Supply challenges cost listed biotech firm £1.1m in sales
Listed biotech Animalcare Group lost £1.1m in sales during the first half of its financial year due to supply challenges from a third-party manufacturer.
The York-based group, which develops and sells of veterinary products in the companion animal, production animal and equine markets, today published a trading update for the six months ended 30 June 2019.
Animalcare said its revenues stood at £36.1m, which was the same result as the same period in the previous year; although it did make a 0.9% improvement on a constant currency basis.
Animalcare said: “The small revenue improvement on a constant currency basis was noteworthy, given the previously reported supply challenges from a third-party manufacturer. These expected one-off challenges within Companion Animals impacted sales by £1.1m during the period.
“We are on track to resolve the supply issues during the current financial year which is anticipated to be reflected in sales during the second half.”
The firm said it had launched seven new products in the period and saw an annualised growth of products launched in 2018. The Board expects underlying EBITDA for the period to be in line with 2018.
At the end of 2018, Animalcare committed to reduce net debt and improve cash conversion. The firm added: “In line with these aims, we have significantly improved our cash generation vs the first half of 2018 and remain on track to improve on the 80% achieved for the full year 2018.”
Net debt stood at £21m as at 30 June 2019 (31 December 2018: £23.6m; 30 June 2018: £26m), the reduction since the 2018 year end largely driven by lower working capital including an inventory reduction of £1.5m.
Jenny Winter, chief executive, said: “We have a clear strategy to become a leading international veterinary pharmaceutical business and we have made good progress towards this goal during the first half of 2019. We have strengthened the Group’s finances with greater cash conversion and made significant strides in streamlining our product portfolio which is critical to enhancing our profitability.
“Greater focus on integration has also begun to impact with further simplification leading to efficiency improvements. I am pleased that the growth platform that we have been focused on building is coming to fruition and I look forward to updating the market further on our progress.”
