‘Priority’ products focus for animal health business
Animal health business Animalcare Group reported revenues of £36.1m in its interim results for the six months ended 30 June 2019.
This compared with a revenue figure of £36m for the same period last year.
The York-based group, which develops and sells of veterinary products in the companion animal, production animal and equine markets, said it was continuing to trade in line with market expectations for the full year on revenue and EBITDA.
It recorded strong sales growth across several key territories driven by successful new product launches, but noted this growth was offset by temporary supply challenges related to third-party manufacturers.
The company declared an interim dividend of two pence per share, in line with the prior period.
And it said it was focusing on the promotion of “higher margin products”, with 25% of its product brands to be delisted or divested by the end of 2019, with no significant impact to profit.
Animalcare’s Chief Executive Officer, Jenny Winter, said: “Over the last six months we have made strong progress in delivering our five-pillar strategy to create a more focused and effective organisation to capitalise on growth in the animal health market.
“Optimising our product portfolio and rebuilding the pipeline has been a key focus and I am pleased to report on the recently signed agreements, including the first product to be marketed in all seven of our territories.
“Our cash conversion is on track to deliver an improvement on the prior year, which underpins our capacity to invest in short and longer-term growth opportunities and to deliver sustainable, profitable growth. We remain confident of delivering on market expectations for the current financial year.”
Jan Boone, Board Chairman, said: “Animalcare has made good progress over the first half of 2019, accelerating the integration of our business and executing upon our five strategic priorities to build the strong foundations from which to deliver sustainable growth over the medium to long-term.
“Under the leadership of Jenny Winter, the Board has identified a clear path forward to achieve financial success through a focus on five core therapy areas and higher margin products, while aiming to grow faster than the markets in which we operate.
“This is alongside building fruitful relationships with our stakeholders and attracting and retaining the best people to drive success.
“In line with our strategic priorities, we continue to focus on building a strong financial base for future growth. New product launches and annualised growth of products launched in 2018 continue to be the main driver of growth, with seven new products launched in the period.
“However, this was offset by temporary supply challenges related to third-party manufacturers. As a result, Group revenue was in line with the same period last year.
“Our underlying EBITDA was also flat on a comparable basis and we continue to closely monitor our cost base alongside a focus on top line growth.
“The Group’s cash performance was strong, with cash conversion improving to 92.3% versus the 80% achieved in the 2018 financial year and net debt reduced to £20.9m.
“During late 2018, we completed a strategic review of our development pipeline and refocused our activities to drive growth over the next three to five years.
“The first phase of the product prioritisation is now complete and we continue to divest products which make insignificant contributions to our profit.
“Alongside this, we are reviewing our product development pipeline with a focus on continuing the development of products which have the greatest potential to deliver future growth.”
