TIDMANCR
RNS Number : 8917W
Animalcare Group PLC
15 February 2017
Animalcare Group plc
("Animalcare" or the "Group")
Half-year Report
Animalcare Group plc (AIM: ANCR), a leading supplier of
veterinary medicines, announces interim results for the six months
ended 31(st) December 2016. The Board is pleased to report a very
strong first half-year for the Group, ahead of the Board's
expectations.
Animalcare's business is made up of three product groups:
Licensed Veterinary Medicines, Animal Welfare Products and
Companion Animal Identification.
Financial Summary
6 months to 6 months to
31(st) Dec 31(st) Dec
2016 2015 % change
----------------------------- ----------- ----------- --------
Revenue GBP7.97m GBP7.11m +12.0%
----------------------------- ----------- ----------- --------
Underlying* operating profit GBP1.90m GBP1.55m +22.6%
----------------------------- ----------- ----------- --------
Underlying* EBITDA GBP2.12m GBP1.68m +26.0%
----------------------------- ----------- ----------- --------
Basic underlying* EPS 7.8p 6.2p +25.8%
----------------------------- ----------- ----------- --------
Reported operating profit GBP1.85m GBP1.49m +23.5%
----------------------------- ----------- ----------- --------
Basic EPS 7.5p 6.1p +23.0%
----------------------------- ----------- ----------- --------
Cash and cash equivalents GBP7.01m GBP6.10m +15.0%
----------------------------- ----------- ----------- --------
Interim dividend 2.0p 1.8p +11.1%
----------------------------- ----------- ----------- --------
* Underlying measures are before the effect of exceptional and
other items. These are analysed in note 3. EBITDA is defined as the
group profit before interest, taxation, depreciation and
amortisation.
Highlights
-- Strong revenue growth from our Licensed Veterinary Medicines
group, up 17.2% to GBP5.37m (2015: GBP4.58m) driven by strong
domestic and export like-for-like growth of 13.0%, and 4.2%
contribution from sales of four new products launched in the
period.
-- Revenues from the Animal Welfare Products range increased 13.3% to GBP1.51m (2015: GBP1.34m).
-- Continued focus on our export business started delivering
significant commercial benefit with revenues up 37.7% versus prior
period.
-- Momentum in our product development pipeline continues with
expenditure in the period of GBP0.6m and anticipated full year
investment increasing to GBP2.0m (FY16: GBP1.6m).
James Lambert, Chairman of Animalcare Group plc, said: "The
business continued to perform strongly during the first six months
of its financial year with sales up by 12% to GBP8.0m. Given the
strong start to the current financial year, and the expected launch
of more new pharmaceutical products in the second half, your Board
remains confident about the Group's prospects for the full year and
beyond."
Animalcare Group plc Tel: 01904 487 687
Iain Menneer, Chief Executive Officer
Chris Brewster, Chief Financial
Officer
Panmure Gordon (Nominated Adviser Tel: 020 7886 2500
and Broker)
Freddy Crossley/Peter Steel
Walbrook PR Ltd Tel: 020 7933 8780 or animalcare@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
Chairman's Statement
Animalcare continues to focus on three product groups: Licensed
Veterinary Medicines, Animal Welfare Products and Companion Animal
Identification; all sold through veterinary wholesalers to
veterinary practices. The business continued to perform strongly
during the first six months of this financial year with sales up by
12.0% to GBP8.0m. Operating margin has also improved over the
comparable half year from 21.0% to 23.2%.
Your Board is pleased to observe that the plan implemented in
2014 and structural changes made to the business, led by Iain
Menneer (CEO) and Chris Brewster (CFO) and our highly capable
senior management team, are delivering the anticipated results.
We will continue to ensure that we have the right team that is
motivated and structured to deliver our strategy. This strategy is
focused on delivering a well-stocked product development pipeline
and on expanding our supply of products in the UK, Europe and
beyond.
Licensed Veterinary Medicines have increased sales by 17.2% to a
record GBP5.4m (2015: GBP4.6m) and export has grown by 37.7% from a
relatively low base during the half. Gross margins also improved
through a combination of favourable sales mix and reduction in cost
of goods. Sales from the Animal Welfare Products group had a strong
half year, increasing by 13.3% to GBP1.51m (2015: GBP1.2m). This
has been driven principally by increasing sales of our infusion
accessories range both in the UK and export.
Companion Animal Identification sales fell back during the
period by 9.2% to GBP1.09m (2015: GBP1.20m) as was expected.
Following the implementation of compulsory microchipping of dogs in
the United Kingdom in April 2016, we have observed a reduction in
microchip volumes. However, database services have grown during the
period.
Operating cash flow remained extremely robust with cash balances
up GBP0.9m to GBP7.0m versus the same period in 2015. During the
half, as expected, we have invested in working capital to support
growth.
Significant challenges that remain in the market, from a
consolidating customer-base and increasingly crowded supplier
arena, mean that Animalcare must continue to invest in its business
and expand its pipeline. Given the strong performance of the Group,
the Board took the decision in 2016 to increase the investment in
new product development to around GBP2.0m during the current
financial year (FY16: GBP1.6m). We made good progress in our
product development pipeline in the half year with many projects
moving forward to the later stages of development as well as
starting several more.
Basic earnings per share in the first half have increased by
23.0% to 7.5p (2015: 6.1p). Given this and the strong cash flow
generation your Board is pleased to announce an 11.1% increase in
the interim dividend to 2.0p (2015: 1.8p).
Given the bright start to the current financial year and the
launch of more pharmaceutical products in the second half, your
Board remains confident about the Group prospects for the full year
and beyond.
James Lambert
Chairman
Business Review
Introduction
We are pleased that the business is performing so well. A number
of the fundamental building blocks put in place over the last four
years are bearing fruit; from the sales team structure, to the
product development team, to our in-house product registration
team, and more recently our focus on sales in Europe and the rest
of the world.
Our half year results were ahead of the Board's expectations in
both sales and profit terms with revenues increasing by 12.0%
versus the same period last year to GBP7.97m (2015: GBP7.11m). The
strong sales performance combined with improving gross margins has
resulted in a 22.6% increase in underlying operating profit to
GBP1.90m (2015: GBP1.55m).
Revenue
6 months to 6 months to
31(st) Dec 31(st) Dec
Revenue GBP'000 2016 2015 % change
-------------------------------- ----------- ----------- --------
Licensed Veterinary Medicines 5,370 4,583 17.2%
-------------------------------- ----------- ----------- --------
Animal Welfare Products 1,512 1,335 13.3%
-------------------------------- ----------- ----------- --------
Companion Animal Identification 1,086 1,196 (9.2%)
-------------------------------- ----------- ----------- --------
TOTAL 7,968 7,114 12.0%
-------------------------------- ----------- ----------- --------
Licensed Veterinary Medicines
The Licensed Veterinary Medicines group, which represents 67% of
total revenue, up from 64% in the prior period, again delivered
good growth with sales up 17.2% versus the prior period to
GBP5.37m. This breaks down to a 14.6% growth in the UK and 37.7% in
export markets. Like-for-like revenue growth of 13.0% is driven by
several of the key pharmaceutical ranges, notably our intravenous
fluids and anaesthetics and analgesics. Four new products were
launched in the period; Acecare, a sedative from our in-house
development pipeline and three products, all on distribution,
assembled to form an ear product range. The former has complemented
our existing sedative, analgesic and anaesthetic range and has
performed well since its launch early in the period. The new ear
treatment range was launched into a mature and busy market and is
consequently taking longer to gain momentum.
Animal Welfare Products
Our Animal Welfare Products group grew 13.3% to GBP1.51m, driven
primarily by increased sales of our intravenous fluid Infusion
Accessories range which now represents 61% of this product group's
total revenues (2015: 55%). We believe there is an opportunity to
further strengthen this infusion accessory range.
Companion Animal Identification
Companion Animal Identification sales were down 9.2% to
GBP1.09m. In addition to a very competitive environment, as
expected, the addressable dog market is now largely reduced to
microchipping puppies following the introduction of compulsory
microchipping legislation in the UK in April 2016. Associated
database services sales grew by 2.9% during the period.
International Sales
Licensed Veterinary Medicines group revenue outside of the UK
grew 37.7% and ahead of our expectations. Like-for-like sales
growth in existing international markets was 28.5% with the
remaining growth coming from sales to three new territories
including our first sales to markets in Asia. Pharmaceutical sales
outside the UK now total GBP0.72m (2015: GBP0.52m).
New distribution contracts and letters of understanding have
been agreed with 14 distribution partners in new markets across
Europe, Asia, Australasia and North America. Where products are
already licensed in these new markets we expect modest sales
revenue this financial year. For the majority of new markets our
products require regulatory approval that will take between 18 to
36 months to achieve and launch into the market.
Operating results
GBP'000 2016 2015 % change
----------------------------- ------ ------ ---------
Underlying operating profit 1,904 1,553 22.6%
----------------------------- ------ ------ ---------
Exceptional and other items (59) (59)
----------------------------- ------ ------ ---------
Reported operating profit 1,845 1,494 23.5%
----------------------------- ------ ------ ---------
Operating margin % 23.2% 21.0% 2.2ppts
----------------------------- ------ ------ ---------
Basic underlying EPS (p) 7.8 6.2 25.8%
----------------------------- ------ ------ ---------
Basic EPS (p) 7.5 6.1 23.0%
----------------------------- ------ ------ ---------
The benefit of strong revenue growth and improved gross margins
can be seen in underlying operating profit, which increased by
22.6% to GBP1.90m (2015: GBP1.55m). We continue to invest in our
business in a controlled way which is both reflected in the
GBP0.37m increase in overheads, but also our operating margin which
has improved by 220 basis points to 23.2%.
Basic underlying EPS improved by 25.8% to 7.8 pence (2015: 6.2
pence). Basic EPS, which incorporates non-underlying items,
increased by 23.0% to 7.5 pence (2015: 6.1 pence).
Dividends
The Board is pleased to announce an 11.1% increase in the
interim dividend to 2.0 pence per share (2015: 1.8 pence per share)
reflecting the continued confidence in the growth prospects of the
Group. The interim dividend will be paid on 21(st) April 2017 to
shareholders on the register on 7(th) April 2017. The Ordinary
shares will become ex-dividend on 6(th) April 2017.
The Board will continue to monitor the Group's cash position to
ensure an appropriate balance between investment for future growth
and dividend flow to deliver overall value for our
shareholders.
Cash flow
The Group's cash position remains strong with period end cash
balances at GBP7.0m (30(th) June 2016: GBP7.1m, 31(st) December
2015: GBP6.1m). As expected, we have made a significant GBP0.8m net
investment in working capital to support growth, some of which we
expect to reverse in H2 as our new supply chain team becomes
established.
The momentum in our product development pipeline continues with
expenditure at GBP0.6m in the period (2015: GBP0.6m). Capital
expenditure is expected to be biased towards the second half of the
financial year, with several regulatory submissions planned in Q4.
We expect expenditure on our pipeline to increase for the current
financial year towards GBP2.0m (FY16: GBP1.6m).
UK market
Corporate veterinary practice chains have continued the momentum
of their acquisition strategy and in this period there has been the
introduction to the market of a new corporate group that has
already grown to 125+ practices. A new key account manager has been
recruited to focus particularly on corporate and charity customers.
The key account team has been successful in winning core product
tenders for a number of our products including Buprecare and
idENTICHIP, with growth being strong across joint venture
partnerships, buying groups and charities from the pull through of
the field force and telesales team.
Product pipeline
There has continued to be good progress in our product
development pipeline.
The first projects from our rejuvenated pipeline were
successfully registered and launched in the second half of the
prior financial year. One further product successfully registered
late in that period was launched into the market in the first half
of the new financial year, achieving sales well in excess of our
expectations. There has been a focus on identification of new novel
and generic product opportunities and technologies. Three new
development projects have been initiated in the first six months of
this year.
The table below highlights the overall position of our pipeline
compared to the previous period.
Identification Feasibility Development Regulatory Commercial
----- --------------- ------------ ------------ -------------- -----------
2016 12 Projects 8 Projects 13 Projects 2 NPD & 1 5 Projects
EPD Projects
----- --------------- ------------ ------------ -------------- -----------
2015 26 Projects 12 Projects 7 Projects 4 NPD & 3 1 Project
EPD Projects
----- --------------- ------------ ------------ -------------- -----------
Following 25 years of success of the Aqupharm fluid range in the
UK, two of our flag ship products, Aqupharm 1 and Aqupharm 11,
solutions were successfully registered during the period in 11
additional EU countries with additional species indications. These
products will be launched into selected new markets in H2.
Significant progress has also been made in the registration
procedure for another new product which is expected to be approved
in March 2017.
Summary and outlook
Animalcare is in a good position to build on the strong
performance in the first half of the year. The continued health of
the business allows us to invest further in our development
activities whilst maintaining our dividend policy.
Our product development pipeline and distribution opportunities
continue to flow and activity to identify innovative and novel
pharmaceutical products is progressing well. We are pleased with
the early success of our strategy to grow revenue from markets
outside the UK and believe we are building a solid platform for
significant future revenue build.
H2 will also see the launch of a further 4 new licensed products
to the Animalcare range, all supporting existing therapy areas.
We continue to invest in our excellent team, supporting them in
all areas of their working life.
Overall, Animalcare is in a strong position to execute its
strategy to drive future growth.
Iain Menneer Chris Brewster
Chief Executive Chief Financial Officer
Officer
Condensed Consolidated Statement of Comprehensive Income
Six months ended 31(st) December 2016
6 months ended 31(st) December 6 months ended 31(st) December
2016 2015
------------------------- ---- --------------------------------------- --------------------------------------
Exceptional
and other Underlying Exceptional and
Underlying items (i) Total results other items (i) Total
Note results GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= ==== ---------------- ----------- -------- ========== ================ ========
Revenue 7,968 - 7,968 7,114 - 7,114
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Cost of sales (3,361) (3,361) (3,230) (3,230)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Gross profit 4,607 - 4,607 3,884 - 3,884
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Distribution
costs (124) - (124) (121) - (121)
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Administrative
expenses (2,381) (59) (2,440) (2,140) (59) (2,199)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Research &
development
expenses (198) - (198) (70) - (70)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Operating profit/(loss) 1,904 (59) 1,845 1,553 (59) 1,494
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Finance income/(expense) 16 (14) 2 13 21 34
========================= ==== ---------------- ----------- -------- ========== ================ ========
Profit/(loss)
before tax 1,920 (73) 1,847 1,566 (38) 1,528
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Income tax
(expense)/credit (279) 15 (264) (257) 7 (250)
========================= ==== ---------------- ----------- -------- ========== ================ ========
Total comprehensive
income/(loss)
for the period 1,641 (58) 1,583 1,309 (31) 1,278
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Basic earnings
per share 6 7.8p 7.5p 6.2p 6.1p
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Fully diluted
earnings per
share 6 7.6p 7.4p 6.1p 6.0p
------------------------- ---- ---------------- ----------- -------- ---------- ---------------- --------
Total comprehensive income/(loss) for the period is attributable
to the equity holders of the parent.
(i) In order to aid understanding of underlying business
performance, the Directors have presented underlying results before
the effect of exceptional and other items. These items are analysed
in note 3.
Condensed Consolidated Statement of Comprehensive Income
Year ended 30(th) June 2016
Exceptional
Underlying and other items
results (i) Total
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ---------- ---------------- --------
Revenue 14,701 - 14,701
----------------------------------- ---- ---------- ---------------- --------
Cost of sales (6,702) - (6,702)
----------------------------------- ---- ---------- ---------------- --------
Gross profit 7,999 - 7,999
----------------------------------- ---- ---------- ---------------- --------
Distribution costs (255) - (255)
----------------------------------- ---- ---------- ---------------- --------
Administrative expenses (4,398) (173) (4,571)
----------------------------------- ---- ---------- ---------------- --------
Research & development expenditure (156) - (156)
----------------------------------- ---- ---------- ---------------- --------
Operating profit/(loss) 3,190 (173) 3,017
----------------------------------- ---- ---------- ---------------- --------
Finance income 33 36 69
----------------------------------- ---- ---------- ---------------- --------
Profit/(loss) before tax 3,223 (137) 3,086
----------------------------------- ---- ---------- ---------------- --------
Income tax (expense)/credit (479) 27 (452)
----------------------------------- ---- ---------- ---------------- --------
Total comprehensive income/(loss)
for the year 2,744 (110) 2,634
----------------------------------- ---- ---------- ---------------- --------
Basic earnings per share 6 13.0p 12.5p
----------------------------------- ---- ---------- ---------------- --------
Fully diluted earnings per
share 6 12.8p 12.3p
----------------------------------- ---- ---------- ---------------- --------
Total comprehensive income/(loss) for the year is attributable
to the equity holders of the parent.
(i) In order to aid understanding of underlying business
performance, the directors have presented underlying results before
the effect of exceptional costs and other items. These items are
analysed in note 3.
Condensed Consolidated Statement of Changes in Shareholders'
Equity
Six months ended 31(st) December 2016
6 months ended 6 months ended Year ended
31(st) December 31(st) December 30(th) June
2016 2015 2016
Note GBP'000 GBP'000 GBP'000
---------------------------- ---- ---------------- ---------------- ------------
Balance at beginning
of period 22,515 20,991 20,991
---------------------------- ---- ---------------- ---------------- ------------
Total comprehensive
income for the period 1,583 1,278 2,634
---------------------------- ---- ---------------- ---------------- ------------
Transactions with owners
of the Company, recognised
in equity:
---------------------------- ---- ---------------- ---------------- ------------
Dividends paid 5 (997) (904) (1,283)
---------------------------- ---- ---------------- ---------------- ------------
Issue of share capital 214 46 53
---------------------------- ---- ---------------- ---------------- ------------
Share-based payments 37 60 120
---------------------------- ---- ---------------- ---------------- ------------
Balance at end of period 23,352 21,471 22,515
---------------------------- ---- ---------------- ---------------- ------------
Condensed Consolidated Balance Sheets
31(st) December 2016
31(st) December 31(st) December
2016 2015 30(th) June 2016
GBP'000 GBP'000 GBP'000
------------------------------ --------------- --------------- ----------------
Non-current assets
------------------------------ --------------- --------------- ----------------
Goodwill 12,711 12,711 12,711
------------------------------ --------------- --------------- ----------------
Other intangible assets 3,293 2,257 2,968
------------------------------ --------------- --------------- ----------------
Property, plant and equipment 254 271 281
------------------------------ --------------- --------------- ----------------
16,258 15,239 15,960
------------------------------ --------------- --------------- ----------------
Current assets
------------------------------ --------------- --------------- ----------------
Inventories 2,172 1,700 1,604
------------------------------ --------------- --------------- ----------------
Trade and other receivables 2,661 1,909 2,189
------------------------------ --------------- --------------- ----------------
Cash and cash equivalents 7,012 6,098 7,118
------------------------------ --------------- --------------- ----------------
11,845 9,707 10,911
------------------------------ --------------- --------------- ----------------
Total assets 28,103 24,946 26,871
------------------------------ --------------- --------------- ----------------
Current liabilities
------------------------------ --------------- --------------- ----------------
Trade and other payables (3,274) (2,090) (3,027)
------------------------------ --------------- --------------- ----------------
Current tax liabilities (202) (301) (101)
------------------------------ --------------- --------------- ----------------
Deferred income (235) (233) (220)
------------------------------ --------------- --------------- ----------------
(3,711) (2,624) (3,348)
------------------------------ --------------- --------------- ----------------
Net current assets 8,134 7,083 7,563
------------------------------ --------------- --------------- ----------------
Non-current liabilities
------------------------------ --------------- --------------- ----------------
Deferred income (732) (724) (762)
------------------------------ --------------- --------------- ----------------
Deferred tax liabilities (308) (127) (246)
------------------------------ --------------- --------------- ----------------
(1,040) (851) (1,008)
------------------------------ --------------- --------------- ----------------
Total liabilities (4,751) (3,475) (4,356)
------------------------------ --------------- --------------- ----------------
Net assets 23,352 21,471 22,515
------------------------------ --------------- --------------- ----------------
Capital and reserves
------------------------------ --------------- --------------- ----------------
Called up share capital 4,244 4,211 4,212
------------------------------ --------------- --------------- ----------------
Share premium account 6,688 6,500 6,506
------------------------------ --------------- --------------- ----------------
Retained earnings 12,420 10,760 11,797
------------------------------ --------------- --------------- ----------------
Equity attributable to
equity holders of the parent 23,352 21,471 22,515
------------------------------ --------------- --------------- ----------------
Cash Flow Statements
Six months ended 31(st) December 2016
Year ended
6 months ended 6 months ended 30(th) June
31(st) December 31(st) December 2016
2016 GBP'000 2015 GBP'000 GBP'000
----------------------------------- ---------------- ---------------- ------------
Comprehensive income for
the period before tax 1,847 1,528 3,086
----------------------------------- ---------------- ---------------- ------------
Adjustments for:
----------------------------------- ---------------- ---------------- ------------
Depreciation of property,
plant and equipment 58 61 66
----------------------------------- ---------------- ---------------- ------------
Amortisation of intangible
assets 218 129 369
----------------------------------- ---------------- ---------------- ------------
Finance income (16) (13) (33)
----------------------------------- ---------------- ---------------- ------------
Share-based payment award 37 60 120
----------------------------------- ---------------- ---------------- ------------
Net deferral/(release) of
deferred income (13) - 24
----------------------------------- ---------------- ---------------- ------------
Operating cash flows before
movements in working capital 2,131 1,765 3,632
----------------------------------- ---------------- ---------------- ------------
(Increase)/decrease in inventories (568) (47) 49
----------------------------------- ---------------- ---------------- ------------
(Increase)/decrease in receivables (491) 337 77
----------------------------------- ---------------- ---------------- ------------
Increase/(decrease) in payables 266 (96) 822
----------------------------------- ---------------- ---------------- ------------
Cash generated by operations 1,338 1,959 4,580
----------------------------------- ---------------- ---------------- ------------
Income taxes paid (102) (161) (444)
----------------------------------- ---------------- ---------------- ------------
Net cash flow from operating
activities 1,236 1,798 4,136
----------------------------------- ---------------- ---------------- ------------
Investing activities:
----------------------------------- ---------------- ---------------- ------------
Payments to acquire intangible
assets (568) (598) (1,604)
----------------------------------- ---------------- ---------------- ------------
Payments to acquire property,
plant and equipment (7) (34) (41)
----------------------------------- ---------------- ---------------- ------------
Disposal of intangible assets - - 47
----------------------------------- ---------------- ---------------- ------------
Interest received 16 13 33
----------------------------------- ---------------- ---------------- ------------
Net cash used in investing
activities (559) (619) (1,565)
----------------------------------- ---------------- ---------------- ------------
Financing:
----------------------------------- ---------------- ---------------- ------------
Receipts from issue of share
capital 214 46 53
----------------------------------- ---------------- ---------------- ------------
Equity dividends paid (997) (904) (1,283)
----------------------------------- ---------------- ---------------- ------------
Net cash used in financing
activities (783) (858) (1,230)
----------------------------------- ---------------- ---------------- ------------
Net (decrease)/increase
in cash and cash equivalents (106) 321 1,341
----------------------------------- ---------------- ---------------- ------------
Cash and cash equivalents
at start of period 7,118 5,777 5,777
----------------------------------- ---------------- ---------------- ------------
Cash and cash equivalents
at end of period 7,012 6,098 7,118
----------------------------------- ---------------- ---------------- ------------
Comprising:
----------------------------------- ---------------- ---------------- ------------
Cash and cash equivalents 7,012 6,098 7,118
----------------------------------- ---------------- ---------------- ------------
Condensed Notes to the Financial Statements
31(st) December 2016
1. GENERAL INFORMATION
Animalcare Group plc ("the Company") is a company incorporated
in England and Wales under the Companies Act 2006 and is domiciled
in the United Kingdom. The condensed set of financial statements as
at, and for, the six months ended 31(st) December 2016 comprises
the Company and its subsidiary, Animalcare Ltd (together referred
to as the "Group"). The nature of the Group's operations and its
principal activities are set out in the latest Annual Report.
This Interim Report does not constitute statutory accounts as
defined in Section 435 of the Companies Act 2006. The information
contained herein has not been reviewed by the Group's auditor.
The prior year comparatives are derived from the audited
financial information as set out in the Group's Annual Report for
the year ended 30(th) June 2016 and the unaudited financial
information in the Group's Interim Report for the six months ended
31(st) December 2015. The comparative figures for the financial
year ended 30(th) June 2016 are not the Group's statutory accounts.
Those accounts have been reported on by the Group's auditor and
delivered to the Registrar of Companies. The report of the auditor
was (i) unqualified, (ii) did not include any reference to matters
to which the auditors drew attention without qualifying their
report and (iii) did not contain a statement under section 498(2)
or (3) of the Companies Act 2006.
The Interim Report for the six months ended 31(st) December 2016
was approved by the Board of Directors and authorised for issue on
15(th) February 2017.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation and accounting policies
Except as described below, the condensed consolidated interim
financial information for the six months ended 31(st) December 2016
has been prepared using accounting policies consistent with those
of the Company's annual accounts for the year ended 30(th) June
2016, which were prepared in accordance with IFRSs as adopted by
the European Union.
Taxes on income in the interim periods are accrued using the
estimated tax rate that would be applicable for the full financial
year.
The following standards and amendments have been published,
endorsed by the EU, with an effective date after the date of these
financial statements. Their adoption, where applicable, is not
expected to have a material effect on the financial statements of
the Group unless otherwise indicated.
International Financial Reporting Standards Applies to periods beginning after
---------------------------------------------- -----------------------------------
IFRS 15 Revenue from Contracts with Customers 1(st) January 2018
---------------------------------------------- -----------------------------------
IFRS 9 Financial Instruments 1(st) January 2018
---------------------------------------------- -----------------------------------
Going concern
The principal risks and uncertainties facing the Group remain
those set out in the latest Annual Report.
For the purposes of their assessment of the appropriateness of
the preparation of the interim financial information on a going
concern basis, the Directors have considered the current cash
position and forecasts of future trading including working capital
and investment requirements.
During the period the Group met its day-to-day general corporate
and working capital requirements through existing cash resources.
At 31(st) December 2016 the Group had cash on hand of GBP7.0
million (30(th) June 2016: GBP7.1 million).
Overall, the Directors believe the Group is well placed to
manage its business risks successfully. The Group's forecasts and
projections, taking account of reasonable possible changes in
trading performance, show that the Group should have sufficient
cash resources to meet its requirements for at least the next 12
months. Accordingly, the adoption of the going concern basis in
preparing the interim financial information remains
appropriate.
3. EXCEPTIONAL AND OTHER ITEMS
Six months ended 31(st) December 2016
6 months ended 6 months ended
31(st) December 31(st) December Year ended
2016 2015 30(th) June 2016
GBP'000 GBP'000 GBP'000
----------------------------- ---------------- ---------------- -----------------
Amortisation of acquired
intangible assets 59 59 118
----------------------------- ---------------- ---------------- -----------------
Strategic review - - 55
----------------------------- ---------------- ---------------- -----------------
Fair value movements
on foreign currency hedging 14 (21) (36)
----------------------------- ---------------- ---------------- -----------------
Sub total 73 38 137
----------------------------- ---------------- ---------------- -----------------
Tax thereon (15) (7) (27)
----------------------------- ---------------- ---------------- -----------------
Total exceptional and
other items 58 31 110
----------------------------- ---------------- ---------------- -----------------
The amortisation charge totalling GBP59,000 (2015: GBP59,000)
relates to brand and customer relationship intangible assets
recognised on the acquisition of Animalcare Ltd in January
2008.
4. REVENUE AND OPERATING SEGMENTS
During the period, the principal activity of the Group was the
supply and distribution of veterinary medicines, identification and
other products for companion animals.
The Chief Operating Decision Maker ("CODM") is considered to be
the Board of Directors of Animalcare Group plc. Performance
assessment is primarily based on underlying operating profit and
cash generation. The Group solely comprises one reportable segment,
being Animalcare.
An analysis of revenue by product group is disclosed within the
Business Review.
5. DIVIDENDS
6 months ended 6 months ended
31(st) December 31(st) December Year ended
2016 2015 30(th) June 2016
GBP'000 GBP'000 GBP'000
-------------------------- ---------------- ---------------- -----------------
Ordinary final dividend
paid for the year ended
30(th) June 2015 of
4.3p per share - 904 904
-------------------------- ---------------- ---------------- -----------------
Ordinary interim dividend
paid for the year ended
30(th) June 2016 of 1.8p
per share - - 379
-------------------------- ---------------- ---------------- -----------------
Ordinary final dividend
paid for the year ended
30(th) June 2016 of
4.7p per share 997 - -
-------------------------- ---------------- ---------------- -----------------
997 904 1,283
-------------------------- ---------------- ---------------- -----------------
The interim dividend was approved by the Board of Directors on
15(th) February 2017 and has not been included as a liability as at
31(st) December 2016.
6. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing the
total comprehensive income for the period attributable to ordinary
equity holders of the Company by the weighted average number of
fully paid ordinary shares outstanding during the period.
The dilutive effect of share options is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares from
the start of the period. The dilutive potential ordinary shares of
the Company are share options.
The following income and share data was used in the earnings per
share computations:
6 months 6 months 6 months 6 months
ended 31(st) ended 31(st) Year ended ended 31(st) ended 31(st) Year ended
December December 30(th) June December December 30(th) June
2016 2015 2016 2016 2015 2016
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Underlying Underlying Underlying
earnings earnings earnings Total earnings Total earnings Total earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Total comprehensive
income attributable
to equity holders
of the Company 1,641 1,309 2,744 1,583 1,278 2,634
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
No. No. No. No. No. No.
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Basic weighted
average number
of shares 21,164,072 21,032,392 21,043,846 21,164,072 21,032,392 21,043,846
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Dilutive potential
ordinary shares 321,800 305,260 319,863 321,800 305,260 319,863
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Fully diluted
weighted average
number of shares 21,485,872 21,337,652 21,363,079 21,485,872 21,337,652 21,363,079
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Total earnings
per share:
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Basic 7.8p 6.2p 13.0p 7.5p 6.1p 12.5p
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
Fully diluted 7.6p 6.1p 12.8p 7.4p 6.0p 12.3p
--------------------- ------------- ------------- ------------ -------------- -------------- --------------
7. CAUTIONARY STATEMENT
This Interim Management Report ("IMR") consists of the
Chairman's Statement and the Business Review, which have been
prepared solely to provide additional information to shareholders
to assess the Group's strategies and the potential for those
strategies to succeed. The IMR should not be relied upon by any
other party or for any other purpose.
The IMR contains a number of forward looking statements. These
statements are made by the Directors in good faith based upon the
information available to them up to the time of their approval of
this report and such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward looking information.
This IMR has been prepared for the Group as a whole and
therefore emphasises those matters which are significant to
Animalcare Group plc and its subsidiaries when viewed as a
whole.
8. INTERIM REPORT
The Group's Interim Report for the six months ended 31(st)
December 2016 was approved and authorised for issue on 15(th)
February 2017 and is expected to be posted to shareholders later
that week commencing 13(th) February 2017. Further copies will be
available to download on the Company's website at:
www.animalcaregroup.co.uk and will also be available from the
Company's head office at 10 Great North Way, York Business Park,
Nether Poppleton, York, YO26 6RB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BIGDDXGBBGRS
(END) Dow Jones Newswires
February 15, 2017 02:00 ET (07:00 GMT)
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