Investor demand for Animalcare (LSE: ANCR) remained flat in Tuesday trading despite the release of impressive trading details.
The York-based business announced that revenues increased 7.9% in the 12 months to June 2017, to £15.9m, a result that pushed underlying EBITDA 13% higher to just under £4m.
Whilst Animalcare saw sales at its Animal Welfare Products arm rise 5.5% in the first half, to £2.9m, it was left to its Licensed Veterinary Medicines division to really steal the show.
Revenues here jumped 17.2% year-on-year, to £10.8m, reflecting strong demand for its key ranges like intravenous fluids, anaesthetics and analgesics and the impact of eight treatment launches — like sedative Acecare which generated an impressive £300,000 worth of sales — in the period. And Animalcare saw sales from outside the UK really take off in the period, these rising 60.1% to £1.7m.
Big and beautiful
And there is plenty of reason to expect sales at the drugs leviathan to continue marching northwards. It pumped £2m into developing its product pipeline in the last fiscal year, up from £1.6m in 2016, and Animalcare is expecting to launch two of the four products registered last year in the current period.
Meanwhile, the £134m reverse takeover of Ecuphar back in July gives the company’s revenues picture an extra shot in the arm, a move that significantly expands its product portfolio, gives it formidable scale, and makes it a major player in Europe’s animal health market.
Earnings growth is predicted to be pretty muted in the near-term, however, with City analysts forecasting a 1% bottom-line improvement in the 12 months to next June. However, I reckon those seeking a stock to retire on could do worse than splash the cash on Animalcare given its souped-up presence in a rapidly-expanding market.
Indeed, I am convinced the medicines mammoth is more than worthy of its high forward multiple of 24.8 times.
Looking good
I also reckon that Ted Baker (LSE: TED) could provide you with the financial independence we all crave in the years ahead.
The fashion star has long proved a dependable earnings generator, and City brokers are predicting further healthy growth in the years ahead — rises of 13% are expected in both the years to January 2018 and 2019 alone.
These projections leave Ted Baker dealing on a forward P/E ratio of 20.3 times, making it a costly paper pick just like Animalcare. But in my opinion the London firm’s explosive sales potential makes it worthy of such a rating.
In its latest trading release it advised that sales detonated 14.3% between January 29 and June 10, with revenues at stable exchange rates rising by a very healthy 8.4%. Ted Baker’s expansion scheme to meet the demand of shoppers across the globe is clearly delivering the goods, as is its online proposition which delivered a 35.9% improvement in takings in the period.
And those seeking abundant returns should also be encouraged by the stock’s ultra-generous dividend policy. Dividends are expected to shoot to 60.4p and 69.5p per share this year and next, up from 53.6p in fiscal 2017 and yielding 2.3% and 2.7% respectively. And Ted Baker’s electrifying earnings prospects are likely to keep payouts growing at a stratospheric rate.
