Anpario Share Discussion Threads

[glasshalfull] 26/4/2012 22:09

Steg - If UK Analyst is correct in suggesting that ANP will achieve 10.6p EPS this year per Finncap then this is a 4% increase on the already UPGRADED EPS forecasts that Finncap issued on 30th March 2012 which had pencilled in an increase to 10.2p EPS. At 95p this place them on a prospective PER of 8.9 while they are delivering a further 20% growth.

As I suggested on the ZULU thread, they tick many of the boxes to enter this prestigious group and on a PEG of 0.4

I'll look for confirmation of this further upgrade of 4% in earnings which would be pretty bullish in the space of only 4-weeks ;-)

Now had a chance to look through results and I see that diluted EPS came in at 8.87p which was 5.6% ahead of Finncaps 8.4p EPS Forecast for 2011. We only received an in-line trading statement as well ;-)

A dividend of 2.3p was also forecast and I reckon another bullish sign to see them increase this ahead of forecasts to 2.4p, a lovely 20% rise and now provides them with a d/v yield of 2.5%.

Healthy cash balance, even after the Meriden acquisition and should be c.£3.5 million at the end of 2012.

Pleasingly margins up as predicted to 30% from 28%, with admin expenses falling considerably.

Yep, like the market they operate in with significant growth opportunities in emerging markets of Latin America and China which they appear to be delivering on.

Very content to hold/add.

Regards,
GHF

[stegrego] 26/4/2012 20:41

UK Anal...

Despite a 10% slide in revenue to 19.2 million pounds in the 12 months to December 2011 at food additives company Anpario (ANP), adjusted pre-tax profits climbed by 10% to 2.1 million pounds. This was primarily thanks to the restructuring of the UK agriculture business, which saw a focus on high margin products. Further margin progress was also made from the integration of 2009 acquisition Optivite into the rest of the business, with operations across four separate sites all being move to one production facility. A third production line at Manton Wood meanwhile was completed mid-year, more than doubling production capacity of speciality feed additives. Now with negligible variable costs, any further revenue generated from this site will feed straight through to the bottom line.

Geographically, the dire economic situation in southern Europe paired with civil unrest in the Middle East would have seen Anpario recognise lower sales from its international division, however impressive growth in Asia Pacific and even more so in Latin America - where the Brazilian food export market is booming - saw revenue come in ahead of last year. On earnings per share of 8.9p the shares trade on a historic multiple of 10.5 times, which is cheap in itself considering the group's overseas growth potential, debt free balance sheet and 2.6% dividend yield. Add to this the 2.4 million pound acquisition of Meriden last month, which was funded entirely from the group's 4.4 million pound cash balance, and broker Finncap's earnings per share forecast for the current year of 10.6p lowers the multiple to just 8.8 times. Anpario shares inched 1p higher to 95p.

[beardmore] 26/4/2012 11:57

""Very happy to sit on these and collect the divi + watch the growth unfold."", my sentiments exactly Norbert. It's a useful dividend and takes the edge of inflation

[norbert colon] 26/4/2012 10:33

Steg

I agree - happy with these results which tied up almost exectly with my own forecasts. Very happy to sit on these and collect the divi + watch the growth unfold.

Good luck to all

Nobby

[stegrego] 26/4/2012 08:30

Looks like a buy still to me. Excellent record of eps growth now.

Lack of action this morning suggests these aren't known to many, which I find strangely comforting.

[glasshalfull] 26/4/2012 08:20

Nice strong figures. EPS
up 23%, margins up and dividend increase welcome.


Looks like a push into Latin America and
China which is mitigating weakness in Southern Europe and the Middle East.

Still think the Meriden acquisition an excellent fit & on great terms. Outlook positive and I'm very happy with these in my portfolio.

Regards
GHF

[spekky] 26/4/2012 08:06

Solid set of results.There is £O.4m w-off/costs related to Aldermaston which wont be there in 2012 and a theoretical £0.5m contribution to profit from Meriden if all goes according to plan.My over simplistic view is that profit for 2012 could be close to £3m.

[davydoo] 24/4/2012 11:16

tailgunner a lot of screens just represent the last traded price, it doesnt mean the bid/mid/offer has actually moved.

My level 2 is showing the price unmoved with 3 sells at 91 and 1 buy at 96 all inside the spread of 90-98. So with a mid of 94, all you saw was the initial sell, and the implication that the price had fallen 3p.

keep calm and carry on

[tailgunner2] 24/4/2012 08:58

Seen it all now.....on my money in am screen.....a 118 share sell and its showing a 3p drop........

[the_hedge] 20/4/2012 14:07

Yes, it would be nice if it stayed over on that side for a change.
Looking at its past performance, it seems to make a good break past a quid before falling back and staying under for yonks.

It still looks an excellent long term buy and hold tho.

[glasshalfull] 18/4/2012 18:45

They are still miles undervalued. Results next Thursday and I wouldn't be surprised if they popped above £1....and kept going.

Regards,
GHF

[the_hedge] 18/4/2012 13:30

Nice to see the share price rising gradually over the last month.
Would be even nicer to see it meander over the pound mark.

[spekky] 11/4/2012 15:05

Yes its a pity it was the Easter weekend,some folks probably forgot about it by the time markets re-opened on Tuesday.....not long to results now so maybe some exposure then.

[glasshalfull] 10/4/2012 18:33

It appears that IC tipped ANP in Friday's issue.

Heading, The animal feeds supplier buys more exposure to emerging markets

I don't subscribe so unable to determine whether it has anything to add to my recent summary or NC's observations...explains the renewed interest and flurry of small transactions though.

Regards,
GHF

[ljsquash] 05/4/2012 15:43

Yes thanks all! :-)

[spekky] 05/4/2012 12:58

Thanks GHF and NC, very interesting posts.

[beardmore] 05/4/2012 10:43

Considering the general market weakness, ANP is showing real strength.

[norbert colon] 05/4/2012 10:02

Thanks GHF - very useful info.

I had a very nice lunch meeting yesterday with Optivite's International Sales Manager who was attending AGRAME here in Dubai. He was very upbeat about the potential of their acquisition of Meriden Animal Health Limited albeit it's early days. We talked about competition in the market and like most sectors its very competative out there (especially in the ME) and he noted that business had been slow over recent years due to general economic downturn (as it has been for a lot of us) but that things were picking up nicely.

Poultry and aqua (rather than beef / lamb) seems to be the main growth market and their link into China has some great potential IMO.

They already have various customers in the region including in Kuwait.

The show itself resulting in a lot of press / media attention due to various key note speakers talking about a potential global food crisis etc due to countries historical investment in land outside of their own jurisdiction and not being suitably self-sufficient from imports. Also some slightly interesting developments in respect to camel milk products (ice cream etc which is in demand locally here) and the need for more high yielding camels.

I remain very positive about ANP.

Nobby

[glasshalfull] 05/4/2012 09:18

Not much stock left and each purchase now having incremental mark up.

Here's a copy of the ANP investment case which I posted on the ZULU thread a few days ago. If they achieve forecasted earnings for the current year then they will have demonstrated 5-years EPS growth which establishes them as a ZULU stock.



Time to revisit ANPARIO - ANP which I posted about in mid-January 2012. They completed a transformational "immediately earnings enhancing" acquisition on Friday.



Acquisition of Meriden Animal Health Limited ("Meriden") for up to £4.125 million

*Meriden's 2011 sales and adjusted profit before interest and tax were £5.35 million and £740,000 respectively.
*Expected to be immediately earnings enhancing.
*Deal increases Anpario's global market share and significantly strengthens its position in China.
*Consideration to be met from the Company's existing cash resources.

Quite a coup ANP have pulled off here IMHO.

At a stroke this earnings enhancing acquisition is forecast to lift earnings forecasts by a whopping 22% this year.

Currently 86p mid they are trading on a prospective PER of 8.4, will still have net cash estimated at £3.5 million at the end of 2012 with only £1.125 million deferred consideration depending on targets being achieved over the next 2 years.

Oh, they also provide a dividend yield of 2.9%(2.5p)

Meriden are a high value, low volume producer of feed additives, with the bulk of revenue based on the group's wholly-owned Orego-Stim product range. Sales are derived internationally from a broad base of distributors. Asia accounts for 40% of revenue while the UK accounts for less than 10%.

Finn Cap indicate that;

Meriden will contribute for 9 months in FY 2012, during which it is expected to add EBIT of £0.5m and revenue of £4.1m. For a full year, Meriden should enhance group PBT by £0.75m. For 2012, adj EPS advances to 10.2p on an adjusted basis (8.3p est) and to 10.9p for 2013, assuming the recently expressed cautious outlook for the core business remains in place. This move encourages us to lift our TP to 140p, offering investors useful upside from the present share price.

Not only that but the deal also provides ANP with a more balanced portfolio of products (essential oils to compliment their acidifiers) direct route into China and multiple cross selling opportunities.

An excellent deal and again my hat off to the management team.

Recap of figures and investment case

ANP - Anapario
(formerly known as Kiotech)

What do they do?

From web site: -

Anpario plc is a leader in the manufacturing and marketing of high performance natural feed additives for global agricultural and aquaculture markets with products which improve the health and output of animals, thereby increasing profits for the farmer.

The Company is positioned to benefit from the trends in growth of the world's population, the increasing demand for meat and fish protein in developing countries and the tightening of global regulation which favours more natural feed additive solutions. Our strong global brands, which include Kiotechagil and Optivite, trade in over 70 countries using a combination of distributors, joint ventures and wholly owned subsidiaries backed up by a centralised manufacturing and research and development centre based in the United Kingdom.

Price 86p

Market Cap £16.8m
(19,571,000 shares in issue)

Covering broker FinnCap (140p price target, upgraded from 120p last week)

EV of only £12.3 million (2011 year end net cash forecast at £4.5m) with decent mid teens earnings growth demonstrated and also forecast over the next few years.

Director buying (10k@ 80.25p) on 12th Jan 2012. Now in close period.

Gross margins also increased to 31% at interims (from 26%) as they bed in the 2010 acquisition of Optivate which has now been integrated with associated cost benefits realised. Apparently Meriden does not require any reorganisation costs with cost associated with acquisition coming in at £0.2 million

They are operating in a growth niche and focus in emerging markets also a big plus in my book.

Financials (Diluted EPS)

2008

PTP £0.48m
EPS 2.99p

2009

PTP £1.41m
EPS 4.14p

2010

PTP £1.52m
EPS 7.2p

2011 – H1



PTP £1.04m (+32%)
Diluted EPS 3.99p (+12% on 2010)
Net cash £3.44m

2011e (trading statement confirmed in-line with results released 26th April 2012)

PTP £2.10m
EPS 8.4p (+16.7% on 2010 actual)
D/V 2.3p (dividend yield 2.7%)
PER 10.2
Net cash est. £4.5 million

2012e (with 9 months of Meriden acquisition adding £500k PTP)

PTP £2.70m
EPS 10.2p (+21% on 2011 estimates)
D/V 2.5p (dividend yield 2.9%)
PER 8.2
Net Cash est. £3.5 million

Conclusion

Look excellent value on a PEG of 0.4 – 0.6 given strength of b/s, growth in their niche and emerging market focus with a decent 3% yield. All IMHO.

Regards,
GHF

[glasshalfull] 02/4/2012 13:49

Quite a coup ANP have pulled off her IMHO.

At a stroke this earnings enhancing acquisition is forecast to lift earnings by a whopping 22% this year.

Currently 86p mid they are trading on a prospective PER of 8.4, will still have net cash estimated at £3.5 million at the end of 2012 and also provide a dividend yield of 3%(2.5p)

Finn Cap indicate that;

Meriden will contribute for 9 months in FY 2012, during which it is expected to add EBIT of £0.5m and revenue of £4.1m. For a full year, Meriden should enhance group PBT by £0.75m. For 2012, adj EPS advances to 10.2p on an adjusted basis (8.3p est) and to 10.9p for 2013, assuming the recently expressed cautious outlook for the core business remains in place. This move encourages us to lift our TP to 140p, offering investors useful upside from the present share price.

Not only that but the deal also provides ANP with a more balanced portfolio of products (essential oils to compliment their acidifiers) direct route into China and multiple cross selling opportunities.

An excellent deal and again my hat off to the management team.

Regards,
GHF

[ljsquash] 01/4/2012 16:06

All looks good now can we breech the dreaded £1?

[beardmore] 31/3/2012 13:06

Thanks Spekky, both are interesting links.

[spekky] 31/3/2012 11:30

"The acquisition prompted broker finnCap to raise its target for Anpario to 140 pence from 120 pence, an upside of nearly 80 percent to Thursdya's closing price."



Watch the video if you have time.(under 2 mins)....

[spekky] 30/3/2012 09:50

I think the fact that it has a foothold in China is great news,looking forward to 2011 results now with renewed optimism.Very nice end to a very sunny week here in West Yorks.Have a good weekend all.

[beardmore] 30/3/2012 09:13

You said it, Spekky, AT LAST!