Sales grow at Animalcare, but investment eats into profit

Animalcare was looking at an increase in sales in its first half results on Wednesday, though profits were down in the six months to 31 December 2015 as the company pressed ahead with its investment strategy.

The AIM-traded supplier of veterinary medicine described progress as good during the period, with the firm achieving top line growth during a phase of significantly increased investment.

Revenue grew by 2% over the corresponding period a year earlier, to £7.11m, though profit before tax fell by 12.9% to £1.53m.

Basic underlying earnings per share fell by 8.8%, to 6.2p.

"The business has continued to perform well during the first six months of its financial year, with sales up by 2.7%, which is particularly pleasing against a very strong first half in FY15,," said chairman James Lambert.

"Given the top line growth during the period and increased levels of investment for the future success of Animalcare, the board remains confident about the prospects and outcome for the full year and beyond."

Animalcare saw solid revenue growth from its Licensed Veterinary Medicines group, up 4.2% to £4.58m against strong comparatives. The sector saw a £0.2m non-recurring benefit from sales of the Bluprecare product, as a result of supply issues at a competitor.

The company also launched a new mini microchip, and began its planned focus on exports which it said was already delivering a commercial benefit.

A continued focus on investment, in a bid to support future growth, was reflected by a £0.16m increase in overheads and a three-fold increase in product development pipeline expenditure to £0.6m.

Animalcare maintained a strong financial position, however, with group cash balances increasing by £0.32m to £6.1m since 30 June 2015.

The company announced an interim dividend of 1.8p per share, which was unchanged from a year earlier.