Broker snap: Dechra continues to grow

7th Sep 2010 12:00

The buy case for veterinary products group Dechra Pharmaceuticals is increasingly compelling, FinnCap believes, after the group posted a 10% rise in annual profit Tuesday morning and hiked its dividend 18%.Revenue growth of 5.5% year on year was in line with FinnCap's expectations and had been signalled in the company's pre-close trading update. That means that Dechra is growing its revenues at a rate faster than the underlying market growth reported at 2-3%, FinnCap analyst Keith Redpath notes. Net debt is also on the path FinnCap expected, with the company announcing a reduction to £6.7m at the end of June from £15.5m a year earlier."Since our initiation of coverage on 8 December 2009 at 447.9p, Dechra's shares reached a high of 505p (twice) before falling to recent lows. We reiterate our 533p price target. While other companies in the veterinary space have had issues, Dechra continues to grow," FinnCap said.