Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
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Volume today, to my surprise, was not comparable with previously heavy volume days, in the previous month. So the relatively light volume and sizeable rise, looks like the market makers, marking up the sp. Maybe the volume at the end of day, will dispel any doubt about whether the rally, has healthy volume support. DYOR.
In a trading update for the twelve months to end 31 March 2024, ECO Animal Health reports that revenue should be close to £90m; this compares to the March trading update outlook of £88.7m. The Group expects that FY24 (adj.) EBITDA should be in line with the current market consensus expectation of £7.8m (ED estimate was £7.6m). The year-end cash position was approximately £22.0m; we estimated £20.1m.
The Group also noted EBITDA delivery against the background of maintained investment in R&D, the wellspring of future product and revenue streams. Our FY24 estimates include provision for £4.2m of R&D spend for the year.
Our Fair Value range is 137p-146p, reflecting the potential in the pipeline of products under development, which is backed by the rigour of EAH’s development-to-distribution process.
New research note here: https://www.equitydevelopment.co.uk/research/fy24-ahead-of-expectations
Could get a holding notification soon given the volume of trades going through today !!
Eco Animal Health has announced the disposal of its treatment for equine parasitic infections, ECOmectin® Horsepaste, to its long-term Italian manufacturing partner, ACME Drugs S.r.l. ACME will acquire all ECOmectin® Horsepaste intellectual property, manufacturing and inventory, distribution and marketing.
Our Fair Value range remains 137p-146p which contrasts with the current share price, suggesting that the potential contribution to earnings from the product development pipeline deserves far closer attention.
https://www.equitydevelopment.co.uk/research/disposal-of-non-core-equine-treatment-operation-for-1.3m
For the year ended 31 March 2024, Eco Animal Health reports progress in both the second half and Q4, underpinned by demand for the Group’s proprietary Aivlosin® antibacterial treatment for gastrointestinal and respiratory diseases in pigs and poultry. The Group reports sustained demand for Aivlosin® across the territories it targets, which we note are worldwide: China, Japan and SE Asia, the Americas and Europe. The Group expects FY24 revenue to be in line with a market consensus estimate of £88.7m.
Following the November Capital Markets event we reviewed the contribution to valuation of the product development pipeline, particularly in light of the strong track record established by Aivlosin® . Our resulting Fair Value range was 137p - 146p. This contrasts with the current share price, and suggests that the potential contribution to earnings of the product development pipeline deserves far closer attention.
Link to research note: https://www.equitydevelopment.co.uk/research/sustained-demand-and-continuing-progress
New research report & audio summary here: https://www.equitydevelopment.co.uk/research/interim-results-generate-more-cash
For the six months to 30 September ECO Animal Health reported revenue of £38.0m, +9%YoY, and (adj.) EBITDA of £0.7m (H1 22: £1.7m). Underlying currency-adjusted revenue growth was 15%YoY. Cash generated by operations of £4.8m compared to £3.0m a year earlier resulting in a period-end cash balance of £20.6m (H1 22: £12.9m). The loss per share was (1.93)p; (H1 22 1.95p). The gross margin at 40.8% contrasted with 45.3% in H1 22; we expect an H2 improvement based on sales mix and clarity of revenue outlook (the Group notes that 94% of market consensus outlook is covered by the order book and stock run rate), abetted by the traditionally strong demand in the northern winter months.
The combination of strong H1 performance in key markets (combined +19.6%YoY), continued strong cash generation and the seasonal nature of second half performance means that our full year FY24 and subsequent FY25 outlook is maintained.
On the basis of our FY24 and FY25 ECO Animal Health EBITDA outlook, and the peer group average EV/EBITDA multiple, the Group Fair Value indicated range is 137p – 146p per share.
The management discussed their 9% revenue growth, despite currencies headwinds for a large part of the first half, and strong visibility over second half revenue. The team talked about their expectation of H2 gross margin improvement, the new Aivlosin® claim approved in the US & Canada, and the exciting prospects for their R&D pipeline as highlighted in the recent Capital Markets Day. They also explored the topic of M&A and the opportunities for both product and regional bolt-ons. Management answered a wide range of questions asked by viewers.
ECO Animal Health Group (AIM: EAH) is a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, Interim Results were for the period to 30th September 2023 and presented by David Hallas (CEO) and Chris Wilks (CFO).
The full video has been divided into chapters, as below:
0:00:00 Introduction and Strategy
0:01:30 Highlights
0:05:15 Revenues
0:10:06 Expenditures
0:12:36 Gross margin & EBITDA comments
0:19:10 ESG Summary
0:20:24 Balance sheet & cashflow
0:23:04 First approvals
0:26:05 Conclusion & Outlook
0:28:00 Questions & Answers
Link to video here: https://www.equitydevelopment.co.uk/research/eco-animal-health-investor-presentation-interim-results-29th-november-2023
ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, will be conducting a live presentation covering the company's Interim Results for the period to 30th September 2023.
The online event will take place at 3.00pm on Wednesday 29th November and will be hosted by David Hallas (CEO) and Chris Wilks (CFO) of ECO Animal Health.
Questions can be submitted during the presentation and will be addressed at the end.
Link to register: https://www.equitydevelopment.co.uk/news-and-events/eco-investor-presentation-29nov2023
ECO Animal Health held a Capital Markets event focused on progress and developments in the the company's Research & Development portfolio pipeline.
A series of specialist speakers took investors through six key products and the transformative impact the successful execution of their portfolio will have on their valuation.
The full video has been dividend into chapters, for ease of viewing, as below:
0:00:03 Introduction and Strategy overview (Dr David Hallas, CEO)
0:04:21 R&D Overview, Strategic Approach and Portfolio (Dr. Hafid Benchaoui, Head R&D)
0:21:06 Importance of Mycoplasmas in poultry (Professor Naola Ferguson)
0:36:35 Best in Class Poultry Mycoplasma vaccines (Dr. Natalie Desloges)
0:43:10 Game changing Swine Biologicals (Dr. Brian Martinson)
0:55:37 Innovation in the treatment of swine respiratory disease (Dr. Alphonso Lopez)
1:03:33 Novel approaches to control enteric disease in poultry (Dr. Alphonso Lopez)
1:10:21 Biologicals Production (Dr. Mike Huether)
1:18:11 Portfolio Valuation & Financial analysis (Chris Wilks, CFO)
1:38:13 Summary (Dr David Hallas, CEO)
1:39:58 Questions & Answers
Link here: https://www.equitydevelopment.co.uk/research/eco-animal-health-capital-markets-day-november-2023-investor-presentation
ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, is pleased to conduct a Capital Markets Day presentation for investors focusing on progress and developments in their Research & Development portfolio.
The event will take place from 2.30pm-4.30pm on Thursday 9th November.
The online presentation will be hosted by key members of the ECO Animal Health management team. Questions can be submitted during the presentation and will be addressed at the end.
Link to register: https://www.equitydevelopment.co.uk/news-and-events/eco-cmd-investor-presentation-9nov2023
Apologies - the correct video link is here: https://youtu.be/8I_Vl-hKho0
David Hallas, CEO, and Christopher Wilks, CFO of ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, conducted a live presentation following the company's FY Results.
The management discussed highlights of the period, which included revenue & EBITDA above expectations, an improved cash position and double-digit revenue growth in LatAm and S&SE Asia regions. The team provided a detailed financial overview, updated viewers on R&D developments, and answered a wide range of questions asked by the audience.
The full video has been divided into chapters as below:
0:00:10 Key Highlights
0:01:31 Financial Highlights
0:06:55 Revenues
0:17:20 R&D Expenditure & Administrative Expenses
0:23:40 EBITDA bridge, cashflow & balance sheet
0:31:04 ESG and China
0:33:50 R&D Update
0:36:36 Summary & Outlook
0:38:26 Questions & Answers
Link to full video if you missed the live event: https://youtu.be/uv7Jqa9i5Z4
Research note available here: https://www.equitydevelopment.co.uk/research/fy23-results-ahead-of-expectations
ECO Animal Health Group reported revenue for the year to 31 March 2023 of £85.3m (+4%YoY) and adjusted EBITDA of £7.2m (+34%YoY), ahead of market expectations. Revenue growth was led by S&SE Asia (+42%YoY) and LatAm (+15%YoY). Gross profitability improved from a 42.7% margin in FY22 to 45.0%, whilst the (adj.) EBITDA margin was also up from 6.6% in FY22 to 8.5%. The year closed with net cash of £21.7m, with cash from operations of £15.9m (FY22: £(0.5)m), in addition to which the Group retained £10m in undrawn £10m RCF.
ECO allocated the equivalent of 9.8% of revenue in R&D spend in FY23 (£8.34m). They reported that two late-stage development projects are to be submitted in FY24; we note the collaboration (from 2022) with Imperial College London, and Moredun Research Institute in Scotland. Our medium-term cashflow outlook indicates ample resources to maintain the level of investment for over a dozen major projects underway or planned, alongside a healthy c£22m cash balance. A well-planned and well-resourced R&D and product development programme – the fruits of which are not factored into near-term estimates – form the basis for additional revenue streams which we estimate could add >£70m by FY28. We expect the group to update on R&D progress and spend before the end of this financial year.
ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, is pleased to confirm that David Hallas, CEO, and Christopher Wilks, CFO, will be conducting a live presentation covering the company's FY Results for the period ended 31 March 2023.
The online presentation will take place on Wednesday 12th July at 2.30pm UK time.
This event is open to all existing and potential shareholders and registration is free. Questions can be submitted during the presentation and will be addressed at the end of it.
You can register at the link: https://www.equitydevelopment.co.uk/news-and-events/ecoanimalhealth-fyresultspresentation-12july2023
According to house broker - Progressive Development - we could expect another TU in "late April", which infers literally this week. This should shed some light to the figures.
Recent dip in SP after the previous TU must have been attributable to certain shareholders selling.
I am genuinely pleasantly surprised how good EAH is performing in the light of the China pork prices. If they can perform at these Chinese pork prices, with H2 expecting improved prices, I am expecting a huge beat.
RoW is performing, I'd expect, above expectations. Absolute prime TO target.
Dechra already taken out. I think only a matter of time with this one.
Per Progressive Dev - 24/3/23
Positive surprises in year-end trading update Eco’s pre-close trading update confirms revenue and EBITDA are ahead of current market expectations for FY23 that had previously anticipated modest growth relative to FY22. The better-than-expected results are being driven by an unexpectedly strong final quarter for Aivlosin in China combined with continued growth in South/Southeast Asia and Latin America. We now expect FY23 sales of £84.7m and an adjusted EBITDA of £7.0m based on our interpretation of the statement.
With an EV of £66m, Eco currently trades on an EV/sales ratio of ~0.78 and EV/EBITDA of 9.4 – both well below norms for the animal health sector. • Year-end trading update: A surprise stronger final quarter (January to March) for its financial year, has led Eco to report that its FY23 revenue and EBITDA are likely to be above current consensus expectations (c £82.6m and £6.4m respectively). The statement is surprising as Chinese pork prices – which are normally a key determinant for Aivlosin demand in that market - have declined between November and February. However, we understand that demand for Aivlosin has been buoyed in recent months by use in managing porcine reproductive and respiratory syndrome (PPRS) outbreaks in China.
• Further update possible in April: As this trading statement is based on the February management accounts, we expect Eco to provide a further update to the market once it has closed the books on FY23, probably in late April. Audited results for FY23 are likely in July.
• Chinese pork market prices: Pork prices in China have been weak for most of FY23. There was some improvement in September to November, but prices seem to have fallen back over the last three months. Nonetheless, we understand at RMB15-16/kg they are currently still above levels where pork production is profitable for producers (this is a key determinant of whether producers will use Aivlosin on high value animals)
Latest house broker report:
https://www.equitydevelopment.co.uk/research/positive-surprises-in-year-end-trading-update
GB deadweight pig prices (UK spec)Updated weeklyThe APP (All Pig Price) is the GB average deadweight pig price achieved by producers each week. The SPP (Standard Pig Price) is the average price for GB standard pigs, those that have not received a premium for the production system, feed regime or breed. The prices are collected from voluntary surveys. These prices are for carcases dressed to UK specification.To find out more about our weekly deadweight pig price reporting series please visit our frequently asked question page or view the video belowDeadweight pig price reporting: Information and FAQsAdditional informationThe SPP and APP PDF reports can be downloaded using the links on this page and contain additional price by weight band information to help provide more insight. If you have any questions please contact us at dead.weight@ahdb.org.ukDownload datasetsHistoric SPP and APP dataEU and UK dressing specificationsThe latest GB Standard Pig Price (SPP)The latest GB All Pig Price (APP)Contact usThis dataset was produced by our Data and Analysis Team. To find out more about the team, along with the internationally recognised ISO 9001:2015 accreditation we have for our Quality Management System, please visit the Data and Analysis team page.If you need any further help, please email Martin, Dorian, Gavin or Esther at econ@ahdb.org.ukWhile AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at info@ahdb.org.uk © Agriculture and Horticulture Development Board. All rights reserved.
New detailed research report with audio summary here: https://www.equitydevelopment.co.uk/research/positive-surprises-in-year-end-trading-update
Eco’s pre-close trading update confirms revenue and EBITDA are ahead of current market expectations for FY23 that had previously anticipated modest growth relative to FY22. The better-than-expected results are being driven by an unexpectedly strong final quarter for Aivlosin in China combined with continued growth in South/Southeast Asia and Latin America.
We now expect FY23 sales of £84.7m and an adjusted EBITDA of £7.0m based on our interpretation of the statement.
With an EV of £66m, Eco currently trades on an EV/sales ratio of ~0.78 and EV/EBITDA of 9.4 – both well below norms for the animal health sector.
If there had been no concerns over the pork prices in China, IMO, SP would be nearing 150s rather than where it is at the mo. A lot of peeps, including myself, was concerned where the pork prices in China were heading over the CNY; however, their most recent TU removes all concerns.
We all knew that the RoW was performing well. If China can perform whilst pork prices are so low over there, how would they perform, in China, once the pork price stablises, given efforts of the Chinese government to intervene to ensure equilibrium between consumers and pig producers.
Overall, I think this is an inflexion point for the company heading upwards. Shroders punt seems to be the right one.
Surprising "ahead of expectations" given the price of pork in China. Once pork prices in China stablises - will lead to further growth in the demand for their products in China
Richly deserved LTIP for some outstanding stewardship and most excellent SP performance for shareholders. Thanks management!
Going to rain on the parade -
BEIJING, Feb. 7 (Xinhua) -- Pork prices in China declined in the week from Jan. 30 to Feb. 3, official data showed.
During this period, the average pork price tracked by the Ministry of Agriculture and Rural Affairs stood at 18.05 yuan (about 2.66 U.S. dollars) per kg, down 12.5 percent compared with the week from Jan. 16 to 20.
An index reflecting the national average of pork prices against grain prices came in at 4.96 to 1 during this period, falling below the warning level of 5 to 1, the National Development and Reform Commission said Monday.
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Very strange why Schroders have decided to increase their stake when Chinese pork prices are at a price where pig producers are loss making. GL and Dyor.
Started a position here today straight after reading through the last few years of reports. Looks to me like their products are in demand wherever local economies are doing okay as evidenced by recent growth everywhere but China. You have to imagine that Chinese pig farming can’t remain unprofitable in perpetuity. The strength of the balance sheet and their ability to turn the dials of R&D spend up or down as necessary means that there is almost no threat of dilution or insolvency whilst we wait for all regions to be firing at once. Also it should always trade at a premium in p/e terms because of the intangible asset value and aforementioned balance sheet strength. I’d guess that 6/7m of profitability would equate to a 150m market cap quite comfortably. Happy to give them a few years to try and achieve that.
GLA
I have taken an initial small position here. The SP is near a 10 year low yet China was the only thorn in the September update, otherwise an exceptional performance. With China now opening up and considering how quickly small caps can fly it appears too good an opportunity to miss. Nearly 80% of the market capital is held by institutions so limited shares available for us small fry.