Global veterinary drug producer ECO posted pre-tax profit of £13.5m ($17.5m), rising from £7.7m ($9.9m) a year earlier, in results for the year up to 31 March 2017.
The animal pharmaceutical business is headquartered in London but has subsidiaries in Argentina, Brazil, China, India, Japan, Malaysia, Mexico, the US and South Africa. It recorded strong growth across all major regions, aside from Brazil where a “turbulent economic and political climate” hit revenue, it claimed.
“ECO has started the current year strongly with revenue ahead of the previous year,” said Peter Lawrence, executive chairman of ECO.
“The ongoing weakness in the value of sterling may continue to be of benefit to ECO as virtually all our sales and the majority of costs arise locally in dollars, RMB [Renminbi or Chinese yuan] or the euro.
“The business is robust with a sound, debt-free balance sheet and this coupled with our strong cash generation will allow us to capitalise on market opportunities as they arise. We look forward with confidence.”
Action to ban antibiotic growth promoters and move intensive farming practices away from routine antibiotic use drove demand for Eco’s flagship pharmaceutical Aivlosin – a drug containing the antibiotic tylvalosin used to treat respiratory diseases in pigs and poultry.
And with a market capitalisation of nearly £400m ($519m), ECO claims to be in a strong position to acquire new drugs that fit its portfolio as the global animal health industry continues to consolidate.
The key to ECO’s performance in global markets rests in its ability to secure marking authorisations for its range of veterinary drugs, without which it would be unable to sell the products.
The drugs are sold in nearly 60 countries and last year ECO won approval for the use of Aivlosin for egg-laying chickens in the EU, Malaysia, Mexico and Thailand. In December it secured marking authorisation from the Brazilian government to use the drug to treat swine infected with porcine proliferative enteropathy (PPE). Access in these markets has the “potential to generate significant earnings,” according to Lawrence.
Alongside its 75% pre-tax profit rise, Eco posted a string of solid financial results. Sales increased by nearly a third (30%) to £61.4m (79.7m). Gross profit is up 44% to £30m ($38m) and earnings before interest, tax, depreciation and amortization (EBITDA), essentially a measure of operational liquidity, rose 54% to £17.1m (£22.2m).