Last checked at 23 Jul 2020 07:00
ANIMALCARE GROUP PLC
(the "Company" or the "Group")
Trading update and Notice of Results
23 July 2020. Animalcare Group plc (AIM: ANCR), the international animal health business, provides the following unaudited trading update for the six months ended 30 June 2020 ahead of publishing its interim results on 29 September 2020.
Trading overview
The Group is pleased to report a resilient first half performance despite the disruption due to COVID-19. While trading for the first half was down on the prior year, our overall performance was at the higher end of the Company's range of scenario modelling, helping maintain our strong financial position and focus on our growth strategy.
Revenue for the period declined by 4.4% to £34.5 million (4.8% at constant exchange rates) reflecting the disruption to veterinary activity across Europe caused by the pandemic. This effect was largely observed within our Companion Animal portfolio during Q2 due to public health measures restricting veterinary activity, offset in part by strong growth in Production Animals. Evidence of a return to more normal customer activity in some markets was visible towards the end of the first half and has continued to develop post period-end. However, uncertainty about the shape and extent of a recovery in demand prevails.
Underlying EBITDA margin is expected to be in line with the first half of 2019 as the Company benefits from the impact of cost efficiencies generated during 2019 together with decisive action to realign SG&A spend during the pandemic. This has not prevented the Company from investing in drivers of future growth including new product launches, pipeline projects and business development opportunities.
As part of our growth strategy, we are committed to strengthening our balance sheet and improving our cash generation to create capacity to invest in future growth. This goal continues to guide us over the long term. As at 30 June 2020 our net debt stood at £18.1 million, broadly in line with the year ended 31 December 2019. As anticipated, cash conversion in the first half was lower than the prior period, largely due to an increase in working capital, in particular inventory, due to the impact of COVID-19 together with strategic stock build of certain key brands. We expect cash conversion to improve during H2 as our stock profile returns to more normal levels.
Jenny Winter, Chief Executive Officer commented: "Given the unprecedented disruption to the animal health sector in recent months, our resilient performance highlights our organisational agility and the strength of the platform we have built in recent years. Uncertainty remains over the shape and speed of the recovery in the second half and we continue to adapt to the evolving needs of our veterinary customers. Huge credit must go to our employees whose skills and commitment have continued to drive the Group forward during this difficult period.
"Despite the challenges, our focus on our growth strategy is as strong as ever and we continue to invest in our pipeline, new products and the pursuit of business development opportunities."
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 |
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Jenny Winter, Chief Executive Officer Chris Brewster, Chief Financial Officer Media relations | +44 (0)1904 487 687
communications@animalcaregroup.com
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Panmure Gordon (Nominated Adviser and Broker) Corporate Finance Freddy Crossley/Emma Earl Corporate Broking James Stearns | +44 (0)20 7886 2500 |
About Animalcare www.animalcaregroup.com
Animalcare Group plc is a UK AIM-listed international veterinary sales and marketing organisation. Animalcare operates in seven countries and exports to approximately 32 countries in Europe and a further 16 worldwide. The Group is focused on bringing new and innovative products to market through its own development pipeline, partnerships and via acquisition.