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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Eco Animal Health Group Plc | LSE:EAH | London | Ordinary Share | GB0032036807 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 94.00 | 93.00 | 95.00 | 94.00 | 94.00 | 94.00 | 32,008 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Chem,fertlizer Minrl Mng,nec | 85.31M | 1.01M | 0.0149 | 63.09 | 63.68M |
TIDMEAH
6 December 2017
ECO Animal Health Group plc ("ECO") (AIM: EAH)
Results for the six months ended 30 September 2017
ECO ANIMAL HEALTH REPORTS ANOTHER STRONG PERFORMANCE
HIGHLIGHTS
Financials
-- 35% increase in adjusted EBITDA to GBP8.5m (2016: GBP6.3m). -- 10% increase in pre-tax profit to GBP5.9m (2016: GBP5.3m) -- 8% increase in sales to GBP29.2m (2016: GBP26.9) -- 11% increase in gross profit to GBP14.2m (2016: GBP12.8m) on improved
margin
-- 13% increase in earnings per share to 6.39p (2016: 5.68p) -- 28% increase interim dividend to 3.2p (2016: 2.5p) -- 36% increase in cash generation from operations to GBP7.2m (2016: GBP5.4m)
leaving net cash of over GBP20 million at the period end.
Operations
-- Demand for Aivlosin® continues to grow strongly -- Strong performances in all major geographic areas, bar Latin America
excluding Mexico
-- New marketing authorisations gained in America and Malaysia - further
authorisations are expected in Canada and South East Asia.
-- Continued investment in new routes to market, product development and
people to support future growth.
Peter Lawrence, Executive Chairman of ECO Animal Health Group plc, commented:
"The second half of the year has started well with a strong and growing order book. ECO has a sound balance sheet with good and reliable cash generation. The Company continues to invest in research and product development programmes to obtain further marketing authorisations and efficiencies in production. I look forward with confidence to reporting another set of impressive results in 2018".
Contacts: ECO Animal Health Group plc Peter Lawrence 020 8336 6190 Marc Loomes 020 8447 6906 Spiro Financial Anthony Spiro 020 8336 6196 Peel Hunt LLP (Nominated Adviser) Dan Webster, Adrian Trimmings, George Sellar 020 7418 8900 N+1 Singer (Joint broker) Mark Taylor 020 7496 3069
ECO Animal Health Group plc is a leader in the development, registration and marketing of pharmaceutical products for animals. Our products for these global growth markets promote well-being. Our financial goals are achieved through the careful and responsible application of science to generate value for our shareholders.
Chairman's statement
I am pleased to report that ECO Animal Health Group has delivered another set of record results for the six months to 30 September 2017. ECO provides essential medications to the ever growing global animal protein production industry. The success of the Company reflects its investment over many years in obtaining marketing authorisations, which are a legal requirement in all of the countries it serves. Currently it holds several hundred marketing authorisations and its products are prescribed and sold in more than sixty countries.
The Company's consistent strategic focus is to concentrate on offering its medications into the key global food production markets. The standards imposed by the regulatory bodies that licence the use of pharmaceuticals for veterinary use are becoming ever more stringent. Consequently, the regulatory authorities require more in depth evaluation of drugs than ever before. ECO already satisfies these enhanced requirements, which means that it has a competitive advantage and is well placed to capitalise on further commercial opportunities.
Financial performance
Profit before tax in the period under review increased by over 10 per cent to almost GBP5.9m (2016: GBP5.3m) while sales advanced by over 8 per cent to GBP29.2m (2016: GBP26.9m). Earnings before interest, tax, depreciation, amortisation, share based payments, non-controlling (minority) interest and foreign exchange movements were almost GBP8.5m (2017: GBP6.3m) an increase of over 35 per cent. Gross profit advanced by 11 per cent to GBP14.2m (2016: GBP12.8m) and earnings per share rose 12.5 per cent to 6.39 pence per share (2016: 5.68 pence). Cash generated from operations remained robust advancing to GBP7.2m (2016: GBP5.4m).
Margins continued to improve compared to the same period last year, reflecting the success of our strategy to concentrate our sales effort on high value products, which offer the best long term returns for the Company.
Over recent months sterling has strengthened a little against major currencies. ECO continues to invoice more than 97 per cent of its sales in foreign currencies but the effect of the slightly stronger pound since our March 2017 year end has meant that the currency gains the Company benefitted from last year have not been repeated. Nevertheless, control of overheads meant that profit from operating activities was up over 30 per cent at GBP5.9m.
The board is pleased to declare an interim dividend of 3.2 pence per share (2016: 2.5 pence) to be paid on 12 April 2018 to shareholders on the register on 23 March 2018. This increase of 28 per cent reflects the board's continued confidence in the sustainable growth of our international business and the consequent implementation of a progressive dividend policy.
Operations:
Sales of Aivlosin®, our patented molecule for the treatment of economically important diseases in pigs and poultry, increased by almost 18 per cent in sterling during the period under review. Aivlosin® is prescribed under strict veterinary control at low, yet efficacious, dose rates for short duration treatments of specified diseases. It meets all current guidelines for the responsible use of antimicrobials, which when used appropriately, help to promote animal welfare and food safety.
Sales in the USA rose 33 per cent in sterling, compared with the same period last year, reflecting strong growth of the Aivlosin® water soluble granule formulation for use in swine suffering from enteric (gut) diseases. In late July, the Center for Veterinary Medicine (CVM) of the US Food and Drug Administration (FDA) approved this formulation for a new label indication. The approval applied to the control of swine respiratory disease (SRD) associated with Bordetella bronchiseptica, Haemophilus parasuis, Pasteurella multocida, and Streptococcus suis, which are important bacterial respiratory pathogens. Early sales of the Aivlosin® medicated feed additive formulation, which was approved at the end of March 2016, also contributed to revenue in the period. In Canada, sales were also significantly ahead. The SRD application is still under review by the Veterinary Drugs Directorate of Health Canada, which when approved, will add to sales in North America.
Revenue growth in South East Asia was buoyant. The regulatory files supporting the marketing authorisation granted by the European Medicines Agency in June 2016 for the use of Aivlosin® water soluble granules in chickens laying eggs for human consumption, with a zero day drug withdrawal period for eggs, were submitted to a number of countries in the region. Approvals were obtained in Thailand, prior to this period, and in Malaysia during the period; further approvals are expected. The granting of a zero withdrawal period is a significant advantage to egg producers, who as a result are not required to destroy eggs laid while birds are being treated. These new licenses underpin our development of closer relationships with major poultry producers, particularly those in the key egg producing markets of South East Asia.
Both Europe and Japan posted strong sales growth across the portfolio, reflecting our development of closer ties with key customers in these more mature markets.
Last year in China our subsidiary, Zhejiang ECO Biok Animal Health Products, delivered exceptional sales growth. The current year's sales reflect the organisation's consolidation of its strong position during a period of softer pork prices and in advance of strategic initiatives to target poultry producers. Sales of Aivlosin® continued to grow and the net profit in China increased by more than 20 per cent over the same period last year, once again reflecting the effectiveness of our overall strategy.
The excellent performance of Aivlosin® across the majority of geographies was tempered by continuing weakness in some Latin American markets including Brazil, mainly due to slow regulatory responses and a generally weak economic environment. Sales in Mexico, on the other hand, were very strong. This performance was boosted by our first Aivlosin® approval for the medication of drinking water for the treatment of infections caused by Mycoplasma in poultry laying eggs for human consumption with a zero day drug withdrawal period for eggs in Latin America, received in January 2017.
People
David Danson, who completed nine years as a non executive director, will retire on 1 December from the board in accordance with corporate governance guidelines. I would like to thank David for his wise counsel, which has been invaluable and reflects his extensive business experience and Council membership of the Royal College of Veterinary Surgeons. Andrew Jones joined us as a non executive director on 1 December. Andrew brings a wealth of board experience gained across large listed, private equity backed and small to medium sized enterprises. Andrew's particular focus is on the life sciences sector and importantly, the animal health industry.
While I have been executive chairman of the Company since its formation, the time is right for my role to become non executive. This change will take effect from 1 January 2018 and conforms to best practice corporate governance.
Outlook:
The second half of the year has started well with a strong and growing order book. ECO has a sound balance sheet with good and reliable cash generation. The Company continues to invest in research and product development programmes to obtain further marketing authorisations and efficiencies in production. I look forward with confidence to reporting another set of impressive results in 2018.
Peter A Lawrence
05 December 2017
CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS TO 30 SEPTEMBER 2017
Six months Six months Year to to ended 30.09.17 30.09.16 31.03.17 Notes (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Revenue 3 29,204 26,939 61,422 Cost of sales (14,970) (14,153) (31,103) Gross Profit 14,234 12,786 30,319 Other operating income 138 98 379 Administrative expenses (6,050) (6,774) (14,232) Currency (losses)/profits (300) 277 (55) Amortisation of intangible (1,700) (1,593) (3,088) assets Share based payments (380) (240) (678) Profit from operating 5,942 4,554 12,645 activities: Net finance (costs)/income (102) 724 784 Share of profit of associate 24 31 23 Profit before income tax 5,864 5,309 13,452 Income tax charge (641) (806) (1,453) Profit for the period from 5,223 4,503 11,999 continuing operations Attributable to: Owners 4,188 3,632 10,565 Minority interest 1,035 871 1,434 5,223 4,503 11,999 BASIC EARNINGS PER SHARE 5 6.39p 5.68p 16.35p FULLY DILUTED EARNINGS 5 6.37p 5.65p 16.17p PER SHARE Earnings from continuing activities before interest, taxation, depreciation, amortisation and share based payments 8,185 6,552 17,009 Exclude foreign exchange 300 (277) 55 differences EBITDA 8,485 6,275 17,064 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS TO 30 SEPTEMBER 2017 Six months Six months Year to to ended 30.09.17 30.09.16 31.03.17 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Profit for the period 5,223 4,503 11,999 Foreign currency translation (482) 998 1,030 differences Defined benefit pension plan - - (483) - actuarial losses Deferred tax on revaluations - - 10 Other comprehensive income (482) 998 557 for the period Total comprehensive income 4,741 5,501 12,556 for the period Attributable to: Owners 3,858 4,341 10,829 Minority interest 883 1,160 1,727 4,741 5,501 12,556 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS TO 30 SEPTEMBER 2017 Share Share Other Revaluation Treasury Retained Total Minority Total Capital Premium Reserves Reserves Reserve Earnings Interest Equity Account Account GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 At 1 April 2016 3,205 55,590 2,028 654 (1,144) 21,824 82,157 3,202 85,359 Profit for - - - - - 10,565 10,565 1,434 11,999 the year Other comprehensiveincome: Foreign - - - - - 737 737 293 1,030 currencydifferences Actuarial - - - - - (483) (483) - (483) (losses) onpension scheme assets Deferred taxation - - - 10 - - 10 - 10 change inrate Total - - - 10 - 10,819 10,829 1,727 12,556 comprehensive income for the year Transactions with ownersrecorded directly in equity Contributions by anddistributions to owners Movement - - - - 1,144 - 1,144 - 1,144 in TreasuryReserve arising fromdisposal of jointly ownedshares Issue of shares 66 2,517 - - - - 2,583 - 2,583 in the year Sale of treasury - 47 - - - 60 107 - 107 shares Share-based - - 678 - - - 678 - 678 payments Transfers on - - (257) - - 257 - - - expiry of options Dividends - - - - - (3,667) (3,667) (587) (4,254) relating to 2016 Transactions 66 2,564 421 - 1,144 (3,350) 845 (587) 258 with owners Balance as at 31 3,271 58,154 2,449 664 - 29,293 93,831 4,342 98,173 March 2017 Total comprehensive incomefor the period: Profit for - - - - - 4,188 4,188 1,035 5,223 the period Other comprehensiveincome Foreign - - - - - (330) (330) (152) (482) currency translationdifferences Total - - - - - 3,858 3,858 883 4,741 comprehensive income for the period Transactions with owners Issue of shares 17 568 - - - - 585 - 585 in the year Share based - - 380 - - - 380 - 380 payments Transfer to - - (294) - - 294 - - - retained earnings on option expiry Dividends - - - - - (1,635) (1,635) (1,389) (3,024) Total 17 568 86 - - (1,341) (670) (1,389) (2,059) transactions withowners At 30 September 3,288 58,722 2,535 664 - 31,810 97,019 3,836 100,855 2017 Prior interim period At 1 April 2016 3,205 55,590 2,028 654 (1,144) 21,824 82,157 3,202 85,359 Total comprehensiveincome for the period: Profit for - - - - - 3,632 3,632 871 4,503 the period Other comprehensive income Foreign - - - - - 709 709 289 998 currency translationdifferences Total - - - - - 4,341 4,341 1,160 5,501 comprehensive income for the period Transactions with owners Issue of shares 30 1,165 - - - - 1,195 - 1,195 in the year Movement - - - - 1,134 - 1,134 - 1,134 in TreasuryReserve arising fromdisposal of jointly ownedshares Disposal of - 47 - - - 59 106 - 106 treasury shares Share based - - 240 - - - 240 - 240 payments Transfer - - (244) - - 244 - - - to retainedearnings on option expiry Dividends - - - - - (1,209) (1,209) (586) (1,795) Total 30 1,212 (4) - 1,134 (906) 1,466 (586) 880 transactions withowners At 30 September 3,235 56,802 2,024 654 (10) 25,259 87,964 3,776 91,740 2016 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at As at As at 30.09.17 30.09.16 31.03.17 (unaudited) (unaudited) (audited) Notes GBP000 GBP000 GBP000 ASSETS Non current assets Goodwill and other 7 55,956 51,975 53,883 intangibles Property,plant 8 1,888 1,851 1,865 and equipment Investment property 9 185 185 185 Investments 113 98 97 58,142 54,109 56,030 Current assets Inventories 18,830 16,636 19,675 Trade and other receivables 14,583 15,393 16,158 Income tax recoverable 470 163 395
Other taxes and social 961 565 897 security Cash and cash equivalents 20,304 18,525 20,602 55,148 51,282 57,727 Total assets 113,290 105,391 113,757 Current liabilities Trade and other payables (10,260) (11,617) (13,733) Income tax (244) (377) (238) Other taxes and social (702) (770) (447) security Dividends (40) (37) (39) (11,246) (12,801) (14,457) Total assets less current 102,044 92,590 99,300 liabilities Non current liabilities Deferred tax (1,189) (750) (1,027) Dilapidations on - (100) (100) property leases 100,855 91,740 98,173 Equity Capital and reserves Called up share capital 3,288 3,235 3,271 Share premium 58,722 56,802 58,154 Treasury Reserve - (10) - Revaluation reserve 664 654 664 Other reserves 2,535 2,024 2,449 Retained earnings 31,810 25,259 29,293 97,019 87,964 93,831 Minority interest 3,836 3,776 4,342 Total equity 100,855 91,740 98,173 CONSOLIDATED STATEMENT OF CASH FLOWS Six months to Six months to Year ended 30.09.17 30.09.16 31.03.17 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Cashflows from operating activities Profit before tax 5864 5309 13452 Adjustment for: Net finance costs 102 (724) (784) Depreciation of property 139 134 264 plant and equipment Losses/(gains) on disposal - 1 37 of non-current assets Amortisation of intangible 1,700 1,593 3,088 assets Impairment of intangible - - 297 assets Pension payments - - (76) Share of associate's results (24) (31) (23) Share based payments 380 240 678 Operating cash flow 8,161 6,522 16,933 before movement in working capital Change in inventories 845 (1,043) (4,082) Change in receivables 1,511 (1,812) (3,195) Change in payables (3,318) 1,774 3,445 Cash generated from 7,199 5,441 13,101 operations Income tax (paid) (548) (555) (1,286) Net cash inflow from 6,651 4,886 11,815 operating activities Cash flows from investing activities Purchase of property (194) (86) (265) plant and equipment Costs of acquiring (3,773) (4,231) (7,931) drug registrations Finance income 61 84 103 Net cash (used in) investing (3,906) (4,233) (8,093) activities Cash flows from financing activities Proceeds from issue of 585 2,435 3,834 share capital and sale ofjointly owned and treasury shares Dividends paid (3,024) (1,795) (4,252) Net cash from financing (2,439) 640 (418) activities Net increase in cash 306 1,293 3,304 and cash equivalents Foreign exchange movements (604) 1,567 1,633 Cash and cash equivalents at 20,602 15,665 15,665 the beginning of theperiod Cash and cash equivalents 20,304 18,525 20,602 at the end of theperiod
NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2017
1. Basis of preparation The financial information for the period to 30 September 2017 does not constitute statutory accounts as defined by Section 435 of the Companies Act 2006. It has been prepared in accordance with the accounting policies set out in, and is consistent with, the audited financial statements for the twelve months to 31 March 2017.
The Group applies revised IAS 1 "Presentation of Financial Statements (2007)". As a result, the Group presents all non-owner changes in equity in consolidated statements of comprehensive income and all owner changes in equity in consolidated statements of changes in equity.
2. Statement of compliance The interim financial statements do not include all of the information required for full annual financial statements and do not comply with all of the disclosure requirements in IAS 34 "Interim Financial Reporting". Accordingly, whilst the interim statements have been prepared in accordance with IFRS, they cannot be construed as being in full compliance with IFRS and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2017.
3. Revenue is derived from the Group's animal pharmaceutical businesses.
4. Principal risks and uncertainties These were set out on pages 63-66 of the notes to the consolidated financial statements for the year ended 31 March 2017. The key exposures are to foreign currency exchange rates, potential delays in obtaining marketing authorisations and single sources of supply for some raw materials and have remained unchanged since the year end.
5.Earnings per share
Six months to Six months to Year ended 30.09.17 30.09.16 31.03.17 (unaudited) (unaudited) (audited) Weighted average number of 65,517 63,992 64,638 shares in issue (000's) Fully diluted weighted 65,787 64,301 65,356 average number of shares in issue(000's) Profit attributable 4,188 3,632 10,565 to equity holders of the company (GBP's) Basic earnings per 6.39 5.68 16.35 share (pence) Fully diluted earnings 6.37 5.65 16.17 per share (pence)
6.Dividends
Six months to Six months to Year ended 30.09.17 30.09.16 31.03.17 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Dividend in respect of the year ended 31 March 2016 at 1.9p/5.7p per ordinary share - 1,209 3,675 Dividend in respect of the year ended 31 March 2017 at 2.5p per ordinary share 1,635 - - Dividend waived by employee - - (8) benefit trust 1,635 1,209 3,667 Dividend paid by subsidiary to non-controlling interests (minorities) 1,389 586 - 3,024 1,795 3,667
The company paid a further dividend of 4.6p per share on 6 October 2017, after the period end. The total paid was GBP3.02 million.
7.Intangible non-current assets
Distribution Development Goodwill Rights Costs Total Cost GBP000 GBP000 GBP000 GBP000 Cost at 1 April 2016 17,930 1,442 59,712 79,084 Additions - - 4,231 4,231 Cost at 30 September 17,930 1,442 63,943 83,315 2016 Additions - - 4,007 4,007 Contributions from - - (307) (307) third parties Cost at 31 March 2017 17,930 1,442 67,643 87,015 Additions - - 3,773 3,773 Cost at 30 September 17,930 1,442 71,416 90,788 2017 Amortisation Amortisation at - 687 29,060 29,747 1 April 2016 Charge for the period - 36 1,557 1,593 Amortisation at 30 - 723 30,617 31,340 September 2016 Charge for the period - 36 1,459 1,495 Impairment charge - - 297 297 Amortisation at - 759 32,373 33,132 31 March 2017 Charge for the period - 39 1,661 1,700 Amortisation at 30 - 798 34,034 34,832 September 2017 Net book value at 17,930 644 37,382 55,956 30 September2017 Net book value at 17,930 683 35,270 53,883 1 April 2017 Net book value at 17,930 719 33,326 51,975 30 September2016 Net book value at 17,930 755 30,652 49,337 1 April 2016
8.Property, plant and equipment
Fixtures, Freehold Plant and fittings & Motor Property Machinery equipment Vehicles Total Cost GBP000 GBP000 GBP000 GBP000 GBP000 Cost at 1 April 2016 730 1,658 710 53 3,151 Additions - 30 24 32 86 Disposals - (13) - - (13) Foreign exchange - 84 1 8 93 movements Cost at 30 September 730 1,759 735 93 3,317 2016 Additions - 17 131 31 179 Disposals - (267) - (47) (314) Foreign exchange - 32 (1) (2) 29 movements Cost at 1 April 2017 730 1,541 865 75 3,211 Additions - 51 143 - 194 Foreign exchange - (30) - (5) (35) movements Cost at 30 September 730 1,562 1,008 70 3,370 2017 Depreciation Depreciation at - 772 507 39 1,318 1 April 2016 Charge for 5 84 43 2 134 the period Disposals - (12) - - (12) Foreign exchange - 24 - 2 26 movements Depreciation at 30 5 868 550 43 1,466 September 2016 Charge for 8 82 35 5 130 the period Disposals - (240) - (37) (277) Foreign exchange - 27 2 (2) 27 movements Depreciation at 13 737 587 9 1,346 1 April 2017 Charge for 6 76 52 5 139 the period Foreign exchange - (3) - - (3) movements Depreciation at 30 19 810 639 14 1,482 September 2017 Net book value Net book value at 30 711 752 369 56 1,888 September 2017 Net book value at 717 804 278 66 1,865 1 April 2017 Net book value at 30 725 891 185 50 1,851 September 2016 Net book value at 730 886 203 14 1,833 1 April 2016
9.Investment property
Freehold Property Total Valuation GBP000 GBP000 Valuation at 1 April 2016, 30 September 2016, 189 189 31March 2017 and 30 September 2017 Depreciation Depreciation at 1 April 2016, 30 September 4 4 2016,31 March 2017 and 30 September 2017 Net Book Value Net Book Value at 1 April 2016, 30 September2016, 185 185 31 March 2017 and 30 September 2017
This financial information was approved by the board on 05 December 2017.
Copies of this interim report are being sent to all of the Company's shareholders. Further copies can be obtained from the Company's registered office at 78 Coombe Road, New Malden, Surrey KT3 4QS.
DIRECTORS AND OFFICERS Peter Lawrence (Chairman) Marc Loomes (Chief Executive) Kevin Stockdale (Finance Director) Julia Trouse (Executive Director and Company Secretary) Brett Clemo (Executive Director) Andrew Jones (Non-Executive Director, appointed 1stDecember 2017) Anthony Rawlinson (Non-Executive Director) REGISTERED OFFICE 78 Coombe Road, New Malden, Surrey. KT3 4QS Tel: 020-8336-2900 Fax: 020-8336-0909 COMPANY NUMBER 01818170 INFORMATION AT www.ecoanimalhealthgroupplc.com
LEI: 2138009XN9DJ3YP70B55
Classification: 1.2. Half yearly financial reports and audit reports/limited reviews
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(END) Dow Jones Newswires
December 06, 2017 02:00 ET (07:00 GMT)
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