |
24,302 |
|
Non-underlying items* |
|
(7,057) |
(3,840) |
(12,553) |
|
Profit for the period attributable to owners of the parent |
|
8,612 |
6,708 |
11,749 |
|
Earnings per share |
|
|
|
|
|
Basic |
7 |
9.91p |
9.27p† |
15.65p† |
|
Diluted |
7 |
9.89p |
9.24p† |
15.60p† |
|
Dividend per share |
6 |
4.34p |
3.77p† |
12.27p† |
* Non-underlying items comprise amortisation of acquired intangibles, acquisition expenses, rationalisation costs, loss on extinguishment of debt and the unwinding of discounts on deferred and contingent consideration.
† Restated to reflect the impact of the bonus element of the Rights Issue.
|
Condensed Consolidated Statement of Comprehensive Income |
|||
|
|
Six months ended |
Year ended |
|
|
|
31.12.12 £'000 |
31.12.11 £'000 |
30.06.12 £'000 |
|
Profit for the period |
8,612 |
6,708 |
11,749 |
|
Other comprehensive income: |
|
|
|
|
Effective portion of changes in fair value of cash flow hedges |
(768) |
(188) |
(419) |
|
Cash flow hedges recycled to income statement |
230 |
199 |
429 |
|
Foreign currency translation differences for foreign operations |
4,833 |
(3,667) |
(8,434) |
|
Income tax relating to components of other comprehensive income |
124 |
(3) |
(2) |
|
Total comprehensive income for the period attributable to owners of the parent |
13,031 |
3,049 |
3,323 |
-9-
|
Dechra Pharmaceuticals PLC |
|
Half-Yearly Financial Report 2012 for the six months ended 31 December 2012
|
|
Condensed Consolidated Statement of Financial Position |
|
|
Note |
As at 31.12.12 £'000 |
As at 31.12.11 £'000 |
As at 30.06.12 £'000
|
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets |
|
222,869 |
116,835 |
225,872 |
|
Property, plant and equipment |
|
16,479 |
7,344 |
16,720 |
|
Total non-current assets |
|
239,348 |
124,179 |
242,592 |
|
Current assets |
|
|
|
|
|
Inventories |
|
58,394 |
48,398 |
57,281 |
|
Trade and other receivables |
|
73,406 |
64,712 |
72,113 |
|
Cash and cash equivalents |
9 |
16,603 |
15,131 |
32,435 |
|
Total current assets |
|
148,403 |
128,241 |
161,829 |
|
Total assets |
|
387,751 |
252,420 |
404,421 |
|
LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Borrowings |
9 |
(9,890) |
(8,474) |
(5,106) |
|
Trade and other payables |
|
(67,750) |
(64,213) |
(79,863) |
|
Deferred and contingent consideration |
|
(2,157) |
(300) |
(10,337) |
|
Current tax liabilities |
|
(7,717) |
(4,632) |
(8,155) |
|
Total current liabilities |
|
(87,514) |
(77,619) |
(103,461) |
|
Non-current liabilities |
|
|
|
|
|
Borrowings |
9 |
(108,677) |
(52,728) |
(114,046) |
|
Deferred and contingent consideration |
|
(4,609) |
(13,593) |
(3,526) |
|
Employee benefit obligations |
|
(499) |
- |
(363) |
|
Deferred tax liabilities |
|
(25,983) |
(11,896) |
(29,343) |
|
Total non-current liabilities |
|
(139,768) |
(78,217) |
(147,278) |
|
Total liabilities |
2 |
(227,282) |
(155,836) |
(250,739) |
|
Net assets |
|
160,469 |
96,584 |
153,682 |
|
EQUITY |
|
|
|
|
|
Issued share capital |
|
871 |
668 |
869 |
|
Share premium account |
|
123,192 |
63,890 |
122,642 |
|
Hedging reserve |
|
(700) |
(286) |
(286) |
|
Foreign currency translation reserve |
|
1,150 |
1,084 |
(3,683) |
|
Merger reserve |
|
1,770 |
1,770 |
1,770 |
|
Retained earnings |
|
34,186 |
29,458 |
32,370 |
|
Total equity attributable to owners of the parent |
|
160,469 |
96,584 |
153,682 |
-10-
|
Dechra Pharmaceuticals PLC |
|
Half-Yearly Financial Report 2012 for the six months ended 31 December 2012
|
|
Condensed Consolidated Statement of Changes in Shareholders' Equity |
|
|
Attributable to owners of the parent |
||||||
|
|
Issued share capital £'000 |
Share premium account £'000 |
Hedging reserve £'000 |
Foreign currency translation reserve £'000 |
Merger reserve £'000 |
Retained earnings £'000 |
Total £'000
|
|
Six months ended 31 December 2011 |
|
|
|
|
|
|
|
|
At 1 July 2011 |
664 |
63,559 |
(294) |
4,751 |
1,770 |
27,883 |
98,333 |
|
Profit for the period |
- |
- |
- |
- |
- |
6,708 |
6,708 |
|
Effective portion of changes in fair value of cash flow hedges, net of tax |
- |
- |
(139) |
- |
- |
- |
(139) |
|
Foreign currency translations differences for foreign operations, net of tax |
- |
- |
- |
(3,667) |
- |
- |
(3,667) |
|
Cash flow hedges recycled to income statement, net of tax |
- |
- |
147 |
- |
- |
- |
147 |
|
Total comprehensive income for the period |
- |
- |
8 |
(3,667) |
- |
6,708 |
3,049 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
(5,584) |
(5,584) |
|
Share-based payments |
- |
- |
- |
- |
- |
451 |
451 |
|
Shares issued |
4 |
331 |
- |
- |
- |
- |
335 |
|
Total contributions by and distribution to owners |
4 |
331 |
- |
- |
- |
(5,133) |
(4,798) |
|
At 31 December 2011 |
668 |
63,890 |
(286) |
1,084 |
1,770 |
29,458 |
96,584 |
|
Year ended 30 June 2012 |
|
|
|
|
|
|
|
|
At 1 July 2011 |
664 |
63,559 |
(294) |
4,751 |
1,770 |
27,883 |
98,333 |
|
Profit for the period |
- |
- |
- |
- |
- |
11,749 |
11,749 |
|
Effective portion of changes in fair value of cash flow hedges, net of tax |
- |
- |
(335) |
- |
- |
- |
(335) |
|
Foreign currency translation differences for foreign operations, net of tax |
- |
- |
- |
(8,434) |
- |
- |
(8,434) |
|
Cash flow hedges recycled to income statement, net of tax |
- |
- |
343 |
- |
- |
- |
343 |
|
Total comprehensive income for the period |
- |
- |
8 |
(8,434) |
- |
11,749 |
3,323 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
(8,325) |
(8,325) |
|
Share-based payments |
- |
- |
- |
- |
- |
1,063 |
1,063 |
|
Shares issued |
205 |
59,083 |
- |
- |
- |
- |
59,288 |
|
Total contributions by and distribution to owners |
205 |
59,083 |
- |
- |
- |
(7,262) |
52,026 |
|
|
|
|
|
|
|
|
|
|
At 30 June 2012 |
869 |
122,642 |
(286) |
(3,683) |
1,770 |
32,370 |
153,682 |
|
Six months ended 31 December 2012 |
|
|
|
|
|
|
|
|
At 1 July 2012 |
869 |
122,642 |
(286) |
(3,683) |
1,770 |
32,370 |
153,682 |
|
Profit for the period |
|
|
|
|
|
8,612 |
8,612 |
|
Effective portion of changes in fair value of cash flow hedges, net of tax |
- |
- |
(591) |
- |
- |
- |
(591) |
|
Foreign currency translation differences for foreign operations, net of tax |
- |
- |
- |
4,833 |
- |
- |
4,833 |
|
Cash flow hedges recycled to income statement, net of tax |
- |
- |
177 |
- |
- |
- |
177 |
|
Total comprehensive income for the period |
- |
- |
(414) |
4,833 |
- |
8,612 |
13,031 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
(7,390) |
(7,390) |
|
Share-based payments |
- |
- |
- |
- |
- |
594 |
594 |
|
Shares issued |
2 |
550 |
- |
- |
- |
- |
552 |
|
Total contributions by and distribution to owners |
2 |
550 |
- |
- |
- |
(6,796) |
(6,244) |
|
At 31 December 2012 |
871 |
123,192 |
(700) |
1,150 |
1,770 |
34,186 |
160,469 |
-11-
|
Dechra Pharmaceuticals PLC |
|
Half-Yearly Financial Report 2012 for the six months ended 31 December 2012
|
|
Condensed Consolidated Statement of Cash Flows
|
|
|
|
Six months ended |
Year ended |
|
|
|
Note |
31.12.12 £'000 |
31.12.11 £'000 |
30.06.12 £'000
|
|
Cash flows from operating activities |
|
|
|
|
|
Profit for the period |
|
8,612 |
6,708 |
11,749 |
|
Adjustments for: |
|
|
|
|
|
Depreciation |
|
1,305 |
772 |
1,584 |
|
Amortisation and impairment |
|
9,232 |
6,051 |
12,762 |
|
(Gain)/loss on disposal of intangible assets |
|
- |
(1) |
47 |
|
Gain on sale of property, plant and equipment |
|
(4) |
- |
(45) |
|
Finance income |
3 |
(84) |
(290) |
(219) |
|
Finance expense |
4 |
3,621 |
2,335 |
4,289 |
|
Equity-settled share-based payment expense |
|
334 |
562 |
1,001 |
|
Income tax expense |
|
2,917 |
2,236 |
5,071 |
|
Operating cash flow before changes in working capital |
|
25,933 |
18,373 |
36,239 |
|
Increase in inventories |
|
(992) |
(8,317) |
(4,846) |
|
(Increase)/decrease in trade and other receivables |
|
(974) |
39 |
(1,827) |
|
Decrease in trade and other payables |
|
(12,345) |
(8,742) |
(438) |
|
Cash generated from operating activities before interest and taxation |
|
11,622 |
1,353 |
29,128 |
|
Interest paid |
|
(2,697) |
(1,497) |
(2,645) |
|
Income taxes paid |
|
(5,125) |
(3,822) |
(7,241) |
|
Net cash inflow/(outflow) from operating activities |
|
3,800 |
(3,966) |
19,242 |
|
Cash flows from investing activities |
|
|
|
|
|
Proceeds from sale of property, plant and equipment |
|
4 |
6 |
50 |
|
Interest received |
|
84 |
135 |
219 |
|
Acquisition of subsidiaries |
10 |
(10,083) |
(500) |
(112,221) |
|
Purchase of property, plant and equipment |
|
(957) |
(602) |
(1,645) |
|
Capitalised development expenditure |
|
(945) |
(182) |
(447) |
|
Purchase of other intangible non-current assets |
|
(1,291) |
(515) |
(6,300) |
|
Net cash outflow from investing activities |
|
(13,188) |
(1,658) |
(120,344) |
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from the issue of share capital |
|
552 |
335 |
60,575 |
|
Share issue expenses |
|
- |
- |
(1,287) |
|
New borrowings |
|
- |
- |
120,000 |
|
Expenses of raising new borrowings |
|
- |
- |
(2,600) |
|
Repayment of borrowings |
|
(508) |
(4,295) |
(64,328) |
|
Resetting of foreign currency borrowings |
|
696 |
(199) |
(327) |
|
Dividends paid |
|
(7,390) |
(5,584) |
(8,325) |
|
Net cash (outflow)/inflow from financing activities |
|
(6,650) |
(9,743) |
103,708 |
|
Net (decrease)/increase in cash and cash equivalents |
|
(16,038) |
(15,367) |
2,606 |
|
Cash and cash equivalents at start of period |
|
32,435 |
30,496 |
30,496 |
|
Exchange differences on cash and cash equivalents |
|
206 |
2 |
(667) |
|
Cash and cash equivalents at end of period |
|
16,603 |
15,131 |
32,435 |
|
Reconciliation of net cash flow to movement in net borrowings |
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(16,038) |
(15,367) |
2,606 |
|
Repayment of borrowings |
|
508 |
4,295 |
64,328 |
|
New borrowings |
|
- |
- |
(120,000) |
|
Expenses of raising new borrowings |
|
- |
- |
2,600 |
|
New finance leases |
|
(329) |
- |
(1,010) |
|
Exchange differences on cash and cash equivalents |
|
206 |
2 |
(667) |
|
Retranslation of foreign borrowings |
|
696 |
(910) |
(429) |
|
Other non-cash changes |
|
(290) |
- |
(54) |
|
Movement in net borrowings in the period |
|
(15,247) |
(11,980) |
(52,626) |
|
Net borrowings at start of period |
|
(86,717) |
(34,091) |
(34,091) |
|
Net borrowings at end of period |
9 |
(101,964) |
(46,071) |
(86,717) |
-12-
|
Dechra Pharmaceuticals PLC |
|
Half-Yearly Financial Report 2012 for the six months ended 31 December 2012
|
|
Notes to the Financial Statements
|
|
1 |
Basis of Preparation and Principal Accounting Policies |
|
Dechra Pharmaceuticals PLC ("Dechra" or the "Company") is a company domiciled in the UK. The condensed set of financial statements as at, and for, the six months ended 31 December 2012 comprises the Company and its subsidiaries (together referred to as the "Group").
The Group financial statements as at, and for, the year ended 30 June 2012 prepared in accordance with IFRSs as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under EU adopted IFRS, are available upon request from the Company's registered office at Dechra House, Jamage Industrial Estate, Talke Pits, Stoke-on-Trent, ST7 1XW.
The prior year comparatives are derived from audited financial information for Dechra Pharmaceuticals PLC as set out in the Annual Report for the year ended 30 June 2012 and the unaudited financial information in the half-yearly financial report for the six months ended 31 December 2011. The comparative figures for the financial year ended 30 June 2012 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's Auditor and delivered to the Registrar of Companies. The report of the Auditor (i) was unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The Directors consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these interim financial statements.
The condensed set of financial statements for the six months ended 31 December 2012 are unaudited but have been reviewed by the Auditor. The independent review report is set out on page 17.
Statement of Compliance The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The condensed set of financial statements does not include all of the information required for full annual financial statements, and should be read in conjunction with the Group financial statements as at, and for, the year ended 30 June 2012.
This condensed set of financial statements was approved by the Board of Directors on 26 February 2013.
Significant Accounting Policies As required by the Disclosure and Transparency Rules of the Financial Services Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's consolidated financial statements for the year ended 30 June 2012, except where new or revised accounting standards have been applied.
Estimates and Judgements The preparation of a condensed set of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
|
|
New and Revised Standards
The following standards/revisions to standards and interpretations are applicable to the Group and have been adopted as they are mandatory for the year ending 30 June 2013:
- Amendments to IAS 1 'Presentation of Items of Other Comprehensive Income'
- Amendments to IAS 12 'Income Taxes - Deferred Tax: Recovery of Underlying Assets'
The adoption of these amendments has not had a material impact on the Group's financial statements.
|
|
|
-13-
|
2. |
Segmental Analysis |
|
The Group has four reportable segments, as discussed below, which are based on information provided to the Board of Directors, which is deemed to be the Group's chief operating decision maker. Several operating segments which have similar economic characteristics have been aggregated into the reporting segments.
The Services segment comprises National Veterinary Services, Dechra Laboratory Services and Dechra Specialist Laboratories. This segment services UK veterinary practices in both the companion animal and livestock sectors.
The European Pharmaceuticals segment comprises Dechra Veterinary Products EU ("DVP EU"), Eurovet and Dechra Manufacturing. Dechra Manufacturing manufactures the vast majority of our own branded licensed pharmaceutical products, which are marketed through DVP EU and Eurovet. This segment operates internationally and is unique in having its sole area of specialisation in companion animal products.
The US Pharmaceuticals segment consists of Dechra Veterinary Products US which sells companion animal pharmaceuticals into that territory.
The Pharmaceuticals research and development segment includes all of the Group's pharmaceutical research and development activities.
There are varying levels of intersegment trading. Intersegment pricing is determined on an arm's length basis. |
|
|
|
Six months ended |
Year ended |
||
|
|
31.12.12 £'000 |
31.12.11 £'000 |
30.06.12 £'000 |
|
|
Revenue by segment |
|
|
|
|
|
Services |
|
|
|
|
|
|
- total |
167,739 |
159,500 |
315,672 |
|
|
- intersegment |
(359) |
(260) |
(518) |
|
European Pharmaceuticals |
|
|
|
|
|
|
- total |
81,935 |
48,281 |
104,764 |
|
|
- intersegment |
(7,128) |
(7,241) |
(13,443) |
|
US Pharmaceuticals |
|
|
|
|
|
|
- total |
10,036 |
9,231 |
20,363 |
|
|
- intersegment |
- |
- |
(797) |
|
|
|
252,223 |
209,511 |
426,041 |
|
Operating profit/(loss) by segment |
|
|
|
|
|
Services |
5,720 |
5,397 |
11,056 |
|
|
European Pharmaceuticals |
21,171 |
12,780 |
28,904 |
|
|
US Pharmaceuticals |
2,963 |
2,302 |
5,863 |
|
|
Pharmaceuticals research and development |
(3,457) |
(2,405) |
(5,735) |
|
|
Segment operating profit |
26,397 |
18,074 |
40,088 |
|
|
Corporate and other unallocated costs |
(2,110) |
(1,895) |
(3,487) |
|
|
Underlying operating profit |
24,287 |
16,179 |
36,601 |
|
|
Amortisation of acquired intangibles |
(8,360) |
(5,190) |
(10,871) |
|
|
Rationalisation costs |
(861) |
- |
(2,525) |
|
|
Acquisition costs |
- |
- |
(2,315) |
|
|
Total operating profit |
15,066 |
10,989 |
20,890 |
|
|
Finance income |
84 |
290 |
219 |
|
|
Finance expense |
(3,621) |
(2,335) |
(4,289) |
|
|
Profit before taxation |
11,529 |
8,944 |
16,820 |
|
|
Total liabilities by segment |
|
|
|
|
|
Services |
(40,340) |
(47,865) |
(55,244) |
|
|
European Pharmaceuticals |
(25,157) |
(13,415) |
(22,058) |
|
|
US Pharmaceuticals |
(7,051) |
(14,527) |
(14,221) |
|
|
Pharmaceuticals research and development |
(315) |
(249) |
(685) |
|
|
Segment liabilities |
(72,863) |
(76,056) |
(92,208) |
|
|
Corporate loans and revolving credit facility |
(117,805) |
(60,700) |
(118,229) |
|
|
Corporate accruals and other payables |
(2,914) |
(2,552) |
(2,804) |
|
|
Current and deferred tax liabilities |
(33,700) |
(16,528) |
(37,498) |
|
|
|
(227,282) |
(155,836) |
(250,739) |
|
-14-
|
3. |
Finance Income |
|||
|
|
Six months ended |
Year ended |
||
|
|
31.12.12 £'000 |
31.12.11 £'000 |
30.06.12 £'000
|
|
|
Recognised in the income statement |
|
|
|
|
|
Finance income arising from: |
|
|
|
|
|
- cash and cash equivalents |
26 |
135 |
120 |
|
|
- loans and receivables |
- |
- |
89 |
|
|
- derivatives at fair value through profit or loss |
- |
155 |
- |
|
|
- foreign exchange gains |
- |
- |
- |
|
|
- return on employee benefit scheme assets |
58 |
- |
10 |
|
|
|
84 |
290 |
219 |
|
|
4. |
Finance Expense |
|||
|
|
Six months ended |
Year ended |
||
|
|
31.12.12 £'000 |
31.12.11 £'000 |
30.06.12 £'000
|
|
|
Underlying |
|
|
|
|
|
Finance expense arising from: |
|
|
|
|
|
- financial liabilities at amortised cost |
2,665 |
1,386 |
2,944 |
|
|
- foreign exchange losses - interest cost in relation to employee benefit obligations |
662 68 |
750 - |
898 12 |
|
|
Underlying finance expense |
3,395 |
2,136 |
3,854 |
|
|
Non-underlying |
|
|
|
|
|
Loss on extinguishment of debt |
- |
- |
158 |
|
|
Unwinding of discounts on deferred and contingent consideration |
226 |
199 |
277 |
|
|
Non-underlying finance expense |
226 |
199 |
435 |
|
|
Total finance expense |
3,621 |
2,335 |
4,289 |
|
|
5. |
Income Tax Expense |
|
The tax charge for the six months ended 31 December 2012 has been based on the estimated effective rate for the year ending 30 June 2013 of 25.3% (six months ended 31 December 2011: 25.0%, year ended 30 June 2012: 30.1%).
|
|
|
6. |
Dividends |
|
The final dividend for the year ended 30 June 2012 of 7.72p per share costing £7,390,000 has been paid in the period.
The Directors have declared an interim dividend of 4.34p per share (2011: 3.77p, restated to reflect the bonus element of the Rights Issue) costing £3,779,000 (2011: £2,741,000). It is payable on 9 April 2013 to Shareholders whose names are on the Register of Members at close of business on 15 March 2013. The ordinary shares will become ex dividend on 13 March 2013.
As the dividend was declared after the end of the period being reported and in accordance with IAS10 'Events After the Balance Sheet Date', the interim dividend has not been accrued for in these financial statements. It will be shown as a deduction from equity in the financial statements for the year ending 30 June 2013. |
|
-15-
|
7. |
Earnings per Share |
|
Earnings per ordinary share have been calculated by dividing the profit attributable to equity holders of the parent after taxation for each financial period by the weighted average number of ordinary shares in issue during the period. |
|
|
|
Six months ended |
Year ended |
|
|
|
31.12.12 Pence |
31.12.11 Pence |
30.06.12 Pence
|
|
Basic earnings per share |
|
|
|
|
- underlying* |
18.03 |
14.57† |
32.37† |
|
- basic |
9.91 |
9.27† |
15.65† |
|
Diluted earnings per share |
|
|
|
|
- underlying* |
17.99 |
14.53† |
32.27† |
|
- basic |
9.89 |
9.24† |
15.60† |
|
The calculations of basic and diluted earnings per share are based upon: |
£'000 |
£'000 |
£'000 |
|
Earnings for underlying basic and underlying diluted earnings per share calculations |
15,669 |
10,548 |
24,302 |
|
Earnings for basic and diluted earnings per share |
8,612 |
6,708 |
11,749 |
|
|
No. |
No. |
No. |
|
Weighted average number of ordinary shares for basic earnings per share |
86,924,375 |
66,489,328 |
75,082,169 |
|
Impact of share options |
184,984 |
202,109 |
224,690 |
|
Weighted average number of ordinary shares for diluted earnings per share |
87,109,359 |
66,691,437 |
75,306,859 |
* Underlying measures exclude non-underlying items as defined on the Condensed Consolidated Income Statement
† Restated to reflect the impact of the bonus element of the Rights Issue
|
8. |
Underlying Operating Profit and Profit before Taxation |
||||||
|
|
Six months ended |
Year ended |
|||||
|
|
31.12.12 £'000 |
31.12.11 £'000 |
30.06.12 £'000 |
||||
|
Operating profit |
|
|
|
||||
|
Underlying operating profit is calculated as follows: |
|
|
|
||||
|
Operating profit |
15,066 |
10,989 |
20,890 |
||||
|
Amortisation of intangible assets acquired as a result of business combinations |
8,360 |
5,190 |
10,871 |
||||
|
Expenses of the acquisition of Eurovet Animal Health B.V. |
- |
- |
2,315 |
||||
|
Rationalisation costs |
861 |
- |
2,525 |
||||
|
Underlying operating profit |
24,287 |
16,179 |
36,601 |
||||
|
Profit before taxation |
|
|
|
||||
|
Underlying profit before taxation is calculated as follows: |
|
|
|
||||
|
Profit before taxation |
11,529 |
8,944 |
16,820 |
||||
|
Amortisation of intangible assets acquired as a result of business combinations |
8,360 |
5,190 |
10,871 |
||||
|
Expenses of the acquisition of Eurovet Animal Health B.V. |
- |
- |
2,315 |
||||
|
Rationalisation costs |
861 |
- |
2,525 |
||||
|
Unwinding of discounts on deferred and contingent consideration |
226 |
199 |
277 |
||||
|
Loss on extinguishment of debt |
- |
- |
158 |
||||
|
Underlying profit before taxation |
20,976 |
14,333 |
32,966 |
||||
|
-16- |
|||||||
|
9. |
Analysis of Net Borrowings |
|
|
||||
|
|
As at 31.12.12 £'000 |
As at 31.12.11 £'000 |
As at 30.06.12 £'000 |
||||
|
Bank loans and overdraft |
(117,805) |
(60,656) |
(118,211) |
||||
|
Finance leases and hire purchase contracts |
(762) |
(546) |
(941) |
||||
|
Cash and cash equivalents |
16,603 |
15,131 |
32,435 |
||||
|
|
(101,964) |
(46,071) |
(86,717) |
||||
|
|
|
|
|
||||
|
|
|||||||
|
10. |
Acquisition of Dermapet, Inc. |
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|
During the period the Group paid a further US$16,000,000 (£10,083,000) in respect of the acquisition of DermaPet, Inc. A payment of US$15,000,000 was made which related to the achievement of a contingent milestone target, the remaining US$1,000,000 related to deferred consideration which was paid on the second anniversary of the completion date.
The maximum further consideration payable is US$6,000,000 of which US$5,000,000 is contingent upon revenue exceeding US$20,000,000 in any rolling 12 month period commencing on the first anniversary of completion and ending on the sixth anniversary of completion. The remaining US$1,000,000 is deferred until the fourth anniversary of completion. |
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|
11. |
Foreign Exchange Rates |
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|
The following exchange rates have been used in the translation of the results of foreign operations: |
||||
|
|
Average rate for the six months ended |
Closing rate |
||
|
|
31.12.12 |
31.12.11 |
at 31.12.12 |
|
|
Danish krone |
9.3154 |
8.5769 |
9.1098 |
|
|
US dollar |
1.5926 |
1.5919 |
1.6153 |
|
|
Euro |
1.2503 |
1.1521 |
1.2220 |
|
|
12. |
Related Party Transactions |
|
There have been no new related party transactions that have taken place in the first six months of the current financial year.
|
|
|
13. |
Half-Yearly Report |
|
Copies of the half-yearly financial report for the six months ended 31 December 2012 will be posted to Shareholders shortly. The report will also be submitted to the National Storage Mechanism at www.morningstar.co.uk/uk/nsm.
The report will be available to download/view on the Company's website www.dechra.com. Copies can be requested from the Company's registered office at: Dechra House, Jamage Industrial Estate, Talke Pits, Stoke on Trent, ST7 1XW, England.
|
|
-17-
|
Independent Review Report to Dechra Pharmaceuticals PLC |
|
Introduction We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2012 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Shareholders' Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
Directors' Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA. |
|
Graham Neale for and on behalf of KPMG Audit Plc Chartered Accountants
|
One Snowhill Snow Hill Queensway Birmingham, B4 6GH
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|
26 February 2013 |
|
-18-
|
Dechra Pharmaceuticals PLC |
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Appendix |
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About Dechra
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Dechra is an international veterinary pharmaceutical business. Its expertise is in the development, manufacturing, distribution, sales and marketing of high quality products exclusively for veterinarians worldwide. Dechra's business is unique as the majority of its products are used to treat medical conditions for which there is no other effective solution or have a clinical or dosing advantage over competitor products. For more information please visit: www.dechra.com |
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Trademarks
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Trademarks appear throughout this document in italics. Dechra and the Dechra 'D' logo are registered Trademarks of Dechra Pharmaceuticals PLC. |
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This information is provided by RNS
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