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UPDATE - Eco Animal hails "excellent" year as Aivlosin sales flourish

Momentum behind Eco Animal Health continues to grow as it posted an "excellent" set of full year numbers, with sales of Aivlosin - its flagship antibiotic for pigs and poultry - continuing to expand.

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Aivlosin is an antibiotic product used in poultry.....

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Momentum behind Eco Animal Health (LON:EAH) continues to grow as it posted an "excellent" set of full year numbers, with sales of Aivlosin - its flagship antibiotic for pigs and poultry - continuing to expand.

Marketing authorisations have now been obtained in nearly all the major markets, the veterinary products group said, and worldwide sales in the year to end March were up over 30%.

Significantly, in North America, which accounts for more than a third of the potential world market for the molecule, sales trebled in the year.

"We are well positioned to build on our excellent start in this important market," said Peter Lawrence, the group's executive chairman.

It all added up to pre-tax profit being up 38% on the year to £5.1 million (2014: £3.6mln) on sales up 22% to £39mln compared to £31.9mln in 2014.

EBITDA (Earnings before interest, tax, depreciation and amortisation were £8.61mln against £7.05mln previously.

Cash from operations also increased, reaching £7.2mln at the year end, an increase of 16%, while EPS rose 57%.

A second interim dividend of 3 pence per share will be paid in October.

"The company is now realising the commercial benefit from the considerable investment it has made over many years in the intellectual property inherent in Aivlosin," said Lawrence.

In China, the subsidiary, which was established over a decade ago, had another successful year with sales rising 8 % in sterling, or 10 % in local currency, he added.

There was a significant upturn in business in Mexico and key tenders were also won in Brazil.

The company also significantly recently won approvals for both Aivlosin and Ecomectin  in the United Arab Emirates, it noted.

Eco also highlighted the recent marketing authorisation granted by the FDA in the US for the use of Aivlosin in pigs as very significant.

"The new financial year has started well with revenue maintaining momentum. I look forward with confidence to ECO delivering another impressive performance when the interim results for the first six months of trading are announced," said Lawrence.

House broker Peel Hunt said it was leaving its forecasts unchanged for now, but added there was "clearly upwards potential given the strong sales performance and the healthy level of forward orders".

"The global market for pigs and poultry is expected to grow by c10% to over $1.5bn by 2018," noted analyst Charles Hall, who rates the shares a 'buy'.

"Despite the focus on reducing antibiotic use, particularly as growth promoters, the overall market is expected to continue to grow due to increased demand for protein and greater industrialisation of farming," he added.

The broker targets 330p for the shares, which is 30p higher than where they are now.

Since the beginning of the year, the stock has performed well, rising 42.5%.

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