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.
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.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Ted Baker plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.