REG - Animalcare Group PLC - Preliminary Unaudited Full Year Results 2023
09/04/2024 07:00
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RNS Number : 7632J Animalcare Group PLC 09 April 2024
Animalcare Group plc
("Animalcare", the "Company" or the "Group")
Preliminary Unaudited Results for the year ended 31 December 2023 and Chair
Succession
9 April 2024. Animalcare Group plc (AIM: ANCR), the international animal
health business, announces its preliminary unaudited results for the year
ended 31 December 2023.
Financial Highlights
* Revenues up 3.8% to £74.4m (2022: £71.6m) reflecting improved performance in
the second half, with sales growth across all three product categories
* Gross margins improved by 1.5% to 58.3% as the Group continues to benefit from
focus on larger-selling, more profitable brands
* Underlying* EBITDA grew by 1.5% to £13.3m as the Group continues to invest in
developing the skills and talent base, alongside new product development
* Reported profit before tax was £3.5m (2022: £2.5m)
* Underlying earnings per share of 10.9p, primarily reflecting a significant
increase in the underlying effective tax rate; reported basic earnings per
share of 2.0 pence (2022: 3.3 pence per share)
* Benefiting from improved cash conversion, net debt was £1.2m at year end
(2022: £5.4m), further extending the Group's capacity and flexibility to
invest in growth opportunities
* Board proposes an increased final dividend of 3.0 pence per share, giving a
full year dividend of 5.0 pence per share (2022: 4.4 pence per share)
* Following the post year end disposal of Identicare, the Group's net cash
position was around £27.0m at 28 February 2024
Strategic and Operational Highlights
1. Plaqtiv+ dental range continued to respond positively to sales and marketing
activities across markets
2. Daxocox recorded double-digit growth across direct sales territories
3. Return of Danilon to the Group's sales and marketing control contributes to
increased revenues
4. The Group's operational capability has been reinforced by the organisational
changes and investments in people
5. Early-stage VHH antibody collaboration and licensing programme with Orthros
Medical continues to advance and has been extended to cover equine conditions
6. Majority stake in Identicare Ltd sold post year end for £24.9m
Chair Succession
* Senior Independent Director, Ed Torr to assume role of Non-Executive Chair at
the conclusion of the AGM on 20 June 2024 following Jan Boone's decision to
stand down from the Board post year end. Ed brings extensive knowledge of the
Company and the veterinary pharmaceutical industry to the position
* Alternative Performance Measures (APMs) are reconciled to reported results
in the Chief Financial Officer's review and within the notes to the unaudited
consolidated financial statements.
Chief Executive Officer, Jenny Winter said: "A positive trading performance
across our direct sales territories and market segments puts Animalcare in a
strong position to deliver on our long-term strategic growth objectives.
"The Group's continued focus on larger-selling, more profitable brands in our
portfolio contributed to growing revenues, expanding gross margins and
improving cash generation over the period. Our strong financial platform
received a material boost in February 2024 with the disposal of Identicare
Ltd, a transaction which crystallised the value of a non-core asset, allowing
us to focus on our animal health pharmaceuticals business. The Group is better
placed than ever to pursue organic and inorganic growth opportunities that can
accelerate future growth and increase the value that the Group creates over
the medium to long-term.
"Operationally, we continued to invest in our people with particular attention
on sales and marketing and business development capabilities, enabling us to
identify opportunities and successfully bring them to our customers.
"I'd like to take this opportunity to thank Jan Boone for his support and wise
counsel as Chair of the Animalcare Board. Jan's contribution to the Group's
growth strategy has been vital and I am looking forward to building an equally
positive partnership with Ed Torr when he takes on the role of Chair after our
Annual General Meeting."
Analyst webcast
A briefing for analysts will be held at 10:30 BST on 9 April 2024 via Zoom
webcast. Analysts wishing to join should use the following link to register
and receive access details.
https://stifel.zoom.us/webinar/register/WN_3SW_YDRqRqGinXhQcTolng
(https://eur04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fstifel.zoom.us%2Fwebinar%2Fregister%2FWN_3SW_YDRqRqGinXhQcTolng&data=05%7C02%7Cnmccrae%40animalcaregroup.com%7C773ac0e30c1543c7b02b08dc53d80e03%7Ce3d54ae94f784bcdb87ca73ab1c9c241%7C0%7C0%7C638477434668321918%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=tGewXiUVdtgDuVm%2FvMZMKos5ExcgkXs2k7%2FaKXPjen0%3D&reserved=0)
A copy of the analyst presentation will be made available on the Group website
shortly after the webcast.
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014.
About Animalcare
Animalcare Group plc is a UK AIM-listed international veterinary sales and
marketing organisation. Animalcare operates in seven countries 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
Chris Brewster, Chief Financial Officer
Media/investor relations communications@animalcaregroup.com (mailto:communications@animalcaregroup.com)
Stifel Nicolaus Europe Limited +44 (0)20 7710 7600
(Nominated Adviser & Joint Broker)
Ben Maddison
Nick Adams
Nicholas Harland
Francis North
Panmure Gordon +44 (0)20 7886 2500
(Joint Broker)
Corporate Finance
Freddy Crossley/Emma Earl
Corporate Broking
Rupert Dearden
Chair's Statement
Animalcare Group performed strongly over the course of 2023 with a return to
revenue growth, increased gross margins and a healthy balance sheet as we
maintain focus on execution of our long-term growth strategy.
The animal health markets in which we operate continued to demonstrate their
resilience and attractive fundamentals despite a normalisation in rates of
demand and the effect of inflationary pressures. Total revenues increased by
around 3.8% to £74.4m (2.5% at constant exchange rates).
Helping to drive this top line growth were recently launched products such as
our Plaqtiv+ oral health range, which is proving popular with vets and pet
owners alike, while Daxocox recorded double-digit growth across our direct
sales operations. Additionally, the return of equine anti-infective Danilon to
the Group's sales and marketing control also contributed to growth, as did the
Identicare pet microchipping and consumer services business.
Gross margins expanded by 1.5% to 58.3% supported by our ongoing focus on the
larger-selling, more profitable brands in our portfolio and the effects of
targeted pricing measures to help offset the impact of inflation during the
period. Underlying EBITDA was £13.3m reflecting investment in our business,
chiefly in people-related overheads.
A cash conversion rate of approximately 86% supported the ongoing reduction in
debt, arriving at a net cash position of £1.7m at the year end before
accounting for IFRS 16 leases. Symbolically, this is an important achievement
for the Group, but most significantly it equips us with additional flexibility
and financial firepower to continue pursuit of investment opportunities that
can grow our business.
Our balance sheet position was further strengthened in February 2024 when we
announced the disposal of our majority stake in Identicare Ltd for a cash
consideration of £24.9m. The sale of this non-core asset represents a
significant crystallisation of value for the Group and its shareholders and
validates the decisions taken by the Company to instil new leadership and with
this, a strategic repositioning of the business to make it attractive to
specialist investors. The disposal of Identicare significantly strengthens the
balance sheet of the Group and enables us to accelerate our organic and
inorganic growth initiatives and deliver long-term value creation for
shareholders. Following the transaction, the Group's net cash position was
around £27.0m.
In 2022 we reached an agreement with Netherlands-based Orthros Medical
covering a licensing and collaboration deal to explore the utility of VHH
antibody technology as an innovative treatment for canine osteoarthritis. The
programme is progressing well and we are extending the scope of the work to
explore the potential benefits in horses. While these are still early days for
the collaboration, we believe this pipeline project represents an exciting and
emerging area of science with real therapeutic promise.
In 2021 we shared specifics of our commitment to the environmental, social and
governance (ESG) pillars of sustainable development. We believe that all
organisations, large or small, have a duty to operate in a responsible manner
in everything they do. The framework we laid out two years ago reflects the
material needs and interests of our stakeholders and continues to guide us on
our journey at the most senior levels of our Group as we grow our business.
Despite the current uncertain macroeconomic environment, we continue to be
optimistic about the prospects of our business. The solid financial position
of the Group, backed by a strong operational capability, give us the
confidence to continue investing in our long-term growth strategy.
The Group's resilience, trading strength and solid financial position supports
the Board's decision to propose a final dividend of 3.0 pence per share,
increasing the full year dividend per share by 13.6% to 5.0 pence per share.
As you will have seen, my decision to retire from the Animalcare Board was
announced today. It has been an honour to serve this Company as chair for the
last seven years, but I believe that the time has come for me to pass the
baton. At the conclusion of the 2024 Annual General Meeting and subject to
shareholder approval of his re-election as a director, my responsibilities as
Non-Executive Chair will transfer to Ed Torr, our Senior Independent Director.
Ed's extensive experience of the veterinary pharmaceutical industry combined
with his proven senior leadership capabilities make him an ideal candidate for
the role of Chair as the Group continues to focus on delivery of our growth
strategy. Ed joined the Animalcare Board in 2017 after an impressive
management career that included 13 years as Commercial Director on the Board
of Dechra Pharmaceuticals plc where he was responsible for the integration of
several major acquisitions and global licensing and launches of key brands.
With Ed's knowledge of Animalcare and, more widely, of the veterinary
pharmaceutical industry, the Group could not be in better hands as we continue
to focus on delivery of our strategy.
There's no doubt that our people drive our success. The positive progress we
made in 2023 was delivered through their efforts and it's important to
recognise our colleagues for their hard work and commitment. I'd also like to
thank you, our shareholders, for your continuing support as we grow our
Company by striving for better animal health.
JAN BOONe
Non-Executive Chair
9 April 2024
Chief Executive Officer's Review
I'm pleased to report that 2023 was a positive year on several fronts for
Animalcare. Over the 12-month period we delivered increased sales and gross
margins across our operations while making progress against our strategic
objectives. The Group is now better equipped than ever to drive growth over
the long term, aided by a further strengthening of our balance sheet and
growing organisational capabilities.
Strong performance
Group revenues totalled £74.4m, up 3.8% at actual exchange rates (2.5% at
CER). Among the key contributors to this top-line growth were new products,
notably annualised growth from the recently launched Plaqtiv+ range, demand
for Danilon, our equine anti-inflammatory that reverted to Animalcare sales
and marketing control from the beginning of 2023, and sales generated by the
Identicare business.
In recent years we have focused our commercial attention on the
larger-selling, more profitable products in our portfolio. Combined with
carefully targeted pricing measures, this has helped deliver a 1.5%
improvement in gross margins over the previous year. That also contributed to
underlying EBITDA of £13.3m, up from £13.1m in the prior year, as we
continue to make SG&A investments, primarily in the development of our
people.
Positive revenue and margin performance alongside an improved cash
conversation rate of approximately 86% (2022: approximately 77%) resulted in a
strengthening of our balance sheet to end the year in a net cash position
before accounting for IFRS 16 leases of £1.7m. This milestone for the Company
equips us with greater financial flexibility and firepower to accelerate our
strategy including through the pursuit of organic and inorganic investment
opportunities.
Organic growth
Much of our success has been built on the strategic commitment to develop and
nurture brands that offer sustainable revenues with attractive margins,
thereby maximising the value of what we possess and the opportunities to add
to our portfolio.
Our top selling brands represent an engine of organic growth for Animalcare.
Revenues in 2023 were boosted in no small part by an enthusiastic customer
response to our Plaqtiv+ dental health range, the first products to result
from our STEM joint venture. Daxocox also continued to make headway in a
competitive and innovative market, achieving a double-digit sales increase
across our direct sales territories.
Each of our market segments saw revenue growth. Companion Animals was again
the main driver of sales in absolute terms, while Equine benefited from our
decision to return Danilon to the Animalcare fold, a decision that gives us
more control over sales and marketing of this anti-inflammatory treatment.
Production Animals, which remains an important part of our overall business,
was up marginally on the prior year.
Inorganic growth
Pursuing external opportunities to drive sustainable growth is a strategic
priority for the Group. This is reflected in the level of senior management
focus dedicated to the identification and assessment of value-creating deals.
Inorganic opportunities can manifest as M&A, in-licensing or partnering
with the objective of expanding the make-up and reach of our existing
portfolio or adding innovative new pharmaceutical products to the pipeline.
At all times Animalcare takes a disciplined approach to acquisitions and
continues to see scope for further expansion with several prospects in
development. We continue to identify plenty of opportunities giving us the
confidence that we can execute attractive external deals aided by our strong
financial platform.
Developing new products
Innovation is a key driver of growth in our industry. That's why we are
increasing our R&D focus and capability on investigative drugs that we
believe have the potential to change veterinary practice.
In 2022 we took a significant step to strengthen our novel pipeline in a
pre-clinical collaboration and licensing deal with Orthros Medical, a
Netherlands-based research company specialising in VHH antibody technology.
Initially focused on treatment of osteoarthritic pain in dogs, we are now
extending the investigative programme to horses. Overall, the project is
progressing well and we are excited about the future potential of this area of
medical science. Our development pipeline also features potentially
value-creating lifecycle projects that aim to expand and extend the reach of
products in our existing portfolio.
Strong foundations
Our future is being built on increasingly strong foundations. Financially, the
reduction in our net debt from around £23.0m in 2019 to what was a net cash
positive position of £1.7m at the 2023 year end, is a significant achievement
and gives us more options as we continue to seek out value-creating
opportunities.
Our balance sheet improved further in February 2024 with the disposal of
UK-based Identicare Ltd. The sale of our majority stake in the non-core
microchipping and pet owner-focused services company for £24.9m realised
significant value for the Group and our shareholders. As a result, at the time
of the announcement the Group's net cash position increased to around £27.0m.
I'm really proud of what we achieved after our decision to carve out the
business under specialist leadership. The disposal was the logical next step
for Animalcare, providing us with significant additional financial flexibility
and resources as we concentrate on growing our pharmaceutical-centred animal
health business.
The skills, attitudes and values our people bring to the table are critical
for delivery of our strategy. We have consistently invested in core skills,
particularly in sales and marketing, and have adjusted our leadership as our
marketplace and organisational needs evolve. Most recently, we have
reconfigured the senior management team with the creation of a Chief Operating
Officer to oversee the Group's pharmaceutical activities supported by a Group
Finance Director. Operationally, I believe we are better placed than ever to
drive future growth; we possess mature capabilities that match and support our
ambitions.
Summary and outlook
In 2023 we delivered a strong set of results in line with the expectations of
the market. Revenue growth, expanded gross margins and improved levels of cash
conversion were all features of a positive performance for Animalcare.
Looking ahead to 2024, we will continue to push for profitable growth and cash
generation in our existing operations as we focus on stepping up investment,
whether inorganic or organic, to build our new product and R&D pipeline.
With our strong balance sheet, significantly enhanced through the post year
end sale of Identicare, the Group is better equipped than ever to accelerate
growth in the future.
I'd like to thank our people for driving such a positive performance in 2023
while wishing the Identicare team every success in the exciting next step in
their journey.
Finally, I would also like to recognise the contribution of Jan Boone who has
decided to stand down as Chair of the Board after seven years in the role. His
support, advice and encouragement have been hugely valuable in the shaping and
pursuit of our long-term growth strategy. I'm very much looking forward to
working more closely with Jan's successor, Ed Torr, who as Senior Independent
Director on the Board since 2017, has ideal credentials to take on the role of
Non-Executive Chair. Ed's leadership skills have been honed over many years in
the international veterinary pharmaceutical industry, most notably at Dechra
Pharmaceuticals plc where his responsibilities spanned commercial operations,
product development, manufacturing, licensing and launching of innovative
global brands as well as the integration of key acquisitions into the
business.
JENNY WINTER
Chief Executive Officer
9 April 2024
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. 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
2023 2022 % Change at AER
£'000 £'000
Revenue 74,351 71,616 3.8%
Gross Profit 43,346 40,659 6.6%
Gross Margin % 58.3% 56.8% 1.5%
Underlying Operating Profit 9,807 9,753 0.6%
Underlying EBITDA 13,327 13,131 1.5%
Underlying EBITDA margin % 17.9% 18.3% (0.4%)
Underlying Basic EPS (p) 10.9p 12.6p (13.5%)
Overall trading activity in 2023 reflected a normalisation in the rates of
demand growth across our markets due to the changing macroeconomic environment
and country-specific dynamics. The Group delivered an improved financial
performance during the second half, returning to revenue growth in line with
market expectations following a more challenging first half against a tough
comparator for the prior period.
Group revenues improved to £74.4m (2022: £71.6m), an increase of 3.8% at AER
(2.5% at CER). An analysis by product category is shown in the table below:
2023 2022 % Change at AER
£'000 £'000
Companion Animals 52,214 50,217 4.0%
Production Animals 15,790 15,674 0.7%
Equine & other 6,347 5,725 10.9%
Total 74,351 71,616 3.8%
Revenue in Companion Animals improved by 4.0% to £52.2m, benefiting from
sales growth generated by new products, which contributed £1.9m (2022:
£2.1m), approximately half driven by Plaqtiv+ following its successful launch
during Q2 2022. Identicare, our UK-based pet microchipping and
consumer-focused services business, continued the strong momentum from FY
2022, with sales increasing by 34% to £3.6m. The Group continues to invest in
sales and marketing activities to drive Daxocox uptake in our direct sales
markets, with the expanding prescriber base delivering 16.7% revenue growth
versus the prior year. These positive contributions to revenue growth were
partially offset by competitor dynamics against certain generic brands,
cessation of distribution arrangements and disruption in supply of certain
brands within the UK.
Production Animals revenues, which are chiefly generated by our Southern
European and International Partners operations, were broadly in line with 2022
at £15.8m. The launch of a third-party distribution product in Spain,
together with growth in a number of our larger-selling brands, were largely
offset by phasing of orders and generic competition, notably within
International Partners.
Equine and other revenues were £6.3m, with growth accelerating during the
second half to 10.9%. This was principally driven by bringing Danilon, one of
our largest products, back into the UK business in the second half of 2022,
supported by focused sales and marketing resource.
The continuing commercial focus on our larger, higher-margin brands and
services, together with a positive sales mix, are the key drivers of the 1.5%
improvement in our gross margins. While the Group has been affected by input
cost (COGS) and logistic price increases, the net impact on gross and EBITDA
margins during the year has not been significant as we have taken mitigating
pricing actions, where possible, while maintaining our competitiveness.
However, we remain alert to the accelerating inflationary pressures, notably
around people, impacting our overall cost base as we progress through 2024.
Underlying EBITDA increased to £13.3m (2022: £13.1m), with EBITDA margins
moderating to 17.9%. Underlying overheads, defined as gross profit less
underlying EBITDA, increased during the year to £30.0m (2022: £27.5m),
representing 40.4% of revenue compared to 38.4% in the prior year. People
costs remain the largest component of our SG&A expenses, which increased
by £1.5m, of which around 40% is inflation related. We continue to invest in
building the skills and talent base that will drive our business forward and,
during the year, we further aligned internal resources to accelerate delivery
of our key strategic objectives, primarily sales and marketing excellence and
the identification of potential M&A opportunities and the building of
commercial alliances. The balance of the increase in overheads largely relates
to R&D (Orthros), regulatory, quality, professional fees and IT licensing
expenses.
The underlying effective tax rate of 26.6% (2022: 16.4%) has significantly
increased versus prior year primarily reflecting the geographic mix of
operating profits, level of non-deductible items and the prior year one-off
impact of the recognition of tax losses in the UK (a non-cash item). We
continue to review and optimise our tax efficiency due to changes in regional
profit mix and the innovation tax relief environment.
Reflecting the points noted above, underlying basic EPS decreased to 10.9
pence (2022: 12.6 pence).
Overview of reported financial results
Reported Group profit after tax for the year (after accounting for the
non-underlying items shown in the table and discussed below) was £1.2m (2022:
£2.0m), with reported earnings per share at 2.0 pence (2022: 3.3 pence per
share).
2023 Underlying results Amortisation and impairment of intangibles Acquisition, restructuring, integration and other costs 2023 Reported results 2022 Reported results
£'000 £'000 £'000 £'000 £'000
Revenue 74,351 - - 74,351 71,616
Gross profit 43,346 - - 43,346 40,659
Selling, general & administrative expenses (31,086) (3,539) (801) (35,426) (32,560)
Research & development expenses (2,455) (646) - (3,101) (3,030)
Net other operating income/(expense) 2 (390) (388) (915)
Impairment losses - (22) - (22) (918)
Operating profit/(loss) 9,807 (4,207) (1,191) 4,409 3,236
Net finance expenses (744) - - (744) (642)
Share in net loss of joint venture (142) - - (142) (52)
Profit/(loss) before tax 8,921 (4,207) (1,191) 3,523 2,542
Taxation (2,376) (207) 259 (2,324) (577)
Profit/(loss) for the year 6,545 (4,414) (932) 1,199 1,965
Basic earnings per share (p) 10.9p - - 2.0p 3.3p
Non-underlying items totalling £5.4m (2022: £6.5m) relating to profit before
tax have been incurred in the year, as set out in note 4. This principally
comprises amortisation and impairment of acquisition-related intangibles of
£4.2m (2022: £5.4m). The current year charge encompasses amortisation in
relation to the reverse acquisition of Ecuphar NV and previous acquisitions
made by Ecuphar NV of £4.2m. In the prior year, a non-cash impairment charge
of £0.9m was incurred in relation to research and development assets that
formed part of the acquired development pipeline, the principal driver of
which was manufacturing challenges that impacted resumption of supply at
appropriate commercial returns.
The balance of the non-underlying charge, totalling £1.2m (2022: £1.2m)
includes share-based payments in respect of Identicare Ltd of £0.8m and costs
relating to M&A and business development activities, including the
disposal of Identicare post year end.
Dividends
An interim dividend of 2.0 pence per share was paid in November 2023.
The Board is proposing a final dividend of 3.0 pence per share (2022: 2.4
pence per share). Subject to shareholder approval at the Annual General
Meeting to be held on 20 June 2024, the final dividend will be paid on 19 July
2024 to shareholders whose names are on the Register of Members at close of
business on Friday 21 June 2024. The ordinary shares will become ex-dividend
on Thursday 20 June 2024. The deadline for the Dividend Re-Investment
Programme (DRIP) election is Friday 28 June 2024.
The Board continues to closely monitor the dividend policy, recognising the
Group's need for higher investment in organic and inorganic growth while
maintaining dividend flow to deliver overall value to our shareholders.
Cash flow and net debt
The Group continues to generate strong cash flows, which we seek to reinvest
into accelerating the strategy and delivering further value creation for
shareholders.
Improved cash generation, ahead of the rate delivered in 2022, has further
strengthened our balance sheet and with it our financial flexibility. The
Group ended the financial year in a net cash position, pre IFRS 16 leases, of
£1.7m (31 December 2022: £2.4m debt).
2023 2022
£'000 £'000
Underlying EBITDA 13,327 13,131
Working capital movement (1,323) (1,904)
Other (1,077) (1,798)
Net cash flow from operations 10,927 9,429
Non-underlying items 498 847
Underlying net cash flow from operations 11,425 10,276
Underlying cash conversion % 85.7% 78.3%
Underlying net cash flow generated by our operations increased to £11.4m
(2022: £10.3m). Working capital increased by £1.3m in the year, the movement
chiefly attributable to £3.3m decrease in payables offset by a higher than
expected inventory reduction of £2.3m (2022: increase of £2.7m), driven by a
combination of supply and sales phasing which we expect to normalise in the
first half of 2024. Trade receivables were broadly in line with 2022.
We are again targeting a year-on-year improvement in cash conversion compared
to 2023, in the range of 85%-90%, which takes into account the post year end
disposal of Identicare. As in the prior year, we expect the profile of our
operating cash conversion to be lower in the first half versus second half,
the key driver of which is the normalisation of our inventory as noted above.
Net debt decreased by £4.2m to £1.2m over the period. The net debt to
underlying EBITDA leverage ratio was approximately 0.1 times (2022: 0.4
times), well below the maximum target of two times, enabling the Group to
pursue external investment opportunities in support of its growth strategy.
£'000
Net debt at 1 January 2023 (5,402)
Net cash flow from operations 10,927
Net capital expenditure (2,553)
Investments in joint venture (306)
Net financing cashflows (1,700)
Dividends paid (2,644)
Foreign exchange on cash and borrowings 376
Movement in IFRS 16 lease liabilities 68
Net debt at 31 December 2023 (1,234)
Comprising:
Net cash at bank 1,709
IFRS 16 lease liability (2,943)
We continue to invest in new product development to strengthen our pipeline
through a balance of early and later-stage opportunities and lifecycle
products. We are placing an increasing emphasis on innovation in Companion
Animals, while at the same time we are reviewing opportunities for novel and
innovative additions to our equine portfolio.
Capital expenditure of £2.6m (2022: £2.9m) largely comprises investment in
our product development pipeline and licence milestone payments to Orthros
Medical and STEM totalling £1.6m. The balance of expenditure relates chiefly
to investment in our business systems, including CRM, ERP and IT
infrastructure within Identicare.
Borrowing facilities
As at 31 December 2023, the Group's total facilities of €51.5m, due to
expire on 31 March 2025, consisted of a committed revolving credit facility
(RCF) of €41.5m and a €10.0m acquisition line, the latter of which cannot
be utilised to fund operations.
Net cash at the year end, pre IFRS 16 leases, was £1.7m (31 December 2022:
£2.4 million debt) with the RCF unutilised, leaving headroom of £40.7m
excluding the undrawn acquisition line.
As at 31 December 2023 and throughout the financial year, all covenant
requirements were met with significant headroom across all measures.
We are currently in discussions with our four syndicate banks to increase our
existing RCF from €41.5m to €44.0m with an extension of the maturity date
to 31 March 2029. The acquisition line, which was drawn down by €3.4m at the
year end, will be settled. We expect to complete the process by the end of
April. The covenant requirements in the RCF will remain unchanged from the
current RCF agreement, details of which are provided below.
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; and
• Solvency (total assets less goodwill/total equity less goodwill)
greater than 25%.
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 indicate that the Group will have
sufficient funds and liquidity to meet its obligations as they fall due, in
particular when taking into consideration the Group's financial position
following the post year end sale of Identicare for £24.9m and 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, with corresponding mitigating actions. The
output from these scenarios shows the Group has adequate levels of liquidity
due to the cash proceeds received from the disposal of Identicare for the
Directors to continue to adopt the going concern basis in preparing the
financial statements without making assumptions concerning the extension of
the RCF facility due to expire on 31 March 2025, and complies with all its
banking covenants associated with the current committed facilities throughout
the going concern assessment period.
Subsequent events
On 28 February 2024 we announced the disposal of our majority shareholding in
Identicare to BG Bidco 21 Limited, a newly incorporated company owned by funds
managed by Bridgepoint Advisors II Limited, for a cash consideration of
£24.9m which was payable upon completion of this sale. This represents a
significant crystallisation of value for the Group and with it, a significant
further strengthening of our balance sheet.
Summary and outlook
The Group has returned to revenue growth and delivered a solid set of results,
in line with market expectations, with positive progress on gross margins and
improved levels of cash conversion versus the prior year.
We will continue to drive profitable growth and cash flow in our existing
operations while focusing on accelerating investment on developing and
building our R&D and new product pipeline, underpinned by our confidence
in our people, our strong operational and financial platform together with the
resilience of the animal health sector in the light of continuing
macroeconomic uncertainties across our markets.
With our strong balance sheet, significantly strengthened post year end
through the disposal of Identicare, the Group is better placed than ever to
accelerate growth in the future. Our capital allocation is closely aligned to
our three strategic priorities. Alongside investment in organic growth,
carefully selected and value-enhancing acquisitions and increasing the number
of novel products in development are key factors in delivering the Group's
long term growth strategy.
CHRIS BREWSTER
Chief Financial Officer
9 April 2024
Consolidated income statement (unaudited)
Year ended 31 December 2023
For the year ended 31 December
Unaudited
Underlying Non-underlying (note 4) Total Underlying Non-under-lying (note 4) Total
2023 2023 2023 2022 2022 2022
Notes £'000 £'000 £'000 £'000 £'000 £'000
Revenue 5 74,351 − 74,351 71,616 − 71,616
Cost of sales (31,005) − (31,005) (30,957) − (30,957)
Gross profit 43,346 − 43,346 40,659 − 40,659
Research and development expenses (2,455) (646) (3,101) (2,363) (667) (3,030)
Selling and marketing expenses (12,316) − (12,316) (13,547) − (13,547)
General and administrative expenses (18,770) (4,340) (23,110) (15,000) (4,013) (19,013)
Net other operating (expense)/income 2 (390) (388) 4 (919) (915)
Impairment losses − (22) (22) − (918) (918)
Operating profit 9,807 (5,398) 4,409 9,753 (6,517) 3,236
Finance costs 6 (1,419) − (1,419) (1,752) − (1,752)
Finance income 7 675 − 675 1,110 − 1,110
Finance costs net (744) − (744) (642) − (642)
Share of net loss of joint venture accounted for using the equity method 12 (142) − (142) (52) − (52)
Profit before tax 8,921 (5,398) 3,523 9,059 (6,517) 2,542
Income tax expense 8 (2,376) 52 (2,324) (1,487) 910 (577)
Profit for the period 6,545 (5,346) 1,199 7,572 (5,607) 1,965
Net profit attributable to:
The owners of the parent 6,545 (5,346) 1,199 7,572 (5,607) 1,965
Earnings per share for profit attributable to the ordinary equity holders of
the Company:
Basic earnings per share 9 10.9p − 2.0p 12.6p − 3.3p
Diluted earnings per share 9 10.8p − 2.0p 12.5p − 3.2p
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 to these financial
statements. The accompanying notes form an integral part of these unaudited
consolidated financial statements.
Consolidated statement of comprehensive income (unaudited)
Year ended 31 December 2023
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Profit 1,199 1,965
Other comprehensive (expense)/income
Exchange differences on translation of foreign operations* (290) 488
Other comprehensive (expense)/income, net of tax (290) 488
Total comprehensive (expense)/income for the year, net of tax 909 2,453
Total comprehensive income attributable to:
The owners of the parent 909 2,453
* May be reclassified subsequently to profit and loss
Consolidated statement of financial position (unaudited)
Year ended 31 December 2023
For the year ended 31 December
Notes
Unaudited 2022
2023
£'000 £'000
Assets
Non-current assets
Goodwill 10 50,656 50,853
Intangible assets 11 20,584 25,283
Property, plant and equipment 403 448
Right-of-use-assets 16 2,819 2,924
Investments in joint ventures 12 1,119 1,305
Deferred tax assets 8 1,726 3,567
Other financial assets 70 70
Total non-current assets 77,377 84,450
Current assets
Inventories 10,062 13,474
Trade receivables 13,294 13,568
Other current assets 1,417 715
Cash and cash equivalents 4,642 6,035
Total current assets 29,415 33,792
Total assets 106,792 118,242
Liabilities
Current liabilities
Lease liabilities 16 (914) (852)
Trade payables (10,808) (15,497)
Current tax liabilities (125) (623)
Accrued charges and contract liabilities 14 (1,159) (1,276)
Other current liabilities (5,412) (4,027)
Total current liabilities (18,418) (22,275)
Non-current liabilities
Borrowings 13 (2,933) (8,426)
Lease liabilities 16 (2,029) (2,159)
Deferred tax liabilities 8 (4,015) (4,773)
Contract liabilities 14 (293) (372)
Provisions (160) (340)
Other non-current liabilities (1,049) (911)
Total non-current liabilities (10,479) (16,981)
Total Liabilities (28,897) (39,256)
Net assets 77,895 78,986
Equity
Share capital 15 12,022 12,019
Share premium 132,798 132,798
Reverse acquisition reserve (56,762) (56,762)
Accumulated losses (12,781) (11,977)
Other reserves 2,618 2,908
Equity attributable to the owners of the parent 77,895 78,986
Total equity 77,895 78,986
Consolidated statement of changes in equity (unaudited)
Year ended 31 December 2023
Attributable to the owners of the parents
Share Share Accumulated losses Reverse acquisition reserve Other reserve Total
capital
premium
equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 12,019 132,798 (11,977) (56,762) 2,908 78,986
Net profit − − 1,199 − − 1,199
Other comprehensive expense − − − − (290) (290)
Total comprehensive income − − 1,199 − (290) 909
Dividends paid − − (2,644) − − (2,644)
Exercise of share options 3 − − − − 3
Share-based payments − − 641 − − 641
At 31 December 2023 (Unaudited) 12,022 132,798 (12,781) (56,762) 2,618 77,895
Attributable to the owners of the parents
Share Share Accumulated losses Reverse acquisition reserve Other reserve Total
capital
premium
equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 12,019 132,798 (11,676) (56,762) 2,420 78,799
Net profit − − 1,965 − − 1,965
Other comprehensive income − − − − 488 488
Total comprehensive income − − 1,965 − 488 2,453
Dividends paid − − (2,644) − − (2,644)
Share-based payments − − 378 − − 378
At 31 December 2022 12,019 132,798 (11,977) (56,762) 2,908 78,986
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 mainly 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 (unaudited)
Year ended 31 December 2023
For the year ended 31 December
Notes Unaudited 2022
2023
£'000 £'000
Operating activities
Profit before tax 3,523 2,542
Non-cash and operational adjustments
Share in net loss of joint venture 12 142 52
Depreciation of property, plant and equipment 1,092 1,118
Amortisation of intangible assets 11 6,613 6,685
Impairment of intangible assets 11 22 918
Share-based payment expense 1,278 542
Gain on disposal of fixed assets − (146)
Non-cash movement in provisions (2) 202
Movement allowance for bad debt, inventories and provisions 757 105
Finance income (675) (260)
Finance expense 1,419 1,001
Impact of foreign currencies - (235)
Fair value adjustment contingent consideration - 140
Gain from IFRS 16 lease modification (9) (6)
Exercise of share options 3 −
Movements in working capital
Increase in trade receivables (319) (5,875)
Decrease/(increase) in inventories 2,257 (2,735)
(Decrease)/increase in payables (3,261) 6,706
Income tax paid (1,913) (1,325)
Net cash flow from operating activities 10,927 9,429
Investing activities
Purchase of property, plant and equipment (52) (407)
Purchase of intangible assets (2,501) (2,540)
Proceeds from the sale of intangible assets - 153
Capital contribution in joint venture 12 (306) (325)
Net cash flow used in investing activities (2,859) (3,119)
Financing activities
Repayment of loans and borrowings (5,252) (1,320)
Repayment of IFRS 16 lease liability 16 (955) (996)
Dividends paid 15 (2,644) (2,644)
Interest paid (646) (444)
Other financial expense (99) (292)
Net cash flow used in financing activities (9,596) (5,696)
Net (decrease)/increase of cash and cash equivalents (1,528) 614
Cash and cash equivalents at beginning of year 6,035 5,633
Exchange rate differences on cash and cash equivalents 135 (212)
Cash and cash equivalents at end of year 4,642 6,035
Reconciliation of net cash flow to movement in net debt
Net (decrease)/increase in cash and cash equivalents in the year (1,528) 614
Cash flow from decrease in debt financing 5,252 1,320
Foreign exchange differences on cash and borrowings 376 (715)
Movement in net debt during the year 4,100 1,219
Net debt at the start of the year (5,402) (5,330)
Movement in lease liabilities during the year 16 68 (1,291)
Net debt at the end of the year (1,234) (5,402)
Notes to the unaudited consolidated financial statements
Year ended 31 December 2023
1. Financial information
The unaudited financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2023 and 31
December 2022. The financial information for the year ended 31 December 2022
is derived from the statutory accounts for 2022 which have been delivered to
the Registrar of Companies. The Auditor has reported on those accounts; their
report was (i) unqualified, (ii) did not include references 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 section 498 (2) or (3) of
the Companies Act 2006. Information has been extracted from the draft
statutory financial statements for the year ended 31 December 2023 which will
be delivered to the Registrar of Companies in due course. Accordingly, the
financial information for 2023 is presented unaudited in the preliminary
announcement.
2. Basis of preparation
The financial information has 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 at 31 December 2023, the Group's total facilities of €51.5m, due to
expire 31 March 2025, consisted of a committed revolving credit facility (RCF)
of €41.5m and a €10.0m acquisition line, the latter of which cannot be
utilised to fund operations.
We are currently in discussions with our four syndicate banks to increase our
existing RCF from €41.5m to €44.0m with an extension of the maturity date
to 31 March 2029. The acquisition line, which was drawn down by €3.4m at the
year end, will be settled. We expect to complete the process by the end of
April. The covenant requirements in the RCF will remain unchanged from the
current RCF agreement, details of which are provided below.
Net debt to underlying EBITDA ratio of 3.5x; underlying EBITDA to interest
ratio of minimum 4x; and solvency (total assets less goodwill/total equity
less goodwill) greater than 25%. As at 31 December 2023 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 consideration the Group's financial position
following the post year end sale of Identicare for £24.9m and 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, with corresponding mitigating actions. The
output from these scenarios shows the Group has adequate levels of liquidity
due to the cash proceeds received from the disposal of Identicare for the
Directors to continue to adopt the going concern basis in preparing the
financial statements without making assumptions concerning the extension of
the RCF facility due to expire on 31 March 2025, and complies with all its
banking covenants associated with the current committed facilities throughout
the going concern assessment period.
4. Non-underlying items
For the year ended
31 December
Unaudited 2022
2023
£'000 £'000
Amortisation and impairment of acquisition related intangibles
Classified within research and development expenses 646 667
Classified within general and administrative expenses 3,539 3,794
Impairment losses 22 895
Total amortisation and impairment of acquisition-related intangibles 4,207 5,356
Restructuring costs 14 282
Acquisition and integration costs - 335
Impairment on intangibles - 23
Divestments and business disposals - (146)
COVID-19 - 2
Long-term incentive plan Identicare Ltd 801 220
UK and Spain office relocation costs 5 182
Expenses related to M&A and business development activities 193 -
Other non-underlying items 178 263
Total non-underlying items before taxes 5,398 6,517
Tax impact (52) (910)
Total non-underlying items after taxes 5,346 5,607
The following table shows the breakdown of non-underlying items before taxes
by category for 2023 and 2022:
For the year ended
31 December
Unaudited 2022
2023
£'000 £'000
Classified within research and development expenses 646 667
Classified within general and administrative expenses 4,340 4,013
Classified within net other operating expense/(income) 390 919
Impairment losses 22 918
Total non-underlying items before taxes 5,398 6,517
The current year £4,340k general and administrative expenses principally
encompass amortisation and impairment of acquisition related intangibles of
£3,539k and a share based payment charge of £801k of which £637k is related
to the cash settled portion of the share based payment arrangement of
Identicare Ltd.
Non-underlying items totalling £5,398k (2022: £6,517k) relating to profit
before tax incurred in the year principally comprise:
* Amortisation and impairment of acquisition-related intangibles of £4,207k
(2022: £5,356k). The current year charge comprises amortisation in relation
to the reverse acquisition of Ecuphar NV and previous acquisitions made by
Ecuphar NV of £4,185k (2022: £4,461k) and a non-cash impairment charge of
in-process R&D assets £22k (2022: £895k) that formed part of the
acquired development pipeline. The principal driver for the prior year charge
was manufacturing challenges that significantly impacted the timing and costs
to resume supply with appropriate commercial returns. This brand has
subsequently been withdrawn from the market.
* Restructuring costs of £14k (2022: £282k) primarily relate to costs
associated with the reorganisation of our Benelux operations.
* Costs associated with the relocation of our Spain and UK operations totalling
£5k (2022: £182k) include one-off move costs and dilapidation provisions.
* Expenses relating to M&A and business development activities of £193k
(2022: £nil) represent legal and professional fees incurred on these
activities, including the disposal of Identicare post year end.
* Other non-underlying items largely relating to legal costs.
5. Segment information
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, 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 following table summarises the segment reporting from continuing
operations for 2023 and 2022. 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.
For the year ended 31 December
Unaudited
2023 2022
£'000 £'000
Revenues 74,351 71,616
Gross Profit 43,346 40,659
Gross Profit % 58 57
Segment underlying EBITDA 13,327 13,131
Segment underlying EBITDA % 18 18
Segment EBITDA 12,136 11,993
Segment EBITDA % 16 17
The underlying and segment EBITDA is reconciled with the consolidated net
profit for the year as follows:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Underlying EBITDA 13,327 13,131
Non-recurring expenses (excluding amortisation and impairment) (1,191) (1,138)
EBITDA 12,136 11,993
Depreciation, amortisation and impairment (7,727) (8,757)
Operating profit 4,409 3,236
Finance costs (1,419) (1,752)
Finance income 675 1,110
Share of net loss of joint venture accounted for using the equity method (142) (52)
Income taxes (1,258) (1,637)
Deferred taxes (1,066) 1,060
Profit for the period 1,199 1,965
Segment assets excluding deferred tax assets located in Belgium, Spain,
Portugal, the United Kingdom and other geographies are as follows:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Belgium 9,484 7,510
Spain 3,458 3,695
Portugal 4,080 4,234
UK 56,252 59,184
Other 2,377 6,260
Non-current assets excluding deferred tax assets 75,651 80,883
Revenue by product category
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Companion animals 52,214 50,217
Production animals 15,790 15,674
Equine 6,339 5,698
Other 8 27
Total 74,351 71,616
Revenue by geographical area
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Belgium 3,560 3,354
The Netherlands 2,115 1,627
United Kingdom 16,860 15,257
Germany 10,045 10,056
Spain 20,419 19,724
Italy 8,785 8,404
Portugal 4,357 4,215
European Union - other 6,875 7,199
Asia 490 494
Middle East & Africa 12 17
Other 833 1,269
Total 74,351 71,616
Revenue by category
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Product sales 71,411 69,642
Services sales 2,940 1,974
Total 74,351 71,616
Product revenue is recognised when the performance obligation is satisfied at
a point in time. Service revenue is recognised by reference to the stage of
completion.
6. Finance costs
Finance costs include the following elements:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Interest expense 646 444
Foreign currency losses 456 985
Unwind of discount on other liabilities 104 124
Other finance costs 213 199
Total 1,419 1,752
7. Finance income
Finance income includes the following elements:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Foreign currency exchange gains 501 1,060
Income from financial assets 124 39
Other finance income 50 11
Total 675 1,110
8. Income tax
Current tax liabilities
Current tax liabilities solely relate to income taxes of £125k (2022:
£623k).
The following table shows the breakdown of the tax expense for 2023 and 2022:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Current tax charge (1,354) (1,685)
Tax adjustments in respect of previous years 96 48
Total current tax charge (1,258) (1,637)
Deferred tax - origination and reversal of temporary differences (945) 774
Deferred tax - adjustments in respect of previous years (121) 286
Total deferred tax (charge)/credit (1,066) 1,060
Total tax expense for the year (2,324) (577)
The total tax expense can be reconciled to the accounting profit as follows:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Profit before tax 3,523 2,542
Share of net loss of joint ventures 142 52
Profit before tax, excl. share in net loss of joint venture 3,665 2,594
Tax at 23.5% (2022: 19.0%) (861) (493)
Effect of:
Overseas tax rates (66) (389)
Non-deductible expenses (432) (99)
Use of tax losses previously not recognised − (24)
Changes in statutory enacted tax rate (1,001) 93
Tax adjustments in respect of previous year (25) 334
Non-recognition of deferred tax on current year losses (15) (21)
Non-recognised deferred tax assets on timing differences 108 15
R&D relief − 53
Other (32) (46)
Income tax expense as reported in the consolidated income statement (2,324) (577)
The tax credit of £52k (2022: credit of £910k) shown within "Non-underlying
items" on the face of the consolidated income statement, which forms part of
the overall tax charge of £2,324k (2022: £577k), relates to the items in
note 4.
The tax rates used for the 2023 and 2022 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
23.5% (the United Kingdom rate 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 UK
enacted tax rate, being 25% from 1 April 2023.
Deferred tax
(a) Recognised deferred tax assets and liabilities
Assets Liabilities Total
Unaudited 2022 Unaudited 2022 Unaudited 2022
2023 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000
Goodwill − − (1,444) (1,290) (1,444) (1,290)
Intangible assets 335 329 (2,860) (2,722) (2,525) (2,393)
Property, plant and equipment − − (645) (707) (645) (707)
Financial fixed assets 1 1 − − 1 1
Inventory − − (54) (54) (54) (54)
Trade and other receivables/(payables) 30 71 − − 30 71
Borrowings 580 565 − − 580 565
Provisions − 4 − − − 4
Accruals and deferred income 132 32 − − 132 32
Tax losses carried forward 1,636 2,565 − − 1,636 2,565
Total 2,714 3,567 (5,003) (4,773) (2,289) (1,206)
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 2023:
Balance as at 1 January 2023 Recognised in income Foreign exchange adjustments Balance as at 31 December Unaudited
2023
£'000 £'000 £'000 £'000
Goodwill (1,290) (181) 27 (1,444)
Intangible assets (2,393) (125) (7) (2,525)
Property, plant and equipment (707) 48 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
Borrowings 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) (1,066) (17) (2,289)
Movement of deferred taxes during 2022:
Balance at 1 January 2022 Recognised in income Foreign exchange adjustments Balance at 31 December 2022
£'000 £'000 £'000 £'000
Goodwill (1,048) (176) (66) (1,290)
Intangible assets (3,192) 782 17 (2,393)
Property, plant and equipment (381) (296) (30) (707)
Financial fixed assets 1 − − 1
Inventory (51) − (3) (54)
Trade and other receivables/(payables) 153 (62) (20) 71
Accruals and deferred income 53 (23) 2 32
Borrowings 405 133 27 565
Provisions 3 − 1 4
Tax losses carry forward and other tax benefits 1,749 702 114 2,565
Net deferred tax (2,308) 1,060 42 (1,206)
Tax losses
The Group has unused tax losses, tax credits and notional interest deduction
available in an amount of £6,549k for 2023 (2022: £11,361k). 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 £1,636k
(2022: £2,565k). 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. It is expected that £325k of the deferred
tax asset will be recovered within the next 12 months and the remaining
£1,311k of the deferred tax asset will be recovered after 12 months.
The non-recognised deferred tax assets of Ecuphar NV on temporary differences
decreased by £108k in 2023 (2022: £15k). The total unrecognised tax losses
as at 31 December 2023 were £2,497k (2022: £2,605k).
9. Earnings per share
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 before continuing operations
For the year ended 31 December
Unaudited 2022 Unaudited 2022
2023 2023
Underlying Underlying Total Total
£'000 £'000 £'000 £'000
Net profit for the year 6,545 7,572 1,199 1,965
Net profit attributable to ordinary equity 6,545 7,572 1,199 1,965
holders of the parent adjusted for the effect of dilution
Average number of shares (basic and diluted)
For the year ended 31 December
Unaudited 2022 Unaudited 2022
2023 2023
Number of shares Underlying Underlying Total Total
Weighted average number of ordinary shares 60,231,020 60,175,407 60,231,020 60,175,407
for basic earnings per share
Dilutive potential ordinary share options 423,222 629,087 423,222 629,087
Weighted average number of ordinary shares 60,654,242 60,804,494 60,654,242 60,804,494
adjusted for effect of dilution
Basic earnings per share
For the year ended 31 December
Unaudited 2022 Unaudited 2022
2023 2023
Underlying Underlying Total Total
in pence in pence in pence in pence
From operations attributable to the ordinary 10.9 12.6 2.0 3.3
equity holders of the company
Total basic earnings per share attributable to 10.9 12.6 2.0 3.3
the ordinary equity holders of the company
Diluted earnings per share
For the year ended 31 December
Unaudited 2022 Unaudited 2022
2023 2023
Underlying Underlying Total Total
in pence in pence in pence in pence
From operations attributable to the ordinary 10.8 12.5 2.0 3.2
equity holders of the Company
Total diluted earnings per share attributable 10.8 12.5 2.0 3.2
to the ordinary equity holders of the Company
10. Goodwill
On acquisition, goodwill acquired in a business combination is allocated to
the cash-generating units ("CGUs") which 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 the CGU as follows:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
CGU: Pharmaceuticals 50,656 50,853
Total 50,656 50,853
The changes in the carrying value of the goodwill can be presented as follows
for the years 2023 and 2022:
Total
£'000
As at 1 January 2022 50,337
Currency translation 516
As at 31 December 2022 50,853
As at 1 January 2023 50,853
Currency translation (197)
As at 31 December 2023 50,656
Goodwill allocated to the pharmaceuticals CGU includes goodwill recognised as
a result of past business combinations of Esteve, Equipharma NV, Ecuphar BV,
Cardon Pharmaceuticals NV and more significantly following the reverse
acquisition of Animalcare Group plc in 2017 which gave rise to goodwill of
£41,048k.
The discount rate and growth rate (in perpetuity) used for value-in-use
calculations are as follows:
Unaudited
2023 2022
Discount rate (pre-tax) % 13.3 14.2
Growth rate (in perpetuity) % 2.0 2.0
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's impairment review is sensitive to change in assumptions used, most
notably the discount rates and the perpetuity growth rates.
A 1.0% increase in discount rates would cause the value in use of the CGU to
reduce by £18.0m but would not give rise to an impairment. A 1.0% reduction
in perpetuity growth rates would cause the value in use of the CGU to reduce
by £13.7m but would not give rise to an impairment.
11. Intangible assets
The changes in the carrying value of the intangible assets can be presented as
follows for the years 2023 and 2022:
R&D assets Patents, distribution rights and licences 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 2022 12,446 18,248 39,567 3,090 494 73,845
Additions 719 − 603 1,218 − 2,540
Disposals (982) − (90) (55) (4) (1,131)
Transfers 375 − − − (375) −
Currency translation 241 760 978 146 12 2,137
As at 31 December 2022 12,799 19,008 41,058 4,399 127 77,391
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 12,743 18,777 41,623 5,003 203 78,349
(Unaudited)
Amortisation
As at 1 January 2022 (4,955) (14,374) (22,417) (1,886) − (43,632)
Amortisation (1,239) (1,325) (3,233) (888) − (6,685)
Disposals 676 − 89 61 − 826
Impairments (868) − (32) (18) − (918)
Currency translation (151) (693) (753) (102) − (1,699)
As at 31 December 2022 (6,537) (16,392) (26,346) (2,833) − (52,108)
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 (7,468) (17,185) (29,258) (3,854) − (57,765)
(Unaudited)
Net carrying value
As at 31 December 2023 5,275 1,592 12,365 1,149 203 20,584
(Unaudited)
As at 31 December 2022 6,262 2,616 14,712 1,566 127 25,283
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 £2,047k
(2022: £1,513k) and is allocated to R&D assets for £1,613k and Product
Portfolios and product development costs for £434k. No amortisation was
charged.
The capitalised software includes IT driven by accelerated CRM software
investment and website and platform development relating to Identicare Ltd.
The total amortisation charge for 2023 is £6,613k (2022: £6,685k), 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 £4,185k (2022: £4,461k) relating to
acquisition-related intangibles and £2,428k (2022: £2,224k) relating to
other intangibles.
A total impairment charge of £22k (2022: £918k) was recorded during the
financial year. Thereof £22k (2022: £895k) is related to a non-cash
impairment charge of acquisition-related intangibles of R&D assets. In
2023, Animalcare Group plc invested £2,091k (2022: £2,540k) in intangible
assets.
On 24 March 2022 the Group entered into two early-stage agreements with
Netherlands-based Orthros Medical, a company focused on the research and early
development of VHH antibodies, also known as small single-chain antibody
fragments. Under the terms of the deal, Animalcare has made upfront payments
to Orthros Medical totalling €400k in the prior year, and €200k during the
period. Of which €530k is recognised as intangible asset under "Product
portfolios and product development costs". As the two licensed preclinical
candidates progress, Orthros Medical may receive development, regulatory and
commercial milestone payments up to a total value of €11m, a significant
proportion of which are linked to successful commercialisation. In addition,
single digit royalties will be due on the net sales of the products. These
payments are expected to be paid out of 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.
12. Investments in joint ventures
On 28 September 2020 the Group announced that it has entered into an agreement
with Canada-based biotech company Kane Biotech Inc. under which the parties
formed STEM Animal Health Inc. ("STEM"), a company dedicated to treating
biofilm-related ailments in animals. The Group acquired, via its 100%
subsidiary Ecuphar NV, 33.34% in STEM for a cash consideration of CAD$3m, of
which CAD$2.0m was paid in prior years, CAD$0.5m (£306k) during the financial
year and CAD$0.5m payable in September 2024. Both the remaining equity
investment in STEM and the licensing fee are expected to be paid from existing
cash resources.
The Group has a call option, for a period until 28 September 2026, to acquire
an additional 18% stake in STEM for CAD$4m. Based on the existing voting
rights (33.34%) and other contractual arrangements, the Group does not have
power over the investee. Accordingly, the investment in STEM is accounted for
through the equity method in the consolidated financial statements.
Separately, the Group also entered into a licensing agreement, under which it
will invest a further CAD$2m, consisting of an initial payment along with a
series of potential payments linked to various milestones, for rights to
commercialise products in global veterinary markets outside the Americas.
Both the remaining equity investment in STEM and the licensing fee are
expected to be paid from existing cash resources.
The Group has made license payments totalling CAD$1.2m, of which CAD$0.7m was
paid during the current financial year. The first sales-related milestone is
expected to be paid in 2024, resulting in a short-term payment of CAD$387k or
£229k. The second and final sales-related milestone is due after 2024, hence
considered as a long-term payable, the expected settlement amount of which is
CAD$361k or £214k.
Further, for the capital contribution, the outstanding short-term liability is
£297k (2022: £292k), shown in the balance sheet as other current liability.
Name of entity Place of business/ % of ownership interest Nature of relationship Measurement method Carrying amount
country of incorporation
2023 2022 Unaudited 2022
2023
£'000 £'000
STEM Animal Health Inc. Canada 33.34% 33.34% Joint Venture Equity method 1,119 1,305
The tables below provide 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 relevant joint venture followed by Animalcare's share of
those amounts.
Unaudited
For the year ended For the year ended
31 December 2023
31 December 2022
£'000 £'000
Non-current assets 94 321
Current assets 1,459 1,511
Total assets 1,553 1,832
Current liabilities 865 825
Total liabilities 865 825
Net assets 688 1,007
Group Share 229 336
Goodwill 570 561
Fair value identified intangibles 435 555
Deferred tax liability (115) (147)
Investment value in joint venture 1,119 1,305
Summarised statement of comprehensive income:
Unaudited For the year ended
31 December 2022
For the year ended
31 December 2023
£'000 £'000
Sales 1,576 1,581
Operating expenses (1,872) (1,651)
Financial result, net 12 65
Net loss for the year (284) (5)
Group share in net loss for the year (95) (2)
Depreciation on fair value adjustments on intangible fixed assets (net of (47) (50)
deferred tax)
Total Group share in net loss for the year (142) (52)
Other comprehensive (expense)/income (44) 67
Group share in total comprehensive (expense)/income (186) 15
Reconciliation of the aforementioned financial information with the net carrying amount of the investment of STEM Animal Health Inc. in the consolidated financial statements:
Unaudited
For the year ended For the year ended
31 December 2023
31 December 2022
£'000 £'000
As at 1 January 1,305 1,290
Group share of net loss for the year (142) (52)
Foreign currency translation differences (44) 67
As at 31 December 1,119 1,305
13. Borrowings
The loans and borrowings include the following:
For the year ended
31 December
Interest Maturity Unaudited
rate
2023 2022
£'000 £'000
Revolving credit facilities Euribor +1.50% March 25 − 4,435
Acquisition loan Euribor +1.75% March 25 2,933 3,991
Lease liabilities See note 16 2,943 3,011
Total loans and borrowings 5,876 11,437
Of which
Non-current 4,962 10,585
Current 914 852
Borrowing facilities
As at 31 December 2023, the Group had total facilities of €51.5m, due to
expire 31 March 2025, provided by a syndicate of four banks, comprising a
committed revolving credit facility (RCF) of €41.5m and a €10.0m
acquisition line, the latter of which cannot be utilised to fund operations.
The loans have a variable, Euribor-based interest rate, increased with a
margin of 1.50% or 1.75%. The revolving credit facilities and the acquisition
financing had a bullet maturity in March 2025.
We are currently in discussions with our four syndicate banks to increase our
existing RCF from €41.5m to €44.0m with an extension of the maturity date
to 31 March 2029. The acquisition line, which was drawn down by €3.4m at the
year end, will be settled. We expect to complete the process by the end of
April. The covenant requirements in the RCF will remain unchanged from the
current RCF agreement, details of which are provided below.
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 3.5x;
* Underlying EBITDA to interest ratio of minimum 4x; and
* Solvency (total assets less goodwill/total equity less goodwill) greater than
25%.
Net cash at the year end, pre IFRS16 leases, was £1.7m (31 December 2022:
£2.4 million debt) with the RCF unutilised, leaving headroom of £40.7m
excluding the undrawn acquisition line.
As at 31 December 2023 and throughout the financial year, all covenant
requirements were met with significant headroom across all three measures.
Net debt reconciliation
As at 31 December
Unaudited 2022
2023
£'000 £'000
Net debt
Cash and cash equivalents 4,642 6,035
Borrowings (2,933) (8,426)
Lease liabilities (2,943) (3,011)
Total (1,234) (5,402)
Liabilities from financing activities Other assets
Borrowings Leases Cash Total
£'000 £'000 £'000 £'000
Net debt as at 1 January 2022 (9,244) (1,720) 5,633 (5,331)
Financing cash flows 1,320 1,086 614 3,020
New leases − (2,142) − (2,142)
Foreign exchange adjustments (148) (145) (212) (506)
Interest expense (354) (90) − (444)
Net debt as at 31 December 2022 (8,426) (3,011) 6,035 (5,402)
Financing cash flows 5,780 1,073 (1,528) 5,325
New leases − (941) − (941)
Foreign exchange adjustments 241 54 135 430
Interest expense (528) (118) − (646)
Net debt as at 31 December 2023 (Unaudited) (2,933) (2,943) 4,642 (1,234)
14. Accrued charges and contract liabilities
Accrued charges and contract liabilities consists of the following:
For the year ended
31 December
Unaudited 2022
2023
£'000 £'000
Accrued charges 286 777
Contract liabilities - due within one year 873 512
Other − (13)
Total due within one year 1,159 1,276
Contract liabilities - due after one year 293 372
Accrued charges of £286k (2022: £777k) mainly include Ecuphar NV (£89k),
Belphar (£20k) and UK (£166k) and are mostly related to payroll and accrued
bank interest costs.
Contract liabilities are liabilities that arise 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 is no contractual
restriction on the number of times the customer makes use of the services. At
the commencement of the contract, it is not possible to determine how many
times the customer will make use of the services, nor does historical evidence
provide indications of any future pattern of use. As such, income is
recognised evenly over the term of the contract, currently between five and 14
years.
Throughout 2023, Identicare Limited also operated both monthly and annual
subscription-based services to pet owners, with income recognised accordingly
over the period of the subscription.
Movements in the Group's contract liabilities tables outstanding:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Balance at the beginning of the year 884 843
Contract liabilities to following years 815 418
Release of contract liabilities from previous years (533) (377)
Balance at the end of the year 1,166 884
The contract liabilities fall due as follows:
For the year ended 31 December
Unaudited 2022
2023
£'000 £'000
Within one year 873 512
After one year 293 372
Balance at the end of the year 1,166 884
15. Equity
Share Capital For the year ended
31 December
Number of shares Unaudited 2022
2023
Allotted, called up and fully paid ordinary shares of 20 pence each 60,107,926 60,092,161
For the year ended
31 December
Unaudited 2022
2023
£'000 £'000
Allotted, called up and fully paid ordinary shares of 20 pence each 12,022 12,019
The following share transactions have taken place during the year ended 31
December 2023:
For the year ended
31 December
Number of shares £'000
At 1 January 2023 60,092,161 12,019
Exercise of share options 15,765 3
At 31 December 2023 (Unaudited) 60,107,926 12,022
Dividends
For the year ended
31 December
Unaudited 2022
2023
£'000 £'000
Ordinary final dividend as at 31 December 2021 of 2.4 pence per share − 1,442
Ordinary interim dividend paid as at 31 December 2022 of 2.0 pence per share − 1,202
Ordinary final dividend as at 31 December 2022 of 2.4 pence per share 1,442 −
Ordinary interim dividend paid as at 31 December 2023 of 2.0 pence per share 1,202 −
2,644 2,644
The interim dividend of 2.0 pence per share was paid in November 2023.
The Board is proposing a final dividend of 3.0 pence per share (2022: 2.4
pence per share). Subject to shareholder approval at the Annual General
Meeting to be held on 20 June 2024, the final dividend will be paid on 19 July
2024 to shareholders whose names are on the Register of Members at close of
business on 21 June 2024. The ordinary shares will become ex-dividend on 20
June 2024.
16. IFRS 16 Leases
The balance sheet shows the following amounts relating to leases as at 31
December 2023:
Unaudited
As at 31 December 2023 As at 31 December 2022
£'000 £'000
Buildings 1,585 1,639
Vehicles 1,220 1,257
Other 14 28
Total right-of-use assets 2,819 2,924
Current lease liabilities 914 852
Non-current lease liabilities 2,029 2,159
Total lease liabilities 2,943 3,011
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 2022 1,527 2,290 16 3,833
Additions 1,343 678 30 2,051
Disposals (855) (415) (14) (1,284)
Currency translation 104 128 1 233
Contract modifications (5) 75 - 70
As at 31 December 2022 2,114 2,756 33 4,903
Additions - 678 4 682
Disposals - (682) (4) (686)
Currency translation (41) (50) - (91)
Contract modifications 287 (5) (14) 268
As at 31 December 2023 (Unaudited) 2,360 2,697 19 5,076
Depreciation
As at 1 January 2022 (948) (1,211) (16) (2,175)
Depreciation charge for the year (358) (662) (3) (1,023)
Disposals 855 415 14 1,284
Contract modifications - 27 - 27
Currency translation (24) (68) - (92)
As at 31 December 2022 (475) (1,499) (5) (1,979)
Depreciation charge for the year (310) (687) (4) (1,001)
Disposals - 682 4 686
Currency translation 10 27 - 37
As at 31 December 2023 (Unaudited) (775) (1,477) (5) (2,257)
Net book value
At 31 December 2022 1,585 1,220 14 2,819
Below are the values for the movements in lease liability during the year:
Lease Liability
£'000
As at 1 January 2023 3,011
Additions 677
Interest expense 118
Payments (1,073)
Modifications 264
Currency translation adjustment (54)
As at 31 December 2023 (Unaudited) 2,943
The following amounts are recognised in the income statement:
Unaudited
For the year ended 31 December 2023
£'000
Depreciation expense of right-of-use assets (1,001)
Interest expense on lease liabilities (118)
Gain on IFRS 16 modification 9
Expense relating to short-term leases and low-value assets (180)
Total amount recognised in the income statement (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.
17. Contingent liability relating to the sale of Medini NV
On 3 September 2018 Ecuphar NV sold the wholesale business Medini NV to Vetdis Holding NV (Vetdis) under a Share Purchase Agreement ("SPA"). In June 2019 Vetdis sent a letter to Ecuphar claiming that Ecuphar had breached the SPA. Ecuphar disputes the majority of the claim; however, Ecuphar considers it likely that a part of the claim, amounting to €157,988 (£139,988), may be valid. Following various discussions and correspondence, during which the parties were unable to reach any agreement, Vetdis issued formal court papers on 29 May 2020. A full court hearing to consider the case took place in the Commercial Court in Bruges on 2 March 2021. The court did not decide on the merits of the claim; instead it appointed an expert auditor to examine the documents and advise the court on the claim. The court, however ordered Vetdis to pay the current account debt plus interest at 8%, and on 4 May 2021, Vetdis made a payment of €432,762 (£383,824). The process involving the expert auditor is now complete. We expect the court to hold another hearing and make its decision in summer 2024. Other than the €157,836 (£139,988), which may be valid, and is written off from the outstanding other receivable from Vetdis, no further provision in respect of this matter has been included in the consolidated financial statements.
18. Subsequent events
On 28 February 2024 we announced the disposal of our majority shareholding in
Identicare to BG Bidco 21 Limited, a newly incorporated company owned by funds
managed by Bridgepoint Advisors II Limited, for a cash consideration of
£24.9m which was payable upon completion of this sale. This represents a
significant crystallisation of value for the Group and with it, a significant
further strengthening of our balance sheet.
The disposal was assessed against the criteria of IFRS 5 Non-Current Assets
Held for Sale and Discontinued Operations and was found to not meet the
criteria for an asset held for sale at the date of the statement of financial
position due to not being assessed as highly probable at that date as due
diligence activities did not commence until post year end.
19. Annual Report
This unaudited 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 2023 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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