Dechra Pharmaceuticals plc Still Leads GlaxoSmithKline plc, AstraZeneca plc, Shire PLC And Smith & Nephew plc After Results Release

Dechra Pharmaceuticals plc (LON: DPH) has risen by more than GlaxoSmithKline plc (LON: GSK), AstraZeneca plc (LON: AZN), Shire PLC (LON: SHP) and Smith & Nephew plc (LON: SN) in the last year

Dechra Pharmaceuticals plc
Dechra Pharmaceuticals plc

Dechra Pharmaceuticals plc (LON: DPH) (LSE: DPH.L) has released full year results for the year ended 30 June 2016. Revenue growth in its existing EU Pharmaceuticals segment was 5.7% at constant exchange rates. This was catalysed by solid performance in Companion Animal Products (CAP) as well as a return to growth of Dechra’s Food producing Animal Products (FAP).

Further, Dechra has experienced strong performance in its existing NA Pharmaceuticals segment where revenue increased by 37.9% at constant exchange rates. This contributed to consolidated revenue growth of 21.7% at constant exchange rates for the overall company.

Dechra’s three value added acquisitions were completed during the year and its product development pipeline continues to deliver results. Recently launched products are gaining good market penetration and its new start up in Austria provides long term potential. This is alongside Dechra’s good performance in Poland and Canada.

Underlying cash generation was 106.8% and this allowed Dechra to maintain a prudent cash position as well as to absorb the costs associated with acquisitions. Its dividends per share increased by 9% which puts it on a yield of 1.4%, while EPS was 8.9% up on financial year 2015.

In the last year Dechra has risen by 39%. This is a superior performance compared to a number of its industry peers such as GlaxoSmithKline plc (LON: GSK), AstraZeneca plc (LON: AZN), Shire PLC (LON: SHP) and Smith & Nephew plc (LON: SN). GlaxoSmithKline has risen by 27%, AstraZeneca is up by 18%, Shire is down 1% and Smith & Nephew is 7% higher than 12 months ago.

Dechra has a P/E of 30.7 and is forecast to grow EPS by 24% in the 2017 financial year. In my view it trades at fair value given its long term growth potential and therefore has investment appeal at this moment in time.

The author owns shares in GlaxoSmithKline and AstraZeneca but not in Shire, Dechra or Smith & Nephew at the time of writing.

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