Interim results
Anpario plc (AIM:ANP), the independent manufacturer of natural sustainable animal feed additives for animal health, nutrition and biosecurity is pleased to announce its unaudited interim results for the six months to 30 June 2024 (“H1 2024”).
Highlights
Financial highlights
– 11% increase in sales to £17.0m (H1 2023: £15.3m).
– 20% increase in gross profit to £8.1m (H1 2023: £6.7m).
– Increase in gross margins to 47.5% (H1 2023: 43.9%).
– 41% increase in adjusted EBITDA1 to £2.7m (H1 2023: £1.9m).
– 53% increase in profit before tax to £2.1m (H1 2023: £1.4m).
– 84% increase in diluted adjusted earnings per share to 10.39p (H1 2023: 5.66p).
– 2% increase in interim dividend to 3.25p (H1 2023: 3.20p) per share.
– Cash balances, including short-term investments, of £13.5m at 30 June 2024 (31 December 2023: £10.6m).
Operational highlights
– Strong sales growth in most regions especially the Middle East, tempered by a pull-back in the United States.
– Strong performance from Orego-Stim® and a return to volume growth in our acid-based eubiotics and pellet binder ranges.
– 20% volume increase contributed to significant gross margin improvement due to recovery of fixed production overheads.
– First sales of Orego-Stim® Forte a water-soluble phytogenic for both aquaculture and agriculture applications.
– Orego-Stim® approved for use in organic livestock production in Europe by Research Institute of Organic Agriculture FiBL.
Outlook
– Strong start to the second half of the year with an acceleration in sales and volume growth.
– Recovery in volumes expected to continue in H2 which should lead to further improvement in profitability.
– Specific challenges related to shipping schedules and logistics and a potential US dockers strike will require navigating, but the Group is experienced in managing such situations.
– The Group’s leading position in natural and sustainable feed additive solutions with its leading brands including Orego-Stim®, pHorce® and Mastercube® gives the Board confidence in the long-term profitable development of the Company.
Matthew Robinson, Chairman, commented:
The Board is delighted to report a strong first half performance in terms of improved sales, margins and profitability. This reflects both management’s initiatives, commenced last year, in sales promotion, cost reduction and margin improvement as well as the broader industry-wide recovery.
Group sales increased by 11% to £17.0m compared to the prior year period of £15.3m, as the global agriculture environment improved, and our specific business development initiatives bore fruit. Meat protein producers are still under pressure, especially in the United States and China swine markets, as high feed and overhead costs and weak consumption impact producer margins. We expect these headwinds to alleviate in the coming months with a corresponding increase in the demand for our specialty feed additives.
Recovery in volumes, as well as sensitive price increases, delivered a significant improvement in gross margins of 3.6% points to 47.5%.
Within improved Group sales, there was notable regional diversity. Our biggest region, Asia including China, delivered sales growth of 15% compared to the same period last year, Middle East and Africa segment delivered an outstanding sales growth of 94%, but the United States was disappointing with a 46% decrease in sales, reflecting on-going difficulties in the swine market and decisions by some customers to reduce or stop using some of our products. We are implementing initiatives to replace this lost business, with improvement expected towards the end of this year and into the next. Our geographic diversity helped to compensate for territories currently experiencing a more challenging environment.
Adjusted EBITDA1 increased by 41% to £2.7m compared to the same period last year of £1.9m. The significant 84% increase in diluted earnings per share to 10.39p (H1 2023: 5.66p) is after the return of £9m in cash to shareholders by way of the tender offer in July 2023 and the cancellation of shares held in treasury which reduced the shares in issue by 17%. Even after this corporate action, the strong cash generation from operations delivered cash balances, including short-term investments, of £13.5m at the 30 June 2024; together with the Group’s strong balance sheet this enables us to invest in innovative natural feed additive solutions, expand our sales and distribution channels and pursue complementary acquisition opportunities which may arise. The Board has approved an interim dividend of 3.25 pence per share (H1 2023: 3.20 pence per share), an increase of 2% to the prior period.
The strong first half performance would not have been possible without the efforts of our staff across the globe who have seen their hard work and diligence repaid with sales success across the product range. There is more to achieve, and the team remains focused on implementing the strategy to deliver strong organic growth by offering sustainable and environmentally friendly products which help customers improve their business performance. The Group has made a strong start to the second half, and we are confident of building on this momentum and maintaining it into next year.
Matthew Robinson, Chairman
1 Adjusted EBITDA represents operating profit for the period of £2.682m (H1 2023: £1.195m) adjusted for: share based payments and associated costs £0.165m (H1 2023: £0.120m); and depreciation and amortisation charges of £0.573m (H1 2023: £0.590m).
| Enquiries: Anpario plc: | ||||
| Richard Edwards, CEO | +44(0)7776 417 129 | |||
| Marc Wilson, Group Finance Director | +44(0)1909 537 380 | |||
| Shore Capital:(Nominated Adviser and Broker): | +44 (0) 20 7408 4090 | |||
| Stephane AutonDavid Coaten | Corporate Advisory | |||
| Tom Knibbs | ||||
| Henry Willcocks | Corporate Broking | |||