UK's ECO Animal Health H1 revenue falls on China weakness

Overview

• UK animal health firm's H1 revenue fell to £33 mln from £39 mln on China weakness

• Adjusted EBITDA for H1 held steady at £3 mln despite lower revenue

• Company expects FY revenue below consensus but adjusted EBITDA and EPS broadly in line

Outlook

• Company expects full-year group revenue to fall short of market consensus due to China weakness

• ECO Animal Health expects adjusted EBITDA and EPS to be broadly in line with consensus

• Company anticipates improvement in China revenue prospects in H2 as pork prices recover

Result Drivers

• CHINA REVENUE DECLINE - Co said lower pork prices in China led to reduced spending by producers on animal health products, causing a significant drop in China and Japan segment revenue

• ASIA GROWTH - Revenue in South and South East Asia grew by more than 50%, offsetting some weakness elsewhere

• GROSS MARGIN IMPROVEMENT - Co said gross margin improved to about 52% due to continued cost control

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the pharmaceuticals peer group is "buy."

• Wall Street's median 12-month price target for ECO Animal Health Group PLC is GBp196.00, about 106.3% above its November 5 closing price of GBp95.00

• The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 27 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)