September 3, 2018 / 8:16 AM / 15 days ago

Dechra Pharma says to implement hard Brexit plan

(Reuters) - Veterinary drugs producer Dechra Pharmaceuticals (DPH.L) said on Monday it was moving ahead with plans for a hard Brexit, stressing the financial impact should be “immaterial” but spooking investors worried about revenue and operations after next year’s split.

Shares of the company plunged around 20 percent to a more than six-month low to 2,454 pence in early trading on the London Stock Exchange.

“Our primary focus is on addressing Brexit risk in our supply chain,” the company said, listing costs worth a total of just 2 million pounds in relation to the plans.

“This includes transferring UK registered Marketing Authorisations for products that are sold in the EU to an EU entity and duplication of product release testing for products that are transferred between the UK and the EU,” it said.

Dechra shares had risen almost 54 percent till Friday’s close, and analysts and traders said the sell-off on Monday looked overdone.

The company listed Brexit along with U.S. sanctions on Iran and the European Union challenging the legality of the UK Control Foreign Company (CFC) tax legislation as three emerging geopolitical risks to its business.

Results for the FTSE 250-listed firm showed revenue rose 13.9 percent to 407.1 million pounds at constant currency for the year-ended June 30. Revenue from its largest EU Pharmaceuticals segment rose 11.4 percent.

Reporting by Shashwat Awasthi in Bengaluru; Editing by Amrutha Gayathri

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