A LEADING York-based supplier of veterinary medicines says it expects trading in the first half of 2017 to be ahead of market expectations.

In an update Animalcare Group plc said trading during the last six months of 2016 had exceeded its board’s expectations in both sales and profit terms, with revenue growth of 12 per cent compared with the same period the previous year to £7.97 million (2015: £7.11 million).

The licensed veterinary medicines group continued to grow strongly, with revenues increasing 17.2 per cent to £5.37 million, driven by growth in the UK of 14.6 per cent and abroad of 37.7 per cent.

Sales from new products launched in the period contributed around £0.2 million, or four per cent, of the overall 17.2 per cent growth. Gross margins had improved against the previous year through a combination of favourable sales mix and cost of goods initiatives.

Sales from the animal welfare products group improved by 13.4 per cent to £1.51 million, driven by continued strong growth of Animalcare’s infusion accessories range.

Revenues for the companion animal identification group decreased by 9.2 per cent to £1.09 million. “Following the implementation of compulsory microchipping of dogs in the UK in April 2016, we expected and have observed a reduction in microchip volumes, which we expect to last into the medium term. Database services, however, have continued to grow.”

“The group’s cash position remains strong with period end cash balances at approximately £7 million.”

The company said four products were launched , three as part of a range of ear cleaners and treatments, all on distribution, and one new product from its in-house development pipeline, Acecare, a companion animal sedative.

There would probably be two further product launches in the next six months, both on distribution from EU partners and for use with companion animals.

It said despite the uncertainty of Brexit the board decided to accelerate investment in new products. “We are pleased to report good progress in our product development pipeline, in particular with regard to the identification of novel formulations which, as previously stated, are strategic focus for the group.

“We expect expenditure on our pipeline to increase for the current financial year to around £2 million.”