REG - Animalcare Group PLC - Preliminary Full Year Results
Tue 07:00
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RNS Number : 5084G Animalcare Group PLC 29 April 2025
ANIMALCARE GROUP PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 31 December 2024
Strong financial performance and strategic progress, including the
transformational acquisition of Randlab post-year end
29 April 2025. Animalcare Group plc (AIM: ANCR), the international animal
health business, announces its preliminary results for the year ended 31
December 2024.
Financial Highlights
· Revenues from continuing operations increased by 4.9% (7.2% at CER)
to £74.2m with sales growth delivered across all three product categories
· Gross margins eased to 55.6% (2023: 56.8%) due the impact of input
inflation and unfavourable exchange rates, offset by positive sales mix
· Continued targeted investment in people and marketing reflected in
underlying* EBITDA at £11.6m, in line with prior year
· Reported profit before tax of £5.8m (2023: £3.3m)
· Underlying continuing earnings per share of 10.9 pence, up 10.1%;
reported basic earnings per share of 30.3 pence (2024: 2.0p) boosted by the
disposals of Identicare and STEM
· Cash conversion rate of 103.1% well ahead of prior year
· Following the equity raise and acquisition of Randlab the balance
sheet remains strong with net debt standing at £9.0m at year end excluding
lease liabilities, with leverage comfortably within the Board's stated
guidance of <2.0x underlying EBITDA
· Board proposes final dividend of 3.0 pence per share amounting to, if
approved, a total payout of 5.0 pence per share for the year
Strategic and Operational Highlights
· Acquisition of Australia-based Randlab in January 2025 for £59.7m
transforms the Company's position in the attractive Equine sector and opens
new routes to Asia Pacific markets for the Group's existing product portfolio.
Post year end, Randlab is performing in line with management expectations
· Sale of equity interests in ldenticare and STEM enhances deal-making
capacity, paving the way for the Randlab transaction
· Daxocox continues to respond positively to sales and marketing focus
with c.40% sales uplift. Ongoing life cycle management programme aims to
broaden range of indications and develop long-acting injectable option
· Plaqtiv+ dental care range records double-digit growth with c.27%
increase in revenues
· Increased focus on R&D with early-stage novel VHH antibody
programme progressing well
· Ed Torr assumed role of Non-Executive Chair at June 2024 AGM
* The Group presents a number of non-GAAP Alternative Performance Measures
(APMs) which exclude non-underlying items. APMs are calculated in line with
the Group's accounting policies and therefore may not be directly comparable
with other companies.
Jenny Winter, Chief Executive Officer commented: "This has been a solid year
of delivery for Animalcare, characterised by a positive organic trading
performance and culminating in the exciting acquisition of Randlab post year
end, providing a transformational boost to the execution of our long-term
growth strategy.
"Revenues increased across all three of our product categories as investment
in our people and the effectiveness of our operations continued to yield
benefits. Strong cash generation, underpinned by the disposal of non-core
assets and the proceeds of the successful equity raise, maintained our balance
sheet firepower, enabling us to continue the pursuit of organic and inorganic
growth opportunities."
Results webcast
Virtual analyst presentation - 10.00am on Tuesday, 29 April 2025
Should you wish to attend, please email animalcare@almastrategic.com
(mailto:animalcare@almastrategic.com)
Virtual investor presentation - 12.00pm on Tuesday, 6 May 2025
Should you wish to attend, please register via the Investor Meet Company
platform using the following link:
https://www.investormeetcompany.com/animalcare-group-plc/register-investor
(https://www.investormeetcompany.com/animalcare-group-plc/register-investor)
A copy of the analyst presentation will be made available on the Group website
shortly after the webcast.
About Animalcare
Animalcare Group plc is a UK AIM-listed international veterinary sales and
marketing organisation. Animalcare operates in seven European countries as
well as Australia and New Zealand and exports to approximately 40 countries in
Europe and worldwide. The Group is focused on bringing new and innovative
products to market through its own development pipeline, partnerships and via
acquisition.
For more information about Animalcare, please visit www.animalcaregroup.com
(http://www.animalcaregroup.com) or contact:
Animalcare Group Plc +44 (0)1904 487 687
Jenny Winter, Chief Executive Officer communications@animalcaregroup.com
Chris Brewster, Chief Financial Officer
Media/investor relations
Stifel Nicolaus Europe Limited +44 (0)20 7710 7600
(Nominated Advisor & Joint Broker)
Ben Maddison
Nicholas Harland
Francis North
Panmure Liberum +44 (0)20 7886 2500
(Joint Broker)
Corporate Finance
Freddy Crossley/Emma Earl
Corporate Banking
Rupert Dearden
Alma Strategic Communications +44 (0)20 3405 0205
Caroline Forde animalcare@almastrategic.com (mailto:animalcare@almastrategic.com)
Kinvara Verdon
Rose Docherty
Chair's Statement
Strong organic revenue growth from our pharmaceuticals operations, driven by
healthy demand for key portfolio brands in a resilient animal health sector,
was underpinned by an ongoing focus on operational excellence. As expected,
underlying EBITDA was at the same level as 2023 reflecting ongoing investment
in SG&A costs, primarily related to people and marketing.
This positive trading performance, supported by strong cash flows, the Group's
solid financial position and the attractive fundamentals of the animal health
market, enables the Board to propose a final dividend of 3.0 pence, 5.0 pence
for the full year, in line with the prior year.
Equally important to the successful execution of our long-term strategy is
growth through inorganic means, typically in the form of M&A, licensing
deals or partnerships. Anyone who has followed Animalcare in recent years will
be aware that the management team has been highly active in identifying
potential targets while applying a disciplined and structured approach to
assessing these opportunities.
Of course, not all these efforts bear fruit, so we're excited with the
material results we delivered on this front in 2024, first of all through the
disposal in February 2024 of Identicare Limited ("Identicare"), the UK-based
pet microchipping and pet owner-focused services company. As part of the
Group's strategy to concentrate on the veterinary pharmaceuticals business,
Identicare was separated from our core operations in 2021, with specialist
leadership brought in. The subsequent strategic repositioning of this non-core
business enabled us to crystallise significant value for the Group.
This transaction was followed in April 2024 by the sale of the Group's
minority stake in STEM Animal Health to Dechra Pharmaceuticals. And as part of
that deal, Animalcare benefited further by securing an enhanced licence and
distribution agreement for biofilm-targeting dental products.
The proceeds from these disposals added significantly to the Group's balance
sheet firepower in 2024, ultimately helping to fund the transformative
acquisition of Randlab for approximately £60m excluding acquisition costs.
Concluded in early January 2025, the acquisition of the Australia-based
company is compelling on many levels. Not only does it increase our exposure
to the fast-growing equine market and is expected to be earnings accretive by
at least 20% in the first year, over the longer term it also provides a
beachhead to extend the reach of our Companion Animals portfolio into the Asia
Pacific region.
Among the many notable aspects of this value-creating transaction was the
equity placing which helped raise the funds to make this deal a reality. The
enthusiasm of institutional investors for what proved to be an over-subscribed
raise demonstrates the widespread confidence in the Group's business and
future prospects. I'd like to thank those existing shareholders who took part
in the raise for their continued support and welcome new investors whose
participation has helped broaden our shareholder base.
On behalf of the Board, I would like to take this opportunity to thank all
shareholders - large or small - for your continued backing. I'd also like to
use this public platform to recognise the hard work of the Animalcare team;
it's their commitment and skill on a daily basis that makes it possible for us
to deliver on our strategic objectives. The progress we've seen during 2024 is
a direct result of the hard work put in by our people across the business.
Looking forward, we have every reason to be positive about the prospects for
Animalcare as we grasp the opportunities and navigate the challenges in our
markets.
Our balance sheet purposely remains strong following the purchase of the
Randlab business. This firepower enables us to continue our pursuit of
inorganic and organic growth through the likes of M&A, business
development, geographic expansion and sustainable licensing deals.
Another potential source of future growth is our new product pipeline.
Industry data shows that much of the growth in animal health markets comes
from new, differentiated products, notably in biologics. So, to maintain
sustainable growth into the future, we are committed to increasing investment
in our development pipeline, whether that be though life cycle management
projects to extend the utility and reach of existing brands or innovative
technology that promises to change veterinary practice.
With a well-funded balance sheet, double-digit growth in our lead products, an
exciting growth opportunity in the Asia Pacific region and a management team
that has proven to deliver on its strategy, the prospects for Animalcare are
bright.
Ed Torr
Independent Non-Executive Chair
29 April 2025
Chief Executive Officer's Review
Strong trading performance
Group revenues from continuing operations - excluding Identicare - totalled
£74.2m (2023: £70.7m), up 4.9% (+7.2% at CER).
Central to our long-term growth strategy has been the rationalisation of our
product portfolio. Over time, this has seen us deprioritise a tail of
smaller-selling products in favour of higher-selling, more profitable brands.
With this refocus materially complete, we have seen a significant boost to the
likes of our dental health range, including Plaqtiv+, Daxocox, and Danilon,
the latter having reverted to our sales and marketing control in 2023.
Gross margins declined by 1.2% to 55.6%, affected by product mix and input
inflation, with offsetting pricing measures while safeguarding our commercial
position in key markets. Underlying EBITDA of £11.6m was maintained at the
prior year level as we continued to invest in SG&A, primarily to focus on
the skills and capabilities necessary to implement our long-term growth
strategy.
The Group continues to deliver strong cash generation, with an improved
underlying cash conversion rate of 103.1% (2023: 86%). At year end, our net
debt position, before accounting for IFRS 16 leases, was £9.0m. This was
strengthened by the oversubscribed placing at the time of the Randlab
acquisition, leaving us well placed as we continue to execute on our growth
strategy.
Over the last three years, we have made significant strategic progress:
driving margin improvements, rationalising our product portfolio and enhancing
our organisational capabilities, all helping to create a strong base from
which to deliver on our priorities. 2024 has been transformational for our
business. Divesting Identicare and our stake in STEM, the former for a
considerable and enhanced valuation, has enabled the Randlab acquisition,
adding another significant avenue for growth.
Our growth strategy is split between organic and inorganic growth and new
product development.
Organic growth
Building and nurturing a focused portfolio of attractive, profitable brands
that offer sustainable revenues and strong margins is at the heart of our
long-term strategy. In recent years, we have re-engineered our product line-up
to place greater emphasis on brands that we can commercialise across all our
markets. Combined with ongoing investment in sales and marketing excellence,
this gives us important synergies that are hard to access from smaller, more
local, products. The value of that approach is evident in the continuing
enthusiastic customer response to brands such as Daxocox and Plaqtiv+. Sales
of Daxocox, our long-acting NSAID for the treatment of osteoarthritic pain,
grew by 40% in 2024, while revenues generated by the Plaqtiv+ dental range
were up 27%.
Each of our product categories delivered growth over the 12 months. Production
Animals which enjoyed an exceptional first half driven, in part, by phasing
and competitor supply shortfalls, returned to more normal demand patterns for
the full year, while Equine continued to benefit from our decision to return
Danilon to the Animalcare fold, a move that gives us more control over sales
and marketing of this anti-inflammatory treatment. Companion Animals returned
to growth (up 3.4%) after the effect of sales phasing in our export business,
launch delays and supply challenges eased in the second half, as expected.
Inorganic growth
Animalcare is committed to pursue value-creating external opportunities that
have the potential to grow our business through M&A, in-licensing and
partnerships. In early 2025, we achieved a significant milestone with the
acquisition of Randlab, the Australia-based equine health company.
As a precursor to this transformative deal, in February 2024, we successfully
disposed of Identicare, the non-core microchipping and pet owner-focused
services company, for £24.9m. To help maximise the attractiveness of the
enterprise to potential buyers, we carved out Identicare from the
pharmaceutical operation during 2021 and brought in specialist leadership. The
next piece of the jigsaw was the decision to sell our minority equity stake in
STEM Animal Health to Dechra Pharmaceuticals. Not only were we able to secure
an attractive return on our equity investment, we gained enhanced commercial
licensing rights to reach more pet owners with products based on anti-biofilm
technology.
The proceeds from these disposals made a significant contribution to the
c.£60m acquisition of Randlab, a business that the Group expects to be
earnings accretive to the tune of more than 20% in 2025. The transaction is an
excellent strategic fit on many levels, for example, providing international
scale in the attractive Equine sector as well as creating a bridgehead into
Asia Pacific markets for the Group's Companion Animals portfolio.
This is a compelling and exciting development for Animalcare.
Following completion, we are confident we have in place an experienced
leadership team to facilitate a smooth transition, integration and deliver our
future growth ambition, with the objective to preserve the absolute focus on
the equine market and entrepreneurial operating environment. The integration
is progressing well and alongside local management, we've taken the decision
to accelerate additional investment in the commercial team to drive future
growth.
Developing new products
With an increased focus on R&D, we have made good progress in the
development of new products during the year. Our overall objective is to
continue building a balanced pipeline that will generate a flow of new
products that meet the needs of our markets.
We are continuing to advance our life cycle management programme for Daxocox,
a long-acting treatment for osteoarthritis pain. We have completed the
clinical phase of our studies to broaden the range of indications for Daxocox
and have initiated early development for a long-acting injectable
non-steroidal anti-inflammatory.
Having completed development and field trials, we plan to launch two new
products in 2025 from a partnership with Yun Probiotherapy. These products
will further expand our line-up of dermatological treatments to improve skin
conditions without the use of antibiotics.
Biologics continue to drive much of the market growth and the development of
our novel VHH antibody treatment is progressing well. While still at an early
stage, we have seen positive data in horses and continue to advance the
overall programme to assess the potential in additional species and new
indications.
We continue to expand the reach of our novel products Daxocox and Plaqtiv+
through the registration in additional territories outside Europe, providing
further opportunities for growth through our network of partners.
Strong foundations
Our foundations are strong and flexible, giving us more scope than ever to
pursue our strategic goals in an attractive marketplace. Having delivered the
most transformative acquisition since the merger of Animalcare and Ecuphar, we
continue to possess the necessary firepower to pursue further value-creating
opportunities through cash-generative trading performance, the support of the
equity raise and undrawn credit facilities.
As important to our future success is the ongoing investment that we have
brought to bear on developing the skills of our people and the effectiveness
of our core operations, particularly in the field of sales and marketing.
Operationally, we are well positioned to drive our growth agenda, increasingly
equipped with the capabilities that match and support our ambitions.
Summary and outlook
In 2024, we delivered another strong set of results in line with market
expectations. Growing revenues from our continuing operations across all
product categories and improved levels of cash conversion were central to the
Group's positive performance. Undoubtedly, the highlight was the acquisition
of Randlab (which completed early in 2025). This transformational deal
represents a powerful strategic rationale for Animalcare, strengthening our
position and portfolio in the growing Equine sector.
Looking ahead, there are many reasons to be confident about our prospects and
our ability to deliver growth over the long term.
I would like to take this opportunity to thank the Animalcare team for their
unwavering commitment to the Company as we push to deliver our long-term
growth strategy.
Finally, I would also like to recognise the members of the Animalcare Board
for their encouragement and wise counsel, especially during a period of
intense business development activity.
Jennifer Winter
Chief Executive Officer
29 April 2025
Chief Financial Officer's Review
Underlying and Statutory Results
To provide comparability across reporting periods, the Group presents its
results on both an underlying and statutory (IFRS) basis. The Directors
believe that presenting our financial results on an underlying basis, which
excludes non-underlying items, offers a clearer picture of business
performance. IFRS results include these items to provide the statutory
results. Following the divestment of Identicare, announced on 28 February
2024, both the 2024 and 2023 income statements have been presented to show the
remaining pharmaceuticals business as continuing operations separately from
Identicare, which has been classified as discontinued.
All figures are reported at actual exchange rates (AER) unless otherwise
stated. Commentary will include references to constant exchange rates (CER) to
identify the impact of foreign exchange movements. A reconciliation between
underlying and statutory results is provided at the end of this financial
review.
Overview of underlying financial results
2024 2023 % Change at AER
£'000
£'000
Revenue 74,228 70,733 4.9%
Gross Profit 41,244 40,147 2.7%
Gross Margin % 55.6% 56.8% (1.2%)
Underlying Operating Profit 8,497 8,790 (3.3%)
Underlying EBITDA 11,556 11,601 (0.4%)
Underlying EBITDA margin % 15.6% 16.4% (0.8%)
Basic Underlying Continuing EPS (p) 10.9p 9.9p 10.1%
Group pharmaceutical revenues for the period increased by 4.9% (7.2% at CER)
to £74.2m, including a strong contribution from volume growth, with all three
product category revenues increasing versus prior year. Gross margins declined
by 120bps to 55.6% predominantly reflecting product category sales mix and
input cost inflation. Underlying EBITDA was in line with prior year at
£11.6m, reflecting continuing investment in SG&A costs, notably related
to our people and marketing.
Revenue performance by product category is shown in the table below:
2024 2023 % Change at AER
£'000
£'000
Companion Animals 49,828 48,212 3.4%
Production Animals 17,027 15,790 7.8%
Equine 7,373 6,731 9.5%
Total 74,228 70,733 4.9%
Revenue in Companion Animals improved by 3.4% to £49.8m, benefiting from
strong double-digit growth in Daxocox (+40%) and our dental range encompassing
Orozyme (+11%) and Plaqtiv+ (+27%). These positive contributions were
underpinned by the organisational changes made in H2 2023 and associated
ongoing focus and investment to drive sales and marketing excellence. New
products launched in the last two years added £1.4m (2023: £1.9m) of sales
through a combination of owned and distribution brands. This performance was
lower than expected due to launch delays and some disruption in supply. Our
mature portfolio continues to be impacted by competitor dynamics against
certain generic brands and cessation of distribution products, offsetting the
revenue growth drivers noted above.
Following a very strong first half, Production Animals revenue increased by
7.8% over the full year to £17.0m. This performance was driven by growth in
certain larger-selling brands, phasing of orders and benefit of a one-off
competitor out of stock. The Group's Production Animals expertise is focused
in our Southern Europe markets and we are reviewing opportunities to build on
this expertise and existing sales footprint to grow this important part of our
business.
Our Equine portfolio sales increased by 9.5% to £7.4m, benefiting from
continuing strong momentum in Danilon within the UK and growth across our
fluids range. During the year we received approval for a number of territory
expansions for Danilon, including France, with commercial launches expected
during 2025.
We continue to focus commercial resources and investment on our larger,
higher-margin brands which have driven much of our revenue growth. Within
these brands, and across our portfolio, gross margins have, overall, decreased
by 120bps to 55.6%, reflecting input cost (COGS) and logistics price
inflation, sales mix, notably with Companion Animals and unfavourable foreign
exchange translation effects - approximately 75 to 80% of our revenues are
denominated in Euros. The Group has partially recovered this inflation through
mitigating pricing actions, where possible, while maintaining our
competitiveness across key brands and geographic markets.
Underlying EBITDA decreased by 0.4% to £11.6m, with EBITDA margins moderating
to 15.6%. Underlying overheads, defined as gross profit less underlying
EBITDA, increased during the year to £29.7m (2023: £28.6m), an increase of
3.8% principally driven by people, marketing and regulatory costs. People
costs include the impact of inflationary and salary increases across the Group
and investment in additional headcount, notably in commercial, R&D and
supply chain roles to underpin the Group's future growth.
Basic underlying continuing EPS increased by 10.1% to 10.9 pence (2023: 9.9
pence) due to a decrease in the underlying effective tax rate to 18.9% (2023:
26.0%) and lower net finance costs driven by interest received on cash
balances following the sale of Identicare. The decrease in the effective tax
rate is primarily attributable to a one-off prior year charge within deferred
tax, arising from a change in the statutory enacted tax rate.
Overview of reported financial results
Reported Group profit after tax for the year (after accounting for the
non-underlying items and discontinued operations shown in the table and
discussed below) was £18.5m (2023: £1.2m), with reported earnings per share
at 30.3 pence (2023: 2.0 pence per share).
2024 Amortisation and impairment of intangibles Acquisition, restructuring, integration and other costs 2024 2023
£'000
£'000
Underlying results Reported results Reported results
£'000
£'000
£'000
Continuing Operations
Revenue 74,228 - - 74,228 70,733
Gross profit 41,244 - - 41,244 40,147
Selling, general & administrative expenses (30,507) (3,326) - (33,833) (32,630)
Research & development expenses (2,270) (639) - (2,909) (3,101)
Net other operating income/(expense) 30 - 2,546 2,576 (388)
Impairment losses - (23) - (23) (22)
Operating profit/(loss) 8,497 (3,988) 2,546 7,055 4,006
Net finance expenses (315) - (988) (1,303) (580)
Share in net profit/(loss) of joint venture 31 - - 31 (142)
Profit/(loss) before tax 8,213 (3,988) 1,558 5,783 3,284
Taxation (1,554) 710 (122) (966) (2,187)
Profit/(loss) for the year 6,659 (3,278) 1,436 4,817 1,097
Profit from discontinued operations 48 - 13,629 13,677 102
Total profit/(loss) for the year 6,707 (3,278) 15,065 18,494 1,199
Basic earnings per share (p) 11.0p - - 30.3p 2.0p
Non-underlying items net income of £11.8m (2023: net charge of £5.3m)
relating to profit after tax have been incurred in the year, as further
described in Note 4. In summary, the principal items are as follows:
· £13.7m gain on disposal of Identicare, £3.4m gain on the sale of
the Group's investment in STEM and a £0.4m gain on disposal of intangible
assets;
· Amortisation and impairment of acquisition-related intangibles of
£4.0m (2023: £4.2m), encompassing amortisation in relation to the reverse
acquisition of Ecuphar NV and previous acquisitions made by Ecuphar NV;
· Net finance expenses of £1.0m representing the loss on hedging
arrangements associated with the advanced payment for the acquisition of
Randlab; and
· The balance of £0.7m (2023: £1.1m) includes costs relating to
restructuring, M&A and business development activities and, in the prior
year, share based payments in respect of Identicare Limited of £0.8m.
Dividends
An interim dividend of 2.0 pence per share was paid in November 2024.
The Board is proposing a final dividend of 3.0 pence per share (2023: 3.0
pence per share). Subject to shareholder approval at the Annual General
Meeting to be held on Tuesday 10 June 2025, the final dividend will be paid on
Friday 18 July 2025 to shareholders whose names are on the Register of Members
at close of business on Friday 20 June 2025. The ordinary shares will become
ex-dividend on Thursday 19 June 2025. The deadline for the Dividend
Re-Investment Programme (DRIP) election is Friday 27 June 2025.
The Board continues to closely monitor the dividend policy, recognising the
Group's need for investment to drive future growth and dividend flow to
deliver overall value to our shareholders.
Operating cash flow and cash conversion
The Group continues to generate strong operating cash flows, demonstrating the
highly cash-generative qualities of our business. Underlying cash conversion
was 103.1%, well ahead of 2023 guidance of 85-90%.
2024 2023
£'000
£'000
Underlying EBITDA - continuing operations 11,556 11,601
Underlying EBITDA - discontinued operations 250 1,726
Total Underlying EBITDA 11,806 13,327
Change in net working capital (695) (1,323)
Taxation (777) (1,913)
Non-cash and other adjusting items 1,018 836
Net cash flow from operations 11,352 10,927
Non-underlying cash items 825 498
Underlying net cash flow from operations 12,177 11,425
Underlying cash conversion % 103.1% 85.7%
Underlying net cash flow generated by our operations increased to £12.2m
(2023: £11.4m). The net working capital outflow of £0.7m was principally
driven by a £3.5m increase in inventories due to the normalisation of the
significant inventory reduction during FY23, together with targeted investment
in certain products to support surety of supply and sales into 2025. The
balance of the net working capital movement reflects a £1.0m decrease in
receivables, offset by £1.8m higher payables driven by trading and inventory
buying patterns towards the year end. Cash taxes significantly reduced
compared to 2023 principally reflecting the geographic mix of profits and
lower level of prior year balancing tax payments.
For 2025, we are anticipating cash conversion in the region of 80% reflecting
the post acquisition cash flows from Randlab, acquired on 3 January 2025, and
the return to target range of c.85-90% within Animalcare. Randlab's cash
conversion has, historically, been lower than Animalcare driven by inventory
policies and higher cash taxes as a percentage of underlying EBITDA. We have
initiated activities to deliver operating cash flow efficiencies in both areas
across 2025 and beyond. As in prior years, we expect the profile of our
operating cash conversion to be lower in the first half versus the second
half.
Net cash/(debt) bridge
£'000
Net cash 1 January 2024* 1,709
Net cash flow from operations 11,352
Net capital expenditure (2,505)
Payment of lease liabilities (976)
Net interest received 195
Other (300)
Advanced payment for acquisitions (59,712)
Disposals 27,668
Proceeds from equity raise and issue of share options 19,097
Dividends (3,019)
FX on cash and borrowings (2,524)
Net debt at 31 December 2024* (9,015)
*Prior to accounting for IFRS 16 leases
Investment in new product development to strengthen our pipeline through a
balance of early and later-stage opportunities totalled £2.1m (2023: £1.6m).
Our development pipeline is spread across novel, generic and lifecycle
management projects in multiple species. Continued progress has been made with
our novel VHH antibody programme. Lifecycle management and territory expansion
activities of key brands, notably Daxocox and Danilon, are ongoing. The
balance of expenditure relates chiefly to investment in our IT business
systems and infrastructure.
During 2025, in line with our capital allocation priorities, we plan to
increase investment in R&D spend to approximately 5% of revenue. We will
focus our R&D resources on larger sustainable innovation projects while
balancing risk. While increasing innovation plays a critical role in our
growth strategy, we will continue to allocate capital to product lifecycle
management to broaden the value of certain existing products.
On 3 January 2025, we announced the completion of the Randlab acquisition,
which necessitated the advanced transfer of £59.7m (AUD$121m) funds on 31
December 2024, representing the estimated completion amount which was
confirmed in March with no material change. The majority of the transaction
expenses of approximately £1.0m were paid in the first quarter of 2025. The
acquisition was funded through a combination of cash realised on the disposals
of Identicare and STEM, an oversubscribed placing that raised gross proceeds
of £20m and debt drawdown, the latter facilitated by a new €10m acquisition
line.
Notwithstanding the significant foreign exchange translation loss of £2.5m
due to the movement in GBP:EUR during the year, strong free cash generation
after lease costs of £7.9m (2023: £7.1m including Identicare contribution of
£1.1m), coupled with Randlab transaction costs largely being paid post year
end, has resulted in the Group's net debt position being lower than expected,
which ended the financial year, pre IFRS 16 leases, at £9.0m (2023: £1.7m
cash).
Net debt including IFRS 16 leases was £11.5m (2023: £1.2m) with leverage on
a statutory basis at 1.0 times underlying EBITDA. Leverage on a proforma
basis, incorporating Animalcare's FY24 results and Randlab's adjusted EBITDA
of AUD$11.0m (approximately £5.6m) for the year ended 30 June 2024, was 0.7
times.
Capital allocation
The Group has the following priorities on capital allocation that closely
align to our strategic priorities of investing in accelerating growth and
value creation while rewarding shareholders:
· Organic growth - continued investment in people and operational
excellence will underpin our strong foundations for future growth
· Inorganic growth - debt and equity capacity reserved for M&A,
with disciplined balance sheet management targeting gearing of up to 2.0x
EBITDA
· New product development - operating cash flows will fund our pipeline
with target R&D investment at c.5% of revenues per annum
· Dividends - maintain dividends relative to our profit and investment
requirements
Borrowing facilities
As at 31 December 2024, the Group had total credit facilities of €49m,
provided by a syndicate of four banks, with all facilities set to mature on 31
March 2029. These facilities included a €44m revolving credit facility (RCF)
provided by all four banks, and a €5m acquisition line, provided by two of
the banks with a commitment for a further €5m from the remaining two. The
acquisition line is restricted and cannot be used for operational funding.
The loans carry a variable, EURIBOR-based interest rate with an applicable
margin of either 1.26% or 1.50%. The RCF features bullet repayment at maturity
in March 2029, while the acquisition line is amortised through quarterly
payments, also concluding in March 2029.
In early 2025, the Group finalised credit documentation with the remaining two
of the four syndicate banks, bringing the total acquisition facility to the
€10m committed in 2024. This completion ensures an equal allocation of the
total credit facility across all four syndicate banks, with the maturity date
for all facilities remaining at 31 March 2029. The Group centrally manages its
banking arrangements through a cross-currency cash pooling system, whereby
funds are swept daily from various bank accounts into central accounts. This
approach optimises the Group's overall net interest payable position.
The Group's credit facilities are subject to the following financial
covenants, which are monitored and maintained at all times:
• Net debt to underlying EBITDA ratio of no more
than 3.5x
• Underlying EBITDA to interest ratio of at least
4.0x
• Solvency ratio (total assets less goodwill/total
equity less goodwill) of more than 25%
At 31 December 2024, net debt (excluding IFRS 16 lease liabilities) was £9.0
million, compared to net cash of £1.7 million as at 31 December 2023. The RCF
had £31.6 million of available headroom as at 31 December 2024.
As of 31 December 2024, and throughout the financial year, the Group was in
full compliance with all covenant requirements, maintaining significant
headroom across all three measures.
Going concern
The Directors have prepared cash flow forecasts for a period of at least 12
months from the date of signing of these financial statements (the going
concern assessment period). These forecasts include Randlab from the date of
acquisition and indicate that the Group will have sufficient funds and
liquidity to meet its obligations as they fall due, taking into account the
potential impact of "severe but plausible" downside scenarios to factor in a
range of downside revenue estimates and higher than expected inflation across
our cost base, and nil EBITDA and cash generation from the newly acquired
Randlab Group with corresponding mitigating actions. The Group also conducted
a reverse stress test assessment to evaluate the performance decline necessary
to breach its banking covenants. The required decline was found to be so
severe that it was considered implausible, as it would necessitate a
significant reduction in both gross margin and cash conversion to breach the
Group's tightest covenant. The output from these scenarios shows the Group has
adequate levels of headroom and expects to comply with all its banking
covenants associated with the current committed facilities throughout the
going concern assessment period. Accordingly, the Directors continue to adopt
the going concern basis in preparing the financial statements.
Subsequent events - acquisition of Randlab
On 3 January 2025, we completed the acquisition of Randlab. The acquisition
was executed through a newly incorporated subsidiary, Animalcare Australia Pty
Ltd, which acquired the entire issued share capital of each Randlab Australia
Pty Ltd (and its wholly owned subsidiary, Randlab (New Zealand) Limited),
Randlab Pty Ltd and Randlab Middle East Veterinary Medicine Trading Single
Owner L.L.C. for an enterprise value of AUD$121m (£59.7m), on a debt-free,
cash-free, normalised working capital basis, subject to customary
post-completion adjustments.
Summary and outlook
We have delivered strong results during the year, in line with market
expectations and have made significant strategic progress in what has been a
transformative year comprising two key non-core disposals, which delivered
material value for our shareholders and subsequently enabled, combined with an
over-subscribed equity raise, our acquisition of Randlab, which significantly
strengthens our Equine portfolio and with this, Animalcare's presence in the
attractive global equine veterinary market.
Our future prospects are exciting, and we are confident in our ability to
deliver long-term growth through investment in organic growth, further
carefully selected M&A and focusing our R&D resources on sustainable
innovation within our pipeline, all underpinned by our strong financial
platform.
Chris Brewster
Chief Financial Officer
29 April 2025
Consolidated income statement
Year ended 31 December 2024
For the year ended
Notes Underlying Non-Underlying (Note 4) Total Underlying Non-Underlying (Note 4) Total
2024 2024 2024 2023 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 5 74,228 − 74,228 70,733 − 70,733
Cost of sales (32,984) − (32,984) (30,586) − (30,586)
Gross profit 41,244 − 41,244 40,147 − 40,147
Research and development expenses (2,270) (639) (2,909) (2,455) (646) (3,101)
Selling and marketing expenses (12,458) − (12,458) (12,034) − (12,034)
General and administrative expenses (18,049) (3,326) (21,375) (16,870) (3,726) (20,596)
Net other operating income/(expenses) 30 2,546 2,576 2 (390) (388)
Impairment losses − (23) (23) − (22) (22)
Operating profit/(loss) 8,497 (1,442) 7,055 8,790 (4,784) 4,006
Finance expenses 7 (1,520) (988) (2,508) (1,254) − (1,254)
Finance income 8 1,205 − 1,205 674 − 674
Finance cost net (315) (988) (1,303) (580) − (580)
Share of net profit/(loss) of joint venture accounted for using the equity 13 31 − 31 (142) − (142)
method
Profit/(loss) before tax 8,213 (2,430) 5,783 8,068 (4,784) 3,284
Income tax (expense)/income 9 (1,554) 588 (966) (2,095) (92) (2,187)
Net profit/(loss) for the period from continuing operations 6,659 (1,842) 4,817 5,973 (4,876) 1,097
Profit/(loss) for the period from discontinued operations 6 48 13,629 13,677 572 (470) 102
Profit/(loss) for the period 6,707 11,787 18,494 6,545 (5,346) 1,199
Earnings per share for profit/(loss) attributable to the ordinary equity
holders of the Company:
Total profit for the period
Basic earnings per share 10 11.0p 30.3p 10.9p 2.0p
Diluted earnings per share 10 10.9p 29.9p 10.8p 2.0p
Continuing underlying profit for the period
Basic earnings per share 10 10.9p 7.9p 9.9p 1.8p
Diluted earnings per share 10 10.8p 7.8p 9.8p 1.8p
In order to aid understanding of underlying business performance, the
Directors have presented underlying results before the effect of exceptional
and other items. These exceptional and other items are categorised as
'non-underlying' and are analysed in detail in Note 4. The accompanying notes
form an integral part of these consolidated financial statements.
Consolidated statement of comprehensive income
Year ended 31 December 2024
For the year ended
2024 2023
£'000 £'000
Profit for the period 18,494 1,199
Other comprehensive expense
Exchange differences on translation of foreign operations* (528) (290)
Other comprehensive expense, net of tax (528) (290)
Total comprehensive income for the year, net of tax 17,966 909
Total comprehensive income attributable to:
The owners of the parent 17,966 909
Total continuing other comprehensive income for the period, net of tax 4,289 807
Total discontinued other comprehensive income for the period, net of tax 13,677 102
17,966 909
* May be reclassified subsequently to profit and loss
Consolidated statement of financial position
Year ended 31 December 2024
As at 31 December
Notes 2024 2023
£'000 £'000
Assets
Non-current assets
Goodwill 11 39,360 50,656
Intangible assets 12 16,597 20,584
Property, plant and equipment 305 403
Right-of-use-assets 17 2,316 2,819
Investments in joint ventures 13 − 1,119
Deferred tax assets 9 2,192 1,726
Other financial assets 82 70
Total non-current assets 60,852 77,377
Current assets
Inventories 11,754 10,062
Trade receivables 13,501 13,294
Current tax receivables* 694 810
Other current assets 60,297 607
Cash and cash equivalents 11,715 4,642
Total current assets 97,961 29,415
Total assets 158,813 106,792
Liabilities
Current liabilities
Borrowings 14 (976) −
Lease liabilities 17 (841) (914)
Trade payables (12,908) (10,808)
Current tax liabilities (623) (125)
Accrued charges and contract liabilities 15 (47) (1,159)
Other current liabilities (5,213) (5,412)
Total current liabilities (20,608) (18,418)
Non-current liabilities
Borrowings 14 (19,754) (2,933)
Lease liabilities 17 (1,594) (2,029)
Deferred tax liabilities 9 (3,395) (4,015)
Contract liabilities 15 − (293)
Provisions (150) (160)
Other non-current liabilities − (1,049)
Total non-current liabilities (24,893) (10,479)
Total liabilities (45,501) (28,897)
Net assets 113,312 77,895
Equity
Share capital 16 13,795 12,022
Share premium 149,992 132,798
Reverse acquisition reserve (56,762) (56,762)
Accumulated profits / (losses) 4,197 (12,781)
Other reserves 2,090 2,618
Equity attributable to the owners of the parent 113,312 77,895
Total equity 113,312 77,895
* This line was previously reported within other current assets but in the
current year it has been reported separately on the face of the statement of
finance position to satisfy the requirements of IAS 1 Presentation of
Financial Statements. The prior year comparatives have been updated
accordingly.
Consolidated statement of changes in equity year
Year ended 31 December 2024
Attributable to the owners of the parent
Share Share Reverse acquisition reserve Accumulated (losses)/profits Other reserve Total
capital
premium
equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2024 12,022 132,798 (56,762) (12,781) 2,618 77,895
Profit for the period − − − 18,494 − 18,494
Other comprehensive expense − − − − (528) (528)
Total comprehensive income − − − 18,494 (528) 17,966
Dividends − − − (3,019) − (3,019)
paid
Exercise of share 53 − − − − 53
options
Capital increase (net of 1,720 17,194 − − − 18,914
costs)
Share-based payments − − − 1,503 − 1,503
At 31 December 2024 13,795 149,992 (56,762) 4,197 2,090 113,312
Attributable to the owners of the parent
Share Share Reverse acquisition reserve Accumulated losses Other reserve Total
capital
premium
equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 12,019 132,798 (56,762) (11,977) 2,908 78,986
Profit for the period − − − 1,199 − 1,199
Other comprehensive income − − − − (290) (290)
Total comprehensive income − − − 1,199 (290) 909
Dividends − − − (2,644) − (2,644)
paid
Exercise of share options 3 − − − − 3
Share-based payments − − − 641 − 641
At 31 December 2023 12,022 132,798 (56,762) (12,781) 2,618 77,895
Reverse acquisition reserve
Reverse acquisition reserve represents the reserve that has been created upon
the reverse acquisition of Animalcare Group plc.
Other reserve
Other reserve relates to currency translation differences. These exchange
differences arise on the translation of subsidiaries with a functional
currency other than sterling.
Consolidated cash flow statement
Year ended 31 December 2024
For the year ended 31 December
Notes 2024 2023
£'000 £'000
Operating activities
Profit before tax from continued operations 5,783 3,284
Profit before tax from discontinued operations 13,685 239
Profit before tax 19,468 3,523
Non-cash and operational adjustments
Share in net (profit) / loss of joint venture 13 (31) 142
Depreciation of property, plant and equipment 1,138 1,092
Amortisation of intangible assets 12 6,043 6,613
Impairment of intangible assets 12 23 22
Share-based payment expense 678 1,278
Gain on disposal of intangible assets (430) −
Non-cash movement in provisions 488 (2)
Gain on sale of discontinued operation 6 (13,723) −
Movement allowance for bad debt, inventories and provisions 1,193 757
Finance income 8 (426) (675)
Finance expense 7 230 1,419
Impact of foreign currencies 1,552 −
Gain from sale of joint venture and release of associated liabilities 13 (3,375) −
Gain from IFRS 16 lease modification (1) (9)
Other (3) −
Exercise of share options − 3
Movements in working capital
Decrease/(increase) in trade receivables 1,008 (319)
(Increase)/decrease in inventories (3,465) 2,257
Increase /(decrease) in payables 1,762 (3,261)
Income tax paid (777) (1,913)
Net cash flow from operating activities 11,352 10,927
Investing activities
Purchase of property, plant and equipment (208) (52)
Purchase of intangible assets (2,802) (2,501)
Proceeds from the sale of intangible assets 505 −
Proceeds from the sale of joint venture 3,780 −
Loans given (300) −
Proceeds from sale of subsidiary, net of cash disposed 24,522 −
Transaction costs from sale of subsidiary (634) −
Advanced payments to acquire subsidiaries 18 (59,712) −
Capital contribution in joint venture − (306)
Interest income 989 -
Net cash flow used in investing activities (33,860) (2,859)
For the year ended 31 December
2024 2023
Notes £'000 £'000
Financing activities
Proceeds from loans and borrowings 17,812 −
Repayment of loans and borrowings − (5,252)
Repayment of IFRS 16 lease liability 17 (976) (955)
Exercise of share options 53 −
Receipts from issue of share capital 16 20,000 −
Share issue costs 16 (956) -
Dividends paid 16 (3,019) (2,644)
Interest paid (408) (646)
Other finance expense (386) (99)
Net cash flow used in financing activities 32,120 (9,596)
Net increase/(decrease) of cash and cash equivalents 9,612 (1,528)
Cash and cash equivalents at beginning of year 4,642 6,035
Exchange rate differences on cash and cash equivalents (2,539) 135
Cash and cash equivalents at end of year 11,715 4,642
Reconciliation of net cash flow to movement in net debt
Net increase / (decrease) in cash and cash equivalents in the year 9,612 (1,529)
Cash flow from (increase) / decrease in debt financing (17,812) 5,252
Foreign exchange differences on cash and borrowings (2,524) 377
Movement in net debt during the year (10,724) 4,100
Net debt at the start of the year (1,234) (5,402)
Movement in lease liabilities during the year 17 508 68
Net debt at the end of the year (11,450) (1,234)
Notes to the consolidated financial statements
1. Financial information
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2024 and 31 December 2023.
Statutory accounts for the year ended 31 December 2023 have been delivered to
the registrar of companies, the Company's auditor at that time,
PricewaterhouseCoopers LLP reported on those accounts; their report was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under s498 (2) or (3) of the Companies Act
2006. Statutory accounts for the year ended 31 December 2024 will be
delivered in due course. The Company's auditor, Grant Thornton UK LLP, has
reported on those accounts; their report was (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report and (iii) did not contain a
statement under s498 (2) or (3) of the Companies Act 2006. Information has
been extracted from the statutory financial statements for the year ended 31
December 2024 which will be delivered to the Registrar of Companies in due
course. Accordingly, the financial information for 2024 is presented audited
in the preliminary announcement.
2. Basis of preparation
The accounting policies applied in this financial information have been
aligned with those in the financial statements. The financial statements have
been prepared in accordance with UK-adopted international accounting standards
("IFRS") and the applicable legal requirements of the Companies Act 2006,
except for the revaluation of certain financial instruments. They have also
been prepared in accordance with the requirements of the AIM Rules.
3. Summary of significant accounting policies
Going concern
As of 31 December 2024, the Group had total credit facilities of €49
million, provided by a syndicate of four banks, with all facilities set to
mature on 31 March 2029. These facilities include a committed €44 million
revolving credit facility (RCF) and a €5 million acquisition line, which is
restricted to acquisition purposes and cannot be used for operational funding.
In 2025, the Group agreed with two of the four syndicate banks to increase the
acquisition line by an additional €5 million, raising the total to €10
million. This adjustment ensures an equal distribution of the total credit
facility across all four syndicate banks, with the maturity date for all
facilities remaining 31 March 2029.
The Group manages its banking arrangements centrally through cross-currency
cash pooling. Funds are swept daily from its various bank accounts into
central bank accounts to optimise the Group's net interest payable position.
The facilities remain subject to the following covenants which are in
operation at all times:
· Net debt to underlying EBITDA ratio of 3.5 times;
· Underlying EBITDA to interest ratio of minimum 4 times;
· Solvency (total assets less goodwill/total equity less goodwill)
greater than 25%.
As at 31 December 2024 and throughout the financial year, all covenant
requirements were met with significant headroom across all three measures. The
principal risks and uncertainties facing the Group are set out in the
Strategic Report.
The Directors have prepared cash flow forecasts for a period of at least 12
months from the date of signing of these financial statements (the going
concern assessment period). These forecasts indicate that the Group will have
sufficient funds and liquidity to meet its obligations as they fall due, in
particular when taking into account the potential impact of "severe but
plausible" downside scenarios to factor in a range of downside revenue
estimates, higher than expected inflation across our cost base, and nil EBITDA
and cash generation from the newly acquired Randlab Group, with corresponding
mitigating actions. The Group also conducted a reverse stress test assessment
to evaluate the performance decline necessary to breach its banking covenants.
The required decline was found to be so severe that it was considered
implausible, as it would necessitate a significant reduction in both gross
margin and cash conversion to breach the Group's tightest covenant. The output
from these scenarios shows that the Group expects to comply with its banking
covenants associated with the current committed facilities throughout the
going concern assessment period. Accordingly, the Directors have concluded
that preparing the financial statements on a going concern basis is
appropriate.
4. Non-underlying (income) / expenses
For the year ended 31 December
2024 2023
£'000 £'000
Amortisation and impairment of acquisition related intangibles
Classified within research and development expenses 639 646
Classified within general and administrative expenses 3,326 3,539
Impairment losses 23 22
Total amortisation and impairment of acquisition-related intangibles 3,988 4,207
Restructuring costs 166 14
Gain on sale of joint venture and release of associated liabilities (3,375) -
Gain on disposal of intangible assets (430) -
UK and Spain office relocation costs - 5
Expenses related to M&A and business development activities 739 193
Other non-underlying items 354 365
Foreign currency translation on acquisition prepayment 988 -
Total non-underlying items before taxes from continuing operations 2,430 4,784
Tax impact (588) 92
Total non-underlying items after taxes from continuing operations 1,842 4,876
Other non-underlying items from discontinued operations 94 470
Gain on disposal of discontinued operation, net of tax (13,723) -
Total non-underlying items after taxes (11,787) 5,346
The following table shows the breakdown of non-underlying items from
continuing operations before taxes by category for 2024 and 2023:
For the year ended 31 December
2024 2023
£'000 £'000
Classified within research and development expenses 639 646
Classified within general and administrative expenses 3,326 3,539
Classified within net other operating (income)/expense (2,546) 577
Impairment losses 23 22
Classified within finance expenses 988 -
Total non-underlying items before taxes 2,430 4,784
Non-underlying items before taxes from continuing operations totalling
£2,067k (2023: £4,784k) principally comprise:
· The amortisation and impairment of acquisition-related intangible
charge totalling £3,988k (2023: £4,394k) largely relates to the historic
Esteve acquisition of £1,125k (2023: £1,154k) and the reverse acquisition of
Animalcare Group plc of £2,840k (2023: £3,031k).
· On 12 April 2024 the Group sold its minority interest (33,34%) in
STEM Animalcare Health Inc. for a cash payment of US$4.7m (£3,780k). In
total, a gain of £3,375k was realised resulting from two distinct agreements.
The sale of the Group's equity holding generated a profit on disposal of
£2,654k. In addition, the Group's requirement to pay a capital contribution
of CAD$0.5m (£289k) in September 2024 was terminated. As part of a separate
agreement, future milestone commitments totalling CAD$748k (£432k) were
renounced.
· Expenses relating to M&A and business development activities of
£739k (2023: £193k) primarily relate to costs associated with the
acquisition of the shares in Randlab Australia Pty Ltd after year-ending,
refer to the subsequent events note.
· Foreign currency translation of £988k related to a hedging
arrangement established to support with the acquisition of shares in Randlab
Australia Pty Ltd.
On 28 February 2024 the Group disposed of its subsidiary Identicare Limited,
resulting in a gain on disposal of £13,723k.
Other non-underlying items from discontinued operations primarily relate to
share-based payment arrangements in respect of growth shares in the disposed
subsidiary (net of tax). The fair value of this long-term incentive plan was
connected to the future value of the subsidiary and not trading; hence it has
been treated as non-underlying since inception on 1 January 2022.
5. Segment information - from continuing operations
The pharmaceutical segment is active in the development and marketing of
innovative pharmaceutical products that provide significant benefits to animal
health.
The measurement principles used by the Group in preparing this segment
reporting are also the basis for segment performance assessment. The Board of
Directors of the Group acts as the chief operating decision maker. As a
performance indicator, the chief operating decision maker controls performance
by the Group's revenue, cost of sales, gross margin, underlying EBITDA and
EBITDA. EBITDA is defined by the Group as net profit plus finance expenses,
less finance income, plus income taxes and deferred taxes, plus depreciation,
amortisation and impairment and is an alternative performance measure.
Underlying EBITDA equals EBITDA plus non-underlying items and is an
alternative performance measure. EBITDA and underlying EBITDA are reconciled
to statutory measures below.
The table below summarises the segment reporting from continuing operations
for 2024 and 2023. As management's internal reporting structure is
principally revenue and profit-based, the reporting information does not
include assets and liabilities by segment and is as such not presented per
segment.
Following the July 2024 IFRIC agenda decision the Group has presented the
material cost of sales per segment within the table below.
For the year ended 31 December
2024 2023
Pharma Pharma
From continuing operations £'000 £'000
Revenues 74,228 70,733
Cost of sales (32,984) (30,586)
Gross profit 41,244 40,147
Gross profit % 55.6% 56.8%
Segment underlying EBITDA 11,556 11,601
Segment underlying EBITDA % 15.6% 16.4%
Segment EBITDA 14,102 11,026
Segment EBITDA % 19.0% 15.6%
The underlying and segment EBITDA is reconciled with the consolidated net
profit of the year as follows:
For the year ended 31 December
2024 2023
From continuing operations £'000 £'000
Underlying EBITDA 11,556 11,601
Non-recurring expenses (excluding amortisation and impairment) 2,546 (577)
EBITDA 14,102 11,024
Depreciation, amortisation and impairment (7,047) (7,018)
Operating profit 7,055 4,006
Finance costs (2,508) (1,254)
Finance income 1,205 674
Share of net loss of joint venture accounted for using the equity method 31 (142)
Income taxes (1,800) (1,063)
Deferred taxes 834 (1,124)
Profit for the period 4,817 1,097
Segment assets excluding deferred tax assets located in Belgium, Spain,
Portugal, the United Kingdom and other geographies are as follows:
As at 31 December
2024 2023
£'000 £'000
Belgium 8,139 9,484
Spain 3,380 3,458
Portugal 3,932 4,080
UK 42,331 56,252
Other 878 2,377
Non-current assets excluding deferred tax assets 58,660 75,651
Revenue by product category
For the year ended 31 December
2024 2023
£'000 £'000
Companion animals 49,828 48,212
Production animals 17,027 15,790
Equine 7,373 6,723
Other − 8
Total 74,228 70,733
Revenue by geographical area
For the year ended 31 December
2024 2023
£'000 £'000
Belgium 3,369 3,560
The Netherlands 2,210 2,115
United Kingdom 14,403 13,242
Germany 10,958 10,045
Spain 20,135 20,419
Italy 9,739 8,785
Portugal 4,175 4,357
European Union - other 7,935 6,875
Asia 656 490
Middle East & Africa 13 12
Other 635 833
Total 74,228 70,733
6. Discontinued operations
On 28 February 2024, the Group sold its entire interest in its majority stake
in its subsidiary Identicare Limited. Identicare Limited was not previously
classified as held-for sale or as discontinued operation based on this not
meeting the requirements of IFRS 5 as at 31 December 2023. The comparative
consolidated income statement and statement of other comprehensive income have
been represented to show the discontinued operation separately from continuing
operations.
The Group recognised a gain in relation to the sale of £13,723k. This is
based on the total consideration (net associated costs) of £24,228k and a net
asset value of £10,505k.
In accordance with IFRS 5, the income statement as per 31 December 2024 and 31
December 2023 have been restated to show continuing operations separately from
discontinued operations. Restatements have been performed in relation to
transactions between Identicare Limited and the other entities.
For the year ended 31 December
Underlying Non-Underlying (Note 4) Total Underlying Non-Underlying (Note 4) Total
2024 2024 2024 2023 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 610 − 610 3,618 − 3,618
Cost of sales (91) − (91) (419) − (419)
Gross profit 519 − 519 3,199 − 3,199
Research and development expenses − − − − − −
Selling and marketing expenses (66) − (66) (282) − (282)
General and administrative expenses (365) − (365) (1,900) (614) (2,514)
Net other operating expenses − (94) (94) − − −
Operating profit/(loss) 88 (94) (6) 1,017 (614) 403
Finance expenses (35) − (35) (164) − (164)
Finance income 3 − 3 − − −
Finance costs net (32) − (32) (164) − (164)
Profit/(loss) before tax 56 (94) (38) 853 (614) 239
Income tax expense (8) − (8) (281) 144 (137)
Gain on sale of discontinued operations − 13,723 13,723 − − −
Net profit/(loss) for the period from discontinued operations 48 13,629 13,677 572 (470) 102
Net profit/(loss) attributable to:
The owners of the parent 48 13,629 13,677 572 (470) 102
Earnings per share for profit/(loss) attributable to the ordinary equity
holders of the company:
Basic earnings per share 0.1p 22.7p 0.9p 0.2p
Diluted earnings per share 0.2p 22.6p 0.9p 0.2p
There are no discontinued gains and losses in the current or prior period
other than those presented in the income statement.
The net cash flow by discontinued operations can be found below:
For the year ended 31 December
2024 2023
£'000 £'000
Operating 432 935
Investing 24,364 (473)
Financing (59) (462)
Net increase in cash generated by the discontinued operations 24,737 −
The major classes of assets and liabilities of Identicare Limited at the
disposal date can be found below:
As at 28 February 2024
£'000
Consideration received in cash 24,862
Associated transaction costs (634)
Net cash inflow 24,228
Net book value of assets disposed of: −
Goodwill (10,855)
Intangible assets (390)
Property, plant and equipment (72)
Right-of-use assets (361)
Inventories (144)
Trade receivables (342)
Other receivables (20)
Cash and cash equivalents (340)
Provisions 7
Deferred tax liabilities 10
Lease liabilities 297
Trade payables 197
Current tax liabilities 232
Other payables (5)
Accrued charges and contract liabilities 1,281
Net assets disposed of (10,505)
Profit on disposal 13,723
Net cash inflow arising on disposal:
Consideration received in cash 24,862
Associated transaction costs (634)
Cash and cash equivalents disposed of (340)
Net cash inflow 23,888
Goodwill allocated to the pharmaceuticals cash-generating unit ("CGU"), of
which Identicare Limited formed a part, includes goodwill recognised as a
result of past business combinations. In assessing the portion of this
goodwill that should be disposed as part of the sale of the Identicare
business, the transaction value was taken as a percentage of the total Group's
market capitalisation at the point of disposal.
Within the consolidated statement of changes in equity, a net credit of £860k
is recognised within the £1,503k share based payments movement in the
accumulated profits reserve. This relates to the crystallisation of the fair
value of the long-term incentive plan ("LTIP") scheme as a result of the
disposal of Identicare Limited. £802k of the £860k represents the release
of the previous cash settled liability held within the statement of financial
position. The ownership of the shares required ongoing employment and carried
value to the holder on either the sale of Identicare, or after five years the
holder could obligate the Group to repurchase the shares at market value via a
put option. The Group could also obligate the holder to sell the shares to the
Group at market value via a call option. The shares carried preferential
rights to return upon the sale of Identicare with an increasing ratchet
depending on the equity value of Identicare.
In line with IFRS 2 Share Based Payments, the accounting immediately prior to
the disposal was updated to reflect the position that the revised form of
settlement had always been expected.
7. Finance costs - from continuing operations
Finance costs include the following elements:
For the year ended 31 December
2024 2023
£'000 £'000
Interest expense 400 646
Foreign currency losses 2,012 456
Unwind of discount on other liabilities − 104
Other finance costs 96 48
Total 2,508 1,254
8. Finance income - from continuing operations
Finance income includes the following elements:
For the year ended 31 December
2024 2023
£'000 £'000
Foreign currency exchange gains 148 501
Income from financial assets 1,057 124
Other finance income − 49
Total 1,205 674
9. Income tax expense - from continuing operations
Current tax liabilities
Current tax liabilities solely relate to income taxes of £623k (2023:
£125k).
Income tax expense
The following table shows the breakdown of the tax expense for 2024 and
2023:
For the year ended 31 December
2024 2023
£'000 £'000
Current tax charge (1,525) (1,159)
Tax adjustments in respect of previous years (275) 96
Total current tax charge (1,800) (1,063)
Deferred tax - origination and reversal of temporary differences 438 (1,003)
Deferred tax - adjustments in respect of previous years 396 (121)
Total deferred tax credit/(charge) 834 (1,124)
Total tax expense for the year (966) (2,187)
The total tax expense can be reconciled to the accounting profit as follows:
For the year ended
2024 2023
£'000 £'000
Profit before tax 5,783 3,284
Share of net loss of joint ventures 31 (142)
Profit before tax, excl. share in net loss of joint venture 5,752 3,426
Tax at 25.0% (2023: 23.5%) (1,438) (806)
Effect of:
Overseas tax rates 16 (66)
Non-deductible expenses (285) (340)
Income not subject to tax - gain on sale of joint venture 844 −
Changes in statutory enacted tax rate − (1,001)
Tax adjustments in respect of previous year 121 (25)
Non-recognition of deferred tax on current year losses (481) (15)
Non-recognised deferred tax assets on timing differences − 108
Derecognition of formerly recognised deferred tax assets (49) −
Deferred tax on share based payments 251 −
Other 55 (42)
Income tax expense as reported in the consolidated income statement (966) (2,187)
The tax credit of £588k (2023: expense of £92k) shown within Non-underlying
items on the face of the consolidated income statement, which forms part of
the overall tax charge of £966k (2023: £2,187k), relates to the items in
Note 4.
The tax rates used for the 2024 and 2023 reconciliation above are the
corporate tax rates of 25.0% (Belgium), 19.0% (the Netherlands), 30.7%
(Germany), 33.0% (France), 25.0% (Spain), 24.0% (Italy), 21.0% (Portugal) and
25.0% (the United Kingdom, prior year rate 23.5% representing a blended rate
of 19.0% up until 1 April 2023 then 25.0% thereafter). These taxes are payable
by corporate entities in the above-mentioned countries on taxable profits
under tax law in that jurisdiction.
Deferred taxes at the balance sheet date have been measured using the enacted
tax rates.
Deferred tax
(a) Recognised deferred tax assets and liabilities
Assets Liabilities Total
2024 2023 2024 2023 2024 2023
£'000 £'000 £'000 £'000 £'000 £'000
Goodwill − − (1,550) (1,444) (1,550) (1,444)
Intangible assets 214 335 (2,129) (2,860) (1,915) (2,525)
Property, plant and equipment including right-of-use assets − − (511) (645) (511) (645)
Financial fixed assets 1 1 − − 1 1
Inventory − − (24) (54) (24) (54)
Trade and other receivables/(payables) 129 30 − − 129 30
Lease liabilities 461 580 − − 461 580
Share based payments 488 − − − 488 −
Accruals and deferred income 189 132 − − 189 132
Tax losses carried forward 1,529 1,636 − − 1,529 1,636
Netting by tax entity (819) (988) 819 988
Total 2,192 1,726 (3,395) (4,015) (1,203) (2,289)
The table above presents deferred tax assets and liabilities on a gross basis
prior to allowable offsetting within tax jurisdictions as presented on the
face of the consolidated statement of financial position.
(b) Movements during the year
Movement of deferred taxes during 2024:
Balance as at 1 January 2024 Recognised Recognised Disposal of subsidiary Foreign exchange adjustments Balance as at 31 December 2024
in income in reserves
£'000 £'000 £'000 £'000 £'000 £'000
Goodwill (1,444) (171) − − 65 (1,550)
Intangible assets (2,525) 626 − − (16) (1,915)
Property, plant and equipment including right-of-use assets (645) 66 − 40 29 (510)
Financial fixed assets 1 (1) − − 1 1
Inventory (54) 26 − − 3 (25)
Trade and other receivables/(payables) 30 95 − − 4 129
Accruals and deferred income 132 63 − − (6) 189
Lease liabilities 580 (94) − − (25) 461
Share based payments − 251 237 − − 488
Tax losses carry forward and other tax benefits 1,636 (27) − − (80) 1,529
Net deferred tax (2,289) 834 237 40 (25) (1,203)
Movement of deferred taxes during 2023:
Balance at 1 January 2023 Recognised in income Disposal of subsidiary Foreign exchange adjustments Balance at 31 December 2023
£'000 £'000 £'000 £'000 £'000
Goodwill (1,290) (181) − 27 (1,444)
Intangible assets (2,393) (125) − (7) (2,525)
Property, plant and equipment including right-of-use assets (707) (10) 58 14 (645)
Financial fixed assets 1 − − − 1
Inventory (54) − − − (54)
Trade and other receivables/(payables) 71 (28) − (13) 30
Accruals and deferred income 32 100 − − 132
Lease liabilities 565 26 − (11) 580
Provisions 4 − − (4) −
Tax losses carry forward and other tax benefits 2,565 (906) − (23) 1,636
Net deferred tax (1,206) (1,124) 58 (17) (2,289)
Tax losses
The Group has unused tax losses, tax credits and notional interest deduction
available in an amount of £10,680k for 2024 (2023: £6,549k). The tax losses
carry forward indefinitely, as there is no expiration date prescribed for
their utilisation.
Deferred tax assets have been recognised on available tax losses carried
forward for some legal entities, resulting in amounts recognised of
£1,529k (2023: £1,636k). This was based on management's estimate that
sufficient positive taxable profits will be generated in the near future for
the related legal entities with fiscal losses. The deferred tax asset is not
expected to be recovered within the next 12 months and is anticipated to be
fully recovered thereafter.
The non-recognised deferred tax assets increased by £481k (2023: decreased by
£108k). The total unrecognised tax losses as at 31 December 2024 are £4,961k
(2023: £2,497k).
10. Earnings per share
Basic earnings per share amounts are calculated by dividing the net profit for
the period attributable to ordinary equity holders of the parent company by
the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit
attributable to ordinary equity holders of the parent company by the weighted
average number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on conversion
of all potential dilutive ordinary shares.
The following income and share data was used in the earnings per share
computations:
Profit for the period
As at 31 December
2024 2023 2024 2023
Underlying Underlying Total Total
£'000 £'000 £'000 £'000
Net profit 6,707 6,545 18,494 1,199
Net profit attributable to ordinary equity holders of the parent adjusted for 6,707 6,545 18,494 1,199
the effect of dilution
Net continuing profit 6,659 5.973 4,817 1,097
Net continuing profit attributable to ordinary equity holders of the parent 6,659 5,973 4,817 1,097
adjusted for the effect of dilution
Average number of shares (basic and diluted)
As at 31 December
2024 2023 2024 2023
Underlying Underlying Total Total
Number Number Number Number
Weighted average number of ordinary shares for basic 61,110,644 60,231,020 61,110,644 60,231,020
earnings per share
Dilutive potential ordinary shares 666,052 423,222 666,052 423,222
Weighted average number of ordinary shares adjusted for effect of dilution 61,776,696 60,654,242 61,776,696 60,654,242
Basic earnings per share
As at 31 December
2024 2023 2024 2023
Underlying Underlying Total Total
Pence Pence Pence Pence
From total operations attributable to the ordinary equity holders of the 11.0 10.9 30.3 2.0
company
Total basic earnings per share attributable to the ordinary equity holders of 11.0 10.9 30.3 2.0
the company
From continuing operations attributable to the ordinary equity holders of the 10.9 9.9 7.9 1.8
company
Total continuing basic earnings per share attributable to the ordinary equity 10.9 9.8 7.9 1.8
holders of the company
Diluted earnings per share
As at 31 December
2024 2023 2024 2023
Underlying Underlying Total Total
Pence Pence Pence Pence
From total operations attributable to the ordinary equity holders of the 10.9 10.8 29.9 2.0
company
Total diluted earnings per share attributable to the ordinary equity holders 10.9 10.8 29.9 2.0
of the company
From continuing operations attributable to the ordinary equity holders of the 10.8 9.8 7.8 1.8
company
Total continuing diluted earnings per share attributable to the ordinary 10.8 9.8 7.8 1.8
equity holders of the company
11. Goodwill
On acquisition, goodwill acquired in a business combination is allocated to
the cash-generating units ("CGUs") that are expected to benefit from that
business combination. This CGU corresponds to the nature of the business,
being pharmaceuticals. The goodwill has been allocated to CGU as follows:
As at 31 December
2024 2023
£'000 £'000
CGU: Pharmaceuticals 39,360 50,656
Total 39,360 50,656
The changes in the carrying value of the goodwill can be presented as follows
for the years 2024 and 2023:
Total
£'000
As at 1 January 2023 50,853
Currency translation (197)
As at 31 December 2023 50,656
As at 1 January 2024 50,656
Disposal of Identicare Limited - see Note 6 (10,855)
Currency translation (441)
As at 31 December 2024 39,360
Goodwill allocated to the pharmaceuticals cash-generating unit (CGU), which
includes Identicare Limited, arises from past business combinations. To
determine the portion of this goodwill to be disposed of with the sale of
Identicare Limited, the transaction value was calculated as a percentage of
the Group's total market capitalisation at the time of disposal.
The two principal assumptions used in our value-in-use calculations are the
discount rate and the perpetuity growth rate. The discount rate is determined
to reflect the Group's cost of capital and risk profile, while the perpetuity
growth rate represents the long-term sustainable growth of future cash flows.
The discount rate and growth rate (in perpetuity) used for value-in-use
calculations are as follows:
2024 2023
% %
Discount rate (pre-tax) 12.9 13.3
Growth rate (in perpetuity) 2.0 2.0
The Group's discount rate, used in the impairment testing of goodwill, has
been developed with the assistance of an independent third party advisor. Our
advisor's approach reflects the Group's geographical exposure by weighting
government bond yields in line with our operating footprint and incorporating
a relevant country-specific risk premium. This methodology ensures that the
risk-free rate accurately mirrors current market conditions while
appropriately capturing the Group's inherent risks, thereby supporting a
robust impairment assessment.
Cash flow forecasts are prepared using the current operating budget approved
by the Directors, which covers a five-year period and an appropriate
extrapolation of cash flows, using the long-term growth rate, beyond this. The
cash flow forecasts assume revenue and profit growth in line with our
strategic priorities. Further, we have assessed the potential impact of
climate change, with reference to our principal risks and the environmental
disclosures made in the Sustainability Report and consider that the impact on
the valuation of goodwill is limited.
The Group conducts its impairment review by testing a range of reasonably
possible changes in key assumptions, including discount rates and perpetuity
growth rates. Sensitivity analyses indicate that while the calculated
recoverable value is sensitive to these assumptions - for example, a 1.0%
increase in discount rate would reduce the recoverable value by £10.4m and a
1.0% reduction in perpetuity growth rates would reduce it by £7.5m - none of
these changes would result in an impairment. This demonstrates that although
the model's headroom is sensitive, the overall outcome remains robust under
all reasonably possible variations.
12. Intangible assets
The changes in the carrying value of the intangible assets can be presented as
follows for the years 2024 and 2023:
R&D assets Patents, distribution rights and licenses Product portfolios and product development costs Capitalised software Intangible assets under construction Total
£'000 £'000 £'000 £'000 £'000 £'000
Acquisition value/cost
As at 1 January 2023 12,799 19,008 41,058 4,399 127 77,391
Brought forward alignment* (1,839) 2 (123) (20) − (1,980)
Additions 294 29 452 889 427 2,091
Disposals (52) − − (261) − (313)
Transfers (204) 31 485 37 (349) −
Currency translation (94) (291) (372) (61) (2) (820)
As at 31 December 2023 10,904 18,779 41,500 4,983 203 76,369
At 1 January 2024 10,904 18,779 41,500 4,983 203 76,369
Additions 812 59 788 589 554 2,802
Disposals (74) − − (3) − (77)
Identicare disposal − − − (1,554) (198) (1,752)
Transfers (1,756) 58 2,115 130 (547) 0
Currency translation (215) (653) (848) (174) (12) (1,902)
As at 31 December 2024 9,671 18,243 43,555 3,971 − 75,440
Accumulated amortisation
As at 1 January 2023 (6,537) (16,392) (26,346) (2,833) − (52,108)
Brought forward alignment* 1,839 (2) 123 20 − 1,980
Amortisation (1,019) (1,061) (3,209) (1,324) − (6,613)
Disposals 52 − − 261 − 313
Impairments (22) − − − − (22)
Currency translation 58 268 297 42 − 665
As at 31 December 2023 (5,629) (17,187) (29,135) (3,834) − (55,785)
At 1 January 2024 (5,629) (17,187) (29,135) (3,834) − (55,785)
Amortisation (876) (870) (3,402) (895) − (6,043)
Identicare disposal − − - 1,362 − 1,362
Impairments (23) − - - − (23)
Currency translation 163 629 715 139 − 1,646
As at 31 December 2024 (6,365) (17,428) (31,822) (3,228) − (58,843)
Net carrying value
As at 31 December 2024 3,306 815 11,733 743 − 16,597
As at 31 December 2023 5,275 1,592 12,365 1,149 203 20,584
* This line item ensures that the opening balances within the standalone
entities across the group align with the consolidated financial statements.
This adjustment has no impact on the net carrying value and, as a result, the
consolidated statement of financial position for the year ended 31 December
2023 and 31 December 2024 remains unchanged.
R&D relates to acquired development projects as part of the Esteve
business combination in 2015, the reverse acquisition of Animalcare Group plc
in 2017 and external and internal R&D costs for which the capitalisation
criteria are met. Patents, distribution rights and licenses include amounts
paid for exclusive distribution rights as well as distribution rights acquired
as part of the Esteve business combination in 2015 and the reverse acquisition
of Animalcare Group plc in 2017.
Product portfolios and product development costs relate to amounts paid for
acquired brands as well as external and internal product development costs
capitalised on the development projects in the pipeline for which the
capitalisation criteria are met.
The net book value of non-commercialised development projects is £2,666k
(2023: £2,047k) and is allocated to R&D assets for £1,731k and Product
Portfolios and product development costs for £935k. No amortisation was
charged.
The capitalised software includes IT driven by accelerated CRM software
investment and website and platform development relating to Identicare
Limited.
The total amortisation charge for 2024 is £6,043k (2023: £6,613k), which is
included in lines R&D expenses, selling and marketing expenses and general
and administrative expenses of the consolidated income statement. Included in
the total amortisation charge is £3,988k (2023: £4,185k) relating to
acquisition-related intangibles and £2,055k (2023: £2,428k) relating to
other intangibles.
An impairment charge of £23k (2023: £22k) related to a non-cash impairment
charge of acquisition-related intangibles of R&D assets. In 2024,
Animalcare Group plc invested £2,802k (2023: £2,091k) in intangible assets.
On 24 March 2022, the Group entered into two agreements with Netherlands-based
Orthros Medical, a company engaged in the further development and enhancement
of its existing VHH antibody technology (small single-chain antibody
fragments). Under the terms of the arrangement, Animalcare has made upfront
payments totalling €600k in prior years, of which €530k has been
recognised as an intangible asset under Product portfolios and product
development costs. As the two licensed preclinical candidates progress,
Orthros Medical may receive additional development, regulatory and commercial
milestone payments up to a total value of €11m, a significant proportion of
which is linked to successful commercialisation. In addition, single digit
royalties will be due on the net sales of the products, with such payments
expected to be funded from the Group's operating cash flow.
The transfers of intangible assets under construction involves the allocation
of internally generated assets to various R&D projects, including those
relating to patents, distribution rights, licences, as well as product
portfolios and development costs.
Transfers from R&D assets to product portfolios and development costs
occur when an R&D project advances to a stage where it is ready for
commercialisation. Subsequently, the transferred value of these assets
initiates depreciation in accordance with their remaining useful life.
13. Investments in joint ventures
The Group carried an investment in a joint venture (STEM Animal Health Inc.)
which was accounted for using the equity method up to 12 April 2024 when the
interest in the joint venture was sold. In addition, the Group's requirement
to pay a capital contribution of CAD$0.5m (£289k) in September 2024 was
terminated. As part of a separate agreement, future milestone commitments
totalling CAD$748k (£432k) were renounced. As a result of these two
agreements, the Group realised a gain of £3,375k comprising profit on
disposal of the equity of £2,654k and a release of license and capital
contribution liabilities of £721k (for further details see Note 4). This gain
is included in Net other operating income / (expenses).
Name of entity Place of business/country of incorporation % of ownership interest Nature of relationship Measurement method Carrying amount
2024 2023 2024 2023
£'000 £'000
STEM Animal Health Inc. Canada − 33.34% Joint Venture Equity method − 1,119
The table below provides summarised financial information for the joint
venture in STEM Animal Health Inc. which is material to the Group. The
information disclosed first reflects the amounts presented in the financial
statements of the joint venture followed by Animalcare's share of those
amounts.
Summarised statement of comprehensive income:
For the period ended 12 April 2024 For the year ended 31 December 2023
£'000 £'000
Sales 636 1,576
Operating expenses (533) (1,872)
Financial result, net 38 12
Net gain/(loss) for the year 141 (284)
Group share in net gain/(loss) 47 (95)
Depreciation on fair value adjustments on intangible fixed assets (16) (47)
(net of deferred tax)
Total Group share in net gain/(loss) for the year 31 (142)
Other comprehensive expense (25) (44)
Group share in total comprehensive income/(expense) 6 (186)
Reconciliation of the aforementioned financial information with the net
carrying amount of the investment of STEM Animal Health Inc. in the
consolidated financial statements:
For the year ended 31 December 2024 For the year ended 31 December 2023
£'000 £'000
As at 1 January 1,119 1,305
Group share of net gain/(loss) 31 (142)
Foreign currency translation differences (25) (44)
Sale of joint venture (1,125) −
As at 31 December − 1,119
14. Borrowings
The loans and borrowings include the following:
As at 31 December
Interest rate Maturity 2024 2023
£'000 £'000
Revolving credit facilities Euribor +1.26% March 2029 16,584 −
Acquisition loan Euribor +1.50% March 2029 4,146 2,933
Lease liabilities See Note 17 2,435 2,943
Total loans and borrowings 23,165 5,876
Of which
Non-current borrowings 19,754 2,933
Non-current lease liabilities 1,594 2,029
Current borrowings 976 -
Current lease liabilities 841 914
Borrowing facilities
As at 31 December 2024, the Group had total credit facilities of €49m,
provided by a syndicate of four banks, with all facilities set to mature on 31
March 2029. These facilities included a €44m revolving credit facility (RCF)
provided by all four banks, and a €5m acquisition line, provided by two of
the banks with a commitment for a further €5m from the remaining two. The
acquisition line is restricted and cannot be used for operational funding.
The loans carry a variable, EURIBOR-based interest rate with an applicable
margin of either 1.26% or 1.50%. The RCF features bullet repayment at maturity
in March 2029, while the acquisition line is amortised through quarterly
payments, also concluding in March 2029.
In early 2025, the Group finalised credit documentation with the remaining two
of the four syndicate banks, bringing the total acquisition facility to the
€10m committed in 2024. This completion ensures an equal allocation of the
total credit facility across all four syndicate banks, with the maturity date
for all facilities remaining 31 March 2029. The Group centrally manages its
banking arrangements through a cross-currency cash pooling system, whereby
funds are swept daily from various bank accounts into central accounts. This
approach optimises the Group's overall net interest payable position.
The Group's credit facilities are subject to the following financial
covenants, which are monitored and maintained at all times:
· Net debt to underlying EBITDA ratio of no more than 3.5x
· Underlying EBITDA to interest ratio of at least 4.0x
· Solvency ratio (total assets less goodwill/total equity less
goodwill) of more than 25%
At 31 December 2024, net debt (excluding IFRS 16 lease liabilities) was
£9.0m, compared to net cash of £1.7m as at 31 December 2023. The revolving
credit facility (RCF) had £31.6m of available headroom as at 31 December
2024.
As of 31 December 2024, and throughout the financial year, the Group was in
full compliance with all covenant requirements, maintaining significant
headroom across all three measures.
Net debt reconciliation
For the year ended 31 December
2024 2023
£'000 £'000
Cash and cash equivalents 11,715 4,642
Borrowings (20,730) (2,933)
Lease liabilities (2,435) (2,943)
Total (11,450) (1,234)
Liabilities from financing activities Other assets
Borrowings Leases Cash Total
£'000 £'000 £'000 £'000
Net debt as at 1 January 2023 (8,426) (3,011) 6,035 (5,402)
Financing cash flows 5,780 1,073 (1,529) 5,324
New leases − (941) − (941)
Foreign exchange adjustments 241 54 136 431
Interest expense (528) (118) − (646)
Net debt as at 31 December 2023 (2,933) (2,943) 4,642 (1,234)
Financing cash flows (17,812) 1,090 9,612 (7,110)
New leases − (874) − (874)
Foreign exchange adjustments − 109 (2,539) (2,430)
Disposal Identicare − 297 − 297
Interest expense 15 (114) − (99)
Net debt as at 31 December 2024 (20,730) (2,435) 11,715 (11,450)
15. Accrued charges and contract liabilities
Accrued charges and contract liabilities consists of the following:
As at 31 December
2024 2023
£'000 £'000
Accrued charges 47 286
Contract liabilities - due within one year − 873
Total due within one year 47 1,159
Contract liabilities - due after one year − 293
Accrued charges of £46k (2023: £286k) are mostly related to payroll and
accrued bank interest costs.
Contract liabilities are liabilities that arose from certain services sold by
the Group's subsidiary Identicare Limited. Historically, and in return for a
single upfront payment, Identicare Limited committed to providing certain
database, pet reunification and other support services to customers over the
life of the pet. There was no contractual restriction on the number of times
the customer could make use of the services. At the commencement of the
contract, it was not possible to determine how many times the customer would
make use of the services, nor did historical evidence provide indications of
any future pattern of use. As such, income was recognised evenly over the term
of the contract, generally between 5 and 14 years. Subsequent to the disposal
of Identicare, the Group has no contract liabilities.
Movements in the Group's contract liabilities:
As at 31 December
2024 2023
£'000 £'000
Balance at the beginning of the year 1,166 884
Contract liabilities to following years 314 815
Release of contract liabilities from previous years (223) (533)
Movement in contract liabilities due to sale of Identicare Limited (see Note (1,257) −
6)
Balance at the end of the year − 1,166
The contract liabilities fall due as follows:
As at 31 December
2024 2023
£'000 £'000
Within one year − 873
After one year − 293
Balance at the end of the year − 1,166
16. Equity
Share capital
As at 31 December
2024 2023
Number Number
Allotted, called up and fully paid ordinary shares of 20p each 68,976,418 60,107,926
As at 31 December
2024 2023
£'000 £'000
Allotted, called up and fully paid ordinary shares of 20p each 13,795 12,022
The Company does not have a limited amount of authorised share capital.
The following share transactions have taken place during the year ended 31
December 2024:
As at 31 December
2024
Number £'000
At 1 January 2024 60,107,926 12,022
Exercise of share options 266,342 53
Capital increase (net of costs) 8,602,150 1,720
At 31 December 2024 68,976,418 13,795
During the year ended 31 December 2024, the company issued 8,602,150 ordinary
shares, each having a nominal value of £0.20. The shares were issued at an
issue price of 232.5 pence per share, with total proceeds net of costs of
£18.9m. Cash in as per 31 December 2024 amounts to £19.0m.
As at 31 December
2023
Number £'000
At 1 January 2023 60,092,161 12,019
Exercise of share options 15,765 3
At 31 December 2023 60,107,926 12,022
Dividends
As at 31 December
2024 2023
£'000 £'000
Ordinary final dividend as at 31 December 2022 of 2.4p per share − 1,442
Ordinary interim dividend paid as at 31 December 2023 of 2.0p per share − 1,202
Ordinary final dividend as at 31 December 2023 of 3p per share 1,803 −
Ordinary interim dividend paid as at 31 December 2024 of 2.0p per share 1,216 −
3,019 2,644
The interim dividend of 2.0 pence per share was paid in November 2024.
The Board is proposing a final dividend of 3.0 pence per share (2023: 3.0
pence per share). Subject to shareholder approval at the Annual General
Meeting to be held on 10 June 2025, the final dividend will be paid on 11 July
2025 to shareholders whose names are on the Register of Members at close of
business on 13 June 2025. The ordinary shares will become ex-dividend on 12
June 2025.
17. IFRS 16 Leases
The balance sheet shows the following amounts relating to leases as at 31
December 2024:
As at 31 December
2024 2023
£'000 £'000
Buildings 1,237 1,585
Vehicles 1,074 1,220
Other 5 14
Total right-of-use assets 2,316 2,819
Current lease liabilities 841 914
Non-current lease liabilities 1,594 2,029
Total lease liabilities 2,435 2,943
Below are the carrying amounts of right-of-use assets recognised and the
movements during the year:
Land and buildings Vehicles Other Total
£'000 £'000 £'000 £'000
Acquisition value/cost
As at 1 January 2023 2,114 2,756 33 4,903
Brought forward alignment* 7 (179) - (172)
Additions - 678 4 682
Disposals - (682) (4) (686)
Currency Translation (41) (50) - (91)
Contract modifications 287 (5) (14) 268
As at 31 December 2023 2,367 2,518 19 4,904
Additions 178 594 3 775
Disposals (97) (519) - (616)
Identicare disposal (351) - (7) (358)
Currency Translation (90) (116) (1) (207)
Contract modifications 63 29 - 92
As at 31 December 2024 2,070 2,506 14 4,590
Accumulated depreciation
As at 1 January 2023 (475) (1,499) (5) (1,979)
Brought forward alignment* (7) 179 - 172
Depreciation charge for the year (310) (687) (4) (1,001)
Disposals - 682 4 686
Currency translation 10 27 - 37
As at 31 December 2023 (782) (1,432) (5) (2,085)
Depreciation charge for the year (294) (730) (4) (1,028)
Disposals 97 519 - 616
Identicare disposal 111 - - 111
Contract modifications - 8 - 8
Currency translation 35 69 - 104
As at 31 December 2024 (833) (1,432) (9) (2,274)
Net book value
At 31 December 2023 1,585 1,220 14 2,819
At 31 December 2024 1,237 1,074 5 2,316
* This line item ensures that the opening balances within the standalone
entities across the group align with the consolidated financial statements.
This adjustment has no impact on the net carrying value and, as a result, the
consolidated statement of financial position for the year ended 31 December
2023 and 31 December 2024 remains unchanged.
Below are the values for the movements in lease liability:
Lease liability
£'000
As at 1 January 2024 2,943
Additions 749
Identicare disposal (297)
Interest expense 114
Payments (1,090)
Modifications 125
Currency translation adjustment (109)
As at 31 December 2024 2,435
Lease liability
£'000
At 1 January 2023 3,011
Additions 677
Interest Expense 118
Payments (1,073)
Modifications 264
Currency translation adjustment (54)
At 31 December 2023 2,943
The following amounts are recognised in the income statement:
For the year ended 31 December
2024 2023
£'000 £'000
Depreciation expense of right-of-use assets (1,028) (1,001)
Interest expense on lease liabilities (114) (118)
Gain on IFRS 16 modification 1 9
Expense relating to short-term leases and low-value assets (182) (180)
Total amount recognised in the income statement (1,323) (1,290)
Cash-flows relating to leases are presented as follows:
· Cash payments for the principal portion of the lease liabilities as
cash flows from financing activities;
· Cash payments for the interest portion consistent with presentation
of interest payments chosen by the Group; and
· Short-term lease payments, payments for leases of low-value assets
and variable lease payments that are not included in the measurement of the
lease liabilities as cash flows from operating activities. In the current
and prior year, the cashflow for these items equalled the charge to the income
statement.
18. Subsequent events
On 3 January 2025, the Group completed an acquisition of Randlab. The
acquisition was executed through a newly incorporated Australian entity,
Animalcare Australia Pty Ltd, which acquired the entire issued share capital
of each Randlab Australia Pty Ltd (and its wholly owned subsidiary, Randlab
(New Zealand) Limited), Randlab Pty Ltd and Randlab Middle East Veterinary
Medicine Trading Single Owner L.L.C. (together "Randlab") for an enterprise
value of AUD$121m (£59.7m), on a debt-free, cash-free, normalised working
capital basis, subject to customary post-completion adjustments. The
acquisition is expected to deliver on our strategic goals of expanding our
geographic reach, acquiring products and brands that enhance our existing
portfolio and building our new product pipeline.
The financial effects of this transaction have not been recognised as of 31
December 2024, as control transferred after the year-end. The operating
results and assets and liabilities of the acquired group will be consolidated
from 3 January 2025.
Details of the consideration transferred are:
£'000
Purchase consideration:
Cash paid 59,712
Total consideration 59,712
Given the limited period of ownership prior to the issuance of the financial
statements, the Group has not yet completed the acquisition accounting
required to meet the disclosure requirements set out in IFRS 3 Business
Combinations. The Group is committed to ensuring compliance with all standards
and will include the relevant disclosures within the 2025 annual report and
accounts.
19. Annual report
This preliminary financial information is not being sent to shareholders. A
further announcement will be made when the Annual Report and Accounts for the
year ended 31 December 2024 will be made available on the Company's website
and copies sent to shareholders.
Further copies will be available to download on the Company's website at:
www.animalcaregroup.com and will also be available from the Company's
registered office address: Moorside, Monks Cross, York, YO32 9LB, United
Kingdom.
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