Anpario Share Discussion Threads

[lancasterbomber] 11/9/2019 12:37

I'm out , don't seem to be going anywhere

[truffle] 11/9/2019 10:19

Not sure what to make of it all.

It seems to be more of the same really, and difficult to fathom what the real growth strategy is.

If you look back at the past 2/3 years, it's a a case of slow and steady progress, no debt, and with plenty of cash in the bank which is not being used for acquisitions.

And of course the share price has declined during this time which means another company might buy it on the cheap which would be a pity.

[zipstuck] 11/9/2019 10:09

Poultry in Brazil and other area seem a few good eggs to come to fruition. Rest is stable and margins improving

[cerrito] 11/9/2019 09:04

Good news from Latam and US in the interims and of course with current FX rates life should be good for ANP.
The 16pc sales decrease compared to H1 18 in China(ie pre AFS) could have been worse and of course sales decrease to Vietnam to be expected. Good about emphasis in poultry sales in China-although they are coy about success, perhaps too soon to know.
I see that profit from Asia was £1.5m this last half year, comparable to the £1.6m in H2 18 but of course well down from the £2.1m in H1 18.
My main problem with both ANP and EAH is that I have no idea how AFS will pan out-and I am not sure if anyone else does.
For me shares a bit undervalued but not sure if I will get round to adding.

[vprt] 01/7/2019 11:39

Good notes, Cerrito, I think that was fairly accurate (I was also there). Yes, it was a friendly and informative meeting with reasonably lively discussion.

Just to supplement your notes:

Aquaculture is currently very very small part of sales (but good that they are working on it).

My impression is that there is very limited further downside for ANP from ASF:
- Management said something along the lines of that they have seen the worst of it
- As you stated, sales towards pork in China is now less than 5% of total revenues (less than half of the 9% of the total is what I have written down)
- Unaffected countries and farms are seeing increased pork demand given the high pork prices in China, leading to additional production and extra / replacement demand for ANP products (some of this coming through outside China). It was mentioned that US pork farmers can produce at a cost of about $1 per kg whilst the market price in China is about $5 per kg (so free trade seems like a good idea, Trump...)

Otherwise the strategy of gradually increasing the percentage of direct sales (as opposed to selling through distributors) makes a lot of sense and bodes well for continued future sales and especially margin and profit improvements:
- margin capture from the distributor mark-up (of course to some extent offset by more Anpario opex in the form of local headcount, so not always sensible)
- avoiding short term / opportunistic pricing by some silly (short term greedy) distributors, taking full control of the ROI to end customers. An example was mentioned by Richard but I did not catch the specifics. (Large, systematic, regular use at a fair price is better for ANP)
- much better communication of the benefits in what is a relatively complex / scientific sale by having knowledgeable Anpario staff dealing with customers directly, giving advice, sharing best practices from other customers and dealing with questions, concerns, requests for pilots, and suggesting relevant additional products
- Anpario's experience of acquiring a distributor in Australia in 2017 (a very small deal) bears this out, as they have achieved brilliant recent sales results in that geography. So a combination of new subsidiaries and selected acquisitions of small distributors seems to make a lot of sense
- direct online sales is being started in the UK, which might bring some of the above benefits whilst also being cost-efficient. hxxps://www.anpariodirect.co.uk
- only 17% of volume (by weight) is currently sold directly (up from 14% in 2017), so plenty of upside on this over time

Taking into account the £13m of cash and no debt, the growing £4m net profit, the nature of this business (which should benefit from several long term trends), and steady/sensible management, I remain a happy and patient holder.

[cerrito] 30/6/2019 23:17

Catching up with last Thursday's AGM.
Too bad that I had to leave for something else after 75 minutes without being able to get to grips with two of my big questions. The first is what is their reading of the situation on the ground in China and the second is how their US marketing is going in the light of the fact that in the 2016 AGM they said it is a two year process to get buy in from the integrators there.
About 8 private shareholders and the Board were open and friendly. That said ,they explained that as the only quoted animal food additive company they for competitive reasons had to hold many cards close to their chest ref divulging information.
All the resolutions passed easily
11m out of 23m shares voted ; would have thought it would be higher given big institutional base.
Discussed the wide bid:offer spread on their shares. For me a major part of the reason is the stability of their major shareholder base with no real change of shareholding between March 2 2018 and March 1 2019. Chairman said a sign of the times with these days no broker holding inventory. Most shares traded via Singer, which explains why they publish research on ANP even though they have no formal fee paying relationship.
Research done by Singers and the broker Peel Hunt. Said that they have been prohibited by Peel Hunt from telling us what the Directors think market expectations are. Barclays who use Digital Look have revenue this year at £31m(down from £34m estimated a month ago) and £33m next year. Earnings have been downgraded in the last month from 19.51p per share to 18.8p.
They went through a good corporate presentation, which has not made it to the website yet.
Some things that caught my attention.
Asked why they have so much cash on their balance sheet they referred to flexibility for doing acquisitions, which they recognized none had been done recently, but continue to monitor. In the part of the meeting I was at, they were not pressed on this.
On which animals their products were used, it would seem that poultry twice as big as pork and pork twice as big as diary. Did not get relative size of other animals,including aquaculture (and they emphasised increased push into this from their Chilean operation and their work on combating sea lice being done with the Danish company Biomar with news hoped for by year end ) stand.
If I understand my notes they said 9% of total sales in China of which in 2017, approx 80% pork down to 60% in 2018 and 40% this year. Poultry has taken up the slack.
They will continue to have all their production in the UK where of course they are finishing a major investment in the bottling plant - currently out sourced but having it in house will be quicker, more flexible and cheaper. Major reason is that it is vital to get the formula for orego stim to be really consistent. This does mean there is a long production cycle as for China it can take three months to produce and transport an order. They have a third party warehouse in China where they retain title and they have a distribution centre in Malaysia.
Reviewed selling overseas via wholly owned companies/in-house rather than independent distributors who tend to be more margin than volume orientated.
The currency headwinds that they had in 2018 referred to the weakness in Turkey and Argentina against the US$ last year .
PS
The AGM statement seems to have provoked some activity as on Friday there were two trades of 10k shares and one of 16k shares.
PPS
Given the AFS headwinds in both China and its neighbours, the current share price seems about right for me. I personally do not see much downside and my reading is that the price will rather lethargically drift up.

[zipstuck] 27/6/2019 14:36

I bought 2000 today. Happy to hold for the turn and think this a good entry point for a company that looks cheap on that basis

[tailgunner] 27/6/2019 12:34

Well.....didn't see too much wrong with that statement ....quite honest and upfront....and things in China on the improve....Doesnt warrant a 20p gurrying on the price...imo.......Hitting us with the 13m in bank, which I dont think has moved much from last year......and chance of future acquisitions, which we get every year, but not had one since I can remember...... If it goes on like this i may be forced to buy a load more.....There again, maybe someone will come along and try and buy us out at this stupid price.......

[tailgunner] 19/6/2019 12:34

Funny how a 3000 sell can drop price at once....but a 77000 buy yesterday and it didn't move at all.......

[cerrito] 17/5/2019 23:15

Iam not surprised on the weakness on the share price given the spread of ASF to HK as it must be impacting on them.
Of course they no doubt welcome recent weakness in sterling

[tailgunner] 14/5/2019 16:44

Someone in selling mode........

[cerrito] 26/4/2019 09:01

As an ANP and EAH holder, a recent article in the FT on African Swine Fever caught my attention. Both companies have said that sales have been hampered in China as they have been unable to visit their clients because of the disease.
ANP has of course highlighted this as a major uncertainty in their out look statement and both companies have in my view correct to say that.(.at least at the time they wrote it )that it is difficult to assess how this will wash out on a global basis. Of course ANP has been clear as to the effects on their sales in China.
I went to the recent ANP AR to see if this featured in the Key risks and uncertainties section-rather to my surprise I could not find such a section.
Obviously a question for the AGM and I note the notice for this has not been issued yet-no surprise as they tend to have it in July.
I see from notes from an AGM of a few years back that ANP swine sales were 30% of total worldwide; I have no idea what the percentage is for EAH half of whose sales I see in the FY to 3/18 were in the Far East.
Three things stood out for me from the FT article. First is that the disease only got to China in August; second is that the Chinese pig herd is likely to reduce by a third; and that so concerned are the US about the disease that the US National Pork Producers council has cancelled its annual World Pork Expo in Iowa this yea- I guess for ANP this must be an important event given their marketing efforts there-not sure about EAH.

[bottomfisher] 07/3/2019 10:08

Does the changing of the guard at Eco Animal Healthcare Group have any message for Anpario?. Peter Lawrence, Anpario's chairman, has resigned as long-time chairman of Eco Animal Healthcare, which he founded in 1972. He is being replaced as Eco's chairman by Richard Wood, who is Anpario's senior independent director.

In terms of sales Anpario is less than half the size of Eco Animal Healthcare, and the latter's market cap is roughly four times bigger. Eco's profit margins are considerably higher, although both companies have roughly the same return on capital.

Would a merger of these two companies make any sense, and could the change of
chairmen make it more likely?. Would appreciate any thoughts from Anpario followers who know this company far better than I do.

[hiddendepths] 06/3/2019 10:46

My 3500 at 340p.

[vprt] 06/3/2019 09:11

Very encouraging report - the long term profitable growth story is intact:
1. Credit to management for including details which show exactly when and where the sales setbacks were - and their largely one-off nature is obvious, especially in China. Brilliant growth in USA (up 31% with California to come), Spain (29%), Australia (45%). Explicit management confidence in return to sales growth in 2019 despite several temporary obstacles still hampering them - so when China comes back (after swine fever and Trump trade tantrums) and Brexit is done, revenues will really take off.
2. Lots of operational progress: Product launches, adding internet sales channel for SME customers, increasing production capacity (liquids), opening new subsidiaries (Mexico, Turkey). All of these operational steps forward are being delivered whilst at the same time boosting the bottom line by 34% to a net profit of £4m!
3. Current trading (2019) is ahead of 2018 - that's what I wanted to hear today

This is a high and increasing quality business that deserves a good multiple given its execution and room to grow with a long term outlook that is backed by several supportive trends. I am a happy holder and delighted that I have used the share price decline in recent months to make this one of my top holdings.

[tailgunner] 06/3/2019 09:09

Sounds good enough to me.....coming from a ex broker.. you obviously have a lot more insight than me.. Thank you for reply...

[hiddendepths] 06/3/2019 08:47

1) They're not down. They're 310-350 as they have been for days now. Nasty spread!

2) You can only see the buys. Someone is providing the stock so there are probably matching sells which are invisible to you. Even if the stock is coming from a marketmaker, the fact that the spread hasn't moved would indicate that the MM already has stock on their book and is quite happy to let it go at just under the offer price. It looks as if the provider of stock is not in a rush nor are they prepared to dump their shares on the market and depress the price. Whether it's a seller or a MM, I would not expect a price change until the overhang is cleared.

That's just my analysis as a former broker!

[tailgunner] 06/3/2019 08:24

All buys today....and down 10p at open... what???.

[cerrito] 01/3/2019 19:30

Yesterday Thursday was a bumper trading day by ANP standards and with a lot of sales(once agsin by ANP standards) going through. Somewhat surprised that the price has not moved but if you are trading at 310/350 that covers a multitude of sins.
Today the market has gone back to sleep.

[mtioc] 22/2/2019 16:31

Vprt I agree. It appears Mifid II is having unintended consequences. Regardless, guidance or information should not be selectively distributed.

[vprt] 22/2/2019 13:52

MTIOC: I should have given you credit - as you can see I passionately agree with your post!

[vprt] 22/2/2019 13:47

Many thanks for sharing the email exchange. And Digital Look seems useful to catch up on (some, presumably belated) broker forecasts.

But this is NOT very comforting from a private investor perspective! We should get the SAME info as they are feeding to the brokers. What is stopping them from doing an RNS with a rough range for revenues going forward?

Look at e.g. Purplebricks (PURP) - where I am thankfully not a shareholder - it just tanked yesterday after slashing revenue guidance with one rough and wide revenue range being replaced by another. Fair - everybody was told the same news at the same time.

This shoddy information sharing treats private investors as second class citizens - this is something management should be confronted with again: Either stop giving such selective "whisper" guidance to anyone, or give it to everybody. Management might "save face" by revenue/profit warnings & upgrades being unofficial - but that is NOT something only some (small, private) investors should be paying for.

Also, even if we for a moment assume that we CAN'T receive the same information (which I don't accept!), we should at least be told exactly WHEN such sensitive info is being given by the company to brokers - so that we can stay AWAY from trading the stock until that new info is reflected in the share price (after brokers have "published" reports to their clients). If I can't have the same information, at least I don't want to be the sucker on the other side of the trade of people who have it! I already feel cheated, to be frank...

[mtioc] 22/2/2019 06:24

Thanks. Really helpful. If Karen Prior is right, a listed company can issue de facto forecasts to institutional investors via its broker, but cannot issue those same forecasts to private shareholders. This appears to cut through the concept of treating all shareholders equally.

They should either brief all shareholders equally at the same time or stop providing information to institutions via brokers.