Dechra expects slight miss in revenue

11th Jul 2011 14:57

Veterinary pharmaceutical group Dechra Pharmaceuticals expects sales for the year ended 30 June to be 5.1% ahead of last year, slightly under consensus forecasts.The trading statement implies that group revenue (at constant currency) will be around £390m, under Bloomberg consensus of £391.7m.finnCap was slightly more optimistic, expecting revenues to come in at around £394.6m. Nevertheless, the broker retained its buy rating on the stock despite the miss.Revenue from European Pharmaceuticals grew by 5% year-on-year, however, growth in the diets business slowed in the second half. Revenue from US Pharmaceuticals, however, surged by 48.7%, driven by sales from the DermaPet acquisition completed in October.Services revenue grew by 3.7%, while operating margin was broadly flat.Panmure Gordon kept its hold rating saying that while the diets business has been weak, affecting growth in pharmaceuticals, "the good news is that the services business has held its margin.""If the stock sells off below 480p between now and preliminary results on 6 September 2011, we would not be averse to increasing our exposure," said analyst Tom Kemp.Shares were trading 1.69% lower at 495p at 15:00 on Monday afternoon.BC