TIDMANP
RNS Number : 7846L
Anpario PLC
15 September 2021
Anpario plc
("Anpario" or the "Group")
Interim results
Anpario plc (AIM:ANP), the independent manufacturer of natural
sustainable animal feed additives for animal health, nutrition and
biosecurity is pleased to announce its interim results for the six
months to 30 June 2021.
Highlights
Financial highlights
-- Sales of GBP16.0m (2020: GBP16.2m), excluding currency movements increased by 3% to GBP16.7m
-- 2% increase in adjusted EBITDA1 to GBP3.5m (2020: GBP3.4m)
-- 12% increase in profit before tax to GBP2.7m (2020: GBP2.4m)
-- Diluted adjusted earnings per share down 7% to 10.88p (2020: 11.74p)
-- 9% increase in interim dividend to 3.00p (2020: 2.75p) per share
-- Cash balances of GBP14.6m at 30 June 2021 (Dec 2020: GBP15.8m)
Operational highlights
-- Sales growth in Latin America, United States, China and Australasia, despite currency headwinds.
-- Strong demand for our unique acid-based eubiotic brand pHorce (R) to the US swine sector as an anti-viral feed
mitigant.
-- 29% sales growth in Orego-Stim (R) benefiting from our aquaculture initiatives and the reduction in use of
antibiotic growth promoters (AGP's).
-- Feed and raw material hygiene product, Salgard SW, with proven efficacy against gram negative bacteria without
safety concerns associated with formaldehyde.
-- New European stockholding hub supporting rapid service to European customers post Brexit.
Kate Allum, Chairman, commented:
"In my first statement as Chairman, I would like to thank my
predecessor, Peter Lawrence, for his 16 years of service to Anpario
and his leadership and guidance of the Board, during which time
significant shareholder value has been created.
The Board is pleased to report a good sales and improved profit
performance with sales at a similar level to last year and 3% ahead
on a constant exchange rate basis. Our strategy of offering more
sustainable and environmentally friendly products as an alternative
to anti-biotic growth promoters and some of the harsher chemical
treatments is gaining traction. This performance should be seen in
the context of a very strong comparative period and at a time when
the UK's trading relationship changed with the European Union.
It is thanks to the efforts of our staff and other stakeholders
across the globe that ensure we continue to supply and support our
customers, as well as implementing our business development
initiatives delivering organic growth. As with most industries, we
have experienced raw material price inflation and some disruption
in our supply chain and global shipping routes but our staff have
been able to manage these challenges successfully.
We are excited about the changes occurring in our markets where
Anpario's environmentally friendly and sustainable solutions are
gaining more interest from global producers. The industry is moving
away from the use of harmful applications such as formaldehyde and
zinc oxide for antimicrobial control in addition to the trend to
reduce antibiotic use. Over the past few years our developments
have been focused on products which comprise 100% natural and
sustainable ingredients which work in synergy with the animal's
natural biological processes to boost immunity.
There has been a strong start to the second half of the year and
we remain confident of continuing the profitable development of the
Group supported by a strong balance sheet and investment in our
operations, technology and global sales channels."
Kate Allum, Chairman
(1) Adjusted EBITDA represents operating profit for the year
GBP2.651m (2020: GBP2.317m) adjusted for: share based payments and
associated costs GBP0.027m (2020: GBP0.029m); foreign exchange
losses GBP0.175m (2020: GBP0.055m gain); foreign exchange hedging
gains GBP0.043m (2020: GBP0.489m loss); and depreciation,
amortisation and impairment charges of GBP0.647m (2020:
GBP0.613m)
Chief Executive Officer's statement
Overview
Group sales for the six months to 30 June 2021 declined by just
1% to GBP16.0m (2020: GBP16.2m). However, on a constant exchange
rate basis, sales for the period grew by 3% to GBP16.7m, helped by
strong performances in a number of territories and 29% sales growth
from our Orego-Stim(R) range. Latin America experienced significant
growth, notably Brazil, and in Chile where commercial trials to the
aquaculture market commenced. With the exception of China and
Australasia, which both delivered strong growth, most other regions
had similar performances to the prior period. South-East Asia
continues to be significantly impacted by the COVID-19 pandemic
experiencing 31% decline in sales compared to the same period last
year.
Gross profit decreased by 5% to GBP8.1m (2020: GBP8.5m) for the
six months to 30 June 2021 but grew by 3% to GBP8.8m on a constant
exchange rate basis. Gross margins fell from 52.5% to 50.5%, for
which there were several contributing factors including currency
movements. There has been a significant increase in logistics costs
and even though most of these costs are borne by our customers it
does impact the gross margin calculation. There has also been some
significant raw material price inflation, which we are passing on
through sales price increases and from which we expect to benefit
in the second half of the year.
The pandemic continues to limit the amount of international
travel and marketing events taking place across the industry,
although our local sales teams are visiting customers where
possible. As such these cost savings and our foreign exchange
hedging measures have translated into a 12% improvement in profit
before tax to GBP2.7m (2020: GBP2.4m) for the period.
Overall, we are very encouraged by the growth in some of our
market leading product brands such as Orego-Stim(R) and pHorce(R)
which are helping producers reduce antibiotic use and mitigate the
risk of virus-contaminated feed respectively. Our technical team
recently developed Salgard SW, a high strength liquid acid-based
eubiotic for feed and raw material hygiene decontamination which is
proving to be an effective replacement to formaldehyde, which was
recently banned in the European Union and certain other countries
around the World.
Operational review
Americas
Overall, the region grew sales by 5% with Latin America
delivering growth of 10%, sales in the US were flat, but there were
mixed performances across countries within Latin America.
Latin America performance was supported with key contributions
from Brazil and Chile. Chile's strong growth was due to the
commencement of commercial aquaculture trials using Orego-Stim(R)
in the feed. Brazil's 19% sales growth was driven by Orego-Stim(R)
sales following successful business development with some new
customers and an increase in sales of Prefect(R) to the aquaculture
market. Argentina, Ecuador and Mexico disappointed partly due to
the pandemic, however, we are expecting an improved second half
from Latin America following new business wins with products such
as Mastercube(R), our natural pellet binder, for aquafeed
purposes.
Additionally, we have set up a wholly owned subsidiary in Mexico
and secured third party warehousing and logistics services to stock
our products. This capability will enable us to respond more
quickly to regional distributor demand and target larger end users
directly.
US performance was flat at actual exchange rates but excluding
currency movements sales grew by 11% and volumes by 26%. Last year
our high strength acid-based eubiotic, pHorce(R), showed excellent
results in a trial undertaken by Pipestone Applied Research
(Pipestone) to evaluate the ability of feed additives in mitigating
the risk of virus-contaminated feed. Following on from this
research our US swine sales team successfully launched the product,
which has proved timely, as the industry has had to contend with
summer outbreaks of porcine reproductive and respiratory syndrome
(PPRS). Where used, pHorce(R) has managed to protect farms from
outbreaks of the virus and is viewed as being a highly effective
preventative product.
We have recently appointed a distributor for the West Coast with
first orders already received following recent sales visits, and we
are in discussions with a potential distributor for Canada. In
addition, we have had meetings with senior executives responsible
for sustainability at a leading poultry integrator to discuss how
Anpario as a company and with its technology can support their
sustainability requirements.
Asia
Overall, sales in the region declined by 2%, impacted by a
significant decline of 31% across South-East Asia as further
lockdowns and the slow rollout of the vaccine impacted economic
activity and tourism in the region. South Korea and The Philippines
experienced significant declines during the period. However, this
period should be compared to a very strong first half in the
previous year and performance has improved from the second half of
2020 which appears to have been the bottom. This weakness in
trading, however, is cushioned by strong performances in both China
and Australasia.
China delivered very strong sales with growth of 113% as
Orego-Stim(R) is adopted as a replacement for antibiotic growth
promoters (AGP's) primarily in piglet feed. We also established a
wholly owned subsidiary in New Zealand in addition to our existing
distributor channel to enable direct sales to end markets not
currently served by our distributor. The Australasia region
delivered sales growth of 26% for the period helped by an increase
in our mould control product, Mycostat(R), in the oilseed crusher
segment.
Our customers in the South-East Asian region are experiencing
some significant challenges which are also reflected around the
world to varying degrees. In addition, to low demand for meat
protein due to the COVID-19 pandemic, animal feed costs have
increased by at least one third due to raw material price inflation
and shipping and logistics issues continue to challenge our export
team. We expect these challenges to continue into next year but our
local sales teams and stock holding in the region is ensuring we
can continue to service our customers effectively.
Notwithstanding these challenges, progress continues to be made
with specific initiatives including the appointment of an
aquaculture specific distributor in Bangladesh and the adoption of
Mastercube(R), our natural pellet binder, as a replacement for
polymethylolcarbamide ( PMC ) pellet binders which contain urea
formaldehyde and are used widely in aquaculture throughout Asia.
Removing PMC from the feed allows for unrestricted export of shrimp
to markets where urea formaldehyde is banned. Our Vietnam
subsidiary was also established during the period and we have
recruited a local sales team for this important market.
The Middle East, Africa and India
Sales in the region declined by 4% compared to the same period
last year, however this represents a 26% recovery in revenue from
the second half of 2020 which was materially impacted by the
COVID-19 pandemic. We are encouraged by this recovery and have been
working on some new initiatives including the recent appointment of
another distributor in India which has already taken delivery of
their first order. There have been some good performances in
Pakistan, Yemen and Turkey and we see further growth opportunities
in Iraq but are closely managing credit terms.
Europe
Sales in Europe declined by 4% compared to the same period last
year affected by some distributors increasing stock in anticipation
of Brexit, although normality in order patterns is returning.
Israel showed a very strong performance delivering sales growth
of over 200% as our distributor has been able to establish
Orego-Stim(R) as the leading phytogenic brand. We are also seeing
increased interest in our products for organic production as the
European Union has committed to have 25% of agricultural land under
organic farming by 2030 . The recent appointment of a combination
of two distributors in Switzerland will give us access to both
larger customers and small farms through a farm van delivery
service, which will give Anpario full coverage of this high value
organic led market.
We have been making good progress with our raw material and feed
hygiene product, Salgard SW, which is being recognised as the best
environmentally friendly alternative to formaldehyde following its
recent ban by the European Union and is seeing customers elsewhere
look for credible alternatives. We are therefore increasing our
liquid bulk storage facilities at Manton Wood to ensure rapid
response to demand across Europe. We have also entered into a
supply agreement with a global life science ingredients distributor
to own brand our acid-based eubiotic technology for enteropathogen
control applications in the rendering sector.
Innovation and development
We are excited about the changes occurring in our markets where
Anpario's environmentally friendly and sustainable solutions are
gaining more interest from global producers. The industry is moving
away from the use of harmful applications such as formaldehyde and
zinc oxide for antimicrobial control in addition to the trend to
reduce antibiotic use. Over the past few years our developments
have been focused on products which comprise 100% natural and
sustainable ingredients which work in synergy with the animal's
natural biological processes to boost immunity. By formulating
highly concentrated products, we use less raw materials than many
competitor products yet are still able to provide better efficacy
and performance that producers value. Our product range is
typically in its early life cycle stage and as global regulatory
requirements tighten these changes should benefit our sales
growth.
It is pleasing to see products like pHorce (R) not only perform
in controlled research trials but also under tough commercial
conditions where the farmer can experience the benefits, which has
been the case in the US in preventing porcine reproductive and
respiratory syndrome virus (PRRS) break on farm through potentially
contaminated feed.
More recent trial work is underway in Chile where an aquaculture
version of Orego-Stim (R) included in the feed is being used to
control low to moderate levels of sea lice infestation in
salmonids, which is proving positive.
Outlook
There has been a strong start to the second half of the year
with most regions recovering from the low point in the second half
of 2020. Our global sales teams are focused on specific business
development initiatives and working arduously, in difficult
circumstances, to deliver beneficial solutions to both existing and
new customers. Our products are best in class and increasingly
being recognised as such.
We are mindful that challenges remain, not least the Covid-19
pandemic which is impacting some of our geographic markets, but
also raw material price inflation and global shipping issues. We
have taken early action to mitigate some of the impact and backed
by the quality and ability of our employees worldwide, we are
confident of delivering our growth plans.
Our strong balance sheet enables the Group to invest in its
growth initiatives including increasing raw material and
stockholding capacity as well as continuing our research and
development programmes. We continue to expand our multi-channel
capabilities with local subsidiaries and sales teams who have
served us exceptionally well during a period when international
travel is restricted. These areas remain a priority for investment
in addition to undertaking earnings enhancing and complementary
acquisitions to accelerate the profitable development of the
Group.
Richard Edwards
Chief Executive Officer
15 September 2021
Key performance indicators
Financial
H1 2021 H1 2020
Note GBP000 GBP000 change % change
------------------------------------ ---- ------- ------- ------ --------
Revenue 3 15,963 16,173 -210 -1%
Gross profit 8,045 8,492 -447 -5%
Gross margin 50.4% 52.5% -2.1%
Adjusted EBITDA 6 3,457 3,393 +64 +2%
Profit before tax 2,673 2,378 +295 +12%
Diluted adjusted earnings per share 12 10.88p 11.74p -0.86 -7%
Interim dividend 3.00p 2.75p +0.25p +9%
Cash and cash equivalents 14,601 13,170 +1,431 +11%
Net assets 39,468 36,539 +2,929 +8%
Financial review
Revenue and gross profits
On a constant exchange rate basis, revenue for the period grew
by 3% to GBP16.7m (2020: GBP16.2m), at actual exchange rates
revenue was down 1% to GBP16.0m. The difference primarily relating
to the increase in GBP/USD exchange rate to an average of 1.389
(2020: 1.254), the impact of which on overall profit before tax was
reduced through foreign exchange hedging. The sales performance
represented a strong recovery from the weaker, COVID impacted,
result in H2 2020 with sales 11% higher than this period.
Particularly pleasing was the continued growth in sales in
China, up 113%, as well as strong performances in LATAM and
Australasia, though market conditions in South-East Asia continued
to be difficult and sales declined 31% in the period. Detailed
commentary on the performance of the operating segments is
available in the Chief Executive Officer's Statement.
On a constant exchange rate basis, gross profit for the six
months to 30 June 2021 grew by 3% to GBP8.8m (2020: GBP8.5m) and
margins were consistent between periods. At actual exchange rates
there was a 5% decrease in gross profit to GBP8.0m (2020: GBP8.5m)
and gross margins fell 210 basis points to 50.4% (2020: 52.5%),
full year margins for 2020 were 51.9%.
There are several contributing factors to the decline in
margins. The prior year sales benefited from realised foreign
exchange gains on sales receipts (GBP0.2m), whereas a loss was
experienced in the current period (GBP0.1m). As with many
businesses in the current market conditions we have experienced
challenges in logistics, though to date we have successfully
navigated these and been able to continuously supply our customers.
In terms of outbound supply, we have seen significant increases in
international shipping costs, excluding sales through our
subsidiary channels, these costs are largely passed on and invoiced
to customers. As such the impact on gross profit is small through
the period, however it does affect and reduce the gross margin
calculation. In terms of raw material supply, there has disruption
to availability which we have responded to through increased
working capital, as well as significant price inflation which is
being passed on through sales prices increases implemented at the
end of the current period.
Administrative expenses
Administrative expenses were 13% lower at GBP5.4m (2020:
GBP6.2m), most of the decline relating to administrative foreign
exchange losses which through our hedging activities were
eliminated in the current period whereas the prior period saw costs
of GBP0.5m. Underlying administrative expenses were 4% lower with
reductions across most types of expenditure.
Travel and marketing costs were lower, particularly as the first
quarter of 2020 had a relatively normal level of expenditure for
these types of activity. These costs remain at low levels but are
expected to continue to gradually normalise as restrictions due to
the pandemic are eased, the timing of which remains uncertain. In
the longer-term, overall expenditure will be lower than per-COVID
levels as we expect that we will continue to benefit from the speed
and cost-efficiencies of new communication technologies.
Legal and professional costs were GBP0.1m lower as they
normalised from higher rates of expenditure in the prior period to
support our continued expansion to support local markets .
Foreign exchange
The Group's primary foreign currency exchange rate risk relates
to both sales and related receivables denominated in US Dollars,
for which there has been significant adverse movement in the
period. However, we continue to actively take steps to mitigate the
impact of these risks and at the end of the period the Group has
recognised a GBP0.9m financial asset (2020: GBP0.1m liability) on
related hedging contracts. These protect a large portion of the
currently forecasted net US Dollar cash flows over the next three
years at an average rate of GBP/USD 1.312.
Profitability and earnings per share
Adjusted EBITDA for the period, which excludes the impact of
foreign exchange gains and losses, increased by 2% to GBP3.5m
(2020: GBP3.4m). Profit before tax increased 12% to GBP2.7m (2020:
GBP2.4m).
Adjusted earnings per share decreased by 7% to 10.88p (2020:
11.74p), this was driven by a higher effective tax rate and a
larger number of dilutive shares because of the increased share
price.
Taxation
The effective tax rate for the period was 32.4% (2020: 20.1%).
Changes to UK corporation tax rates occurred firstly in the prior
period with planned reductions to 17% being scrapped, then in the
current period on 3 March 2021 the UK government announced an
increase to 25%, from 19%, from April 2023. Deferred taxes have
been remeasured at these revised rates in both periods and resulted
in a deferred tax charge of GBP0.4m (2020: GBP0.2m). Excluding
these exceptional charges, the underlying effective tax rate for
the period was 16.9% (2020: 13.4%).
Cash flow
Operating cash flows before changes in working capital were
GBP3.5m (2020: GBP3.4m) in the period. Changes in working capital
absorbed GBP3.6m (2020: GBP2.0m), the most significant factor was
an increase in inventory of GBP1.9m. This partly relates to the
continued sales growth in our Subsidiary operations which hold
finished goods stock but also further increases in the overall
level of product held in these locations that are closer to our
customers in light of the global logistics challenges. The other
factor being a reduction in Trade and other payables, largely
related to the payment in the period of bonuses earned for the
prior year performance.
Net cash used in investing activities decreased slightly in the
period to GBP0.5m (2020: GBP0.6m). Net cash used in financing
activities was GBP0.9m lower than the prior period which saw a
GBP1.0m share buyback programme purchasing 297,346 ordinary shares
at a volume weighted average price of 336.31p per share.
Overall, cash and cash equivalents decreased by GBP1.2m in the
period to a balance of GBP14.6m (Dec 2020: GBP15.8m). The primary
purpose of holding these resources is to fund future acquisitions
and we continue to explore suitable opportunities.
Dividend
The Board has approved an interim dividend of 3.00 pence per
share (2020: 2.75 pence), an increase of 9%. This dividend, payable
on 12 November to shareholders on the register on 26 November,
reflects the Board's continued confidence in the Group and its
ability to generate cash.
Consolidated statement of comprehensive income
for the six months ended 30 June 2021
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
---------------------------------------------------------------- ------ -------------- -------------- ------------
Revenue 3 15,963 16,173 30,522
Cost of sales (7,918) (7,681) (14,670)
---------------------------------------------------------------- ------ -------------- -------------- ------------
Gross profit 8,045 8,492 15,852
Administrative expenses (5,394) (6,175) (10,585)
Operating profit 2,651 2,317 5,267
Depreciation and amortisation 647 613 1,233
Adjusting items 4 159 463 104
Adjusted EBITDA 4 3,457 3,393 6,604
---------------------------------------------------------------- ------ -------------- -------------- ------------
Net finance income 5 22 61 83
---------------------------------------------------------------- ------ -------------- -------------- ------------
Profit before tax 2,673 2,378 5,350
Income tax (867) (478) (1,145)
---------------------------------------------------------------- ------ -------------- -------------- ------------
Profit for the period 1,806 1,900 4,205
---------------------------------------------------------------- ------ -------------- -------------- ------------
Items that may be subsequently reclassified to profit or loss:
Exchange difference on translating foreign operations (29) 212 (65)
Cashflow hedge movements (net of deferred tax) 68 (307) 68
Total comprehensive income for the period 1,845 1,805 4,208
---------------------------------------------------------------- ------ -------------- -------------- ------------
Basic earnings per share 6 8.84p 9.31p 20.63p
Diluted earnings per share 6 8.20p 9.08p 19.89p
Adjusted earnings per share 6 11.74p 12.04p 21.94p
Diluted adjusted earnings per share 6 10.88p 11.74p 21.15p
---------------------------------------------------------------- ------ -------------- -------------- ------------
Consolidated statement of financial position
as at 30 Jun 2021
as at as at as at
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
---------------------------------- ------ -------- -------- ------------
Intangible assets 7 11,349 11,553 11,522
Property, plant and equipment 8 4,247 4,052 4,142
Right of use assets 9 65 145 85
Deferred tax assets 1,175 1,037 987
Derivative financial instruments 489 20 641
Non-current assets 17,325 16,807 17,377
Inventories 10 6,739 5,373 4,902
Trade and other receivables 6,507 6,874 6,053
Derivative financial instruments 419 - 327
Cash and cash equivalents 14,601 13,170 15,820
---------------------------------- ------
Current assets 28,266 25,417 27,102
Total assets 45,591 42,224 44,479
---------------------------------- ------ -------- -------- ------------
Lease liabilities (42) (34) (7)
Derivative financial instruments - (152) -
Deferred tax liabilities (2,106) (1,545) (1,662)
Non-current liabilities (2,148) (1,731) (1,669)
Trade and other payables (3,709) (3,565) (5,007)
Lease liabilities (27) (116) (83)
Derivative financial instruments (10) (201) -
Current income tax liabilities (229) (72) (215)
Current liabilities (3,975) (3,954) (5,305)
Total liabilities (6,123) (5,685) (6,974)
---------------------------------- ------ -------- -------- ------------
Net assets 39,468 36,539 37,505
---------------------------------- ------ -------- -------- ------------
Called up share capital 5,433 5,411 5,426
Share premium 11,241 10,996 11,148
Other reserves (6,449) (6,729) (6,506)
Retained earnings 29,243 26,861 27,437
Total equity 39,468 36,539 37,505
---------------------------------- ------ -------- -------- ------------
Consolidated statement of changes in equity
for the six months ended 30 June 2021
Called up Share Other Retained Total
share capital premium reserves earnings equity
---------------------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------------------- --------------- --------- ---------- ---------- --------
Balance at 1 Jan 2020 5,394 10,849 (5,650) 24,961 35,554
--------------------------------------------- --------------- --------- ---------- ---------- --------
Profit for the period - - - 1,900 1,900
Currency translation differences - - 212 - 212
Cash flow hedge reserve - - (307) - (307)
Total comprehensive income for the period - - (95) 1,900 1,805
--------------------------------------------- --------------- --------- ---------- ---------- --------
Issue of share capital 17 147 - - 164
Purchase of treasury shares - - (1,004) - (1,004)
Share-based payment adjustments - - 20 - 20
Transactions with owners 17 147 (984) - (820)
--------------------------------------------- --------------- --------- ---------- ---------- --------
Balance at 30 Jun 2020 5,411 10,996 (6,729) 26,861 36,539
--------------------------------------------- --------------- --------- ---------- ---------- --------
Profit for the period - - - 2,305 2,305
Currency translation differences - - (277) - (277)
Cash flow hedge reserve - - 375 - 375
Total comprehensive income for the period - - 98 2,305 2,403
--------------------------------------------- --------------- --------- ---------- ---------- --------
Issue of share capital 15 152 - - 167
Share-based payment adjustments - - 26 - 26
Deferred tax regarding share-based payments - - 99 - 99
Final dividend relating to 2018 - - - (1,144) (1,144)
Interim dividend relating to 2019 - - - (585) (585)
Transactions with owners 15 152 125 (1,729) (1,437)
--------------------------------------------- --------------- --------- ---------- ---------- --------
Balance at 31 Dec 2020 5,426 11,148 (6,506) 27,437 37,505
--------------------------------------------- --------------- --------- ---------- ---------- --------
Profit for the period - - - 1,806 1,806
Currency translation differences - - (29) - (29)
Cash flow hedge reserve - - 68 - 68
Total comprehensive income for the year - - 39 1,806 1,845
--------------------------------------------- --------------- --------- ---------- ---------- --------
Issue of share capital 7 93 - - 100
Share-based payment adjustments - - 18 - 18
Transactions with owners 7 93 18 - 118
--------------------------------------------- --------------- --------- ---------- ---------- --------
Balance at 30 Jun 2021 5,433 11,241 (6,449) 29,243 39,468
--------------------------------------------- --------------- --------- ---------- ---------- --------
Consolidated statement of cash flows
for the six months ended 30 June 2021
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
Note GBP000 GBP000 GBP000
---------------------------------------------------------- ------ -------------- -------------- ------------
Operating profit for the period 2,651 2,317 5,267
Depreciation, amortisation and impairment 4 647 613 1,233
Loss on disposal of property, plant and equipment 8 - - 3
Share-based payments 18 20 46
Fair value adjustment to derivatives 156 433 (406)
Operating cash flows before changes in working capital 3,472 3,383 6,143
Increase in inventories (1,921) (1,186) (1,000)
(Increase)/decrease in trade and other receivables (488) (1,571) (636)
(Decrease)/increase in trade and other payables (1,141) 724 2,233
Changes in working capital (3,550) (2,033) 597
Cash generated by operations (78) 1,350 6,740
---------------------------------------------------------- ------ -------------- -------------- ------------
Income tax paid (619) (529) (910)
Net cash from operating activities (697) 821 5,830
---------------------------------------------------------- ------ -------------- -------------- ------------
Purchases of property, plant and equipment 8 (336) (270) (593)
Proceeds from disposal of property, plant and equipment 4 - -
Payments to acquire intangible assets 7 (191) (361) (663)
Interest received 5 24 64 88
Net cash used in investing activities (499) (567) (1,168)
Purchase of treasury shares - (1,004) (1,004)
Proceeds from issuance of shares 100 164 331
Cash payments in relation to lease liabilities (60) (60) (117)
Operating lease interest paid 5 (2) (3) (5)
Dividend paid to Company's shareholders - - (1,729)
Net cash from financing activities 38 (903) (2,524)
Net (decrease)/increase in cash and cash equivalents (1,158) (649) 2,138
---------------------------------------------------------- ------ -------------- -------------- ------------
Effect of exchange rate changes (61) (23) (160)
Cash and cash equivalents at the beginning of the period 15,820 13,842 13,842
Cash and cash equivalents at the end of the period 14,601 13,170 15,820
---------------------------------------------------------- ------ -------------- -------------- ------------
1. General information
Anpario plc ("the Company") and its Subsidiaries (together "the
Group") produce and distribute natural feed additives for animal
health, hygiene and nutrition. Anpario plc is a public company
traded on the Alternative Investment Market ("AIM") of the London
Stock Exchange and is incorporated in the United Kingdom and
registered in England and Wales. The address of its registered
office is Unit 5 Manton Wood Enterprise Park, Worksop,
Nottinghamshire, S80 2RS. The presentation currency of the Group is
pounds sterling.
2. Basis of preparation
The consolidated financial statements comprise the accounts of
the Company and its subsidiaries drawn up to 30 June 2021.
The Group has presented its financial statements in accordance
with International Financial Reporting Standards ("IFRSs") in
conformity with the Companies Act 2006 applicable to companies
reporting under IFRS.
Full details on the basis of the accounting policies used are
set out in the Group's financial statements for the year ended 31
December 2020, which are available on the Company's website at
www.anpario.com.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 31
December 2020 were approved by the Board of Directors on 17 March
2021 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 (2) or (3) of the Companies Act 2006.
The consolidated interim financial information for the period
ended 30 June 2021 is neither audited nor reviewed.
3. Operating segments
Management has determined the operating segments based on the
information that is reported internally to the Chief Operating
Decision Maker, the Board of Directors, to make strategic
decisions. The Board considers the business from a geographic
perspective and is organised into four geographical operating
divisions: Americas, Asia, Europe, Middle-East and Africa (MEA) and
Head Office.
All revenues from external customers are derived from the sale
of goods and services in the ordinary course of business to the
agricultural markets and are measured in a manner consistent with
that in the income statement. Inter-segment revenue is charged at
prevailing market prices or in accordance with local transfer
pricing regulations.
Americas Asia Europe MEA Head Office Total
--------------------------------------
for the six months ended 30 Jun 2021 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------------- --------- ------- -------- ------- ------------ --------
Total segmental revenue 4,033 6,111 11,045 1,446 - 22,635
Inter-segment revenue - - (6,672) - - (6,672)
Revenue from external customers 4,033 6,111 4,373 1,446 - 15,963
-------------------------------------- --------- ------- -------- ------- ------------ --------
Depreciation and amortisation (1) (30) (5) (2) (609) (647)
Net finance income - - - - 22 22
Profit before tax 1,616 1,703 1,654 505 (2,805) 2,673
-------------------------------------- --------- ------- -------- ------- ------------ --------
Americas Asia Europe MEA Head Office Total
--------------------------------------
for the six months ended 30 Jun 2020 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------------- --------- ------- -------- ------- ------------ --------
Total segmental revenue 3,841 6,242 9,311 1,519 - 20,913
Inter-segment revenue - - (4,740) - - (4,740)
Revenue from external customers 3,841 6,242 4,571 1,519 - 16,173
-------------------------------------- --------- ------- -------- ------- ------------ --------
Depreciation and amortisation (2) (31) (2) (2) (576) (613)
Net finance income - (1) - 1 61 61
Profit before tax 823 2,413 2,011 422 (3,291) 2,378
-------------------------------------- --------- ------- -------- ------- ------------ --------
Americas Asia Europe MEA Head Office Total
--------------------------------------
for the year ended 31 Dec 2020 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------------- --------- ------- -------- ------- ------------ --------
Total segmental revenue 7,384 11,664 16,567 2,668 - 38,283
Inter-segment revenue - - (7,761) - - (7,761)
Revenue from external customers 7,384 11,664 8,806 2,668 - 30,522
-------------------------------------- --------- ------- -------- ------- ------------ --------
Depreciation and amortisation (3) (63) (3) (4) (1,160) (1,233)
Net finance income - (1) - 1 83 83
Profit before tax 1,473 4,100 3,906 828 (4,957) 5,350
-------------------------------------- --------- ------- -------- ------- ------------ --------
4. Alternative performance measures
In reporting financial information, the Group presents
alternative performance measures (APMs), which are not defined or
specified under the requirements of IFRS. The Group believes that
these APMs, which are not considered to be a subsitute for or
superior to IFRS measures, provide depth and understanding to the
users of the financial statements to allow for further assessment
of the underlying performance of the Group.
The Board considers that adjusted EBITDA is the most appropriate
profit measure by which users of the financial statements can
assess the ongoing performance of the Group. EBITDA is a commonly
used measure in which earnings are stated before net finance
income, amortisation and depreciation. The Group makes further
adjustments to remove items that are non-recurring or are not
reflective of the underlying operational performance either due to
their nature or the level of volatility.
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------------------- -------------- -------------- ------------
Operating profit 2,651 2,317 5,267
------------------------------------------------- -------------- -------------- ------------
Share-based payments 27 29 67
Loss on disposal of property - - -
Foreign exchange losses/(gains) 175 (55) 442
Foreign exchange hedging - Fair value movements (43) 489 (405)
------------------------------------------------- -------------- -------------- ------------
Total adjustments 159 463 104
Adjusted operating profit 2,810 2,780 5,371
------------------------------------------------- -------------- -------------- ------------
Depreciation and amortisation 647 613 1,233
Adjusted EBITDA 3,457 3,393 6,604
------------------------------------------------- -------------- -------------- ------------
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------------------- -------------- -------------- ------------
Adjusted operating profit 2,810 2,780 5,371
------------------------------------------------- -------------- -------------- ------------
Income tax expense (867) (478) (1,145)
Effect of changes to future tax rates 416 159 158
Income tax impact of adjustments 38 (5) 88
Adjusted profit after tax 2,397 2,456 4,472
------------------------------------------------- -------------- -------------- ------------
5. Net finance income
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------------------- -------------- -------------- ------------
Interest receivable on short-term bank deposits 24 64 88
------------------------------------------------- -------------- -------------- ------------
Finance income 24 64 88
Lease interest paid (2) (3) (5)
------------------------------------------------- -------------- -------------- ------------
Finance costs (2) (3) (5)
Net finance income 22 61 83
------------------------------------------------- -------------- -------------- ------------
6. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
-------------------------------------------------------- -------------- -------------- ------------
Profit for the year (GBP000's) 1,806 1,900 4,205
--------------------------------------------------------- -------------- -------------- ------------
Weighted average number of shares in issue 20,423,732 20,399,790 20,387,477
--------------------------------------------------------- -------------- -------------- ------------
Number of dilutive shares 1,611,463 522,281 755,047
Weighted average number for diluted earnings per share 22,035,195 20,922,071 21,142,524
--------------------------------------------------------- -------------- -------------- ------------
Basic earnings per share 8.84p 9.31p 20.63p
Diluted earnings per share 8.20p 9.08p 19.89p
--------------------------------------------------------- -------------- -------------- ------------
The calculation of the adjusted and diluted adjusted earnings
per share is based on the following data:
six months to six months to year ended
30 June 30 June 31 December
Note 2021 2020 2020
---------------------------------------------------------------- ------ -------------- -------------- ------------
Adjusted profit attributable to owners of the Parent (GBP000's) 4 2,397 2,456 4,472
---------------------------------------------------------------- ------ -------------- -------------- ------------
Weighted average number of shares in issue 20,423,732 20,399,790 20,387,477
---------------------------------------------------------------- ------ -------------- -------------- ------------
Number of dilutive shares 1,611,463 522,281 755,047
Weighted average number for diluted earnings per share 22,035,195 20,922,071 21,142,524
---------------------------------------------------------------- ------ -------------- -------------- ------------
Adjusted earnings per share 11.74p 12.04p 21.94p
Diluted adjusted earnings per share 10.88p 11.74p 21.15p
---------------------------------------------------------------- ------ -------------- -------------- ------------
7. Intangible assets
Patents,
trademarks
Customer and Development Software
Goodwill Brands relationships registrations costs and Licenses Total
-----------------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- ------- ---------------- ----------------- ----------------- -------------- -------
Cost
As at 1 January
2021 5,960 4,440 786 1,773 559 784 14,302
Additions - - - 63 127 1 191
As at 30 June
2021 5,960 4,440 786 1,836 686 785 14,493
----------------- --------- ------- ---------------- ----------------- ----------------- -------------- -------
Accumulated
amortisation
As at 1 January
2021 - 731 661 890 - 498 2,780
Charge for the
year - 130 30 137 - 67 364
As at 30 June
2021 - 861 691 1,027 - 565 3,144
----------------- --------- ------- ---------------- ----------------- ----------------- -------------- -------
Net book value
As at 1 January
2021 5,960 3,709 125 883 559 286 11,522
As at 30 June
2021 5,960 3,579 95 809 686 220 11,349
----------------- --------- ------- ---------------- ----------------- ----------------- -------------- -------
8. Property, plant and equipment
Land and Fixtures, fittings Assets in the course
buildings Plant and machinery and equipment of construction Total
------------------------------
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ----------- -------------------- ------------------- --------------------- -------
Cost
As at 1 January 2021 1,854 3,355 635 479 6,323
Additions - 78 14 244 336
Transfer of assets in
construction - 284 - (284) -
Disposals - - (8) - (8)
Foreign exchange - - (1) - (1)
As at 30 June 2021 1,854 3,717 640 439 6,650
------------------------------ ----------- -------------------- ------------------- --------------------- -------
Accumulated depreciation
As at 1 January 2021 283 1,473 425 - 2,181
Charge for the year 14 170 41 - 225
Disposals - - (3) - (3)
As at 30 June 2021 297 1,643 463 - 2,403
------------------------------ ----------- -------------------- ------------------- --------------------- -------
Net book value
As at 1 January 2021 1,571 1,882 210 479 4,142
As at 30 June 2021 1,557 2,074 177 439 4,247
------------------------------ ----------- -------------------- ------------------- --------------------- -------
9. Right-of-use assets
Land and Plant and Fixtures, fittings
buildings machinery and equipment Total
-----------------------------
GBP000 GBP000 GBP000 GBP000
----------------------------- ----------- ----------- ------------------- -------
Cost
As at 1 January 2021 321 26 7 354
Additions 28 - - 28
Modification to lease terms 11 - - 11
Disposals - (26) (5) (31)
Foreign exchange 1 - - 1
As at 30 June 2021 361 - 2 363
----------------------------- ----------- ----------- ------------------- -------
Accumulated depreciation
As at 1 January 2021 239 25 5 269
Charge for the year 56 1 1 58
Modification to lease terms 1 - - 1
Disposals - (26) (5) (31)
Foreign exchange 1 - - 1
As at 30 June 2021 297 - 1 298
----------------------------- ----------- ----------- ------------------- -------
Net book value
As at 1 January 2021 82 1 2 85
As at 30 June 2021 64 - 1 65
----------------------------- ----------- ----------- ------------------- -------
10. Inventories
six months to six months to year ended
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------- -------------- -------------- ------------
Raw materials and consumables 1,979 2,178 1,932
Finished goods and goods for resale 4,760 3,195 2,970
Inventory 6,739 5,373 4,902
------------------------------------- -------------- -------------- ------------
Enquiries:
Anpario plc
Richard Edwards, CEO +44(0) 777 6417 129
Marc Wilson, Group Finance Director +44(0) 1909 537380
Peel Hunt LLP (NOMAD) +44 (0)20 7418 8900
Adrian Trimmings
Andrew Clark
Will Bell
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END
IR DZGMLGDRGMZZ
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