Proactive Investors - Dechra Pharmaceuticals PLC (LON:DPH)'s shares plunged after warning full-year operating profit will be below current guidance after de-stocking by a number of wholesalers.
The FTSE 250-listed firm said the trading environment during the period January to April has been more volatile and challenging than in February when the firm reported its interim results.
In the US, Dechra said “the impact of the now widely reported de-stocking by US wholesalers has been deeper and longer than initially expected and had a material impact on Q3 performance, although there are encouraging signs that this is now re-bounding.”
The company said a similar de-stocking pattern has also been experienced in the UK during April 2023, due to certain wholesalers managing financial year-end inventory levels, although order patterns are beginning to show signs of normalising.
In the rest of Europe, the market appears to be slowing in response to the changing macro-economic environment and country specific dynamics.
As a result, Dechra expects full year underlying operating profit will be below £186mln, the guidance given in February.
Nonetheless, the company is confident it “remains very well positioned to continue to grow over the medium and longer term despite the unprecedented and, by nature, short term trading headwinds.”
Dechra added talks with EQT continue regarding a possible all-cash recommended offer of 4,070p.
The deadline for any bid is June 2. But shares were sitting well below that level on Monday, down 10.30% at 3,230p.