Veterinary sales group revenues down as demand growth returns to pre-pandemic levels
International veterinary sales and marketing group Animalcare saw a 4.1% drop in first-half revenues to £36.7m, saying demand growth had returned to pre-pandemic levels and distributors had destocked since the end of last year.
A 1.5% increase in gross margins and strong performance of products such as its Plaqtiv+ dental water additive, partially offset lower revenues, and half-year profit before tax was £2.4m, down from £3.4m in the same period last year.
The York-based firm said it expected a return to revenue growth for the full year, with an improvement in second-half performance over 2022, and EBITDA in line with market expectations.
Chief executive Jenny Winter said, “Animalcare has established itself as a profitable, cash generative business with strong margins and low levels of debt. That is further underlined by our financial performance in the first half of 2023 with positive progress on gross margins and cash conversion despite a return to more pre-pandemic levels of demand growth across our markets.
“Notably, the group continues to make progress against our stated objectives, the licensing and research collaboration agreement with Orthros Medical generating positive pre-clinical results and identifying new potential candidates in the promising field of VHH antibodies. Additionally, Identicare delivered strong revenue and profit growth in the period as the business continues its transition towards a scalable recurring-revenue subscription platform. And alongside our development and commercialisation of products from the STEM joint venture, we are exploring opportunities generated by Kane Biotech’s decision to review its majority equity interest in STEM.
“The strong financial platform we’ve built enables the group to invest in organic and inorganic drivers of growth, including M&A where we are seeing increased levels of activity. Animalcare remains firmly in the hunt for value-creating opportunities in our key areas of interest.
“Over the long-term, we remain confident in the prospects of the group and the attractive fundamentals of the animal health sector.”