REG - Anpario PLC - Interim results
11/09/2024 07:00
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RNS Number : 6604D Anpario PLC 11 September 2024
Anpario plc
("Anpario", the "Group"
or the "Company")
Interim results
Anpario plc (AIM:ANP), the independent manufacturer of natural sustainable
animal feed additives for animal health, nutrition and biosecurity is pleased
to announce its unaudited interim results for the six months to 30 June 2024
("H1 2024").
Highlights
Financial highlights
- 11% increase in sales to £17.0m (H1 2023: £15.3m).
- 20% increase in gross profit to £8.1m (H1 2023: £6.7m).
- Increase in gross margins to 47.5% (H1 2023: 43.9%).
- 41% increase in adjusted EBITDA(1) to £2.7m (H1 2023: £1.9m).
- 53% increase in profit before tax to £2.1m (H1 2023: £1.4m).
- 84% increase in diluted adjusted earnings per share to 10.39p (H1
2023: 5.66p).
- 2% increase in interim dividend to 3.25p (H1 2023: 3.20p) per
share.
- Cash balances, including short-term investments, of £13.5m at 30
June 2024 (31 December 2023: £10.6m).
Operational highlights
- Strong sales growth in most regions especially the Middle East,
tempered by a pull-back in the United States.
- Strong performance from Orego-Stim® and a return to volume growth
in our acid-based eubiotics and pellet binder ranges.
- 20% volume increase contributed to significant gross margin
improvement due to recovery of fixed production overheads.
- First sales of Orego-Stim® Forte a water-soluble phytogenic for
both aquaculture and agriculture applications.
- Orego-Stim® approved for use in organic livestock production in
Europe by Research Institute of Organic Agriculture FiBL.
Outlook
- Strong start to the second half of the year with an acceleration
in sales and volume growth.
- Recovery in volumes expected to continue in H2 which should lead
to further improvement in profitability.
- Specific challenges related to shipping schedules and logistics
and a potential US dockers strike will require navigating, but the Group is
experienced in managing such situations.
- The Group's leading position in natural and sustainable feed
additive solutions with its leading brands including Orego-Stim®, pHorce®
and Mastercube® gives the Board confidence in the long-term profitable
development of the Company.
Matthew Robinson, Chairman, commented:
The Board is delighted to report a strong first half performance in terms of
improved sales, margins and profitability. This reflects both management's
initiatives, commenced last year, in sales promotion, cost reduction and
margin improvement as well as the broader industry-wide recovery.
Group sales increased by 11% to £17.0m compared to the prior year period of
£15.3m, as the global agriculture environment improved, and our specific
business development initiatives bore fruit. Meat protein producers are still
under pressure, especially in the United States and China swine markets, as
high feed and overhead costs and weak consumption impact producer margins. We
expect these headwinds to alleviate in the coming months with a corresponding
increase in the demand for our specialty feed additives.
Recovery in volumes, as well as sensitive price increases, delivered a
significant improvement in gross margins of 3.6% points to 47.5%.
Within improved Group sales, there was notable regional diversity. Our biggest
region, Asia including China, delivered sales growth of 15% compared to the
same period last year, Middle East and Africa segment delivered an outstanding
sales growth of 94%, but the United States was disappointing with a 46%
decrease in sales, reflecting on-going difficulties in the swine market and
decisions by some customers to reduce or stop using some of our products. We
are implementing initiatives to replace this lost business, with improvement
expected towards the end of this year and into the next. Our geographic
diversity helped to compensate for territories currently experiencing a more
challenging environment.
Adjusted EBITDA(1) increased by 41% to £2.7m compared to the same period last
year of £1.9m. The significant 84% increase in diluted earnings per share to
10.39p (H1 2023: 5.66p) is after the return of £9m in cash to shareholders by
way of the tender offer in July 2023 and the cancellation of shares held in
treasury which reduced the shares in issue by 17%. Even after this corporate
action, the strong cash generation from operations delivered cash balances,
including short-term investments, of £13.5m at the 30 June 2024; together
with the Group's strong balance sheet this enables us to invest in innovative
natural feed additive solutions, expand our sales and distribution channels
and pursue complementary acquisition opportunities which may arise. The Board
has approved an interim dividend of 3.25 pence per share (H1 2023: 3.20 pence
per share), an increase of 2% to the prior period.
The strong first half performance would not have been possible without the
efforts of our staff across the globe who have seen their hard work and
diligence repaid with sales success across the product range. There is more to
achieve, and the team remains focused on implementing the strategy to deliver
strong organic growth by offering sustainable and environmentally friendly
products which help customers improve their business performance. The Group
has made a strong start to the second half, and we are confident of building
on this momentum and maintaining it into next year.
Matthew Robinson, Chairman
(1) Adjusted EBITDA represents operating profit for the period of £2.682m (H1
2023: £1.195m) adjusted for: share based payments and associated costs
£0.165m (H1 2023: £0.120m); and depreciation and amortisation charges of
£0.573m (H1 2023: £0.590m).
Enquiries:
Anpario plc:
Richard Edwards, CEO +44(0)7776 417 129
Marc Wilson, Group Finance Director +44(0)1909 537 380
Shore Capital: +44 (0) 20 7408 4090
(Nominated Adviser and Broker):
Stephane Auton Corporate Advisory
David Coaten
Tom Knibbs
Henry Willcocks Corporate Broking
Chief Executive Officer's statement
Overview
Group sales for the six months to 30 June 2024 increased by 11% to £17.0m (H1
2023: £15.3m), delivering the best ever first half-year revenue performance
for the Group. This strong performance was due to the general improvement in
the environment for global agriculture, some of our business development
initiatives coming to fruition and a recovery in volumes of our more price
sensitive product groups, such as acid-based eubiotics delivering volume
growth of 17% and helped reduce the under-recovery of production overheads
experienced in the same period last year.
Asia, Europe and the Middle East and Africa (MEA) segments delivered strong
sales growth of 15%, 6% and 94% respectively, with almost all territories in
MEA segment showing growth including six not sold to in the same period last
year. A good performance in Asia, which accounts for 36% of Group sales, also
helped to drive overall performance. Sales in the Americas segment decreased
by 19% due to a disappointing performance from the United States (US) with a
decrease in sales of 46%, but for this, the rest of the Americas grew its
sales and volumes by 6% and 16% respectively.
The recovery in our lower value-add price sensitive products was very welcome
as it contributed to increasing gross margins from 43.9% to 47.5%,
demonstrating that some of the decline in these product groups was temporary.
With our gross margins moving closer to normal levels, gross profit increased
by 20% to £8.1m (H1 2023: £6.7m) for the six months to 30 June 2024 compared
to the same period last year. Product brands which delivered strong sales
performances include Orego-Stim®, Salgard®, Mastercube® and Neutox®
delivering sales growth of 15%, 107%, 49% and 55% compared to the same period
last year. pHorce® delivered a 27% decrease in sales due to the challenges
experienced in the US swine market.
Group product volumes increased by 20% helped by the recovery in lower
value-add price sensitive products. This change in product mix meant average
selling price per tonne declined by 7%, but average gross profit per tonne
remained at the same level, illustrating the extent to which we have been able
to retain selling price increases implemented during the past two years to
recover raw material price inflation.
The versatility of our Orego-Stim® range continues to drive growth across
several species, including in milk replacer products for calves. Our
water-soluble version, Orego-Stim Forte®, achieved first commercial sales in
aquaculture following proven trials for a range of applications which
subsequently led to productivity and performance gains for the farmer.
Similarly, our natural pellet binder, Mastercube®, which accounts for 6% of
Group sales is increasingly used for several applications from aquaculture
through to pet food and is being trialled in a number of new markets, which if
successful could present significant growth opportunities.
The resumption in growth in our acid-based eubiotic range which, although tend
to be viewed as lower value-add, offer significant benefits and
differentiation from competitor products through our unique formulations. The
41% increase in Adjusted EBITDA(1) to £2.7m compared to the same period last
year (H1 2023: £1.9m) reflects the difficult decisions taken over the last 24
months to pass on raw material price inflation in selling prices and to reduce
our overheads.
The strong start to the second half is very encouraging. We expect shipping
and logistics issues to challenge us, and individual territory performance
will be variable, affected by local factors. However, our geographic diversity
and business development initiatives offer several opportunities to accelerate
organic growth in the coming year.
Operational review
Americas
Overall, sales and volumes in this segment declined by 19% and 2%
respectively, almost wholly due to a 46% decrease in sales to the United
States (US) compared to the same period last year. Margin pressures on US pork
producers combined with some customers deciding to reduce purchases of
pHorce® led to sales being down by £0.5m for the product. pHorce® continues
to receive positive feedback as an anti-viral feed mitigant, especially in
relation to porcine reproductive and respiratory syndrome (PRRS). Where used,
pHorce® has managed to protect farms from outbreaks of the virus and by
supporting the animal's gut microbiome is viewed as being a highly effective
preventative product compared to other solutions. We are working with a large
veterinary group who intend to recommend pHorce® to their clients and so we
are hopeful of recovering some of the lost volume.
Orego-Stim® also suffered with a similar decline in sales in the US due to a
number of customers reducing their orders and, in some cases, switching back
to use cheaper antibiotics, which in the long run is not sustainable given the
serious consequences of antimicrobial resistance to the world's population.
Orego-Stim® is, however, making solid progress in the young cattle market
with several new customers trialling the product supported by local university
trials looking at the effect of Orego-Stim® on cryptosporidia and coccidiosis
in pre and post weaned calves. The ruminant market in the United States is a
significant opportunity for the Group, and we intend to expand our sales
resource and network to take advantage.
The rest of the Americas segment delivered sales and volume growth of 6% and
16% respectively compared to the same period last year, with Venezuela being a
new territory since the second half of last year, contributing sales of £0.3m
during the period. Colombia also delivered a strong performance with sales
growth of 45%, helped by continued demand for Optomega® Algae.
Brazil delivered a flat performance during the period due to tough local
market conditions in the layer market where oversupply has meant egg producers
have lost significant income, resulting in reduced demand for specialty feed
additives. The species sector currently performing well in Brazil is swine due
to the export deal with China, which has helped to support our business there.
Asia
The segment, which includes Asia Pacific, Australasia and China is our biggest
region and delivered sales growth of 15% compared to the same period last
year. Asia Pacific performed well growing sales by 26% with strong
performances from Malaysia and South Korea with sales growth of 110% and 45%
respectively. The agricultural environment has improved in the region with the
decline in feed costs leading to better economics for producers compared to
the previous two years. This improvement led to strong growth for
Orego-Stim®, Mastercube® and our range of acid-based eubiotics, which came
under pressure from cheaper locally produced products but are now growing as
customers have worked through their high inventory levels from a year ago.
Other territories such as the Philippines, Indonesia and Japan experienced
modest sales declines due to phasing of orders and a slower recovery from the
difficult period last year.
Commercial trials of Orego-Stim® Forte have been successful for a range of
applications which have specifically been shown to inhibit the growth of
Vibrio species, an aquatic borne bacteria, in the absence of antibiotics. We
have achieved initial sales in the region during the period and received
strong interest from large aquaculture groups. Sales of our Mastercube®
pellet binder increased by 130% as demand for natural and environmentally
friendly pellet binders grew for aquafeed purposes where certain export
markets restrict the use of harmful alternatives, such as urea formaldehyde,
in the food chain.
China sales and volumes grew by 8% and 25% respectively, helped by a good
recovery in mycotoxin binder products and a modest increase in sales of
Orego-Stim®. Commercial trials are underway with our Optomega® Algae product
which, if successful, would commence first sales before the year end. There
are clear signs that the pig market is improving in China, which should lead
to a positive effect for specialty feed additives as the pressure to remove
additives wanes.
Australia, which accounts for around 3% of Group sales, experienced a decrease
in sales of 13% and although partly due to phasing of orders, the market is
experiencing tougher conditions. We also gained registration approval in New
Zealand for Anpro®, our broad-spectrum mycotoxin binder product.
The Middle East, Africa and India
This segment delivered a very strong increase in sales of 94%, with most
territories experiencing growth compared to the same period last year. Saudi
Arabia grew seven-fold with strong demand for Mastercube® and our mycotoxin
binder products. India, Iraq and Turkey increased sales by 42%, 38% and 89%
respectively, as focused business development initiatives and the signing of
the Indian partnership agreement began to deliver. There were also initial
sales to new territories during the period including Algeria and Uzbekistan.
In addition to our phytogenics and pellet and mycotoxin binder range,
acid-based eubiotics also recovered with sales growth of 51%. Governments in
the Middle East are focused on food security and therefore are supporting
local producers with investment to ensure self-sufficiency in the future. The
main territory to show a reduction in sales was the United Arab Emirates with
sales decreasing 44% following a strong performance for the same period last
year.
Europe
Europe delivered sales growth of 6% on flat volumes driven by growth of
Orego-Stim®, Mastercube® and Anpro® our mycotoxin binder range. The biggest
pullback was in Optomega® Algae, where an increase in the price of the raw
material made it uneconomic for use in the end food product. There were strong
territory performances from Austria, Czech Republic, Italy and Serbia with
sales growth of 99%, 101%, 78% and 139% respectively. Spain suffered with a
sales decrease of 31% due to tough conditions experienced by pork producers
and a competitive local market for specialty feed additives. We expect overall
pork production for 2024 to decline across Europe as forecast by the European
Commission.
Our business development activities are helping to broaden our species mix
with Mastercube® being used in pet food applications and being tested for
wood pellet manufacturing. Increasing our presence in ruminant and aquaculture
markets will help our resilience to monogastric markets but will require
developing our sales channels to reach the smaller ruminant farmer, which is
typical in Northern European countries, where the herd size is much smaller.
The United Kingdom, which accounts for 10% of Group sales, delivered a sales
decrease of 3%, primarily due to losing a customer buying one of our
acid-based eubiotic products. However, the business was competitively priced
and so the impact on overall gross profit is small and was also offset by
strong sales growth in Orego-Stim® of 36% in the territory.
The growth in the Europe segment is due to an 8% increase in weighted average
selling prices from a combination of product mix and necessary selling price
increases implemented last year. Orego-Stim® Plus was also approved for use
in organic livestock production by the Research Institute of Organic
Agriculture FiBL Germany and Demeter International. Satisfying the rigorous
certification process to ensure compliance with EU regulation, the
complementary feedstuff is now available for organic producers to help support
optimal production. Organic production across Europe continues to grow at 5-8%
per year and fast approaching half a million organic producers.
Innovation and development
It is 25 years since Orego-Stim® was developed to help manage intestinal
health and support gut integrity for optimum animal performance and is widely
acknowledged as the leading phytogenic solution for livestock and aquaculture
producers. Its extensive number of natural essential oil compounds means it is
effective for numerous applications, some of which we have yet to discover. In
recent developments, our approach has been to use the Orego-Stim® oil as the
platform to which other plant extracts are combined to target a specific
problem. This approach is what enabled our research teams to develop a
water-soluble version, Orego-Stim® Forte, which is having significant success
for a range of issues in both aquaculture and agriculture applications.
Outlook
The second half has started well with an acceleration in sales and volume
growth driven by continued demand for our premium product brands and a
recovery in volume in our more price sensitive products as the global
agriculture environment improves. As a result, we expect the improvement in
profitability to continue. The more positive outlook for producers is
stimulating them to increase their use of specialty feed additives and, as our
more immediate business development initiatives start to pay off, we look
forward to our other initiatives with longer gestation periods contributing to
future organic growth.
There are still some challenges to navigate, not least shipping and logistics
disruption due to the ongoing Red Sea issues and the potential of a US dock
workers strike from the beginning of October. Such actions can have knock-on
effects which last longer, but we are making contingency plans and with our
geographic diversity and ability to work through such issues we do not
currently expect a significant impact on the Group's performance.
There are three key strands to our strategy: expand and strengthen our global
sales channels to be closer to the end customer, grow in other species
segments including ruminants, aquaculture and pet to smooth out any disruption
affecting monogastric species, and acquire or develop other proven product
technology to complement our current range.
The use of antibiotics in the food supply chain must be reduced if we are to
curb the spread of drug-resistant 'superbugs'. Orego-Stim® and other products
are already being used to help reduce antibiotic use by controlling
enteropathogens and supporting gut health. We therefore believe well
researched specialty feed additives will play a crucial role in weaning the
world off the overuse of antibiotics. The Group is well placed and has the
balance sheet to benefit from this crucial trend both organically and
supplemented with complementary corporate opportunities.
Richard Edwards
Chief Executive Officer
11 September 2024
Key performance indicators
Financial
H1 2024 H1 2023
Note £000 £000 change % change
Revenue 3 16,993 15,273 +1,720 +11%
Gross profit 8,071 6,699 +1,372 +20%
Gross margin 47.5% 43.9% +3.6%
Adjusted EBITDA 4 2,682 1,905 +777 +41%
Profit before tax 2,084 1,364 +720 +53%
Diluted adjusted earnings per share 6 10.39p 5.66p +4.73p +84%
Interim dividend 3.25p 3.20p +0.05p +2%
Cash and cash equivalents 13,465 7,298 +6,167 +85%
Net assets 35,449 43,059 -7,610 -18%
Financial review
Revenue and gross profits
Revenue for the period was the highest ever in first-half of the year by the
Group, increasing by 11% to £17.0m (H1 2023: £15.3m). The performance was
particularly strong in MEA, with revenue up 94% over the prior period. Growth
was also seen in the Asia and European segments. Comparatively, the regions
that were demonstrating good growth last year, USA and Australasia, are now
experiencing weaker performance. This continues to show the importance of our
wide-ranging geographic diversity for overall performance of the Group.
Detailed commentary on the performance of the operating segments is available
in the Chief Executive Officer's Statement.
Volumes increased by 20% in the period, with growth seen across almost all
product classes in the Group's portfolio of feed additives. Orego-stim®
continued to be the largest contributor to increased revenue. In addition to
which, there was also a good recovery across a range of higher-volume product
classes that had suffered last year such as pellet binders and acid-based
eubiotics.
The recovery in some of the higher-volume, though lower-sales contribution,
product classes led to a reduction in the average selling price per tonne of
7%, however, the gross profit per tonne remained the same as last year. The
higher sales volumes, combined with a continued focus on efficiency across the
largely fixed and semi-fixed cost of production, enabled a reduction in the
manufacturing cost per tonne.
Raw material costs were lower compared with the prior period as purchase
prices have reduced through H2 2023 and into the start of 2024. There are
still several inputs which remain at historically elevated prices, and there
are several materials that have experienced spikes in cost, due to various
factors including higher shipping costs. However, the overall cost base has
generally stabilised. We continue to closely monitor raw material price
increases and our selling price strategy.
Combined, the production efficiencies from higher volumes, lower input costs
and some selective selling price increases, have led to an improvement in
gross margins to 47.5% (H1 2023: 43.9%).
Administrative expenses
Administrative expenses were 11% higher at £6.1m (H1 2023: £5.5m). This
highlights the importance of the redundancy and restructuring exercise
conducted last year to right-size the operations of the Group for the current
levels of performance. As a result, we were able to reduce establishment costs
across the group by 12%. This process also unfortunately required a reduction
in headcount, which reduced employment costs by 10%.
Certain costs have increased over last year, such as legal and professional
expenses and marketing. The increase in marketing costs, focused on a number
of H1 2024 initiatives and specific-projects to both stimulate sales growth
and a continued launch of new products and applications such as Orego-Stim®
Forte and Mastercube®. This has proven to be successful as we have seen a
broad recovery in performance across the product range and notable growth in
those key marketing focus areas.
Other factors increasing administrative expenses, included a higher level of
foreign exchange loss for the period and a lower level of staff capitalisation
related to R&D projects. Anpario continues to work on several new product
and product-application initiatives, but these are at a lower levels than in
prior periods, reducing the credit to administrative costs.
Taxation
The effective tax rate for the period was 17.9% (H1 2023: 10.6%). Last year's
charge was lower due to a beneficial deferred tax movement, excluding which
the effective tax rate was principally the same across both periods. Anpario
benefits from R&D tax allowances due to the development work related to
new products and applications. As well as the application of the Patent Box
scheme which allows companies to apply a lower rate of corporation tax to
profits attributable to qualifying patents.
Tender offer
In July 2023, Anpario completed a £9.0m Tender Offer to purchase its own
shares at a price of 225p per ordinary share. Following the conclusion of the
Tender Offer, the 4,000,000 shares repurchased, together with a further
440,388 shares that were already held in Treasury were subsequently cancelled.
The lower time-weighted average shares in issue resulting from the tender
offer only affected the second half of 2023, and no impact on the first half,
whereas the current year has the full-benefit of the reduction in shares for
the earnings per share calculation.
Profitability and earnings per share
Adjusted EBITDA(1) for the period increased by 41% to £2.7m (H1 2023: £1.9m)
and profit before tax increased by 53% to £2.1m (H1 2023: £1.4m).
Benefitting from the reduced number of shares as a result of the tender offer,
the increased profit performance and, despite the higher tax charge for the
period, basic earnings per share increased by 74% to 10.27p (H1 2023: 5.91p)
and diluted adjusted earnings per share increased by 84% to 10.39p (H1 2023:
5.66p).
Cash flow
Operating cash flows before changes in working capital were 59% higher in the
period at £2.6m (H1 2023: £1.6m), principally as a result of the increased
level of operating profit at £1.9m (H1 2023: £1.2m). There was a further
release of working capital in the period of £0.5m (H1 2023: £0.9m). This was
mainly due to a reduction in raw material inventory holdings of £0.7m. Trade
and other payables increased by £0.2m. Offsetting these movements was an
increase in trade and other receivables of £0.4m, due to the increased level
of sales. Combined, these factors led to an increase in cash generated by
operations of 22% during the period to £3.1m (H1 2023: £2.6m).
Capital expenditure in the period was £0.2m (H1 2023: £0.5m), with a fall in
both tangible and intangible asset purchases. As previously highlighted, the
plant automation programme that began in 2016 has largely concluded, reducing
the current required level of plant and machinery investment.
Net cash from financing activities reduced from an outflow of £9.1m in H1
2023 to a nominal amount in the current period. The prior period outflow
relates to the transfer of funds into escrow in June 2023 for the Tender
Offer.
Overall, total cash, cash equivalents and short-term investments increased by
£2.8m to £13.5m (31 December 2023: £10.6m).
Dividend
The Board has approved an interim dividend of 3.25 pence per share (H1 2023:
3.20 pence per share), an increase of 2% compared to the prior period. This
dividend, payable on 29 November 2024 to shareholders on the register on 15
November 2024 (ex-dividend date is 14 November 2024), reflects the Board's
continued confidence in the Group and its ability to generate cash.
Marc Wilson
Group Finance Director
11 September 2024
Consolidated statement of comprehensive income
for the six months ended 30 June 2024
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
Note £000 £000 £000
Revenue 3 16,993 15,273 30,998
Cost of sales (8,922) (8,574) (17,040)
Gross profit 8,071 6,699 13,958
Administrative expenses (6,127) (5,504) (11,435)
Operating profit 1,944 1,195 2,523
Depreciation and amortisation 573 590 1,237
Adjusting items 4 165 120 703
Adjusted EBITDA 4 2,682 1,905 4,463
Net finance income 5 140 169 230
Profit before tax 2,084 1,364 2,753
Income tax (372) (144) (225)
Profit for the period 1,712 1,220 2,528
Items that may be subsequently reclassified to profit or loss:
Exchange difference on translating foreign operations (146) (185) (221)
Cashflow hedge movements (net of deferred tax) 93 477 722
Total comprehensive income for the period 1,659 1,512 3,029
Basic earnings per share 6 10.27p 5.91p 13.51p
Diluted earnings per share 6 10.21p 5.88p 13.45p
Adjusted earnings per share 6 10.46p 5.68p 15.37p
Diluted adjusted earnings per share 6 10.39p 5.66p 15.31p
Consolidated statement of financial position
As at 30 June 2024
as at as at as at
30 June 30 June 31 December
2024 2023 2023
Note £000 £000 £000
Intangible assets 7 10,485 11,390 10,637
Property, plant and equipment 8 4,439 4,827 4,626
Right of use assets 9 70 107 76
Deferred tax assets 513 736 537
Derivative financial instruments 189 233 253
Non-current assets 15,696 17,293 16,129
Inventories 10 5,536 7,535 6,348
Trade and other receivables 11 7,056 7,042 6,815
Tender offer funds held in escrow - 9,144 -
Derivative financial instruments 71 5 67
Current income tax assets - - 186
Short-term investments - 143 110
Cash and cash equivalents 13,465 7,155 10,539
Cash, cash equivalents and short-term investments 13,465 7,298 10,649
Current assets 26,128 31,024 24,065
Total assets 41,824 48,317 40,194
Lease liabilities (40) (75) (46)
Derivative financial instruments (49) (562) (46)
Deferred tax liabilities (2,035) (1,701) (1,762)
Non-current liabilities (2,124) (2,338) (1,854)
Trade and other payables 12 (4,022) (2,683) (4,046)
Lease liabilities (34) (34) (33)
Derivative financial instruments (156) (102) (377)
Current income tax liabilities (39) (101) (235)
Current liabilities (4,251) (2,920) (4,691)
Total liabilities (6,375) (5,258) (6,545)
Net assets 35,449 43,059 33,649
Share capital 4,672 5,636 4,615
Share premium 15,646 15,040 15,047
Capital redemption reserve 1,021 - 1,021
Other reserves (9,145) (10,051) (8,577)
Retained earnings 23,255 32,434 21,543
Total equity 35,449 43,059 33,649
Consolidated statement of changes in equity
for the six months ended 30 June 2024
Called up Share Capital redemption reserve Other Retained Total
share capital
premium
reserves
earnings
equity
£000 £000 £000 £000 £000 £000
Balance at 1 Jan 2023 5,624 14,934 - (10,461) 31,214 41,311
Profit for the period - - - - 1,220 1,220
Currency translation differences - - - (185) - (185)
Cash flow hedge reserve - - - 477 - 477
Total comprehensive income for the period - - - 292 1,220 1,512
Issue of share capital 12 106 - - - 118
Share-based payment adjustments - - - 110 - 110
Deferred tax regarding share-based payments - - - 8 - 8
Transactions with owners 12 106 - 118 - 236
Balance at 30 Jun 2023 5,636 15,040 - (10,051) 32,434 43,059
Profit for the period - - - - 1,308 1,308
Currency translation differences - - - (36) - (36)
Cash flow hedge reserve - - - 245 - 245
Total comprehensive income for the period - - - 209 1,308 1,517
Issue of share capital - 7 - - - 7
Purchase and Cancellation of Tender Offer shares (920) - 920 - (9,248) (9,248)
Cancellation of treasury shares (101) - 101 1,189 (1,189) -
Share-based payment adjustments - - - 174 - 174
Deferred tax regarding share-based payments - - - (98) - (98)
Final dividend relating to 2022 - - - - (1,228) (1,228)
Interim dividend relating to 2023 - - - - (534) (534)
Transactions with owners (1,021) 7 1,021 1,265 (12,199) (10,927)
Balance at 31 Dec 2023 4,615 15,047 1,021 (8,577) 21,543 33,649
Profit for the period - - - - 1,712 1,712
Currency translation differences - - - (146) - (146)
Cash flow hedge reserve - - - 93 - 93
Total comprehensive income for the year - - - (53) 1,712 1,659
Issue of share capital 57 599 - - - 656
Joint-share ownership plan - - - (656) - (656)
Share-based payment adjustments - - - 141 - 141
Transactions with owners 57 599 - (515) - 141
Balance at 30 Jun 2024 4,672 15,646 1,021 (9,145) 23,255 35,449
Consolidated statement of cash flows
for the six months ended 30 June 2023
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
Note £000 £000 £000
Operating profit for the period 1,944 1,195 2,523
Depreciation, amortisation and impairment 4 573 590 1,237
Loss on disposal of intangible assets 7 - - 541
Loss on disposal of property, plant and equipment 8 1 - 11
Share-based payments 141 110 284
Fair value adjustment to derivatives (33) (246) (243)
Operating cash flows before changes in working capital 2,625 1,649 4,353
Decrease/(increase) in inventories 669 2,098 3,277
(Increase)/decrease in trade and other receivables (384) (193) 163
Increase/(decrease) in trade and other payables 232 (969) 267
Changes in working capital 517 936 3,707
Cash generated by operations 3,142 2,585 8,060
Income tax (paid)/refunded (107) 688 635
Net cash from operating activities 3,035 3,273 8,695
Purchases of property, plant and equipment 8 (68) (220) (277)
Payments to acquire intangible assets 7 (135) (313) (466)
Interest received 5 142 172 236
Movement in short-term investments 110 1,685 1,718
Net cash used in investing activities 49 1,324 1,211
Funds placed in escrow for tender offer - (9,144) -
Purchase of shares through Tender Offer - - (9,248)
Joint share ownership plan (656) - -
Proceeds from issuance of shares 656 118 125
Cash payments in relation to lease liabilities (33) (35) (69)
Operating lease interest paid 5 (2) (3) (6)
Dividend paid to Company's shareholders - - (1,762)
Net cash from financing activities (35) (9,064) (10,960)
Net (decrease)/increase in cash and cash equivalents 3,049 (4,467) (1,054)
Effect of exchange rate changes (123) (117) (146)
Cash and cash equivalents at the beginning of the period 10,539 11,739 11,739
Cash and cash equivalents at the end of the period 13,465 7,155 10,539
1. General information
Anpario plc ("the Company") and its Subsidiaries (together "the Group")
produce and distribute natural feed additives for animal health, hygiene and
nutrition. Anpario plc is a public company traded on the Alternative
Investment Market ("AIM") of the London Stock Exchange and is incorporated in
the United Kingdom and registered in England and Wales. The address of its
registered office is Unit 5 Manton Wood Enterprise Park, Worksop,
Nottinghamshire, S80 2RS. The presentation currency of the Group is pounds
sterling.
2. Basis of preparation
The unaudited consolidated financial statements comprise the accounts of the
Company and its subsidiaries drawn up to 30 June 2024.
The Group has presented its financial statements in accordance with UK adopted
International Financial Reporting Standards ("IFRSs").
Full details on the basis of the accounting policies used are set out in the
Group's financial statements for the year ended 31 December 2023, which are
available on the Company's website at www.anpario.com. There are not expected
to be any changes to the accounting policies and the same policies are
expected to be applicable for the year ended 31 December 2024.
This condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2023 were approved by
the Board of Directors on 20 March 2024 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 (2) or (3) of the Companies Act 2006.
The consolidated interim financial information for the period ended 30 June
2024 is neither audited nor reviewed.
3. Operating segments
Management has determined the operating segments based on the information that
is reported internally to the Chief Operating Decision Maker, the Board of
Directors, to make strategic decisions. The Board considers the business from
a geographic perspective and is organised into four geographical operating
divisions: Americas, Asia, Europe, Middle-East and Africa (MEA) and Head
Office.
All revenues from external customers are derived from the sale of goods and
services in the ordinary course of business to the agricultural markets and
are measured in a manner consistent with that in the income statement.
Inter-segment revenue is charged at prevailing market prices or in accordance
with local transfer pricing regulations.
for the six months ended 30 Jun 2024 Americas Asia Europe MEA Head Office Total
£000 £000 £000 £000 £000 £000
Total segmental revenue 3,837 6,134 7,563 3,330 - 20,864
Inter-segment revenue - - (3,871) - - (3,871)
Revenue from external customers 3,837 6,134 3,692 3,330 - 16,993
Depreciation and amortisation (2) (24) (5) (2) (540) (573)
Net finance income - 1 - - 139 140
Profit before tax 760 1,316 1,374 1,235 (2,601) 2,084
for the six months ended 30 Jun 2023 Americas Asia Europe MEA Head Office Total
£000 £000 £000 £000 £000 £000
Total segmental revenue 4,709 5,356 7,126 1,713 - 18,904
Inter-segment revenue - - (3,631) - - (3,631)
Revenue from external customers 4,709 5,356 3,495 1,713 - 15,273
Depreciation and amortisation (2) (25) (7) (2) (554) (590)
Net finance income - - - - 169 169
Profit before tax 1,226 1,323 1,136 514 (2,835) 1,364
for the year ended 31 Dec 2023 Americas Asia Europe MEA Head Office Total
£000 £000 £000 £000 £000 £000
Total segmental revenue 9,057 11,367 13,832 3,872 - 38,128
Inter-segment revenue - - (7,130) - - (7,130)
Revenue from external customers 9,057 11,367 6,702 3,872 - 30,998
Depreciation and amortisation (3) (75) (13) (4) (1,142) (1,237)
Net finance income - (2) - 1 231 230
Profit before tax 1,763 2,788 2,263 1,359 (5,420) 2,753
4. Alternative performance measures
In reporting financial information, the Group presents alternative performance
measures (APMs), which are not defined or specified under the requirements of
IFRS. The Group believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, provide depth and understanding
to the users of the financial statements to allow for further assessment of
the underlying performance of the Group.
The Board considers that adjusted EBITDA is the most appropriate profit
measure by which users of the financial statements can assess the ongoing
performance of the Group. EBITDA is a commonly used measure in which earnings
are stated before net finance income, amortisation and depreciation. The Group
makes further adjustments to remove items that are non-recurring or are not
reflective of the underlying operational performance either due to their
nature or the level of volatility.
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Operating profit 1,944 1,195 2,523
R&D Impairment - - 399
Share-based payments 165 120 304
Total adjustments 165 120 703
Adjusted operating profit 2,109 1,315 3,226
Depreciation and amortisation 573 590 1,237
Adjusted EBITDA 2,682 1,905 4,463
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Adjusted operating profit 2,109 1,315 3,226
Income tax expense (372) (144) (225)
Income tax impact of adjustments 6 2 5
Impact of prior year Patent Box tax reduction - - (130)
Adjusted profit after tax 1,743 1,173 2,876
5. Net finance income
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Interest receivable on short-term bank deposits 142 172 236
Finance income 142 172 236
Lease interest paid (2) (3) (6)
Finance costs (2) (3) (6)
Net finance income 140 169 230
6. Earnings per share
The Group presents basic and diluted earnings per share ("EPS") data, both
adjusted and non-adjusted for its ordinary shares. Basic EPS is calculated by
dividing profit attributable to ordinary shareholders by the weighted average
number of ordinary shares fully outstanding during the period. Potential
ordinary shares and shares held in the Joint Share Ownership Plan ("JSOP") are
only treated as dilutive when their conversion to ordinary shares would
decrease EPS.
The calculation of earnings per share is based on the following data:
six months to six months to year ended
30 June 30 June 31 December
Note 2024 2023 2023
Basic weighted average number of shares 16,663,131 20,648,766 18,716,282
Number of dilutive potential shares 105,039 90,890 73,034
Diluted weighted average number of shares 16,768,170 20,739,656 18,789,316
Profit for the period attributable to owners of the Parent (£000's) 1,712 1,220 2,528
Basic earnings per share 10.27p 5.91p 13.51p
Diluted earnings per share 10.21p 5.88p 13.45p
Adjusted profit for the period attributable to owners of the Parent (£000's) 4 1,743 1,173 2,876
Adjusted earnings per share 10.46p 5.68p 15.37p
Diluted adjusted earnings per share 10.39p 5.66p 15.31p
7. Intangible assets
Goodwill Brands and developed products Customer relationships Patents, trademarks Development costs Software Total
and registrations
and Licenses
£000 £000 £000 £000 £000 £000 £000
Cost
As at 1 January 2024 5,960 5,345 786 1,026 485 925 14,527
Additions - - - 26 97 12 135
Disposals - - - (84) - (6) (90)
Foreign exchange - - - (1) - - (1)
As at 30 June 2024 5,960 5,345 786 967 582 931 14,571
Accumulated amortisation
As at 1 January 2024 - 1,680 755 581 - 874 3,890
Charge for the year - 183 4 77 - 22 286
Disposals - - - (84) - (6) (90)
As at 30 June 2024 - 1,863 759 574 - 890 4,086
Net book value
As at 1 January 2024 5,960 3,665 31 445 485 51 10,637
As at 30 June 2024 5,960 3,482 27 393 582 41 10,485
8. Property, plant and equipment
Land and Plant and Fixtures, fittings Total
buildings
machinery
and equipment
£000 £000 £000 £000
Cost
As at 1 January 2024 2,253 5,243 375 7,871
Additions - 32 36 68
Disposals - - (16) (16)
Foreign exchange - - (2) (2)
As at 30 June 2024 2,253 5,275 393 7,921
Accumulated depreciation
As at 1 January 2024 401 2,536 308 3,245
Charge for the year 25 213 16 254
Disposals - - (15) (15)
Foreign exchange - - (2) (2)
As at 30 June 2024 426 2,749 307 3,482
Net book value
As at 1 January 2024 1,852 2,707 67 4,626
As at 30 June 2024 1,827 2,526 86 4,439
9. Right-of-use assets
Land and Plant and Fixtures, fittings Total
buildings
machinery
and equipment
£000 £000 £000 £000
Cost
As at 1 January 2024 364 34 3 401
Modification to lease terms 28 - - 28
Foreign exchange (10) - - (10)
As at 30 June 2024 382 34 3 419
Accumulated depreciation
As at 1 January 2024 314 8 3 325
Charge for the year 30 3 - 33
Foreign exchange (9) - - (9)
As at 30 June 2024 335 11 3 349
Net book value
As at 1 January 2024 50 26 - 76
As at 30 June 2024 47 23 - 70
10. Inventories
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Raw materials and consumables 2,346 3,476 3,064
Finished goods and goods for resale 3,190 4,059 3,284
Inventory 5,536 7,535 6,348
11. Trade and other receivables
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Trade receivables - gross 6,444 6,585 5,973
Less: expected credit losses (385) (260) (357)
Trade receivables - net 6,059 6,325 5,616
Taxes 595 362 475
Other receivables 49 73 74
Prepayments 353 282 650
Total trade and other receivables 7,056 7,042 6,815
12. Trade and other payables
six months to six months to year ended
30 June 30 June 31 December
2024 2023 2023
£000 £000 £000
Trade payables 1,848 1,274 2,033
Taxes and social security costs 89 148 132
Other payables 87 104 104
Accruals 1,998 1,157 1,777
Trade and other payables 4,022 2,683 4,046
13. Interim results
Copies of this notice are available to the public from the registered office
at Manton Wood Enterprise Park, Worksop, Nottinghamshire, S80 2RS, and on the
Company's website at www.anpario.com.
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