Proactive Investors - 7.55am: Dechra warns de-stocking to hit profit
Dechra Pharmaceuticals PLC (LON:DPH) has warned 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.
House prices hit record high in May
UK house prices hit a new record high in May as the housing market continued to defy pessimistic forecasts at the start of the year, figures on Monday showed.
Rightmove's house price index showed the average price of property coming to market jumped by 1.8%, GBP6,647, to set a new peak of GBP372,894 as sellers responded with increased pricing confidence.
The 1.8% monthly increase is the biggest of the year so far, and significantly higher than the historic average May rise of 1.0%, Rightmove said.
Tim Bannister, Rightmove's director of property science, suggested one reason for this increased confidence "may be that the gloomy start-of-the-year predictions for the market are looking increasingly unlikely".
"What is much more likely is that the market will continue to transition to a more normal activity level this year following the exceptional activity of the pandemic years," Bannister said.