The stock certificate of the veterinary laboratory has fallen by 16% in the beginning of last week, as the investors fear the 1996-97 situation to repeat. Hence the reaction of the group.
Is the 'Mad Cow' disease going to make the /www.virbac.com">Virbaccertificate, the great veterinary laboratory settled in Carros, go down again ? In the beginning of last week, the alert has been given : within six sessions the certificate had decreased by 16% on the second market of Paris. What are the brokers worrying about ? A recurrence of what happened in 1996-97, during the first mad cow crisis. At that time, the company had suffered from the loss of purchasing power among the final customers. Farmers and cooperatives, which didn't have as money as they used to, were becoming harder to please about prices. This 'mad cow' side effect, combined with a strong competition on anti-parasite products, had made the Virbac results fall by 25% in 1996.
So the world tenth veterinary laboratory decided to react from Friday morning with a press release which aimed at putting people's minds at ease. Eric Marée, the president, wanted to underline the limited part represented by the Group bovine activity in Europe. 'On a consolidated turnover of more than 315 million euros expected in 2000, with a rise of more than 15%, less than 1% are dedicated to the production of bovine meat in Europe outside France and less than 3% in France.'
As well, Virbac president brought back to people's mind that the objective to make the group's net result grow by more than 20% was maintained. Finally the group insisted on the good activity and profitability prospects for 2001, thanks to job sharing (57% of pets ; 43% of cattle) and to this strong worldwide influence (more than half of the turnover outside Europe). So Virbac will take advantages of transfers from 'Europe bovine' activity to 'pork-fowl' and 'outside Europe bovine' activities.
A crisis communication which seems to have reach the aim : on Friday December 15th, the certificate increased by 8.45% up to 77 euros and rose by 2.47% on Monday December 18th. Of course, the Virbac certificate, despite this hard blow, is still seen as very outstanding since it has increased by 34.6% from January. Much more than many TMT securities (Telecommunications, Medias, Technologies) that have been so hurt this year. However, in the long run, the 'mad cow' side effect could hit the whole animal network…