Preliminary Results - year ended 30 June 2014
Monday, 8 September 2014
Dechra Pharmaceuticals PLC
(Dechra or the Group)
Preliminary Results Announcement / Press Release
International veterinary pharmaceutical business, Dechra issues its audited preliminary results
for the year ended 30 June 2014
"Strengthening our position within the global animal health market"
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"As a pure veterinary pharmaceuticals and related products business, we have focused on our four strategic growth drivers, namely pipeline delivery, portfolio focus, geographical expansion and acquisition. We are pleased to report that the Group has delivered a solid performance with revenue and operating margins increasing in the majority of countries in which we trade." |
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Ian Page, Chief Executive Officer |
Highlights
· Approval of a major new equine product, Osphos®, with launch targeted for quarter one of 2015 financial year in the US and UK;
· Good progress on the pipeline; dossier submitted for approval of a novel canine endocrine product in the US and EU;
· All EU markets are showing growth, with the exception of the Netherlands;
· Strong performance in the US driven by our key products growing well and the Ophthalmic range relaunch, partly offset by continuing supply issues;
· Group revenue up by 1.6% (at constant exchange rate); positive momentum in the second half with revenue growth of 4.0%;
· Completed the acquisition of the trade and assets of PSPC Inc., which will expand our US product portfolio;
· Newly established Italian subsidiary opened in March 2014;
· Significantly improved net debt position of £5.0 million (2013: £80.8 million) following divestment of the Services Segment;
· Dividend of 15.40p, an increase of 10% over the previous year; and
· Current trading in line with management expectations.
Financial summary
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|
Continuing operations' |
Continuing operations |
Reported currency |
Constant currency |
|
2014 |
2013 |
|
|
|
|
£m |
£m |
% |
% |
|
|
Revenue |
193.6 |
189.2 |
2.3 |
1.6 |
|
Gross profit |
107.7 |
100.7 |
7.0 |
6.5 |
|
Gross profit % |
55.6% |
53.2% |
|
|
|
Underlying operating profit |
42.2 |
39.1 |
7.9 |
7.2 |
|
EBIT % |
21.8% |
20.7% |
|
|
|
Underlying profit before tax |
39.9 |
33.5 |
19.1 |
17.9 |
|
|
|
|
|
|
|
Underlying EBITDA |
46.2 |
42.8 |
7.9 |
7.2 |
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|
|
|
|
|
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Underlying diluted EPS (p) |
36.32 |
29.07 |
24.9 |
23.9 |
|
|
|
|
|
|
|
Dividend per share (p) |
15.40 |
14.00 |
10.0 |
10.0 |
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Enquiries: |
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Dechra Pharmaceuticals PLC |
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Ian Page, Chief Executive Officer |
Mobile: +44 (0) 7775 642 222 |
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Anne-Francoise Nesmes, Chief Financial Officer e-mail: corporate.enquiries@dechra.com |
Mobile: +44 (0) 7841 764 864 Office: +44 (0) 1606 814 730 |
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TooleyStreet Communications Ltd |
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Fiona Tooley, Director e-mail: fiona@tooleystreet.com |
Office: +44 (0) 121 309 0099 Mobile: +44 (0) 7785 703 523 |
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Results Briefing today: A presentation of the Annual Result's will be held today at 9.30 am at the office of Investec, 2 Gresham Street London EC2V 7QP Rooms 9/10, Third Floor
Dial in ref: Dechra - Standard International Access London+44 (0) 20 7073 8804 - USA Local New York +1 347 532 1806 - Japan Local Tokyo +81 (0) 3 5050 5410
For further assistance please contact Fiona Tooley on +44 (0) 7785 703 523 or Investec on + 44 (0) 20 7597 5004.
About Dechra Dechra is an international specialist veterinary pharmaceuticals and related products business. Our expertise is in the development, manufacture, and 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.
Stock Code: Full Listing (Pharmaceuticals): DPH
Trademarks Trademarks appear throughout this document in italics. Dechra and the Dechra "D" logo are registered trademarks of Dechra Pharmaceuticals PLC
Forward Looking Statement This document contains certain forward-looking statements. The forward-looking statements 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. |
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Dechra Pharmaceuticals PLC
Preliminary Results for the year ended 30 June 2013
Chairman's and Chief Executive Officer's Statement
We are pleased to report that the Group has delivered a solid performance with revenue and operating margins increasing in the majority of countries in which we trade. Following a difficult start to the year, predominantly due to a disappointing performance in the Netherlands and continuing supply issues in the US, we experienced positive momentum in the second half with improved revenue growth of 4.0% compared to a decline of 0.7% in the first half (at CER). This creates a strong platform for the start of our new financial year.
Following the divestment of the Services Segment in August 2013, which created a pure veterinary pharmaceuticals and related products business, we have focused on our four key growth drivers, namely portfolio focus, pipeline delivery, geographical expansion and acquisition:
· we have optimised returns from our existing portfolio by achieving a higher gross margin;
· our pipeline has delivered a major new equine product, Osphos, and we have received regulatory approval to relaunch our ophthalmic range in the US;
· geographical expansion has continued with the establishment of a new subsidiary in Italy, whilst planning is at an advanced stage to commence trading in Canada; and
· we have completed a strategic acquisition in the US, which has both increased our critical mass and bolstered our product portfolio.
Portfolio Focus
Our aim is to maximise revenue and profits from our existing portfolio through a clear focus and a strong market position in eight therapeutic sectors: dermatology, ophthalmology, equine medicine, anaesthesia and analgesia, endocrinology, cardiovascular disease, food producing animal antimicrobials and pet diets.
Maximising revenues and profit
(i) Driving revenue growth
Our focus on defined therapeutic categories and extensive marketing and sales capabilities have enabled us to deliver growth in almost all our target therapeutic sectors:
· within our major sector, endocrinology, Forthyron® and Felimazole® have seen growth in the EU, whilst in the US, Vetoryl® and Felimazole have increased by 24% and 19% respectively;
· our unique market leading brands in dermatology, Canaural® and Malaseb™, continue to expand. The current strong performance of our range of medicated shampoos will be further enhanced by the recent launch of a new formulation in the US, MiconaHex+Triz™;
· Cardisure®, our cardiovascular product, the only branded, differentiated pimobendan generic within the EU, has delivered exceptional growth of 32% across all our key European markets;
· our unique anaesthetic and analgesic product, Comfortan®, is highly rated by veterinarians and has grown by 40%. By offering a comprehensive range of critical care products, we are successfully retaining market share despite strong competition; and
· within ophthalmology, Fucithalmic® Vet remains the leading first line treatment for eye infections. We are also pleased to report that we have successfully re-launched Vetropolycin® and Vetropolycin HC within the US market following the resolution of long term supply issues.
Our success is driven by our ability to offer unique and specialised products that address veterinarians' requirements. This, in turn, is supported by clear branding and marketing messages.
(ii) Increasing profits through our own distribution
We have brought in-house a number of products that were acquired through Eurovet®, which were historically marketed through distribution partners, thereby enabling the Group to retain the full margin and enhance sales focus. Contracts with the previous partners ended in December 2013, allowing us to market Forthyron in France and Sweden, and Atipam® and Sedator® in the Nordics from January 2014.
(iii) Positioning Dechra as a trusted partner to veterinarians
We provide solutions that add value to veterinarians by supporting them in their daily clinical work and keeping them abreast of developments in our key therapeutic sectors.
We have updated the Dechra Academy online tool, a well respected platform that can be accessed by all veterinarians and provides certified Continuous Professional Development in a number of our therapeutic focus areas. We have also conducted over 165 evening meetings in the US, presenting endocrinology seminars with an average of 35 veterinarians attending each session. This demonstrates our ability to support veterinarians in improving their understanding of our areas of therapeutic expertise.
Food Producing Animal Antimicrobials
Our strategic intent is to build critical mass over the medium to long term; however, within the financial year, sales in this sector declined by 7.3% at CER.
This anticipated decline was due to a very competitive environment and a global focus on antimicrobial reduction. The Netherlands has seen the largest decline and overall is our only European market not to have shown total growth within the year. As previously reported, Dutch veterinarians have reduced antibiotic usage by over 50% in the last three years due to government pressure.
Despite the recognised benefits of some of our water soluble products, we believe that the Group has further exposure to the decline in antimicrobials, predominantly in Germany where we have a strong market position. In the majority of other markets in which we trade, we have low market shares and we anticipate that we should be able to compensate for any decline in the market by increasing our volumes.
Pipeline Delivery
Our aim is to deliver the ongoing development projects and ensure we continuously refill the pipeline in order to sustain the flow of new products.
Delivering the existing pipeline
We achieved a significant milestone in April 2014 with the approval in the US and UK of a major new equine product, branded Osphos. We also submitted our EU dossier in July 2014 having completed the studies to establish a maximum residue limit for the product. Osphos (clodronate injection) is used for the control of the clinical signs associated with navicular syndrome in horses. Navicular syndrome occurs in approximately 6% of horses and causes pain and lameness in the forelimbs. Osphos is applied as an intramuscular injection by the veterinarian and demonstrates measurable clinical improvement.
Following the successful registrations reported last year, we have introduced the following products:
· Buprenodale® Multidose Injection launched in 16 European countries in October 2013. Buprenodale is a generic Buprenorphine injection which complements our analgesics portfolio; and
· Felimazole Tablets 1.25mg launched in 12 European countries in September 2013. Felimazole is our leading endocrinology treatment for hyperthyroidism in cats. The 1.25mg dosage strength provides flexibility on dosing options and was introduced to differentiate our product from recent generic competition.
Progress in our US pipeline is important to continue to deliver organic growth:
· MiconaHex+Triz™ was formulated and launched as a shampoo, topical spray and wet wipes to complement our dermatological range and to compete with the market leading brand whose patents have recently expired; and
· Vetropolycin and Vetropolycin HC have been successfully transferred into a new manufacturing site with the necessary variations to the licenses completed and approved by the FDA. These ophthalmic products are unique in being the only veterinary approved products within their sector and were relaunched at the end of our financial year in June 2014. They were historically sold by the Group up until January 2010 and achieved historic peak sales of US$2.2 million per annum. However, manufacturing supply issues with a third party contractor resulted in the product coming off the market in 2010.
Finally, to support our global expansion strategy, registrations into new subsidiary territories were also achieved,
for example:
· Felimazole Tablets in South Korea in October 2013;
· Felimazole Tablets 1.25mg in Canada in September 2013; and
· Sedator and Atipam in Israel in February 2014.
Pipeline Progress Update
The following progress has been made on our pipeline products:
· dossiers have been submitted for both the US and EU for a new novel canine endocrinology product following the completion of a successful clinical trial;
· a pivotal clinical trial is under way for a canine endocrine opportunity;
· characterisation studies are ongoing for canine dermatological and canine ophthalmology products;
· clinical trials for a feline endocrinology drug were suspended during the third quarter of our financial year due to concerns over the formulation. A revised formulation is now being assessed for suitability to recommence the trial;
· a number of generic and range extension dossiers have been submitted within the EU and are currently under review; and
· Osphos has been submitted in Australia and Canada.
Refilling the pipeline
We are focused on continuously identifying and evaluating new ideas and we have screened several new opportunities within the period. As a result we have started new development projects. We are of course in the early phases of these programmes but these new projects increase the depth of our pipeline.
Additional potential candidates are still being assessed and we expect further progress next year.
Geographical Expansion
We aim to expand geographically through a strategy addressing short, medium and long term opportunities. In the short term we are opening subsidiaries where we have existing critical mass. For the medium to long term we are developing our plans to build a presence in new geographies where there is a recognised market opportunity.
The start of trading in Italy on 1 March 2014 represented a major milestone for Dechra as it is the first major territory we have entered as a greenfield start-up since the US in 2004. The financial justification for setting up our own subsidiary is clear: the value of the margins retained by selling our own products exceeds the incremental infrastructure costs, therefore delivering additional profit to the bottom line. We appointed an experienced country manager who led the process to establish the office and recruited a skilled team based in Turin. Distribution agreements with our main Italian distributors were terminated, with our contractual obligations ending in February 2014. Since the start of trading under our own Dechra brand, sales have been in line with our expectations.
We are following a similar process in Canada with the appointment of a country manager who has set up an office facility in Montreal. We have two major distributors in Canada; our contractual obligations with one of them will terminate in December 2014, therefore, trading will commence in January 2015.
We have identified other countries and conducted thorough market reviews to ascertain the feasibility of future greenfield start-ups. We are currently preparing detailed financial plans with the intention of trading in another new territory during the 2016 calendar year.
Our Export department has focused their commercial efforts on a number of key territories. The Regulatory team has provided product registration support. Our objective is to obtain enough product registrations to build a critical mass to support our subsidiary expansion strategy in future years. To accelerate this process additional regulatory support is being recruited.
Acquisition
We aim to identify and complete acquisitions that will increase Dechra's value and improve returns to shareholders.
In May 2014 we announced the acquisition of the trade and assets of PSPC Inc., for a consideration of US$8.5 million. In addition to the initial consideration Dechra will pay royalties on total net sales of 10.0%, which will increase by 2.5% once annualised sales exceed US$7.5 million with a further increase should sales exceed US$12.5 million. Subsequent to the acquisition of the trade and assets, in June 2014 we acquired PSPC's facility for a further US$3.0 million. PSPC's principal product, Phycox®, is a nutraceutical with historic sales of approximately US$4.5 million per annum. Phycox, a novel and patented product, competes in the US veterinary joint healthcare supplement market, a sector estimated at US$55.0 million. The business has also developed a new Levothyroxine product which is in the final phase of development. We paid a milestone of US$1.5 million for this product which will be launched in the first half of our new financial year (ending June 2015). This product will strengthen Dechra's endocrinology therapeutic sector and contains the same active principal ingredient as one of our leading European market brands.
We are evaluating selective acquisition opportunities. The principal selection criteria are businesses that:
· have their own intellectual property;
· can introduce new technologies, or complementary product ranges; or
· would provide entry into new geographies.
We continue to have a dialogue with a number of businesses; however, recent transactions by big pharma in the animal health sector have created unreasonably high expectations. Where acquisition is not possible, we are pursuing strategic partnerships.
Strategic Enablers
Manufacturing
There have been notable developments in our manufacturing capabilities throughout the year. With a focus on continuous improvement and efficiency gains, significant investments have been made in the liquids, creams and ointments suite, tablet compression machines and the encapsulation production line. This investment is important as we work towards one of our strategic objectives for manufacturing: the extension of our FDA compliance into new dosage forms.
The application to the FDA for the approval of a new canine endocrinology product has triggered the FDA inspection of our sterile injectables facility at Skipton where the product will be manufactured. A significant amount of resource and effort has been put into ensuring that our facility and procedures will meet the standards required.
We have also completed the transfer of Cardisure and Forthyron to our Skipton facility. These key Companion Animal Products, which came into the Group through the Eurovet acquisition, were previously outsourced. Bringing these products in-house will improve margins and provide us with greater flexibility and control of production.
Logistics
Following a €2 million investment, our new enlarged central European distribution centre in Uldum, Denmark was opened on 26 November 2013. The new facility has more than doubled our scale to 7,400 m2 and has tripled our pallet handling capacity to 10,500. This facility:
· creates a logistics hub that provides for all our current and medium term distribution requirements;
· almost entirely eliminates third party storage and handling costs; and
· improves logistics efficiency.
In the second half of the financial year we started an exercise to transfer our Specific pet diets to a new external third party manufacturing partner to improve overall delivery efficiency and product quality. Following an extensive search and due diligence, we identified a new supplier and started to transfer products into the new manufacturer. To date we have transferred over 50% of our volume requirements and are already seeing an improvement in quality, palatability and on time delivery.
We anticipate the transfer will be completed by the end of December 2014, at which time we intend to re-position and re-market this important range of products.
Information Technology
Further progress has been made with the Oracle ERP implementation. Our manufacturing facility in Bladel successfully went live on the platform in November 2013. After a full review of the project plan to ensure that the Oracle implementation would support our strategic objectives, we are now focusing on the next phase which includes the Group financial consolidation and the set-up of our European subsidiaries.
Within the year we have successfully standardised all critical non ERP software and hardware use across the Group, thereby reducing costs and improving internal systems. We have also improved communication capabilities by completing the roll out of a new secure private network across the majority of the business units.
Given the increasing importance of digital technologies, we have worked to update our customer-facing interfaces such as the Dechra Veterinary Products website and the Dechra Academy. The Dechra Veterinary Products website has been completely rewritten utilising the latest software capabilities with an optimised user interface pulling data from a newly established single database of all the Group's products' technical and marketing information. Furthermore, the Dechra Academy, with online learning courses for our veterinary customers, has been redeveloped to enhance its content and functionality. The site, www.dechra.co.uk, was launched in the UK in July 2014 and will be translated and rolled out across all our other trading subsidiaries throughout the remainder of the 2014 calendar year.
People
Senior Executive Team
Following the disposal of the Services Segment a new Senior Executive Team (SET) was established. The principal objective of the SET is to develop and implement the Group's strategy. The team comprises the Executive Directors along with the Company Secretary, US and Manufacturing Managing Directors and the heads of Product Development and Regulatory Affairs, HR and IT.
Management and Staff
A new Group HR Director, Katy Clough, joined us at the end of April 2014. Working closely with senior managers and the HR team, she has developed a people plan that supports our strategic aims and continues to build on the strong Values embedded across the Group. Dechra now employs 775 people in over 14 countries and we expect the headcount to increase during the next financial year. Our diverse and talented workforce has been key to our success and we will continue to leverage this advantage through succession planning and ongoing development programmes throughout the 2015 financial year.
Board Changes
At the Company's Annual General Meeting in October 2013 Neil Warner stepped down as Senior Independent Non-Executive Director and Chairman of the Audit Committee. Upon his retirement, Ishbel Macpherson was appointed as Senior Independent Non-Executive Director and Julian Heslop stepped into Neil's role as Chairman of the Audit Committee. In January 2014 Ed Torr stepped down as an Executive Director from the main Board following 17 years with the business. Ed has entered into a Consultancy Agreement with the Company to work on specific projects as and when required. We would like to express our thanks to both Neil and Ed for the huge contributions they have made to Dechra.
Dividend
The Board is proposing a final dividend of 10.65 pence per share (2013:9.66 pence). Added to the interim dividend of 4.75 pence per share, this brings the total dividend per share for the financial year ended June 2014 to 15.40 pence, representing 10% growth over the previous year.
Subject to shareholder approval at the Annual General Meeting to be held on 24 October 2014, the final dividend will be paid on 21 November 2014 to shareholders on the Register at 7 November 2014. The shares will become ex-dividend on 6 November 2014.
Prospects
Current trading is in line with management expectations and is consistent, at constant exchange rates, with the growth seen in the second half of our prior financial year.
Looking ahead, we are confident that the execution of our strategy will continue to deliver growth. We have a strong balance sheet which allows us to make strategic investments and deliver new products from our pipeline.
We are excited about the imminent launch of Osphos and by the potential growth opportunities for our recent acquisition PSPC Inc. These factors, together with revenue and margin growth from geographical expansion in Italy and Canada, and the delivery of further new products, give the Board confidence in the Group's future prospects.
Financial Review by the Chief Financial Officer
After several years of progressive organic growth and successful acquisitions, our 2014 financial year was predominantly a year of consolidation during which we implemented several improvement projects to support the execution of our four strategic growth drivers. During the year we achieved a balance between revenue growth and investments to support our strategic ambitions whilst delivering profit growth and improved operating leverage.
When presenting our financial results, we use a number of adjusted measures which are used by management in reporting and planning discussions. These measures are reconciled to the financial results reported under IFRS further in this report.
· Underlying results reflect the Group's trading performance excluding amortisation of acquired intangibles, non-underlying charges and other one-off events such as restructuring and acquisition costs.
· All growth rates for both underlying and non-underlying results included in this review are at constant exchange rates (CER) unless otherwise stated. This shows the year-on-year growth as if exchange rates had remained the same as in the previous year.
· All numbers are presented on a continuing operations basis. The divested Services Segment is shown as discontinued operations in accordance with IFRS.
Overview of Underlying Financial Results
We delivered underlying operating profit of £42.2 million, representing a growth of 7.2% compared to the previous year. This was achieved through a combination of modest revenue growth, improvement in margins and investments in strategic areas.
|
|
2014 £m |
2013 £m |
Reported currency |
Constant currency |
|
Revenue |
193.6 |
189.2 |
2.3% |
1.6% |
|
Gross profit |
107.7 |
100.7 |
7.0% |
6.5% |
|
Gross profit % |
55.6% |
53.2% |
|
|
|
Underlying operating profit |
42.2 |
39.1 |
7.9% |
7.2% |
|
EBIT % |
21.8% |
20.7% |
|
|
|
Underlying EBITDA |
46.2 |
42.8 |
7.9% |
7.2% |
|
Underlying diluted EPS (p) |
36.32 |
29.07 |
24.9% |
23.9% |
|
Dividend per share (p) |
15.40 |
14.00 |
10.0% |
10.0% |
A reconciliation to reported results is provided further in this report.
Revenue
Total revenue grew by 1.6% to £193.6 million. Our growth accelerated to 4.0% in the second half from a decline in the first half of 0.7% (compared to the same period last year).
Revenue by Segment
European Pharmaceuticals Segment revenue grew by 1.0% to £172.4 million as a good performance in all markets was offset by very disappointing sales in the Netherlands. The decline in this market was due to competitive pressure and reduced use of antibiotics. We have taken actions to address the situation.
Revenue in our US Pharmaceuticals Segment grew by 6.8% to £21.2 million. Our key products performed strongly with an increase of 24.3% for Vetoryl, 18.7% for Felimazole and 10.5% for DermaPet. There were no sales of Animax in 2014 (2013: £1.5 million) due to previously reported supply issues. This reduced overall US growth by 9 percentage points.
Revenue by Categories
Overall the performance across our major product categories has been adversely affected by a decline in FAP sales.
CAP grew by 3.7%. As stated in the Chairman's and Chief Executive Officer's Statement, all our key products performed well. However Vetoryl sales momentum in Europe slowed down compared to the prior year due to phasing of sales in Italy and the unavailability of a third party drug necessary to diagnose Cushing's disease. It is also worth noting that our generics defence strategy for Felimazole proved successful, except in the Netherlands.
Given the increasing importance of and our focus on our Equine product portfolio, we are pleased to report growth of 13.6% driven by the uptake in HY-50, a drug for lameness caused by joint dysfunction.
FAP declined by 7.3%, mostly due to the impact of the reduction in the prescription of antibiotics and increased competition in the Netherlands.
The Pet Diets franchise remained stable compared to the prior year, a satisfying performance as we transfer manufacturing to a new third party supplier (see Chairman's and Chief Executive Officer's Statement). Finally, third party manufacturing sales increased by 4.0%. The incremental value obtained by securing several new third party contracts was reduced due to a delay in production in Bladel. We expect to recover fully in the 2015 financial year.
|
|
2014 £m |
2013 £m |
Reported currency |
Constant |
|
CAP |
98.7 |
94.8 |
4.1% |
3.7% |
|
Equine |
12.6 |
11.0 |
14.5% |
13.6% |
|
FAP |
35.8 |
38.1 |
(6.0%) |
(7.3%) |
|
Subtotal Pharma |
147.1 |
143.9 |
2.2% |
1.5% |
|
Diets |
28.4 |
27.9 |
1.8% |
0.7% |
|
Third Party Manufacturing |
18.1 |
17.4 |
4.0% |
4.0% |
|
Total |
193.6 |
189.2 |
2.3% |
1.6% |
Gross Profit
Our gross margins have improved from 53.2% to 55.6% reflecting the continued realisation of the Eurovet synergies and changes in our product mix based on our sales performance.
We benefited in this financial year from a full year of margin synergies realised by bringing in-house third party distribution contracts in France and Germany part way through the prior financial year. Additionally the impact of higher margin CAP growth and lower margin FAP decline resulted in a more favourable product mix.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses grew by 6.4% to £57.3 million as we invested in people and targeted projects to support our strategic ambition.
Staff costs increased faster than inflation in a few departments as we invested strategically to support our growth. For instance we have continued to invest in the US sales infrastructure which has delivered clear benefits to the top line.
We have also incurred additional one-off costs in relation to several significant finance projects that will deliver future benefits, an example of which is outlined in the Taxation section of this report.
Research and Development Expenses (R&D)
Our R&D spend totalled £8.2 million as we continued to progress the pipeline.
Our spend is broadly in line with last year. However, it is slightly lower than expected as we suspended the clinical trial of a feline endocrinology drug following concerns over the formulation. All other projects progressed as planned.
Segmental Profit
Operating leverage is improving in our EU and US Pharmaceuticals Segments with underlying profit as a percentage of sales at 28.4% and 28.3% respectively.
Following the divestment of the Services Segment, the Board reviewed our reporting Segments and concluded that retaining the EU Pharmaceuticals and US Pharmaceuticals segments reflected the way we currently manage the Group and they meet the criteria defined under IFRS 8.
The operating leverage of our US Pharmaceuticals Segment is improving as past investment in infrastructure drives revenue growth. Investment will continue to support the forthcoming launch of Osphos.
Overview of Reported Financial Results
Including the profit from the discontinued operations and non-underlying items, Group's profit after tax of £59.0 million increased by 227.9% at CER (229.6% at reported).
|
|
|
Reported currency |
Constant currency |
|
|
2014 £m |
2013 £m |
|||
|
Revenue |
193.6 |
189.2 |
2.3% |
1.6% |
|
Gross profit |
107.7 |
100.7 |
7.0% |
6.5% |
|
Gross profit % |
55.6% |
53.2% |
|
|
|
Operating profit |
25.0 |
18.3 |
36.6% |
34.4% |
|
EBIT % |
12.9% |
9.7% |
|
|
|
Profit after tax |
19.4 |
10.9 |
78.0% |
75.2% |
|
Profit after tax including discontinued operations |
59.0 |
17.9 |
229.6% |
227.9% |
|
Diluted EPS (p) |
67.33 |
20.45 |
229.2% |
227.5% |
A reconciliation of underlying results to reported results as at 30 June 2014 is shown in the table below:
|
|
2014 Underlying results £m |
Discontinued operations £m |
Non-underlying items |
2014 Total reported results £m |
|||
|
Amortisation of intangibles £m |
Acquisition costs £m |
Finance expenses £m |
Rationalisation costs £m |
||||
|
Revenue |
193.6 |
|
|
|
|
|
193.6 |
|
Gross profit |
107.7 |
|
|
|
|
|
107.7 |
|
Selling, General and Administrative Expenses |
(57.3) |
|
(16.5) |
(0.2) |
|
(0.5) |
(74.5) |
|
Research and Development expenses |
(8.2) |
|
|
|
|
|
(8.2) |
|
Operating profit |
42.2 |
|
(16.5) |
(0.2) |
|
(0.5) |
25.0 |
|
Net finance costs |
(2.3) |
|
|
|
(1.3) |
|
(3.6) |
|
Profit before tax |
39.9 |
|
(16.5) |
(0.2) |
(1.3) |
(0.5) |
21.4 |
|
Taxation |
(8.0) |
|
5.7 |
|
0.2 |
0.1 |
(2.0) |
|
Profit after tax |
31.9 |
|
(10.8) |
(0.2) |
(1.1) |
(0.4) |
19.4 |
|
Profit from discontinued operations |
|
39.6 |
|
|
|
|
39.6 |
|
Profit for the period |
31.9 |
39.6 |
(10.8) |
(0.2) |
(1.1) |
(0.4) |
59.0 |
|
Diluted Earnings per share (pence) |
36.32 |
|
|
|
|
|
67.33 |
The sale of the Services Segment was completed on 16 August 2013. The profit from the discontinued operations was £39.6 million, of which £38.7 million was the pre-tax profit on the disposal. Additional details are shown in note 14.
Non-underlying items of £18.4 million, excluding the discontinued operations, are £2.7 million lower than the previous year due to Eurovet rationalisation costs in the prior year and favourable foreign exchange movements on the amortisation of acquired intangibles held in foreign currencies. Full details are shown in notes 4 and 5.
Earnings per Share and Dividends
Underlying diluted EPS from continuing operations for the year was 36.32 pence, 23.9% growth versus last year as we benefited from interest and tax savings. The total dividend per share is 15.40 pence.
The reduction in interest payments following the repayment of our debt, together with expected tax savings and prior year tax adjustments (see note 6), contributed to our Earnings per Share increase. Our tax strategy is covered in more detail later in this report.
The reported diluted EPS for the year was 67.33 pence (2013: 20.45 pence). The growth over the previous year reflected the profit on the sale of the Services Segment partly offset by the lost operating profit contribution from that business.
The Board is proposing a final dividend of 10.65 pence per share (2013: 9.66 pence). Added to the interim dividend of 4.75 pence, it brings the total dividend per share for the year to 15.40 pence, representing 10% growth over the previous year. Dividend cover based on underlying earnings was 2.4 times.
Net Debt
Our net debt position has improved considerably, from £80.8 million in the prior year to £5.0 million as at 30 June 2014.
The proceeds from the divestment of the Services Segment were used to pay down the term loan in full and partly pay down the revolving credit facility, which significantly improved our net debt position.
Covenants on the loan facilities were met during the year.
Balance Sheet
Net assets at 30 June 2013 totalled £204.8 million, a £30.2 million increase compared to the prior year.
|
|
2014 £m |
2013 £m |
|
|
Assets |
|
|
|
|
Total non-current assets |
214.4 |
235.7 |
|
|
Total current assets |
86.3 |
89.6 |
|
|
Assets of disposal group held for sales |
- |
89.8 |
|
|
Total assets |
300.7 |
415.1 |
|
|
Liabilities |
|
|
|
|
Total current liabilities |
(35.7) |
(49.5) |
|
|
Total non-current liabilities |
(60.2) |
(137.0) |
|
|
Liabilities of disposal group held for sales |
- |
(54.0) |
|
|
Total liabilities |
(95.9) |
(240.5) |
|
|
Total net assets |
204.8 |
174.6 |
|
Total non-current assets include intangibles which amounted to £196.2 million (2013: £219.6m) as at 30 June 2014. The only significant addition relates to the product rights to Phycox and Levothyroxine from the PSPC Inc. acquisition which was more than offset by amortisation charges and currency translation differences.
Lower non-current liabilities reflect the repayment of borrowings following the Services Segment divestment.
Additionally it is worth noting that total working capital increased during the year from £28.4 million (on a continuing basis) to £32.2 million. £2.5 million of this rise is due to an increase in our trade working capital balance. The key drivers for this were the inclusion of the Services Segment as debtors in working capital combined with bringing business in-house from our distributors, offset by favourable exchange rates. The remainder is an increase in the non-trade balance principally due to exchange rates and divestment costs accruals. This has impacted our cash conversion.
Finance Strategy
During the year we have reviewed our tax and treasury strategies, resulting in improvements that will make our operations more efficient, robust and scalable. They will deliver financial benefits that will contribute to earnings growth.
Taxation
We have implemented a tax strategy that reflects the current and future Group business model, in line with the tax policy approved by the Audit Committee.
We have performed a strategic review of our international tax affairs to ensure we take advantage of international government-backed incentive schemes, such as the patent box in the UK, innovation box in the Netherlands and global research and development regimes in the countries in which we operate. We are also aiming to simplify our operating model in order to improve control and ensure that we are structured in the most tax efficient manner.
Treasury
In September 2014, the Group refinanced its existing bank facility.
Our existing bank facility was committed until October 2016. Given the current economic context and our strategic ambitions, we felt it was appropriate to refinance.
The Group's revised borrowing facilities comprise a committed £90 million Revolving Credit Facility with an 'Accordion' facility of £30 million. The terms apply until September 2019. The interest rate that is charged on the Revolving Credit Facility is dependent upon the Group's Leverage ratio (defined as the ratio of Total Net Debt to Total Adjusted EBITDA). The minimum interest rate payable by the Group is 1.30% over LIBOR and the maximum interest rate payable by the Group is 2.00% over LIBOR.
The facilities are provided by a syndicate of three banks: HSBC, RBS and Barclays. We will also consolidate our day-to-day banking operations with these banks, thereby improving the effectiveness of, and the controls over, our cash management.
This will give rise to a loss on extinguishment of debt of £386,000 in the year ending 30 June 2015.
Summary
We have consolidated our position in 2014 and are in a strong financial position to execute our strategy going forward:
· our gross margin improvements increase our operating leverage. Profits can be reinvested in the business where needed to drive returns;
· the progress we have made defining our tax and treasury strategies ensure that we are building a scalable finance structure; and
· we have maintained a strong balance sheet which gives us the flexibility to pursue strategic investment opportunities as and when they arise.
Consolidated Income Statement
For the year ended 30 June 2014
|
|
Note |
2014 |
2013 |
|||||
|
Underlying £000 |
Non- underlying items* (notes 4 & 5) £000 |
Total £000 |
Underlying £000 |
Non- underlying items* (notes 4 & 5) £000 |
Total £000 |
|||
|
Revenue |
2 |
193,571 |
- |
193,571 |
189,176 |
- |
189,176 |
|
|
Cost of sales |
|
(85,863) |
- |
(85,863) |
(88,470) |
- |
(88,470) |
|
|
Gross profit |
|
107,708 |
- |
107,708 |
100,706 |
- |
100,706 |
|
|
Selling, general and administrative expenses |
|
(57,292) |
(17,172) |
(74,464) |
(53,637) |
(20,772) |
(74,409) |
|
|
Research and development expenses |
|
(8,248) |
- |
(8,248) |
(7,961) |
- |
(7,961) |
|
|
Operating profit |
2 |
42,168 |
(17,172) |
24,996 |
39,108 |
(20,772) |
18,336 |
|
|
Finance income |
3 |
302 |
- |
302 |
73 |
- |
73 |
|
|
Finance expense |
4 |
(2,609) |
(1,247) |
(3,856) |
(5,634) |
(297) |
(5,931) |
|
|
Profit before taxation - continuing operations |
|
39,861 |
(18,419) |
21,442 |
33,547 |
(21,069) |
12,478 |
|
|
Income tax expense |
6 |
(8,012) |
5,986 |
(2,026) |
(8,083) |
6,455 |
(1,628) |
|
|
Profit for the year - continuing operations |
|
31,849 |
(12,433) |
19,416 |
25,464 |
(14,614) |
10,850 |
|
|
Profit for the year - discontinued operations |
14 |
1,020 |
38,611 |
39,631 |
8,449 |
(1,386) |
7,063 |
|
|
Profit for the year attributable |
32,869 |
26,178 |
59,047 |
33,913 |
(16,000) |
17,913 |
||
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
8 |
|
|
67.57p |
|
|
20.59p |
|
|
- continuing operations |
|
|
|
22.22p |
|
|
12.47p |
|
|
- discontinued operations |
|
|
|
45.35p |
|
|
8.12p |
|
|
Diluted |
8 |
|
|
67.33p |
|
|
20.45p |
|
|
- continuing operations |
|
|
|
22.14p |
|
|
12.39p |
|
|
- discontinued operations |
|
|
|
45.19p |
|
|
8.06p |
|
|
Dividend per share (interim paid and final proposed for the year) |
7 |
|
|
15.40p |
|
|
14.00p |
|
* Non-underlying items comprise amortisation of acquired intangibles, acquisition expenses, rationalisation costs, loss on extinguishment of debt, the unwinding of discounts on deferred and contingent consideration, and profit and related expenses on the disposal of discontinued operations.
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2014
|
|
2014 £000 |
2013 £000 |
|
Profit for the year |
59,047 |
17,913 |
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to profit or loss: |
|
|
|
Remeasurement of defined benefit pension scheme |
(136) |
(772) |
|
|
(136) |
(772) |
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
Effective portion of changes in fair value of cash flow hedges |
(341) |
(185) |
|
Cash flow hedges recycled to income statement |
180 |
557 |
|
Foreign currency translation differences for foreign operations |
(18,128) |
12,789 |
|
Income tax relating to components of other comprehensive income |
29 |
(86) |
|
|
(18,260) |
13,075 |
|
Total comprehensive income for the period attributable to owners of the parent |
40,651 |
30,216 |
Consolidated Statement of Financial Position
At 30 June 2014
|
|
Note |
2014 £000 |
2013 £000 |
|
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
9 |
196,182 |
219,596 |
|
Property, plant and equipment |
|
18,258 |
16,074 |
|
Total non-current assets |
|
214,440 |
235,670 |
|
Current assets |
|
|
|
|
Inventories |
|
29,673 |
29,199 |
|
Trade and other receivables |
|
29,888 |
27,682 |
|
Cash and cash equivalents |
|
26,773 |
32,791 |
|
Assets of disposal group held for sale |
|
- |
89,784 |
|
Total current assets |
|
86,334 |
179,456 |
|
Total assets |
|
300,774 |
415,126 |
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Borrowings |
11 |
(103) |
(9,750) |
|
Trade and other payables |
|
(27,365) |
(28,483) |
|
Deferred and contingent consideration |
|
(1,784) |
(957) |
|
Current tax liabilities |
|
(6,463) |
(10,368) |
|
Liabilities of disposal group held for sale |
|
- |
(53,961) |
|
Total current liabilities |
|
(35,715) |
(103,519) |
|
Non-current liabilities |
|
|
|
|
Borrowings |
11 |
(31,660) |
(103,840) |
|
Deferred and contingent consideration |
|
(6,025) |
(4,971) |
|
Employee benefit obligations |
|
(1,070) |
(996) |
|
Deferred tax liabilities |
10 |
(21,498) |
(27,184) |
|
Total non-current liabilities |
|
(60,253) |
(136,991) |
|
Total liabilities |
|
(95,968) |
(240,510) |
|
Net assets |
|
204,806 |
174,616 |
|
EQUITY |
|
|
|
|
Issued share capital |
|
877 |
872 |
|
Share premium account |
|
124,429 |
123,485 |
|
Own shares |
|
(606) |
- |
|
Hedging reserve |
|
(132) |
- |
|
Foreign currency translation reserve |
|
(9,022) |
9,106 |
|
Merger reserve |
|
1,770 |
1,770 |
|
Retained earnings |
|
87,490 |
39,383 |
|
Total equity attributable to equity holders of the parent |
|
204,806 |
174,616 |
Consolidated Statement of Changes in Shareholders' Equity
For the year ended 30 June 2014
|
Year ended 30 June 2013 |
Attributable to owners of the parent |
|||||||
|
Issued share capital £000 |
Share premium account £000 |
Own shares £000 |
Hedging reserve £000 |
Foreign currency translation reserve £000 |
Merger reserve £000 |
Retained earnings £000 |
Total £000 |
|
|
At 1 July 2012 |
869 |
122,642 |
- |
(286) |
(3,683) |
1,770 |
32,370 |
153,682 |
|
Profit for the period |
- |
- |
- |
- |
- |
- |
17,913 |
17,913 |
|
Effective portion of changes in fair value of cash flow hedges, net of tax |
- |
- |
- |
(140) |
- |
- |
- |
(140) |
|
Foreign currency translation differences for foreign operations |
- |
- |
- |
- |
12,789 |
- |
- |
12,789 |
|
Remeasurement of defined benefit pension scheme |
- |
- |
- |
- |
- |
- |
(772) |
(772) |
|
Cash flow hedges recycled to income statement, net of tax |
- |
- |
- |
426 |
- |
- |
- |
426 |
|
Total comprehensive income |
- |
- |
- |
286 |
12,789 |
- |
17,141 |
30,216 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
- |
(11,170) |
(11,170) |
|
Share-based payments |
- |
- |
- |
- |
- |
- |
1,042 |
1,042 |
|
Shares issued |
3 |
843 |
- |
- |
- |
- |
- |
846 |
|
Total contributions by and distributions to owners |
3 |
843 |
- |
- |
- |
- |
(10,128) |
(9,282) |
|
At 30 June 2013 |
872 |
123,485 |
- |
- |
9,106 |
1,770 |
39,383 |
174,616 |
|
Year ended 30 June 2014 |
|
|
|
|
|
|
|
|
|
At 1 July 2013 |
872 |
123,485 |
- |
- |
9,106 |
1,770 |
39,383 |
174,616 |
|
Profit for the period |
- |
- |
- |
- |
- |
- |
59,047 |
59,047 |
|
Effective portion of changes in fair value of cash flow hedges, net of tax |
- |
- |
- |
(312) |
- |
- |
- |
(312) |
|
Foreign currency translation differences for foreign operations |
- |
- |
- |
- |
(18,128) |
- |
- |
(18,128) |
|
Remeasurement of defined benefit pension scheme |
- |
- |
- |
- |
- |
- |
(136) |
(136) |
|
Cash flow hedges recycled to |
- |
- |
- |
180 |
- |
- |
- |
180 |
|
Total comprehensive income |
- |
- |
- |
(132) |
(18,128) |
- |
58,911 |
40,651 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
- |
- |
(12,579) |
(12,579) |
|
Share-based payments |
- |
- |
- |
- |
- |
- |
1,775 |
1,775 |
|
Shares issued |
5 |
944 |
- |
- |
- |
- |
- |
949 |
|
Own shares purchased |
- |
- |
(606) |
- |
- |
- |
- |
(606) |
|
Total contributions by and distributions to owners |
5 |
944 |
(606) |
- |
- |
- |
(10,804) |
(10,461) |
|
At 30 June 2014 |
877 |
124,429 |
(606) |
(132) |
(9,022) |
1,770 |
87,490 |
204,806 |
Hedging Reserve
The hedging reserve represents the cumulative fair value gains or losses on derivative financial instruments for which cash flow hedge accounting has been applied.
Foreign Currency Translation Reserve
The foreign currency translation reserve contains exchange differences on the translation of subsidiaries with a functional currency other than Sterling and exchange gains or losses on the translation of liabilities that hedge the Company's net investment in foreign subsidiaries.
Merger Reserve
The merger reserve represents the excess of fair value over nominal value of shares issued in consideration for the acquisition of subsidiaries where statutory merger relief has been applied in the financial statements of the Parent Company.
Consolidated Statement of Cash Flows
For the year ended 30 June 2014
|
|
Note |
2014 £000 |
2013 £000 |
|
|
Cash flows from operating activities |
|
|
|
|
|
Profit for the period |
|
59,047 |
17,913 |
|
|
Adjustments for: |
|
|
|
|
|
Depreciation |
|
2,197 |
2,795 |
|
|
Amortisation and impairment |
9 |
18,340 |
19,876 |
|
|
Loss on sale of property, plant and equipment |
|
- |
462 |
|
|
(Profit)/related expenses on disposal of discontinued operations, net of tax |
14 |
(38,611) |
1,357 |
|
|
Finance income |
3 |
(302) |
(73) |
|
|
Finance expense |
4 |
3,856 |
5,931 |
|
|
Equity settled share-based payment expense |
|
1,616 |
821 |
|
|
Income tax expense |
|
2,322 |
4,167 |
|
|
Operating cash flow before changes in working capital |
|
48,465 |
53,249 |
|
|
(Increase)/decrease in inventories |
|
(2,811) |
1,299 |
|
|
Increase in trade and other receivables |
|
(21,100) |
(9,456) |
|
|
(Decrease)/increase in trade and other payables |
|
(1,159) |
4,302 |
|
|
Cash generated from operating activities before interest and taxation |
|
23,395 |
49,394 |
|
|
Interest paid |
|
(2,444) |
(4,788) |
|
|
Income taxes paid |
|
(9,479) |
(7,741) |
|
|
Net cash inflow from operating activities |
|
11,472 |
36,865 |
|
|
Cash flows from investing activities |
|
|
|
|
|
Proceeds from sale of property, plant and equipment |
|
- |
11 |
|
|
Interest received |
|
260 |
74 |
|
|
Acquisition of subsidiaries |
13 |
(5,938) |
(10,333) |
|
|
Proceeds from disposal of discontinued operations |
14 |
91,202 |
- |
|
|
Expenses related to the disposal of discontinued operations |
14 |
(1,576) |
- |
|
|
Purchase of property, plant and equipment |
|
(4,927) |
(3,665) |
|
|
Capitalised development expenditure |
9 |
(1,065) |
(1,584) |
|
|
Purchase of other intangible non-current assets |
9 |
(1,381) |
(3,871) |
|
|
Net cash inflow/(outflow) from investing activities |
|
76,575 |
(19,368) |
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from the issue of share capital |
|
949 |
846 |
|
|
Own shares purchased |
|
(606) |
- |
|
|
Repayment of borrowings |
|
(81,470) |
(5,653) |
|
|
Resetting of foreign currency borrowings |
11 |
1,558 |
(2,289) |
|
|
Dividends paid |
7 |
(12,579) |
(11,170) |
|
|
Net cash outflow from financing activities |
|
(92,148) |
(18,266) |
|
|
Net decrease in cash and cash equivalents |
|
(4,101) |
(769) |
|
|
Cash and cash equivalents at start of period |
|
32,791 |
32,435 |
|
|
Exchange differences on cash and cash equivalents |
|
(1,917) |
1,125 |
|
|
Cash and cash equivalents at end of period |
|
26,773 |
32,791 |
|
|
Reconciliation of net cash flow to movement in net borrowings |
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(4,101) |
(769) |
|
|
Repayment of borrowings |
|
81,470 |
5,653 |
|
|
New finance leases |
|
- |
(190) |
|
|
Exchange differences on cash and cash equivalents |
|
(1,917) |
1,125 |
|
|
Retranslation of foreign borrowings |
|
1,935 |
687 |
|
|
Other non-cash changes |
|
(1,578) |
(588) |
|
|
Movement in net borrowings in the period |
|
75,809 |
5,918 |
|
|
Net borrowings at start of period |
11 |
(80,799) |
(86,717) |
|
|
Net borrowings at end of period |
11 |
(4,990) |
(80,799) |
|
Notes to the Preliminary Results
for the year ended 30 June 2014
1. Status of Accounts
These summary financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (adopted IFRS). These summary financial statements have also been prepared in accordance with the Companies Act 2006.
The Board of Directors approved the preliminary announcement on 8 September 2014.
2. Operating Segments
The Group has three reportable segments (four including the divested Services Segment), 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.
On 16 August 2013, the Group completed the disposal of the Services Segment. This Segment comprised National Veterinary Services, Dechra Laboratory Services and Dechra Specialist Laboratories. This Segment serviced UK veterinary practices in both the companion animal and livestock sectors. The Segment is a discontinued operation and was classified as held for sale at 30 June 2013. Refer to note 14 for further details and segmental analysis in relation to the Services Segment.
The European Pharmaceuticals Segment comprises Dechra Veterinary Products EU and Dechra Pharmaceuticals Manufacturing. This Segment operates internationally and manufactures and markets Companion Animal, Equine and Food producing Animal Products. This Segment also includes third party manufacturing sales.
The US Pharmaceuticals Segment consists of Dechra Veterinary Products US which sells companion animal pharmaceuticals into that territory. The Segment expanded during this financial year with the acquisition of PSPC Inc.'s manufacturing unit based in Melbourne, Florida.
The Pharmaceuticals Research and Development Segment includes all of the Group's pharmaceutical research and development activities. From a Board perspective, this Segment has no revenue income.
Reconciliations of reportable segment revenues, profit or loss and liabilities and other material items:
|
|
2014 £000 |
2013 £000 |
|
Revenue by segment |
|
|
|
European Pharmaceuticals - total |
172,449 |
168,684 |
|
- inter segment |
(35) |
- |
|
US Pharmaceuticals - total |
21,215 |
20,889 |
|
- inter segment |
(58) |
(397) |
|
|
193,571 |
189,176 |
|
Operating profit/(loss) by segment |
|
|
|
European Pharmaceuticals |
49,016 |
45,819 |
|
US Pharmaceuticals |
5,980 |
5,585 |
|
Pharmaceuticals Research and Development |
(8,248) |
(7,961) |
|
Segment operating profit |
46,748 |
43,443 |
|
Corporate and other unallocated costs |
(4,580) |
(4,335) |
|
Underlying operating profit |
42,168 |
39,108 |
|
Amortisation of acquired intangibles |
(16,543) |
(18,195) |
|
Rationalisation costs |
(479) |
(2,577) |
|
Acquisition costs |
(150) |
- |
|
Total operating profit |
24,996 |
18,336 |
|
Finance income |
302 |
73 |
|
Finance expense |
(3,856) |
(5,931) |
|
Profit before taxation - continuing operations |
21,442 |
12,478 |
|
Total liabilities by segment |
|
|
|
Services (classified as held for sale in 2013) |
- |
(53,961) |
|
European Pharmaceuticals |
(23,615) |
(24,985) |
|
US Pharmaceuticals |
(8,884) |
(6,602) |
|
Pharmaceuticals Research and Development |
(633) |
(804) |
|
Segment liabilities |
(33,132) |
(86,352) |
|
Corporate loans and revolving credit facility |
(31,653) |
(113,110) |
|
Corporate accruals and other payables |
(3,222) |
(3,496) |
|
Current and deferred tax liabilities |
(27,961) |
(37,552) |
|
|
(95,968) |
(240,510) |
|
Revenue by product category |
|
|
|
CAP |
98,747 |
94,714 |
|
Equine |
12,585 |
11,003 |
|
FAP |
35,865 |
38,073 |
|
Diets |
28,372 |
27,941 |
|
Third party manufacturing |
18,002 |
17,445 |
|
|
193,571 |
189,176 |
|
Additions to intangible non-current assets by segment (including through business combinations) |
|
|
|
Services (classified as held for sale in 2013) |
- |
88 |
|
European Pharmaceuticals |
1,356 |
1,132 |
|
US Pharmaceuticals |
7,567 |
3,143 |
|
Pharmaceuticals Research and Development |
1,065 |
1,092 |
|
Corporate and central costs |
25 |
- |
|
|
10,013 |
5,455 |
|
|
2014 £000 |
2013 £000 |
|
Additions to Property, Plant and Equipment by segment (including through business combinations) |
|
|
|
Services (classified as held for sale in 2013) |
- |
733 |
|
European Pharmaceuticals |
2,979 |
2,622 |
|
US Pharmaceuticals |
2,185 |
18 |
|
Pharmaceuticals Research and Development |
55 |
69 |
|
Corporate and central costs |
26 |
223 |
|
|
5,245 |
3,665 |
|
Depreciation and amortisation by segment |
|
|
|
Services (included within discontinued operations) |
- |
757 |
|
European Pharmaceuticals |
17,684 |
18,360 |
|
US Pharmaceuticals |
1,987 |
3,112 |
|
Pharmaceuticals Research and Development |
816 |
426 |
|
Corporate and central costs |
50 |
16 |
|
|
20,537 |
22,671 |
Geographical Information
The following table shows revenue based on the geographical location of customers and non-current assets based on the country of domicile of the entity holding the asset:
|
|
2014 Revenue £000 |
2014 Non- current assets £000 |
2013 Revenue* £000 |
2013 Non- current assets £000 |
|
UK |
49,412 |
17,752 |
48,950 |
17,651 |
|
Germany |
38,599 |
2,260 |
36,376 |
2,399 |
|
Rest of Europe |
71,918 |
152,158 |
74,285 |
176,674 |
|
USA |
21,242 |
42,270 |
19,428 |
38,946 |
|
Rest of World |
12,400 |
- |
10,137 |
- |
|
|
193,571 |
214,440 |
189,176 |
235,670 |
* £2,309,000 has been reclassified from UK to Rest of Europe due to customer reclassification.
3. Finance Income
|
|
2014 £000 |
2013 £000 |
|
Finance income arising from: |
|
|
|
- Cash and cash equivalents |
80 |
2 |
|
- Loans and receivables |
61 |
71 |
|
- Foreign exchange gains |
161 |
- |
|
|
302 |
73 |
4. Finance Expense
|
Underlying |
2014 £000 |
2013 £000 |
|
Finance expense arising from: |
|
|
|
- Financial liabilities at amortised cost |
2,561 |
5,150 |
|
- Net interest on net defined benefit obligations |
48 |
1 |
|
- Foreign exchange losses |
- |
483 |
|
Underlying finance expense |
2,609 |
5,634 |
|
Non-underlying |
2014 £000 |
2013 £000 |
|
Loss on extinguishment of debt (note 11) |
1,213 |
- |
|
Unwinding of discounts on deferred and contingent consideration |
34 |
297 |
|
Non-underlying finance expense |
1,247 |
297 |
|
Total finance expense |
3,856 |
5,931 |
5. Non-underlying Items
Non-underlying items comprise:
|
|
2014 £000 |
2013 £000 |
|
Amortisation of intangible assets acquired as a result of acquisitions |
16,543 |
18,195 |
|
Rationalisation costs |
479 |
2,577 |
|
Expenses related to the acquisition of Phycox |
150 |
- |
|
|
17,172 |
20,772 |
Rationalisation costs relate to the integration of Eurovet Animal Health B.V. and the ensuing senior management team restructure.
6. Income Tax Expense
|
|
2014 £000 |
2013 £000 |
|
Current tax - UK corporation tax |
646 |
675 |
|
- overseas tax at prevailing local rates |
6,097 |
5,871 |
|
- adjustment in respect of prior years |
(910) |
(800) |
|
Total current tax expense |
5,833 |
5,746 |
|
Deferred tax - origination and reversal of temporary differences |
(2,428) |
(4,502) |
|
- adjustment in respect of prior years |
(1,379) |
384 |
|
Total deferred tax expense |
(3,807) |
(4,118) |
|
Total income tax expense in the Consolidated Income Statement - continuing operations |
2,026 |
1,628 |
|
Tax on discontinued operations |
396 |
2,539 |
|
Total income tax expense in the Consolidated Income Statement |
2,422 |
4,167 |
The tax on the Group's profit before tax differs from the standard rate of UK corporation tax of 22.5% (2013: 23.75%). The differences are explained below:
|
|
2014 £000 |
2013 £000 |
|
Profit before taxation - continuing operations |
21,442 |
12,478 |
|
Tax at 22.5% (2013: 23.75%) |
4,824 |
2,964 |
|
Effect of: |
|
|
|
- disallowable expenses |
98 |
286 |
|
- innovation related tax credits |
(832) |
(39) |
|
- differences on overseas tax rates |
331 |
553 |
|
- adjustments in respect of prior years |
(2,289) |
(415) |
|
- non-taxable foreign exchange gains |
- |
(137) |
|
- change in tax rates |
(106) |
(1,584) |
|
Total income tax expense - continuing operations |
2,026 |
1,628 |
|
Tax on discontinued operations |
396 |
2,539 |
|
Total income tax expense in the Consolidated Income Statement |
2,422 |
4,167 |
Tax Credit Recognised Directly in Equity
|
|
2014 £000 |
2013 £000 |
|
Deferred tax on effective portion of changes in fair value of cash flow hedges |
29 |
(86) |
|
Tax recognised in Consolidated Statement of Comprehensive Income |
29 |
(86) |
|
Corporation tax on equity settled transactions |
250 |
152 |
|
Deferred tax on equity settled transactions |
(91) |
70 |
|
Total tax recognised in equity |
188 |
136 |
The Budget on 20 March 2013 announced that the UK corporation tax rate will reduce to 20% by 2015. A reduction in the rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013.
The deferred tax balance at 30 June 2014 has been calculated based on the rate of 20% which was substantively enacted at the balance sheet date. The future rate reductions will affect the Group's future current tax charges.
7. Dividends
|
|
2014 £000 |
2013 £000 |
|
Final dividend paid in respect of prior year but not recognised as a liability in that year: Interim dividend paid: 4.75p per share (2013: 4.34p) |
8,420 4,159 |
7,390 3,780 |
|
Total dividend 14.41p per share (2013: 12.84p) recognised as distributions to equity |
12,579 |
11,170 |
|
Proposed final dividend for the year ended 30 June 2014: 10.65p per share (2013: 9.66p) |
9,341 |
8,419 |
|
Total dividend paid and proposed for the year ended 30 June 2014: 15.40p per share |
13,500 |
12,199 |
In accordance with IAS 10 'Events After the Balance Sheet Date', the proposed final dividend for the year ended 30 June 2014 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 2015. There are no income tax consequences. The final dividend for the year ended 30 June 2013 is shown as a deduction from equity in the year ended 30 June 2014.
8. 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.
|
|
2014 Pence |
2013 Pence |
|
Basic earnings per share |
|
|
|
- Underlying* |
37.61 |
38.98 |
|
- continuing operations |
36.45 |
29.27 |
|
- discontinued operations |
1.16 |
9.71 |
|
- Basic |
67.57 |
20.59 |
|
- continuing operations |
22.22 |
12.47 |
|
- discontinued operations |
45.35 |
8.12 |
|
Diluted earnings per share |
|
|
|
- Underlying* |
37.48 |
38.71 |
|
- continuing operations |
36.32 |
29.07 |
|
- discontinued operations |
1.16 |
9.64 |
|
- Diluted |
67.33 |
20.45 |
|
- continuing operations |
22.14 |
12.39 |
|
- discontinued operations |
45.19 |
8.06 |
The calculations of basic and diluted earnings per share are based upon:
|
|
2014 £000 |
2013 £000 |
|
Earnings for underlying basic and underlying diluted earnings per share |
32,869 |
33,913 |
|
- continuing operations |
31,849 |
25,464 |
|
- discontinued operations |
1,020 |
8,449 |
|
Earnings for basic and diluted earnings per share |
59,047 |
17,913 |
|
- continuing operations |
19,416 |
10,850 |
|
- discontinued operations |
39,631 |
7,063 |
|
|
No. |
No. |
|
Weighted average number of ordinary shares for basic earnings per share |
87,385,689 |
87,011,352 |
|
Impact of share options |
312,771 |
587,258 |
|
Weighted average number of ordinary shares for diluted earnings per share |
87,698,460 |
87,598,610 |
* Underlying measures exclude non-underlying items as defined in the Consolidated Income Statement.
At 30 June 2014, there are 799,997 options that are excluded from the EPS calculations as they are anti-dilutive for the period presented but may become dilutive in the future.
9. Intangible Assets
|
|
Goodwill £000 |
Software £000 |
Development costs £000 |
Patent rights £000 |
Marketing authorisations £000 |
Acquired intangibles £000 |
Total £000 |
|
Cost |
|
|
|
|
|
|
|
|
At 1 July 2012 |
57,921 |
4,656 |
7,440 |
3,680 |
853 |
193,406 |
267,956 |
|
Additions |
- |
728 |
1,584 |
- |
- |
3,143 |
5,455 |
|
Disposals |
- |
(234) |
- |
- |
- |
- |
(234) |
|
Transferred to assets held for sale |
(2,621) |
(1,836) |
- |
- |
- |
(377) |
(4,834) |
|
Foreign exchange adjustments |
3,055 |
98 |
47 |
- |
- |
8,658 |
11,858 |
|
At 30 June 2013 and |
58,355 |
3,412 |
9,071 |
3,680 |
853 |
204,830 |
280,201 |
|
Additions |
- |
1,381 |
1,065 |
- |
- |
- |
2,446 |
|
Acquisitions through business combinations |
84 |
- |
- |
- |
- |
7,483 |
7,567 |
|
Foreign exchange adjustments |
(3,461) |
(187) |
(67) |
- |
- |
(11,372) |
(15,087) |
|
At 30 June 2014 |
54,978 |
4,606 |
10,069 |
3,680 |
853 |
200,941 |
275,127 |
|
Amortisation |
|
|
|
|
|
|
|
|
At 1 July 2012 |
- |
1,621 |
3,106 |
1,133 |
- |
36,224 |
42,084 |
|
Charge for the year |
- |
451 |
857 |
335 |
- |
18,233 |
19,876 |
|
Disposals |
- |
(234) |
- |
- |
- |
- |
(234) |
|
Transferred to assets held for sale |
- |
(891) |
- |
- |
- |
(230) |
(1,121) |
|
At 30 June 2013 and |
- |
947 |
3,963 |
1,468 |
- |
54,227 |
60,605 |
|
Charge for the year |
- |
341 |
1,122 |
334 |
- |
16,543 |
18,340 |
|
At 30 June 2014 |
- |
1,288 |
5,085 |
1,802 |
- |
70,770 |
78,945 |
|
Net book value At 30 June 2014 |
54,978 |
3,318 |
4,984 |
1,878 |
853 |
130,171 |
196,182 |
|
At 30 June 2013 and |
58,355 |
2,465 |
5,108 |
2,212 |
853 |
150,603 |
219,596 |
|
At 30 June 2012 |
57,921 |
3,035 |
4,334 |
2,547 |
853 |
157,182 |
225,872 |
|
|
|
|
|
|
|
|
|
|
|
2014 £000 |
2013 £000 |
|
Contracted capital commitments |
- |
6 |
|
Software assets in the course of construction included above |
2,856 |
2,279 |
Included in contracted capital commitments is £nil (2013: £6,000) relating to assets held for sale.
Goodwill is allocated across cash-generating units that are expected to benefit from that business combination.
10. Deferred Taxes
Recognised Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:
|
|
Assets |
Liabilities |
Net |
|||
|
2014 £000 |
2013 £000 |
2014 £000 |
2013 £000 |
2014 £000 |
2013 £000 |
|
|
Intangible assets |
- |
- |
(21,738) |
(27,548) |
(21,738) |
(27,548) |
|
Property, plant and equipment |
- |
- |
(1,641) |
(1,896) |
(1,641) |
(1,896) |
|
Inventories |
477 |
1,067 |
- |
- |
477 |
1,067 |
|
Payables |
303 |
212 |
- |
- |
303 |
212 |
|
Share-based payments |
719 |
964 |
- |
- |
719 |
964 |
|
Losses |
90 |
- |
- |
- |
90 |
- |
|
Employee benefit obligations |
292 |
17 |
- |
- |
292 |
17 |
|
|
1,881 |
2,260 |
(23,379) |
(29,444) |
(21,498) |
(27,184) |
Deferred tax assets and liabilities are offset to the extent that there is a legally enforceable right to offset current tax assets against current tax liabilities.
11. Borrowings
|
|
2014 £000 |
2013 £000 |
|
Current liabilities: |
|
|
|
Bank loans |
- |
10,000 |
|
Finance lease obligations |
103 |
338 |
|
Arrangement fees netted off |
- |
(588) |
|
|
103 |
9,750 |
|
Non-current liabilities: |
|
|
|
Bank loans |
32,039 |
105,073 |
|
Finance lease obligations |
7 |
142 |
|
Arrangement fees netted off |
(386) |
(1,375) |
|
|
31,660 |
103,840 |
|
Total borrowings |
31,763 |
113,590 |
At 30 June 2014, the Group's borrowing facilities comprise a £65.0 million revolving credit facility committed until 31 October 2016, of which £32.0 million was drawn down at 30 June 2014, and various finance lease obligations. In September 2013, the proceeds from the divestment of the Services Segment were used to pay down the term loan in full and partly pay down the revolving credit facility. This gave rise to a loss on extinguishment of debt of £1,213,000.
Resetting of foreign currency borrowings within the Consolidated Statement of Cash Flows relates to the cash adjustment required to ensure the movements in foreign exchange rates do not result in the committed revolving credit facility being exceeded.
In September 2014, the Group refinanced its existing bank facility, which will give rise to a loss on extinguishment of debt of £386,000 in the year ending 30 June 2015. The Group's revised borrowing facility comprises a £90.0 million revolving credit facility and a £30.0 million Accordion facility committed until September 2019 and various finance lease obligations.
At the year end, the Group had the following unutilised borrowing facilities:
|
|
2014 £000 |
2013 £000 |
|
Bank overdraft facility |
- |
10,000 |
The current revolving credit facility is secured by a fixed and floating charge on the assets of the Group. Interest is charged at 2.50% over LIBOR or the applicable base rate. All covenants were met during the year ended 30 June 2014.
The revised borrowing facility is not secured on any assets of the Group but is supported by a joint and several cross-guarantee structure. Interest will be charged at 1.30% over LIBOR.
The maturity of the bank loans and overdrafts is as follows:
|
|
2014 £000 |
2013 £000 |
|
Payable: |
|
|
|
Within one year |
- |
10,000 |
|
Between one and two years |
32,039 |
10,000 |
|
Between two and five years |
- |
95,073 |
|
|
32,039 |
115,073 |
Analysis of Net Borrowings
|
|
2014 £000 |
2013 £000 |
|
Bank loans |
(31,653) |
(113,110) |
|
Finance leases |
(110) |
(480) |
|
Cash and cash equivalents |
26,773 |
32,791 |
|
|
(4,990) |
(80,799) |
12. Foreign Exchange Rates
The following exchange rates have been used in the translation of the results of foreign operations:
|
|
Closing rate at 30 June 2013 |
Average rate |
Closing rate at 30 June 2014 |
|
Danish Krone |
8.7146 |
8.9378 |
9.3051 |
|
Euro |
1.1687 |
1.1981 |
1.2480 |
|
US Dollar |
1.5208 |
1.6259 |
1.6938 |
13. Acquisitions
Acquisition of Phycox
On 20 May 2014, the Group acquired certain trade and assets of PSPC Inc., for a maximum total consideration of
US$14.2 million. PSPC's principal product is Phycox, a patented nutraceutical which competes in the US veterinary joint health supplement market. Additionally a new product is in the final phase of development. The acquisition enhances our US product portfolio and adds further critical mass to our US business. US$8.5 million of the consideration was payable on completion, US$1.5 million was contingent upon the successful registration of the new product, which occurred in June 2014, and US$4.2 million is contingent on future sales.
|
|
Book value £000 |
Fair value £000 |
|
Recognised amounts of identifiable assets acquired and liabilities assumed |
|
|
|
Identifiable assets |
|
|
|
Property, plant and equipment |
701 |
319 |
|
Trade and other receivables |
86 |
86 |
|
Inventory |
617 |
436 |
|
Identifiable intangible assets |
- |
7,483 |
|
Net identifiable assets |
1,404 |
8,324 |
|
Goodwill |
|
84 |
|
Total consideration |
|
8,408 |
|
Satisfied by: |
|
|
|
Cash |
|
5,047 |
|
Contingent consideration arrangement - paid on 20 June 2014 |
|
891 |
|
Contingent consideration |
|
2,470 |
|
Total consideration transferred |
|
8,408 |
|
Net cash outflow arising on acquisition |
|
|
|
Cash consideration |
|
5,047 |
|
Contingent consideration arrangement - paid on 20 June 2014 |
|
891 |
|
|
|
5,938 |
The fair value adjustments mostly relate to harmonisation with the Group IFRS accounting policies, including the application of fair values on acquisition, principally the recognition of product rights in accordance with IFRS 3. No deferred tax has been recognised on the identifiable intangible assets as no temporary differences arise between the carrying amounts of the assets for financial purposes and the amounts used for taxation purposes (the tax base).
The book value of receivables in the table above represents the gross contractual amounts receivable.
The goodwill of £84,000 arising from the acquisition consists of the assembled workforce and technical expertise. None of the goodwill is expected to be deductible for income tax purposes.
Acquisition related costs (included in operating expenses) amounted to £150,000. Phycox's results are reported within the US Pharmaceuticals Segment.
Contingent consideration of US$1.5 million was paid on 20 June 2014 following the successful registration of the new product. The remaining contingent consideration of US$4.2 million (£2.5 million) represents royalties payable of 10% of future global net sales (with a further 2.5% payable on sales over US$7.5 million, and a further 2.5% payable on sales over US$12.5 million).
Phycox contributed £nil revenue and £nil to the Group's underlying pre-tax profit for the period between the date of acquisition and the balance sheet date. If the acquisition of Phycox had been completed on the first date of the financial year, Group revenues for the period would have been £196.4 million and the Group underlying pre-tax profit for continuing operations would have been £40.1 million.
Acquisition of Genitrix Limited
On 1 December 2010, the Group acquired 100% of the share capital of Genitrix Limited. The acquisition of Genitrix Limited, a veterinary pharmaceuticals company based in Billingshurst, UK, is consistent with our strategy to grow our domestic and international pharmaceutical business.
The remaining £300,000 contingent consideration outstanding for this acquisition was paid in the prior period.
Acquisition of DermaPet Inc.
On 22 October 2010, the Group acquired 100% of the share capital of DermaPet Inc., a Florida based business which develops and markets a range of dermatological preparations, including shampoos, conditioners and ear products, for the US and overseas companion animal markets. These veterinary products are marketed and distributed through the same channels as Dechra's current US product portfolio.
During the prior period the Group paid a further US$16,000,000 (£10,033,000) 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$1,000,000 is payable on the fourth anniversary of the completion date (being 22 October 2014). The remaining US$5,000,000 is contingent upon revenue exceeding US$20,000,000 in any rolling 12 month period ending on the sixth anniversary of the completion date.
14. Discontinued Operations
The divestment of the Services Segment was completed on 16 August 2013 for sale proceeds of £91.2 million. The costs to sell were £1.6 million (of which £1.5 million was incurred in the prior year), with an associated tax deduction of £0.1 million.
The Services businesses constitutes a reporting segment in accordance with IFRS 8.
The results of the discontinued operations included in the profit for the year are set out below. The Segment was classified as discontinued operations and as held for sale at 30 June 2013. The Consolidated Income Statement has been presented to show the discontinued operations separately from continuing operations.
Profit for the Year from Discontinued Operations
|
|
2014 £000 |
2013 £000 |
|
Revenue |
48,259 |
333,244 |
|
Cost of sales |
(44,519) |
(303,389) |
|
Gross profit |
3,740 |
29,855 |
|
Distribution costs |
(1,669) |
(12,540) |
|
Administrative expenses |
(755) |
(6,203) |
|
Non-underlying expenses* |
- |
(38) |
|
Operating profit |
1,316 |
11,074 |
|
Net finance expense |
- |
(5) |
|
Profit before taxation from operating activities |
1,316 |
11,069 |
|
Income tax expenses |
(296) |
(2,649) |
|
Profit for the year from operating activities |
1,020 |
8,420 |
|
Profit on disposal and related expenses |
38,711 |
(1,467) |
|
Tax on profit on disposal and related expenses |
(100) |
110 |
|
Total profit for the year from discontinued operations attributable to owners of the parent |
39,631 |
7,063 |
* Non-underlying items comprise amortisation of acquired intangibles and rationalisation costs.
See note 8 for the Earnings per Share split between continued and discontinued operations.
Cash Flows from Discontinued Operations
|
|
2014 £000 |
2013 £000 |
|
Net cash (outflow)/inflow from operating activities |
(14,210) |
1,305 |
|
Net cash inflow/(outflow) from investing activities |
89,626 |
(810) |
|
Net cash outflow from financing activities (including repayment of intercompany funding) |
- |
(508) |
As completion occurred half way through the month, the working capital position on 16 August 2013 was significantly higher than at year end. This increase in the Services Segment working capital affected our operating cash flow before interest and tax payments, generating a cash inflow of £11.5 million at 30 June 2014 compared to £36.9 million at 30 June 2013. Excluding the Services' operating cash outflow of £14.2 million (the majority of which relates to trade and other receivables), cash generated from operations before interest and tax payments for the continuing operations was £25.7 million.
Effect of the disposal on the financial position of the Group
|
|
2014 £000 |
|
Goodwill |
(2,621) |
|
Intangible assets |
(1,049) |
|
Property, plant and equipment |
(1,677) |
|
Inventories |
(29,274) |
|
Trade and other receivables |
(73,330) |
|
Trade and other payables |
55,569 |
|
Net assets sold |
(52,382) |
|
|
|
|
Consideration received |
87,500 |
|
Working capital adjustment |
3,702 |
|
Expenses related to disposal (including those accrued in the prior year) |
(1,576) |
|
Net cash inflow |
89,626 |
15. Events after the Reporting Period
In September 2014 the Group refinanced its borrowing facility. Refer to note 11 for further details.
16. Other Information
The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 June 2014 or 2013 but is derived from the 2014 accounts. Statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 will be delivered in due course. The external auditor has reported on those accounts; the report was (i) unqualified, (ii) did not include references to any matters to which the external auditor drew attention by way of emphasis without qualifying the reports and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.
17. Preliminary Statement
This Preliminary statement is not being posted to shareholders. The Report & Accounts for the year ended 30 June 2014 will be posted to Shareholders shortly. Further copies will be available from the Company's Registered Office: 24 Cheshire Avenue, Cheshire Business Park, Lostock Gralam, Northwich CW9 7UA.
Email: corporate.enquiries@dechra.com. Copies are also available on the Company website www.dechra.com .
18. Directors' Responsibility Statement Required under the Disclosure and Transparency Rules
The responsibility statement below has been prepared in connection with the Company's full Annual Report for the year ended 30 June 2014. Certain parts of that Report are not included with this announcement.
We confirm to the best of our knowledge:
a) the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
b) the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
c) the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.
Approved by the Board and signed on its behalf by:
|
Ian Page |
Anne-Francoise Nesmes |
|
Chief Executive Officer |
Chief Financial Officer |
|
8 September 2014 |
8 September 2014 |
This information is provided by RNS
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