THE year has started with a "continued focus on investment" for York veterinary medicine specialist Animalcare with a 300 per cent rise in spending on its development pipeline.

The business, which operates across three divisions specialising in animal medicines, identification chipping, and welfare products, issued a trade update yesterday ahead of its interim results next month, revealing a 2.7 per cent rise in revenues to £7.11 million.

Bosses at the York Science Park-based firm said they have entered the 2016 financial year with a continued focus on investment, both in people and product development pipeline.

In the first six months of 2016's financial year it has invested more than 300 per cent more in its product development pipeline compared to the year before, and a result overheads are expected to increase by around £200,000 compared to early 2015.

In its interims results, due on February 10, Animalcare is due to report revenue from sales of its Licensed Veterinary Medicines division rising 4.2 per cent to £4.58 million.

The group's Companion Animal Identification division saw sales decline by 5.2 per cent to £1.20 million, which it attributed to the microchipping market becoming "significantly more competitive" ahead of compulsory microchipping in England, Wales and Scotland in April 2016. However while microchip revenues were adversely affected other products and services in this group "performed well", increasing by 7.2 per cent.

Revenues from the Animal Welfare Products group increased by 5 per cent to £1.34 million, which Animalcare said was driven primarily by increased sales of its Infusion Accessories range.

The company reported that in line with its strategy of product development and investment, one new product will be launched for distribution in the second half of 2016. In addition one existing product development product will be commercialised early in the second six months, which is expected to deliver "significant commercial benefit".

Animalcare said is expects three other in-house product development projects to receive regulatory approval during H2, with commercialisation soon after.

In its trade update the firm said: "The rate of progress of our product development pipeline is expected to continue; the estimated rate of expenditure is expected to be between £1 million and £1.5 million for the current financial year and beyond, leaving Animalcare well positioned to drive growth from 2017 onwards.

"While the uptake of microchips for dogs in England, Scotland and Wales remains modest there has been increased competition between suppliers to the market. Animalcare has plans in place to respond to this and to maximise the value from this segment beyond the current financial year.

"Following the solid trading performance in the first half, particularly across the Licensed Veterinary Medicines and Animal Welfare Product groups, the board remains confident about the prospects and outcome for the full year."