Animalcare Group PLC Trading update & Notice of Interim Results (5900T)

TIDMANCR

RNS Number : 5900T

Animalcare Group PLC

09 January 2017

Animalcare Group plc

(the 'Group' or the 'Company')

Trading update & Notice of Interim Results

Animalcare Group plc (AIM: ANCR), a leading supplier of veterinary medicines, provides a trading update for the first six months of the current financial year ahead of publishing its interim results on 15(th) February 2017. Following a very strong first half-year for the Group, the Board is pleased to announce that it expects that trading for the year ending 30(th) June 2017 will be ahead of current market expectations.

Trading Update

Trading during the period has been ahead of the Board's expectations in both sales and profit terms, which saw revenue growth of 12.0% versus the same period last year to GBP7.97m (2015: GBP7.11m).

The Licensed Veterinary Medicines group continued to grow strongly in the first half with revenues increasing 17.2% to GBP5.37m (2015: GBP4.58m), driven by growth in the UK of 14.6% and outside the UK of 37.7%. Sales from new products launched in the period contributed around GBP0.20m, or 4%, of the overall 17.2% growth. Gross margins have improved versus the prior year through a combination of favourable sales mix and cost of goods initiatives.

Sales from the Animal Welfare Products group improved by 13.4% to GBP1.51m (2016: GBP1.34m) driven by continued strong growth of our infusion accessories range.

The Companion Animal Identification group revenues decreased by 9.2% to GBP1.09m (2016: GBP1.20m). Following the implementation of compulsory microchipping of dogs in the United Kingdom in April 2016, we expected and have observed a reduction in microchip volumes, which we expect to last into the medium-term. Database services however have continued to grow.

The Group's cash position remains strong with period end cash balances at approximately GBP7.0m (30(th) June 2016: GBP7.1m, 31(st) December 2015: GBP6.1m). As expected, we have made a significant net investment in working capital to support growth.

Summary and Outlook

Four products were launched in the first half; three as part of a range of ear cleaners and treatments, all on distribution, and one new product from our in-house development pipeline, Acecare (a companion animal sedative).

It is expected that there will be two further product launches in H2, both on distribution from EU partners and both for use with companion animals.

As we highlighted in our FY16 results in October, despite the uncertainty of Brexit, the Board took the decision to accelerate investment in new products on the strength of continued positive trading momentum and the Group's strong financial position. We are pleased to report good progress in our product development pipeline, in particular with regard to the identification of novel formulations which, as previously stated, are strategic focus for the Group. We expect expenditure on our pipeline to increase for the current financial year to around GBP2.0m (FY16: GBP1.6m).

Following a very strong first half-year for the Group, the Board is pleased to announce that for the year ending 30(th) June 2017 it expects trading will be ahead of current market expectations and revenues to be in line with the first half.

For further information, please contact:

 
 Animalcare Group plc                                           Tel: [phone] 
 Iain Menneer, Chief Executive 
  Officer 
 Chris Brewster, Chief 
  Financial Officer 
 
 Panmure Gordon (Nominated 
  Adviser & Broker) 
 Freddy Crossley                                                Tel: [phone] 
 Peter Steel                                                    Tel: [phone] 
 
 Walbrook PR Ltd                   Tel: [phone] or [e-mail] 
 Paul McManus                                                   Mob: [phone] 
 Lianne Cawthorne                                               Mob: [phone] 
 
 

About Animalcare

Animalcare is a leading veterinary sales and marketing company based in York with 68 employees including a sales team of 24 selling to veterinary practices around the United Kingdom.

Animalcare has developed a range of generic veterinary medicines and animal identification products primarily to companion animal veterinary markets.

Animalcare operates in three product areas:

   --     Licensed Veterinary Medicines 
   --     Animal Welfare Products 
   --     Companion Animal Identification 

For more information see: www.animalcaregroup.co.uk

This information is provided by RNS

The company news service from the London Stock Exchange

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January 09, 2017 02:00 ET (07:00 GMT)