It has been yet another good year for Dechra, what have been the key drivers behind the success?Quite simply it has been the delivery of our strategy. All four key growth drivers have delivered. We have had good organic growth within Europe and exceptional organic growth within the US which has been enhanced by new product launches, particularly Osphos and Zycortal; geographical expansion is progressing well; we have launched in a number of new territories over the last few years: Italy, Canada, Poland and, more recently, Austria have all contributed towards growth and are all performing to our expectations. Finally, we have had a good contribution from the three acquisitions we have made within the period.
Can you tell us a little more about the acquisitions?It has been an unusual year first of all with three acquisitions, but each one of them is strategically important. Taking them in turn: first of all Genera is a business based in Croatia that predominantly focuses on manufacturing and developing poultry vaccines. It is at an early stage of development for European registrations, so this is really one for the future. What it will do is it will give us more products to sell into our farm animal sector; particularly poultry vaccines to sell alongside our successful antibiotic franchise and it will also help us to develop sales in the rest of the world. Poultry is one of the fastest growing consumed meats within the world and it is an important sector for us.
Secondly Brovel: Brovel was a family owned Mexican business that we acquired at a relatively low cost. This really is about just a platform to register our own products. They also have reach from a sales and marketing perspective into the Mexican market and it accelerates our geographical expansion.
The third and most important acquisition within the period was Putney. Putney was our absolute number one acquisition target and has been for some time. There are very few decent assets available within the US market and Putney really adds to the critical mass that we require to be successful in the most important animal health market in the world. It adds a portfolio of new products into the Group, but also just as importantly it adds a pipeline.
With all three acquisitions we have done a very good job in integrating them very quickly and rationalising the businesses into the Dechra Group and they will all deliver results in the future and will provide a platform to add to our growth in future years.
You have started up in a number of new countries in the last two years, where is next?Italy, Poland and Canada have all been successful and are performing to our expectations and more recently we have launched in Austria which is also performing well. They were the obvious territories for us to start trading in over the last couple of years because we had already got a certain level of sales through marketing partners. There is no obvious next step that is a simple process that we can do organically like that, but what we are now doing is spending more money on registering in new territories to hopefully create that critical mass in future. The other way to obviously expand geographically is as we have in Mexico with the acquisition of Brovel. We do have a number of opportunities in a number of countries that we would hope to pursue over the next couple of years.
There seems to have been a number of management changes lately, is there an underlying reason?There is no one reason. First of all if we start with the PLC Board and the Non-Executive team. The Chairman has to step down after nine years (he has actually done 14); that is recommendations on corporate governance about independence, so he will step down from the business in October of this year at the AGM. Mike has been replaced by Tony Rice who is an industrialist with a huge amount of experience and I look forward to working with him. I would also like to take this opportunity to thank Mike Redmond for the huge contribution he has made towards the Group through his tenure and he is a great supporter of myself and the management team.
Looking also at the PLC level, but from an Executive perspective, Anne-Francoise as the CFO has also left the Group. Anne was always ambitious and has moved into a FTSE 100 company. Anne has done a great job in improving the infrastructure within the organisation over her period and I would to like to thank her for that also.
Looking at the Senior Executive Team (SET), we have now made another two appointments onto that team. Greig Rooney, who has a lot of experience in manufacturing and supply chain management, has joined the SET and we have also appointed a new head of product development, Anthony Lucas, who has joined us from the Putney group. So, all the changes have been made either because of corporate governance regulations or to strengthen the Group, so I do believe that we have now got an excellent management team that will take us forward for the next few years of our growth.
So you remain confident about Dechra's future?I remain very confident about Dechra's future. We have had a very successful history, but we also look forward to the future with optimism. We have introduced a lot of new products, we are trading in a lot of new countries, we have got a very strong management team, we are still getting good growth from a number of our older products and, finally, we have got a lot of growth to come from the acquisitions that we have just made. The animal health market in the world continues to grow from both a companion animal and a farm animal perspective, so all in all we are in good shape, we're in a good market and we have got a good management team.