TIDMANCR
RNS Number : 3406G
Animalcare Group PLC
23 July 2019
23 July 2019
Animalcare Group plc
(the "Group" or the "Company")
Trading Update & Notice of Results
23 July 2019. Animalcare Group plc (AIM: ANCR), the
international animal health business, today provides the following
unaudited trading update for the six months ended 30 June 2019 (the
"Period") ahead of publishing its interim results on 24 September
2019.
Trading overview
Current trading is in line with market expectations and we are
delivering against all our five key objectives, with cash
conversion improving significantly as a result.
For the period to 30 June 2019, revenue from our continuing
Pharmaceuticals segment was in line with prior year (c.0.9%
increase on a constant currency basis) at GBP36.1m (2018:
GBP36.1m).
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 GBP1.1m 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. Underlying revenue growth during the period has
been driven primarily by the launch of seven new products and
annualised growth of products launched in 2018.
We have maintained our focus on operating costs and cash
generation. The Board expects underlying EBITDA for the period to
be in line with 2018, before a c.GBP0.5m benefit following the
adoption of IFRS 16, which has no impact on profit before tax for
the Group.
At the end of 2018, we committed to reducing our net debt and
improving cash conversion. 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 was around GBP21.0m as at 30 June 2019 (31
December 2018: GBP23.6m; 30 June 2018: GBP26.0m), the reduction
since the 2018 year end largely driven by lower working capital
including an inventory reduction of c.GBP1.5m.
Operational update
The Group continues to execute upon its five strategic
priorities to deliver short and long term sustainable, profitable
growth. During the first half of 2019 we have accelerated the pace
of integration to drive simplification and improve efficiency,
delivered against these priorities, as follows:
1) Build a strong financial basis through revenue growth, cash
conversion, EPS growth and EBITDA margin growth
As outlined above we are trading in line with expectations and
cash conversion has been strong. We have streamlined supply across
Southern Europe, delivering inventory reduction ahead of plan.
Investment in SAP ERP will commence in H2 to drive further
efficiencies during 2020.
We completed the R&D and Technical & Regulatory
centralisation during Q2 2019, which will drive efficiencies and
integrate management. We have therefore completed our planned
headcount reduction of nine employees in the UK and Spain, for
which around GBP1.4m one-off costs were incurred in the period.
2) Grow the business through a focussed portfolio of existing
products and build a robust future pipeline in five key therapy
areas in the companion animal and equine markets
Phase 1 of the project to create a focussed range of higher
margin and growth brands that support our primary portfolio areas
is nearing completion. 25% of brands that are insubstantial in
terms of revenue and insignificant in terms of EBITDA contribution
are expected to be delisted or divested by the end of the year with
a further c20% reduction during 2020.
3) Build on existing customer relationships with vets and other
stakeholders to deliver trusted products and services
We continue to strengthen our relationships with key
stakeholders including our international partners and will be
launching our first products with our partner in China in Q3.
4) Business development focus with partners to in license and acquire innovative products
The product development pipeline has progressed in line with
expectations during the first half, with approval granted for three
new products. All three will be launched as planned during H2 and
we expect two further approvals by the end of 2019.
5) Organisation for success, building leadership strength and
attract, retain and develop talent for the future
We implemented an LTIP for Senior Leaders and rolled out
performance-based bonus plans. We have strengthened our Country
Manager team with the recruitment of Sara Maddens in Belgium.
Animalcare's Chief Executive Officer, Jenny Winter, commented:
"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."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
For further information, please contact:
Animalcare Group plc Tel: 01904 487 687
Jenny Winter, Chief Executive
Officer
Chris Brewster, Chief Financial
Officer
Panmure Gordon (Nominated Adviser Tel: 020 7886 2500
& Broker)
Corporate Finance
Freddy Crossley / Emma Earl
Corporate Broking
James Stearns
animalcare@consilium-comms.com
Consilium Strategic Communications
Amber Fennell/Angela Gray/Olivia
Manser
About Animalcare (www.animalcaregroup.com)
Animalcare Group plc is a UK AIM listed veterinary sales and
marketing organisation resulting from the merger of Animalcare and
Ecuphar NV in July 2017. Animalcare operates in seven countries and
exports to approximately 32 countries in Europe and a further 16
worldwide. The company is focused on bringing new and innovative
products to market through its own development pipeline,
partnerships and via acquisition.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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