Animalcare Grp Regulatory News (ANCR)

Animalcare Group plc

("Animalcare" or the "Group")

Trading Update & Notice of Interim Results

Animalcare (AIM: ANCR), a leading supplier of veterinary medicines, provides the following trading update for the six months ended 31st December 2015, in advance of releasing its interim results on Wednesday 10th February 2016.

Trading Update

The Board is pleased to report good progress during the Period, achieving top line growth during a phase of significantly increased investment to deliver our strategy.

Revenues across the Group were up by 2.7% to £7.11m (2014: £6.93m).

Revenue from sales of Licensed Veterinary Medicines was up 4.2% to £4.58m (2014: £4.40m). This increase has been delivered despite the impact of the prior period £0.2m non-recurring first half benefit from sales of Buprecare as a result of competitor supply issues, therefore reflecting strong sales growth of products launched in the second half of the previous financial year.

The companion animal microchipping market has become significantly more competitive ahead of compulsory microchipping in England, Wales and Scotland in April 2016. Sales in the Companion Animal Identification group declined by 5.2% to £1.20m (2014: £1.26m). Whilst microchip revenues were adversely affected other products and services in this group performed well, increasing by 7.2%.

Revenues from the Animal Welfare Products group increased by 5.0% to £1.34m (2014: £1.27m) driven primarily by increased sales of our Infusion Accessories range.

As we noted in our FY15 results in October last year, we entered the 2016 financial year with a continued focus on investment, both in our people and product development pipeline. In the first six months of FY16 we have invested over 300% more in our product development pipeline versus the prior period. We expect overheads for the period to increase by approximately £0.2m compared with the first six months of FY15 as we position the business for future growth.

Our Group cash position increased by £0.3m to £6.1m (30th June 2015: £5.78m; 31st December 2014: £5.04m). We continue to maintain robust control over our working capital hence operating cash flows remain strong.

Summary and Outlook

In line with our strategy of product development and investment, one new product will be launched on distribution in H2. In addition one Existing Product Development product will be commercialised early in H2 delivering significant commercial benefit. Three other in-house product development projects are expected to receive regulatory approval during H2, with commercialisation soon after.

The rate of progress of our product development pipeline is expected to continue; the estimated rate of expenditure is expected to be between £1.0m and £1.5m for the current financial year and beyond, leaving Animalcare well positioned to drive growth from 2017 onwards.

Whilst the uptake of microchips for dogs in England, Scotland and Wales remains modest there has been increased competition between suppliers to the market. Animalcare has plans in place to respond to this and to maximise the value from this segment beyond the current financial year.

Following the solid trading performance in the first half, particularly across the Licensed Veterinary Medicines and Animal Welfare Product groups, the Board remains confident about the prospects and outcome for the full year.

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Notes to editors

Animalcare is a leading supplier of generic veterinary medicines and animal identification products to companion animal veterinary markets.

Animalcare develops and sells goods and services to veterinary professionals principally for use in companion animals; operating through UK wholesalers and distribution and development partners in key markets in Western Europe.  

Animalcare has three product groups:

· Licensed Veterinary Medicines - a range of branded veterinary licensed pharmaceuticals sold to veterinary professionals in the UK and selected markets in Europe. The range can be divided into four main categories; antimicrobials, anaesthetics & analgesics, fluid therapy and speciality pharmaceuticals.

· Companion Animal Identification - Identichip is the pioneering microchip identification system in the UK. Animalcare also owns and operates the Anibase database; together the market leader in electronic identification for pets in the UK.

· Animal Welfare Products - a range used by veterinary professionals in the diagnosis and care of their patients, for example intravenous infusion accessories, hygiene solutions and trauma management products.