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ANCR Animalcare Group Plc

211.00
0.00 (0.00%)
Last Updated: 08:03:33
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Animalcare Group Plc LSE:ANCR London Ordinary Share GB0032350695 ORD 20P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 211.00 202.00 220.00 211.00 210.00 210.00 744 08:03:33
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Veterinary Service-livestock 71.62M 1.97M 0.0327 64.53 126.81M

Animalcare Group PLC Half-year Report (8917W)

15/02/2017 7:00am

UK Regulatory


Animalcare (LSE:ANCR)
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TIDMANCR

RNS Number : 8917W

Animalcare Group PLC

15 February 2017

Animalcare Group plc

("Animalcare" or the "Group")

Half-year Report

Animalcare Group plc (AIM: ANCR), a leading supplier of veterinary medicines, announces interim results for the six months ended 31(st) December 2016. The Board is pleased to report a very strong first half-year for the Group, ahead of the Board's expectations.

Animalcare's business is made up of three product groups: Licensed Veterinary Medicines, Animal Welfare Products and Companion Animal Identification.

Financial Summary

 
                               6 months to  6 months to 
                                31(st) Dec   31(st) Dec 
                                      2016         2015  % change 
-----------------------------  -----------  -----------  -------- 
Revenue                           GBP7.97m     GBP7.11m    +12.0% 
-----------------------------  -----------  -----------  -------- 
Underlying* operating profit      GBP1.90m     GBP1.55m    +22.6% 
-----------------------------  -----------  -----------  -------- 
Underlying* EBITDA                GBP2.12m     GBP1.68m    +26.0% 
-----------------------------  -----------  -----------  -------- 
Basic underlying* EPS                 7.8p         6.2p    +25.8% 
-----------------------------  -----------  -----------  -------- 
Reported operating profit         GBP1.85m     GBP1.49m    +23.5% 
-----------------------------  -----------  -----------  -------- 
Basic EPS                             7.5p         6.1p    +23.0% 
-----------------------------  -----------  -----------  -------- 
Cash and cash equivalents         GBP7.01m     GBP6.10m    +15.0% 
-----------------------------  -----------  -----------  -------- 
Interim dividend                      2.0p         1.8p    +11.1% 
-----------------------------  -----------  -----------  -------- 
 

* Underlying measures are before the effect of exceptional and other items. These are analysed in note 3. EBITDA is defined as the group profit before interest, taxation, depreciation and amortisation.

Highlights

-- Strong revenue growth from our Licensed Veterinary Medicines group, up 17.2% to GBP5.37m (2015: GBP4.58m) driven by strong domestic and export like-for-like growth of 13.0%, and 4.2% contribution from sales of four new products launched in the period.

   --    Revenues from the Animal Welfare Products range increased 13.3% to GBP1.51m (2015: GBP1.34m). 

-- Continued focus on our export business started delivering significant commercial benefit with revenues up 37.7% versus prior period.

-- Momentum in our product development pipeline continues with expenditure in the period of GBP0.6m and anticipated full year investment increasing to GBP2.0m (FY16: GBP1.6m).

James Lambert, Chairman of Animalcare Group plc, said: "The business continued to perform strongly during the first six months of its financial year with sales up by 12% to GBP8.0m. Given the strong start to the current financial year, and the expected launch of more new pharmaceutical products in the second half, your Board remains confident about the Group's prospects for the full year and beyond."

 
  Animalcare Group plc                                                Tel: 01904 487 687 
 Iain Menneer, Chief Executive Officer 
 Chris Brewster, Chief Financial 
  Officer 
 
 Panmure Gordon (Nominated Adviser                                    Tel: 020 7886 2500 
  and Broker) 
 Freddy Crossley/Peter Steel 
 
 Walbrook PR Ltd                         Tel: 020 7933 8780 or animalcare@walbrookpr.com 
 Paul McManus                                                         Mob: 07980 541 893 
 Lianne Cawthorne                                                     Mob: 07584 391 303 
 

Chairman's Statement

Animalcare continues to focus on three product groups: Licensed Veterinary Medicines, Animal Welfare Products and Companion Animal Identification; all sold through veterinary wholesalers to veterinary practices. The business continued to perform strongly during the first six months of this financial year with sales up by 12.0% to GBP8.0m. Operating margin has also improved over the comparable half year from 21.0% to 23.2%.

Your Board is pleased to observe that the plan implemented in 2014 and structural changes made to the business, led by Iain Menneer (CEO) and Chris Brewster (CFO) and our highly capable senior management team, are delivering the anticipated results.

We will continue to ensure that we have the right team that is motivated and structured to deliver our strategy. This strategy is focused on delivering a well-stocked product development pipeline and on expanding our supply of products in the UK, Europe and beyond.

Licensed Veterinary Medicines have increased sales by 17.2% to a record GBP5.4m (2015: GBP4.6m) and export has grown by 37.7% from a relatively low base during the half. Gross margins also improved through a combination of favourable sales mix and reduction in cost of goods. Sales from the Animal Welfare Products group had a strong half year, increasing by 13.3% to GBP1.51m (2015: GBP1.2m). This has been driven principally by increasing sales of our infusion accessories range both in the UK and export.

Companion Animal Identification sales fell back during the period by 9.2% to GBP1.09m (2015: GBP1.20m) as was expected. Following the implementation of compulsory microchipping of dogs in the United Kingdom in April 2016, we have observed a reduction in microchip volumes. However, database services have grown during the period.

Operating cash flow remained extremely robust with cash balances up GBP0.9m to GBP7.0m versus the same period in 2015. During the half, as expected, we have invested in working capital to support growth.

Significant challenges that remain in the market, from a consolidating customer-base and increasingly crowded supplier arena, mean that Animalcare must continue to invest in its business and expand its pipeline. Given the strong performance of the Group, the Board took the decision in 2016 to increase the investment in new product development to around GBP2.0m during the current financial year (FY16: GBP1.6m). We made good progress in our product development pipeline in the half year with many projects moving forward to the later stages of development as well as starting several more.

Basic earnings per share in the first half have increased by 23.0% to 7.5p (2015: 6.1p). Given this and the strong cash flow generation your Board is pleased to announce an 11.1% increase in the interim dividend to 2.0p (2015: 1.8p).

Given the bright start to the current financial year and the launch of more pharmaceutical products in the second half, your Board remains confident about the Group prospects for the full year and beyond.

James Lambert

Chairman

Business Review

Introduction

We are pleased that the business is performing so well. A number of the fundamental building blocks put in place over the last four years are bearing fruit; from the sales team structure, to the product development team, to our in-house product registration team, and more recently our focus on sales in Europe and the rest of the world.

Our half year results were ahead of the Board's expectations in both sales and profit terms with revenues increasing by 12.0% versus the same period last year to GBP7.97m (2015: GBP7.11m). The strong sales performance combined with improving gross margins has resulted in a 22.6% increase in underlying operating profit to GBP1.90m (2015: GBP1.55m).

Revenue

 
                                  6 months to  6 months to 
                                   31(st) Dec   31(st) Dec 
Revenue GBP'000                          2016         2015  % change 
--------------------------------  -----------  -----------  -------- 
Licensed Veterinary Medicines           5,370        4,583     17.2% 
--------------------------------  -----------  -----------  -------- 
Animal Welfare Products                 1,512        1,335     13.3% 
--------------------------------  -----------  -----------  -------- 
Companion Animal Identification         1,086        1,196    (9.2%) 
--------------------------------  -----------  -----------  -------- 
TOTAL                                   7,968        7,114     12.0% 
--------------------------------  -----------  -----------  -------- 
 

Licensed Veterinary Medicines

The Licensed Veterinary Medicines group, which represents 67% of total revenue, up from 64% in the prior period, again delivered good growth with sales up 17.2% versus the prior period to GBP5.37m. This breaks down to a 14.6% growth in the UK and 37.7% in export markets. Like-for-like revenue growth of 13.0% is driven by several of the key pharmaceutical ranges, notably our intravenous fluids and anaesthetics and analgesics. Four new products were launched in the period; Acecare, a sedative from our in-house development pipeline and three products, all on distribution, assembled to form an ear product range. The former has complemented our existing sedative, analgesic and anaesthetic range and has performed well since its launch early in the period. The new ear treatment range was launched into a mature and busy market and is consequently taking longer to gain momentum.

Animal Welfare Products

Our Animal Welfare Products group grew 13.3% to GBP1.51m, driven primarily by increased sales of our intravenous fluid Infusion Accessories range which now represents 61% of this product group's total revenues (2015: 55%). We believe there is an opportunity to further strengthen this infusion accessory range.

Companion Animal Identification

Companion Animal Identification sales were down 9.2% to GBP1.09m. In addition to a very competitive environment, as expected, the addressable dog market is now largely reduced to microchipping puppies following the introduction of compulsory microchipping legislation in the UK in April 2016. Associated database services sales grew by 2.9% during the period.

International Sales

Licensed Veterinary Medicines group revenue outside of the UK grew 37.7% and ahead of our expectations. Like-for-like sales growth in existing international markets was 28.5% with the remaining growth coming from sales to three new territories including our first sales to markets in Asia. Pharmaceutical sales outside the UK now total GBP0.72m (2015: GBP0.52m).

New distribution contracts and letters of understanding have been agreed with 14 distribution partners in new markets across Europe, Asia, Australasia and North America. Where products are already licensed in these new markets we expect modest sales revenue this financial year. For the majority of new markets our products require regulatory approval that will take between 18 to 36 months to achieve and launch into the market.

Operating results

 
 GBP'000                         2016    2015   % change 
-----------------------------  ------  ------  --------- 
 Underlying operating profit    1,904   1,553      22.6% 
-----------------------------  ------  ------  --------- 
 Exceptional and other items     (59)    (59) 
-----------------------------  ------  ------  --------- 
 Reported operating profit      1,845   1,494      23.5% 
-----------------------------  ------  ------  --------- 
 Operating margin %             23.2%   21.0%    2.2ppts 
-----------------------------  ------  ------  --------- 
 Basic underlying EPS (p)         7.8     6.2      25.8% 
-----------------------------  ------  ------  --------- 
 Basic EPS (p)                    7.5     6.1      23.0% 
-----------------------------  ------  ------  --------- 
 

The benefit of strong revenue growth and improved gross margins can be seen in underlying operating profit, which increased by 22.6% to GBP1.90m (2015: GBP1.55m). We continue to invest in our business in a controlled way which is both reflected in the GBP0.37m increase in overheads, but also our operating margin which has improved by 220 basis points to 23.2%.

Basic underlying EPS improved by 25.8% to 7.8 pence (2015: 6.2 pence). Basic EPS, which incorporates non-underlying items, increased by 23.0% to 7.5 pence (2015: 6.1 pence).

Dividends

The Board is pleased to announce an 11.1% increase in the interim dividend to 2.0 pence per share (2015: 1.8 pence per share) reflecting the continued confidence in the growth prospects of the Group. The interim dividend will be paid on 21(st) April 2017 to shareholders on the register on 7(th) April 2017. The Ordinary shares will become ex-dividend on 6(th) April 2017.

The Board will continue to monitor the Group's cash position to ensure an appropriate balance between investment for future growth and dividend flow to deliver overall value for our shareholders.

Cash flow

The Group's cash position remains strong with period end cash balances at GBP7.0m (30(th) June 2016: GBP7.1m, 31(st) December 2015: GBP6.1m). As expected, we have made a significant GBP0.8m net investment in working capital to support growth, some of which we expect to reverse in H2 as our new supply chain team becomes established.

The momentum in our product development pipeline continues with expenditure at GBP0.6m in the period (2015: GBP0.6m). Capital expenditure is expected to be biased towards the second half of the financial year, with several regulatory submissions planned in Q4. We expect expenditure on our pipeline to increase for the current financial year towards GBP2.0m (FY16: GBP1.6m).

UK market

Corporate veterinary practice chains have continued the momentum of their acquisition strategy and in this period there has been the introduction to the market of a new corporate group that has already grown to 125+ practices. A new key account manager has been recruited to focus particularly on corporate and charity customers. The key account team has been successful in winning core product tenders for a number of our products including Buprecare and idENTICHIP, with growth being strong across joint venture partnerships, buying groups and charities from the pull through of the field force and telesales team.

Product pipeline

There has continued to be good progress in our product development pipeline.

The first projects from our rejuvenated pipeline were successfully registered and launched in the second half of the prior financial year. One further product successfully registered late in that period was launched into the market in the first half of the new financial year, achieving sales well in excess of our expectations. There has been a focus on identification of new novel and generic product opportunities and technologies. Three new development projects have been initiated in the first six months of this year.

The table below highlights the overall position of our pipeline compared to the previous period.

 
        Identification   Feasibility   Development    Regulatory     Commercial 
-----  ---------------  ------------  ------------  --------------  ----------- 
 2016    12 Projects     8 Projects    13 Projects     2 NPD & 1     5 Projects 
                                                      EPD Projects 
-----  ---------------  ------------  ------------  --------------  ----------- 
 2015    26 Projects     12 Projects   7 Projects      4 NPD & 3     1 Project 
                                                      EPD Projects 
-----  ---------------  ------------  ------------  --------------  ----------- 
 

Following 25 years of success of the Aqupharm fluid range in the UK, two of our flag ship products, Aqupharm 1 and Aqupharm 11, solutions were successfully registered during the period in 11 additional EU countries with additional species indications. These products will be launched into selected new markets in H2. Significant progress has also been made in the registration procedure for another new product which is expected to be approved in March 2017.

Summary and outlook

Animalcare is in a good position to build on the strong performance in the first half of the year. The continued health of the business allows us to invest further in our development activities whilst maintaining our dividend policy.

Our product development pipeline and distribution opportunities continue to flow and activity to identify innovative and novel pharmaceutical products is progressing well. We are pleased with the early success of our strategy to grow revenue from markets outside the UK and believe we are building a solid platform for significant future revenue build.

H2 will also see the launch of a further 4 new licensed products to the Animalcare range, all supporting existing therapy areas.

We continue to invest in our excellent team, supporting them in all areas of their working life.

Overall, Animalcare is in a strong position to execute its strategy to drive future growth.

 
 Iain Menneer      Chris Brewster 
 Chief Executive   Chief Financial Officer 
  Officer 
 

Condensed Consolidated Statement of Comprehensive Income

Six months ended 31(st) December 2016

 
                                          6 months ended 31(st) December          6 months ended 31(st) December 
                                                                    2016                                    2015 
-------------------------  ----  ---------------------------------------  -------------------------------------- 
 
                                                   Exceptional 
                                                     and other            Underlying   Exceptional and 
                                       Underlying    items (i)     Total     results   other items (i)     Total 
                           Note   results GBP'000      GBP'000   GBP'000     GBP'000           GBP'000   GBP'000 
=========================  ====  ----------------  -----------  --------  ==========  ================  ======== 
Revenue                                     7,968            -     7,968       7,114                 -     7,114 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Cost of sales                             (3,361)                (3,361)     (3,230)                     (3,230) 
=========================  ====  ----------------  -----------  --------  ==========  ================  ======== 
Gross profit                                4,607            -     4,607       3,884                 -     3,884 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Distribution 
 costs                                      (124)            -     (124)       (121)                 -     (121) 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Administrative 
 expenses                                 (2,381)         (59)   (2,440)     (2,140)              (59)   (2,199) 
=========================  ====  ----------------  -----------  --------  ==========  ================  ======== 
Research & 
 development 
 expenses                                   (198)            -     (198)        (70)                 -      (70) 
=========================  ====  ----------------  -----------  --------  ==========  ================  ======== 
Operating profit/(loss)                     1,904         (59)     1,845       1,553              (59)     1,494 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Finance income/(expense)                       16         (14)         2          13                21        34 
=========================  ====  ----------------  -----------  --------  ==========  ================  ======== 
Profit/(loss) 
 before tax                                 1,920         (73)     1,847       1,566              (38)     1,528 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Income tax 
 (expense)/credit                           (279)           15     (264)       (257)                 7     (250) 
=========================  ====  ----------------  -----------  --------  ==========  ================  ======== 
Total comprehensive 
 income/(loss) 
 for the period                             1,641         (58)     1,583       1,309              (31)     1,278 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Basic earnings 
 per share                    6              7.8p                   7.5p        6.2p                        6.1p 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
Fully diluted 
 earnings per 
 share                        6              7.6p                   7.4p        6.1p                        6.0p 
-------------------------  ----  ----------------  -----------  --------  ----------  ----------------  -------- 
 

Total comprehensive income/(loss) for the period is attributable to the equity holders of the parent.

(i) In order to aid understanding of underlying business performance, the Directors have presented underlying results before the effect of exceptional and other items. These items are analysed in note 3.

Condensed Consolidated Statement of Comprehensive Income

Year ended 30(th) June 2016

 
 
                                                            Exceptional 
                                           Underlying   and other items 
                                              results               (i)     Total 
                                     Note     GBP'000           GBP'000   GBP'000 
-----------------------------------  ----  ----------  ----------------  -------- 
Revenue                                        14,701                 -    14,701 
-----------------------------------  ----  ----------  ----------------  -------- 
Cost of sales                                 (6,702)                 -   (6,702) 
-----------------------------------  ----  ----------  ----------------  -------- 
Gross profit                                    7,999                 -     7,999 
-----------------------------------  ----  ----------  ----------------  -------- 
Distribution costs                              (255)                 -     (255) 
-----------------------------------  ----  ----------  ----------------  -------- 
Administrative expenses                       (4,398)             (173)   (4,571) 
-----------------------------------  ----  ----------  ----------------  -------- 
Research & development expenditure              (156)                 -     (156) 
-----------------------------------  ----  ----------  ----------------  -------- 
Operating profit/(loss)                         3,190             (173)     3,017 
-----------------------------------  ----  ----------  ----------------  -------- 
Finance income                                     33                36        69 
-----------------------------------  ----  ----------  ----------------  -------- 
Profit/(loss) before tax                        3,223             (137)     3,086 
-----------------------------------  ----  ----------  ----------------  -------- 
Income tax (expense)/credit                     (479)                27     (452) 
-----------------------------------  ----  ----------  ----------------  -------- 
Total comprehensive income/(loss) 
 for the year                                   2,744             (110)     2,634 
-----------------------------------  ----  ----------  ----------------  -------- 
Basic earnings per share                6       13.0p                       12.5p 
-----------------------------------  ----  ----------  ----------------  -------- 
Fully diluted earnings per 
 share                                  6       12.8p                       12.3p 
-----------------------------------  ----  ----------  ----------------  -------- 
 

Total comprehensive income/(loss) for the year is attributable to the equity holders of the parent.

(i) In order to aid understanding of underlying business performance, the directors have presented underlying results before the effect of exceptional costs and other items. These items are analysed in note 3.

Condensed Consolidated Statement of Changes in Shareholders' Equity

Six months ended 31(st) December 2016

 
 
                                      6 months ended    6 months ended    Year ended 
                                     31(st) December   31(st) December   30(th) June 
                                                2016              2015          2016 
                              Note           GBP'000           GBP'000       GBP'000 
----------------------------  ----  ----------------  ----------------  ------------ 
Balance at beginning 
 of period                                    22,515            20,991        20,991 
----------------------------  ----  ----------------  ----------------  ------------ 
Total comprehensive 
 income for the period                         1,583             1,278         2,634 
----------------------------  ----  ----------------  ----------------  ------------ 
Transactions with owners 
 of the Company, recognised 
 in equity: 
----------------------------  ----  ----------------  ----------------  ------------ 
Dividends paid                   5             (997)             (904)       (1,283) 
----------------------------  ----  ----------------  ----------------  ------------ 
Issue of share capital                           214                46            53 
----------------------------  ----  ----------------  ----------------  ------------ 
Share-based payments                              37                60           120 
----------------------------  ----  ----------------  ----------------  ------------ 
Balance at end of period                      23,352            21,471        22,515 
----------------------------  ----  ----------------  ----------------  ------------ 
 

Condensed Consolidated Balance Sheets

31(st) December 2016

 
                                31(st) December  31(st) December 
                                           2016             2015  30(th) June 2016 
                                        GBP'000          GBP'000           GBP'000 
------------------------------  ---------------  ---------------  ---------------- 
Non-current assets 
------------------------------  ---------------  ---------------  ---------------- 
Goodwill                                 12,711           12,711            12,711 
------------------------------  ---------------  ---------------  ---------------- 
Other intangible assets                   3,293            2,257             2,968 
------------------------------  ---------------  ---------------  ---------------- 
Property, plant and equipment               254              271               281 
------------------------------  ---------------  ---------------  ---------------- 
                                         16,258           15,239            15,960 
------------------------------  ---------------  ---------------  ---------------- 
Current assets 
------------------------------  ---------------  ---------------  ---------------- 
Inventories                               2,172            1,700             1,604 
------------------------------  ---------------  ---------------  ---------------- 
Trade and other receivables               2,661            1,909             2,189 
------------------------------  ---------------  ---------------  ---------------- 
Cash and cash equivalents                 7,012            6,098             7,118 
------------------------------  ---------------  ---------------  ---------------- 
                                         11,845            9,707            10,911 
------------------------------  ---------------  ---------------  ---------------- 
Total assets                             28,103           24,946            26,871 
------------------------------  ---------------  ---------------  ---------------- 
Current liabilities 
------------------------------  ---------------  ---------------  ---------------- 
Trade and other payables                (3,274)          (2,090)           (3,027) 
------------------------------  ---------------  ---------------  ---------------- 
Current tax liabilities                   (202)            (301)             (101) 
------------------------------  ---------------  ---------------  ---------------- 
Deferred income                           (235)            (233)             (220) 
------------------------------  ---------------  ---------------  ---------------- 
                                        (3,711)          (2,624)           (3,348) 
------------------------------  ---------------  ---------------  ---------------- 
Net current assets                        8,134            7,083             7,563 
------------------------------  ---------------  ---------------  ---------------- 
Non-current liabilities 
------------------------------  ---------------  ---------------  ---------------- 
Deferred income                           (732)            (724)             (762) 
------------------------------  ---------------  ---------------  ---------------- 
Deferred tax liabilities                  (308)            (127)             (246) 
------------------------------  ---------------  ---------------  ---------------- 
                                        (1,040)            (851)           (1,008) 
------------------------------  ---------------  ---------------  ---------------- 
Total liabilities                       (4,751)          (3,475)           (4,356) 
------------------------------  ---------------  ---------------  ---------------- 
Net assets                               23,352           21,471            22,515 
------------------------------  ---------------  ---------------  ---------------- 
Capital and reserves 
------------------------------  ---------------  ---------------  ---------------- 
Called up share capital                   4,244            4,211             4,212 
------------------------------  ---------------  ---------------  ---------------- 
Share premium account                     6,688            6,500             6,506 
------------------------------  ---------------  ---------------  ---------------- 
Retained earnings                        12,420           10,760            11,797 
------------------------------  ---------------  ---------------  ---------------- 
Equity attributable to 
 equity holders of the parent            23,352           21,471            22,515 
------------------------------  ---------------  ---------------  ---------------- 
 

Cash Flow Statements

Six months ended 31(st) December 2016

 
                                                                           Year ended 
                                       6 months ended    6 months ended   30(th) June 
                                      31(st) December   31(st) December          2016 
                                         2016 GBP'000      2015 GBP'000       GBP'000 
-----------------------------------  ----------------  ----------------  ------------ 
Comprehensive income for 
 the period before tax                          1,847             1,528         3,086 
-----------------------------------  ----------------  ----------------  ------------ 
Adjustments for: 
-----------------------------------  ----------------  ----------------  ------------ 
Depreciation of property, 
 plant and equipment                               58                61            66 
-----------------------------------  ----------------  ----------------  ------------ 
Amortisation of intangible 
 assets                                           218               129           369 
-----------------------------------  ----------------  ----------------  ------------ 
Finance income                                   (16)              (13)          (33) 
-----------------------------------  ----------------  ----------------  ------------ 
Share-based payment award                          37                60           120 
-----------------------------------  ----------------  ----------------  ------------ 
Net deferral/(release) of 
 deferred income                                 (13)                 -            24 
-----------------------------------  ----------------  ----------------  ------------ 
Operating cash flows before 
 movements in working capital                   2,131             1,765         3,632 
-----------------------------------  ----------------  ----------------  ------------ 
(Increase)/decrease in inventories              (568)              (47)            49 
-----------------------------------  ----------------  ----------------  ------------ 
(Increase)/decrease in receivables              (491)               337            77 
-----------------------------------  ----------------  ----------------  ------------ 
Increase/(decrease) in payables                   266              (96)           822 
-----------------------------------  ----------------  ----------------  ------------ 
Cash generated by operations                    1,338             1,959         4,580 
-----------------------------------  ----------------  ----------------  ------------ 
Income taxes paid                               (102)             (161)         (444) 
-----------------------------------  ----------------  ----------------  ------------ 
Net cash flow from operating 
 activities                                     1,236             1,798         4,136 
-----------------------------------  ----------------  ----------------  ------------ 
Investing activities: 
-----------------------------------  ----------------  ----------------  ------------ 
Payments to acquire intangible 
 assets                                         (568)             (598)       (1,604) 
-----------------------------------  ----------------  ----------------  ------------ 
Payments to acquire property, 
 plant and equipment                              (7)              (34)          (41) 
-----------------------------------  ----------------  ----------------  ------------ 
Disposal of intangible assets                       -                 -            47 
-----------------------------------  ----------------  ----------------  ------------ 
Interest received                                  16                13            33 
-----------------------------------  ----------------  ----------------  ------------ 
Net cash used in investing 
 activities                                     (559)             (619)       (1,565) 
-----------------------------------  ----------------  ----------------  ------------ 
Financing: 
-----------------------------------  ----------------  ----------------  ------------ 
Receipts from issue of share 
 capital                                          214                46            53 
-----------------------------------  ----------------  ----------------  ------------ 
Equity dividends paid                           (997)             (904)       (1,283) 
-----------------------------------  ----------------  ----------------  ------------ 
Net cash used in financing 
 activities                                     (783)             (858)       (1,230) 
-----------------------------------  ----------------  ----------------  ------------ 
Net (decrease)/increase 
 in cash and cash equivalents                   (106)               321         1,341 
-----------------------------------  ----------------  ----------------  ------------ 
Cash and cash equivalents 
 at start of period                             7,118             5,777         5,777 
-----------------------------------  ----------------  ----------------  ------------ 
Cash and cash equivalents 
 at end of period                               7,012             6,098         7,118 
-----------------------------------  ----------------  ----------------  ------------ 
Comprising: 
-----------------------------------  ----------------  ----------------  ------------ 
Cash and cash equivalents                       7,012             6,098         7,118 
-----------------------------------  ----------------  ----------------  ------------ 
 

Condensed Notes to the Financial Statements

31(st) December 2016

1. GENERAL INFORMATION

Animalcare Group plc ("the Company") is a company incorporated in England and Wales under the Companies Act 2006 and is domiciled in the United Kingdom. The condensed set of financial statements as at, and for, the six months ended 31(st) December 2016 comprises the Company and its subsidiary, Animalcare Ltd (together referred to as the "Group"). The nature of the Group's operations and its principal activities are set out in the latest Annual Report.

This Interim Report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The information contained herein has not been reviewed by the Group's auditor.

The prior year comparatives are derived from the audited financial information as set out in the Group's Annual Report for the year ended 30(th) June 2016 and the unaudited financial information in the Group's Interim Report for the six months ended 31(st) December 2015. The comparative figures for the financial year ended 30(th) June 2016 are not the Group's statutory accounts. Those accounts have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include any reference to matters to which the auditors drew attention without qualifying their report and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The Interim Report for the six months ended 31(st) December 2016 was approved by the Board of Directors and authorised for issue on 15(th) February 2017.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation and accounting policies

Except as described below, the condensed consolidated interim financial information for the six months ended 31(st) December 2016 has been prepared using accounting policies consistent with those of the Company's annual accounts for the year ended 30(th) June 2016, which were prepared in accordance with IFRSs as adopted by the European Union.

Taxes on income in the interim periods are accrued using the estimated tax rate that would be applicable for the full financial year.

The following standards and amendments have been published, endorsed by the EU, with an effective date after the date of these financial statements. Their adoption, where applicable, is not expected to have a material effect on the financial statements of the Group unless otherwise indicated.

 
 International Financial Reporting Standards     Applies to periods beginning after 
----------------------------------------------  ----------------------------------- 
 IFRS 15 Revenue from Contracts with Customers                   1(st) January 2018 
----------------------------------------------  ----------------------------------- 
 IFRS 9 Financial Instruments                                    1(st) January 2018 
----------------------------------------------  ----------------------------------- 
 

Going concern

The principal risks and uncertainties facing the Group remain those set out in the latest Annual Report.

For the purposes of their assessment of the appropriateness of the preparation of the interim financial information on a going concern basis, the Directors have considered the current cash position and forecasts of future trading including working capital and investment requirements.

During the period the Group met its day-to-day general corporate and working capital requirements through existing cash resources. At 31(st) December 2016 the Group had cash on hand of GBP7.0 million (30(th) June 2016: GBP7.1 million).

Overall, the Directors believe the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of reasonable possible changes in trading performance, show that the Group should have sufficient cash resources to meet its requirements for at least the next 12 months. Accordingly, the adoption of the going concern basis in preparing the interim financial information remains appropriate.

3. EXCEPTIONAL AND OTHER ITEMS

Six months ended 31(st) December 2016

 
 
                                 6 months ended    6 months ended 
                                31(st) December   31(st) December         Year ended 
                                           2016              2015   30(th) June 2016 
                                        GBP'000           GBP'000            GBP'000 
-----------------------------  ----------------  ----------------  ----------------- 
Amortisation of acquired 
 intangible assets                           59                59                118 
-----------------------------  ----------------  ----------------  ----------------- 
Strategic review                              -                 -                 55 
-----------------------------  ----------------  ----------------  ----------------- 
Fair value movements 
 on foreign currency hedging                 14              (21)               (36) 
-----------------------------  ----------------  ----------------  ----------------- 
Sub total                                    73                38                137 
-----------------------------  ----------------  ----------------  ----------------- 
Tax thereon                                (15)               (7)               (27) 
-----------------------------  ----------------  ----------------  ----------------- 
Total exceptional and 
 other items                                 58                31                110 
-----------------------------  ----------------  ----------------  ----------------- 
 

The amortisation charge totalling GBP59,000 (2015: GBP59,000) relates to brand and customer relationship intangible assets recognised on the acquisition of Animalcare Ltd in January 2008.

   4.            REVENUE AND OPERATING SEGMENTS 

During the period, the principal activity of the Group was the supply and distribution of veterinary medicines, identification and other products for companion animals.

The Chief Operating Decision Maker ("CODM") is considered to be the Board of Directors of Animalcare Group plc. Performance assessment is primarily based on underlying operating profit and cash generation. The Group solely comprises one reportable segment, being Animalcare.

An analysis of revenue by product group is disclosed within the Business Review.

5. DIVIDENDS

 
 
                              6 months ended    6 months ended 
                             31(st) December   31(st) December         Year ended 
                                        2016              2015   30(th) June 2016 
                                     GBP'000           GBP'000            GBP'000 
--------------------------  ----------------  ----------------  ----------------- 
Ordinary final dividend 
 paid for the year ended 
 30(th) June 2015 of 
 4.3p per share                            -               904                904 
--------------------------  ----------------  ----------------  ----------------- 
Ordinary interim dividend 
 paid for the year ended 
 
 30(th) June 2016 of 1.8p 
 per share                                 -                 -                379 
--------------------------  ----------------  ----------------  ----------------- 
Ordinary final dividend 
 paid for the year ended 
 30(th) June 2016 of 
 4.7p per share                          997                 -                  - 
--------------------------  ----------------  ----------------  ----------------- 
                                         997               904              1,283 
--------------------------  ----------------  ----------------  ----------------- 
 

The interim dividend was approved by the Board of Directors on 15(th) February 2017 and has not been included as a liability as at 31(st) December 2016.

   6.            EARNINGS PER SHARE 

Basic earnings per share amounts are calculated by dividing the total comprehensive income for the period attributable to ordinary equity holders of the Company by the weighted average number of fully paid ordinary shares outstanding during the period.

The dilutive effect of share options is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares from the start of the period. The dilutive potential ordinary shares of the Company are share options.

The following income and share data was used in the earnings per share computations:

 
                            6 months       6 months                      6 months        6 months 
                        ended 31(st)   ended 31(st)    Year ended    ended 31(st)    ended 31(st)      Year ended 
                            December       December   30(th) June        December        December     30(th) June 
                                2016           2015          2016            2016            2015            2016 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
                          Underlying     Underlying    Underlying 
                            earnings       earnings      earnings  Total earnings  Total earnings  Total earnings 
                             GBP'000        GBP'000       GBP'000         GBP'000         GBP'000         GBP'000 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Total comprehensive 
 income attributable 
 to equity holders 
 of the Company                1,641          1,309         2,744           1,583           1,278           2,634 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
                                 No.            No.           No.             No.             No.             No. 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Basic weighted 
 average number 
 of shares                21,164,072     21,032,392    21,043,846      21,164,072      21,032,392      21,043,846 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Dilutive potential 
 ordinary shares             321,800        305,260       319,863         321,800         305,260         319,863 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Fully diluted 
 weighted average 
 number of shares         21,485,872     21,337,652    21,363,079      21,485,872      21,337,652      21,363,079 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Total earnings 
 per share: 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Basic                           7.8p           6.2p         13.0p            7.5p            6.1p           12.5p 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
Fully diluted                   7.6p           6.1p         12.8p            7.4p            6.0p           12.3p 
---------------------  -------------  -------------  ------------  --------------  --------------  -------------- 
 
   7.            CAUTIONARY STATEMENT 

This Interim Management Report ("IMR") consists of the Chairman's Statement and the Business Review, which have been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied upon by any other party or for any other purpose.

The IMR contains a number of forward looking statements. These statements are made by the Directors in good faith based upon the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward looking information.

This IMR has been prepared for the Group as a whole and therefore emphasises those matters which are significant to Animalcare Group plc and its subsidiaries when viewed as a whole.

   8.            INTERIM REPORT 

The Group's Interim Report for the six months ended 31(st) December 2016 was approved and authorised for issue on 15(th) February 2017 and is expected to be posted to shareholders later that week commencing 13(th) February 2017. Further copies will be available to download on the Company's website at: www.animalcaregroup.co.uk and will also be available from the Company's head office at 10 Great North Way, York Business Park, Nether Poppleton, York, YO26 6RB.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR BIGDDXGBBGRS

(END) Dow Jones Newswires

February 15, 2017 02:00 ET (07:00 GMT)

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