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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 0.0% 352.50 345.00 360.00 0.00 07:34:15
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Pharmaceuticals & Biotechnology 72.1 5.2 3.8 92.3 238

Eco Animal Health Group PLC Half-Year Report

04/02/2021 7:02am

UK Regulatory (RNS & others)


Eco Animal Health (LSE:EAH)
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TIDMEAH

RNS Number : 9854N

Eco Animal Health Group PLC

04 February 2021

ECO Animal Health Group plc ("ECO")

(AIM: EAH)

Results for the six months ended 30 September 2020

ECO REPORTS A BUOYANT FIRST HALF AND POSITIVE FULL YEAR INDICATIONS

HIGHLIGHTS

Financials

   --    Sales at GBP42.5m (2019 restated*: GBP28.3m) 
   --    EBITDA at GBP6.7m (2019 restated*: GBP1.7m) 
   --    Profit before taxation of GBP4.5m (2019 restated profit*: GBP1.1m) 
   --    Profit after taxation of GBP3.9m (2019 restated profit*: GBP1.3m) 
   --    Earnings per share of 3.13p (2019: restated Earnings per share*: 1.68p) 
   --    Cash generated by operations of GBP3.5m (2019 restated*: GBP1.3m) 
   --    Net cash at 30th September 2020 of GBP12.9m (2019: GBP13.4m) 

* Prior period figures have been restated to reflect adjustments arising from the March 2020 audit.

Operations

   --    Exceptionally strong recovery in China following the African Swine Fever impact in 2019 
   --    USA recovery following the easing in geopolitical trade tensions between China and the USA 
   --    Latin America performing strongly, led by Brazil 

-- New marketing authorisation from the European Medicines Agency for the use of Aivlosin(R) 625 mg/g Water Soluble Granules in pigs for the treatment of Mycoplasma hyopneumoniae

   --    Strong trading in the third quarter 

Dr Andrew Jones, Non-executive Chairman of ECO Animal Health Group plc, commented:

"This set of results for the first half builds upon the strong trading seen in China during the latter part of last year with an acceleration in sow restocking and an appreciation of the benefits that Aivlosin(R) brings to animal health and productivity. We are pleased to be releasing these Interim results at the same time as the audited final results for March 2020 and together they mark a turning point in the reassessment of the Group's prior accounting. We are experiencing strong forward trading as evidenced by the successive trading updates and we are also excited with the continued new product development successes. The Directors are confident and excited about the future prospects for the business."

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Contacts:

 
 
   ECO Animal Health Group plc 
   Marc Loomes (CEO) 
   Christopher Wilks (CFO) 
   Andrew Jones (Chairman)                         020 8447 8899 
 IFC Advisory 
  Graham Herring 
  Zach Cohen                                      020 3934 6630 
 N+1 Singer (Nominated Adviser & Joint Broker) 
  Mark Taylor 
  Iqra Amin                                       020 7496 3000 
 Peel Hunt LLP (Joint Broker) 
  James Steel 
  Dr Christopher Golden                           020 7418 8900 
 
 
 
 
 

ECO Animal Health Group plc ("ECO" or "the Group") researches, develops and commercialises products for livestock. Our business strategy is to generate shareholder value by achieving the maximum sales potential from the existing product portfolio whilst investing in Research and Development ("R&D") for new products, particularly vaccines, and seeking to in-license new products.

Chairman's statement

I am pleased to report that despite the considerable challenges presented by Covid-19 we report a set of interim results which demonstrate considerable strength in revenue and profitability.

We welcome Dr Frank Armstrong to our Board. Frank joined us on the 1(st) May 2020 and he brings a wealth of experience in life sciences - businesses large and small - and in particular around the areas of management of Research and Development. This is an increasing feature of our business and his experience will add greatly to our future endeavours.

Audit of the Group's results for the Year ended 31st March 2020

We are releasing this Interim statement on the same day as the delayed release of the Annual report for the year ended 31st March 2020. We are pleased that the first audit by our new auditors, BDO, is complete and the thorough review undertaken, together with the comprehensive prior year restatements sets the Group on a positive footing for future periods.

Covid-19

This trading period has coincided with the primary outbreak of Covid-19 in Europe and the USA and necessary transition to remote working and social distancing has by and large been a smooth and uninterrupted process. Certainly in terms of order volumes, reaching customers and the logistics of order fulfilment we could not have hoped for a better process. The adoption of new ways of working and utilising all that modern on-line communication offers has been a great credit to the skills of our staff members, customers and suppliers and on behalf of the Board I would like to express our gratitude to them.

Financial Performance

Revenue was sharply higher in the first six months to 30th September 2020 at GBP42.5 million (30th September 2019 - GBP28.3 million, driven in the main by a resurgence in China. This is further discussed in the Business Performance comments below. At GBP42.5 million this first half period is at roughly the same run-rate with the GBP43.8 million revenue recorded in the second half of the year ended 31st March 2020. Given the historical pattern of second half weighting to revenue this underlines the strength of the revenue performance in this period.

The gross margin in the first six months has been an average of 48%. This is ahead of the full year ended 31st March 2020 (46%) and considerably stronger than that recorded in the six months ended 30th September 2019 (43%). As reported last year the gross margins were negatively impacted in the USA and as a result of the stronger pork market in the USA the margins have recovered to previously seen levels.

Administrative expenses of GBP10.5 million (2019 - GBP7.2 million) were incurred, the increase being associated with variable costs such as performance related bonus accruals, investment in new members of staff and certain exceptional costs.

Research and development expenditure shown on the income statement and together with the amount capitalised represented a cash investment of 10% of revenue in the six months ended 30 September 2020 (17% in the six month period ended 30th September 2019 restated). In response to the Covid-19 pandemic the Board instigated a prioritisation exercise in the R&D portfolio to conserve cash. Additionally, the revenue in the period was ahead of budget which also results in a slightly lower ratio for a budgeted amount of R&D expenditure.

Earnings before interest, tax, depreciation, amortisation, share based payments and foreign exchange movements ("Adjusted EBITDA") were GBP6.7 million (2019 restated: GBP1.7 million). This increase in profitability was directly a result of the higher revenue at greater gross margins and partially offset by increased R&D investment and overheads.

Cash generated from operations was GBP3.5 million (2019: GBP1.3 million). This was a particularly strong performance which was inline with the cash generated in 2019 allowing for an element of inventory build which was planned ahead of Brexit.

Net cash at 30th September 2020 was GBP12.9 million (31st March 2020: GBP9.8 million). The higher cash position arose from stronger trading and judicious control of cash expenditure in the midst of uncertainty surrounding Covid-19 and its impact on world economies. This consolidated cash position at 30th September 2020 includes GBP9.7 million (March 2020 - GBP5.3 million) which is held in the Group's subsidiary in China. A portion of this cash is repatriated from China once per annum by dividend declaration; the Group's share which is received in the UK is 51%.

Business Performance

The geographical analysis of the Group's revenue in the six months ended 30th September 2020 compared to the prior period in 2019 and the full year ended 31st March 2020 was as follows:

 
                                      6 months ended 30th 
 Revenue Summary                           September         Year ended 
                                                                 31(st) 
                                                                  March 
                                          2020        2019         2020       % change 
                                       (GBP'm)     (GBP'm)      (GBP'm)   2019 to 2020 
                                                  Restated     Restated 
 China and Japan                          20.8         7.0         23.1           197% 
 North America (USA and Canada)            6.4         3.6         11.6            78% 
 South and South East Asia                 4.0         7.1         14.2          (44%) 
 Latin America                             6.4         5.1         12.6            25% 
 Europe                                    4.1         4.7          7.6          (13%) 
 Rest of World and UK                      0.8         0.8          3.0             0% 
                                          42.5        28.3         72.1            50% 
  --------------------------------  ----------  ----------  -----------  ------------- 
 

Group revenue improved by 50% to GBP42.5 million compared to the prior period in 2019 - a period which continued to be dominated by the unprecedented impact of Covid-19.

The recovery from ASF in China has been widely reported. The rate of restocking of the pig herd has been ahead of most predictions; the strong pork commodity price driving a number of mechanisms to increase the number of breeding sows and resulting in extraordinary farm profitability. This is turn has resulted in the greater use of premium medications such as Aivlosin(R). It is believed that the efficacy benefits that new users have experienced will result in a number of new, long term, customers.

Revenue in North America, USA in particular, has been strong with a return to pre-2019 levels of business and margins. This has been a result of a normalisation in pork prices in that market as well as export markets (China) becoming available.

India had a steady six months; the poultry market has been badly affected during the Covid-19 pandemic but commentators are expecting a recovery during 2022.

Brazil continues to record strong revenue resulting from a buoyant domestic and export swine market as well as an effective in-country distributor.

Research and Development

In our core product area, a marketing authorisation was obtained from the European Medicines Agency for the use of Aivlosin(R) Water Soluble Granules in the treatment of pigs for Mycoplasma hyopneumoniae. This, together with the equivalent authorisation in the USA and Canada received in January 2021 further demonstrates the strength and depth of our cornerstone product family and the "evergreening" of the Group's core offering.

The Group will continue to invest in building a product pipeline targeting both viral and bacterial diseases of economic importance in pigs and poultry, with the intention of developing a range of vaccines and new products to complement our existing antimicrobial business. The product pipeline contains a mix of well-established concepts as well as novel, potentially disruptive technologies and approaches. These are in various stages of development thereby ensuring that the Group has several mid and late stage projects able to deliver revenues from 2022/23. We were very pleased to announce the approval of the first of these vaccine projects - this was received in January 2021 in Brazil and is for the combined vaccination of pigs against Porcine Circovirus Type2 and Mycoplasma hyopneumoniae.

Brexit

The Group has successfully transferred all EU marketing authorisations to a new European subsidiary, ECO Animal Health Europe Limited with a registered address in Dublin, Republic of Ireland. All contingency planning is in place and the financial and operational impact of Brexit is expected to be minimal.

Prior to 31(st) December 2020, the vast majority of orders for delivery in the first quarter of the calendar year 2021 were delivered to insulate the Group from any possible effects of logistical issues, port delays and transport interruptions.

Dividend

The directors recognise the importance of the dividend to shareholders. However, having due regard to the Group's significant investment in new product development, operating cash flow, and cash balances, the directors consider it prudent to defer the declaration of a dividend at this time.

Outlook

Performance so far in the current financial year ending 31st March 2021 has been strong with the strength seen in both our Chinese and US markets continuing into the second half of our current financial year. In October 2020, we announced that n otwithstanding the historical second half weighting to the Group's revenue, if the first half revenue trends continued through the second half of the financial year the Board expected that the Group's full year revenue for the year ending 31st March 2021 would exceed market expectations. This resulted in an upgraded market expectation both for revenue and profitability.

On 24th November 2020 we confirmed that strong trading had continued during November and, being mindful of the continuing global uncertainties and four months remaining until the end of the financial year, we were confident of meeting the upgraded market expectations.

On 21st January 2021 we issued a positive trading update, confirming Group revenues and EBITDA were expected to be significantly ahead of market expectations for the year ending 31st March 2021. We noted that the strength in the Chinese market, supported by the rebuilding of pig herds and the high price for pork, continued through the third quarter and the outlook for the final quarter sales continued these strong trading trends.

We look forward to the rest of this financial year and our reporting prospects for 2021 with continuing optimism.

Dr Andrew Jones

Non-Executive Chairman

3 February 2021

 
                                             CONSOLIDATED INCOME STATEMENT 
                                       FOR THE SIX MONTHS TO 30th SEPTEMBER 2020 
 
                                                              Six months             Six months             Year ended 
                                                             to 30.09.20            to 30.09.19               31.03.20 
                                          Notes              (unaudited)            (unaudited)              (audited) 
                                                                GBP000's               GBP000's               GBP000's 
                                                                                      Restated* 
 Revenue                                    4                     42,530                 28,316                 72,106 
 Cost of sales                                                  (22,098)               (16,197)               (38,742) 
                                                 -----------------------  ---------------------  --------------------- 
 Gross Profit                                                     20,432                 12,119                 33,364 
 Other income                                                        397                      8                    105 
 Administrative expenses                                        (10,524)                (7,154)               (16,991) 
 R&D expense                                                     (4,093)                (3,563)                (8,775) 
 Currency profits/(losses)                                         (843)                    714                  (539) 
 Amortisation of intangible assets                                 (789)                  (821)                (1,685) 
 Share based payments                                               (85)                  (208)                  (284) 
                                                 -----------------------  ---------------------  --------------------- 
 Profit from operating activities:                                 4,495                  1,095                  5,195 
 Net finance cost                                                   (39)                    (4)                   (30) 
 Share of profit of associate                                          -                     42                     42 
                                                 -----------------------  ---------------------  --------------------- 
 Profit before income tax                                          4,456                  1,133                  5,207 
 Income tax benefit/(charge)                                       (598)                    130                (1,032) 
                                                 -----------------------  ---------------------  --------------------- 
 Profit for the period                                             3,858                  1,263                  4,175 
                                                 -----------------------  ---------------------  --------------------- 
 
 Attributable to: 
 Owner of parent company                                           2,113                  1,133                  2,582 
 Non-controlling interest                                          1,745                    130                  1,593 
                                                 -----------------------  ---------------------  --------------------- 
                                                                   3,858                  1,263                  4,175 
                                                 =======================  =====================  ===================== 
 
 Earnings per share (pence 2019 - 
  restated)                                 6                       3.13                   1.68                   3.82 
 
 Diluted earnings per share (pence 
  - restated)                               6                       3.01                   1.67                   3.67 
 
 Earnings before interest, taxation, 
  depreciation, 
 amortisation and share based payments 
  (EBITDA)                                                         5,838                  2,408                  7,823 
 Exclude foreign exchange differences                                843                  (714)                    539 
 Adjusted EBITDA excluding foreign 
  exchange differences                                             6,681                  1,694                  8,362 
                                                 =======================  =====================  ===================== 
 
 *Details of the restatement, which is unaudited, 
  is presented in Note 3. 
 
 
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 
                                                         Six months              Six months             Year ended 
                                                        to 30.09.20             to 30.09.19               31.03.20 
                                                        (unaudited)             (unaudited)              (audited) 
                                                           GBP000's                GBP000's               GBP000's 
                                                                                  Restated* 
 
 Profit for the period                                        3,858                   1,263                  4,175 
 
 Other Comprehensive income/(losses) (net 
  of related tax effects): 
 
 Items that will or may be reclassified 
  to profit/(loss) in future periods: 
 Revaluation of freehold property                                 -                       -                   (92) 
 Adjustment for intangible assets - note 
  3                                                               -                     835                      - 
 Adjustment to tax rates on previously 
  reported adjustments - note 3                                   -                   (617)                      - 
 Foreign currency translation differences                       507                      47                     98 
 
 Items that will not be reclassified: 
 Defined benefit plan - actuarial losses                          -                       -                     12 
 
 Other comprehensive income/(losses) for 
  the period                                                    507                     265                     18 
                                             ----------------------  ----------------------  --------------------- 
 
 Total comprehensive income for the period                    4,365                   1,528                  4,193 
 
 Attributable to: 
 Owners of the parent Company                                 2,651                   1,424                  2,561 
 Non-controlling interest                                     1,714                     104                  1,632 
                                                              4,365                   1,528                  4,193 
                                             ======================  ======================  ===================== 
 
 *Details of the restatement, which is unaudited, 
  is presented in Note 3. 
 
 
                                                                  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 
                                                                                                 Foreign                                      Minority 
                            Share            Share         Revaluation            Other         Exchange        Retained          Total                        Total 
                          Capital          Premium            Reserves         Reserves          Reserve        Earnings                      Interest        Equity 
                          Account          Account 
                         GBP000's         GBP000's            GBP000's         GBP000's         GBP000's        GBP000's       GBP000's       GBP000's      GBP000's 
 FOR THE YEARED 
  31 MARCH 2020 
 Balance as 
  at 31 March 
  2019                      3,372           62,650                 664              106              467          17,214         84,473          5,102        89,575 
 Profit for 
  the year                      -                -                   -                -                -           2,582          2,582          1,593         4,175 
 Other 
 comprehensive 
 income: 
 Foreign currency 
  differences                   -                -                   -                -               59               -             59             39            98 
 Revaluation 
  of freehold                   -                -                (92)                -                -               -           (92)              -          (92) 
 Actuarial 
  (losses) 
  on pension 
  scheme assets                 -                -                   -                -                -              12             12              -            12 
 Total 
  comprehensive 
  income for 
  the year                      -                -                (92)                -               59           2,594          2,561          1,632         4,193 
                    -------------  ---------------  ------------------  ---------------  ---------------  --------------  -------------  -------------  ------------ 
 Transactions 
 with owners 
 recorded directly 
 in equity: 
 Issue of shares 
  in the year                   5              232                   -                -                -               -            237              -           237 
 Share-based 
  payments                      -                -                   -                -                -             284            284              -           284 
 Deferred tax 
  on share-based 
  payments                      -                -                   -                -                -           (373)          (373)              -         (373) 
 Dividends                      -                -                   -                -                -         (7,453)        (7,453)          (968)       (8,421) 
 Transactions 
  with owners                   5              232                   -                -                -         (7,542)        (7,305)          (968)       (8,273) 
                    -------------  ---------------  ------------------  ---------------  ---------------  --------------  -------------  -------------  ------------ 
 Balance as 
  at 31 March 
  2020                      3,377           62,882                 572              106              526          12,266         79,729          5,766        85,495 
                    =============  ===============  ==================  ===============  ===============  ==============  =============  =============  ============ 
 
 FOR THE SIX MONTHSED 30 SEPTEMBER 
  2020 
 Profit for 
  the period                    -                -                   -                -                -           2,113          2,113          1,745         3,858 
 Other 
 comprehensive 
 income: 
 Foreign currency 
  differences                   -                -                   -                -              538               -            538           (31)           507 
 Total 
  comprehensive 
  income for 
  the period                    -                -                   -                -              538           2,113          2,651          1,714         4,365 
                    -------------  ---------------  ------------------  ---------------  ---------------  --------------  -------------  -------------  ------------ 
 Transactions 
 with owners 
 recorded directly 
 in equity: 
 Issue of shares 
  in the period                 -                6                   -                -                -               -              6              -             6 
 Share-based 
  payments                      -                -                   -                -                -              85             85              -            85 
 Total 
  transactions 
  with owners                   -                6                   -                -                -              85             91              -            91 
                    -------------  ---------------  ------------------  ---------------  ---------------  --------------  -------------  -------------  ------------ 
 Balance as 
  at 30 September 
  2020                      3,377           62,888                 572              106            1,064          14,464         82,471          7,480        89,951 
                    =============  ===============  ==================  ===============  ===============  ==============  =============  =============  ============ 
 
 
 
                                                                 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 
                                                                                                Foreign                                      Minority 
                            Share            Share      Revaluation            Other           Exchange        Retained          Total                         Total 
                          Capital          Premium         Reserves         Reserves            Reserve        Earnings                      Interest         Equity 
                          Account          Account 
                         GBP000's         GBP000's         GBP000's         GBP000's           GBP000's        GBP000's       GBP000's       GBP000's       GBP000's 
 FOR THE SIX MONTHSED 30 SEPTEMBER 
  2019 
 
   Balance as at 
   31 March 2019            3,372           62,650              664              106                467          17,214         84,473          5,102         89,575 
 
   Profit for the 
   period - as 
   reported                     -                -                -                -                  -           1,018          1,018            130          1,148 
 Prior period 
  adjustments: 
 Adjustment for 
  intangible 
  assets 
  - note 3                      -                -                -                -                  -             115            115              -            115 
                    -------------  ---------------  ---------------  ---------------  -----------------  --------------  -------------  -------------  ------------- 
 Profit for the 
  period - 
  restated                      -                -                -                -                  -           1,133          1,133            130          1,263 
 Other 
 comprehensive 
 income: 
 Adjustment for 
  intangible 
  assets 
  - note 3                      -                -                -                -                  -             835            835              -            835 
 Adjustment to 
  tax rates on 
  previously 
  reported 
  adjustments - 
  note 3                        -                -                -                -                  -           (617)          (617)              -          (617) 
 Foreign currency 
  differences                   -                -                -                -                 73               -             73           (26)             47 
 Total 
  comprehensive 
  income for the 
  period                        -                -                -                -                -73           1,351          1,424            104          1,528 
                    -------------  ---------------  ---------------  ---------------  -----------------  --------------  -------------  -------------  ------------- 
 Transactions 
 with owners 
 recorded 
 directly in 
 equity: 
 Issue of shares 
  in the period                 5              232                -                -                  -               -            237              -            237 
 Share-based 
  payments                      -                -                -                -                  -             208            208              -            208 
 Dividends                      -                -                -                -                  -         (7,453)        (7,453)              -        (7,453) 
 Total 
  transactions 
  with owners                   5              232                -                -                  -         (7,245)        (7,008)              -        (7,008) 
                    -------------  ---------------  ---------------  ---------------  -----------------  --------------  -------------  -------------  ------------- 
 Balance as at 
  30 September 
  2019                      3,377           62,882              664              106                540          11,320         78,889          5,206         84,095 
                    =============  ===============  ===============  ===============  =================  ==============  =============  =============  ============= 
 
 
 
 
 
 
                                     CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
 
                                                       As at                        As at                        As at 
                                                    30.09.20                     30.09.19                     31.03.20 
                                                 (unaudited)                  (unaudited)                    (audited) 
                          Notes                     GBP000's                     GBP000's                     GBP000's 
                                                                                Restated* 
 Non-current assets 
 Intangible assets          7                         40,667                       41,470                       41,439 
 Property, plant and 
  equipment                                            2,323                        2,044                        2,426 
 Investment property                                     305                          200                          305 
 Right of use assets                                   1,525                        2,043                        1,658 
 Investments                                             150                          166                          166 
                                 ---------------------------  ---------------------------  --------------------------- 
                                                      44,970                       45,923                       45,994 
 Current assets 
 Inventories                                          20,282                       20,647                       17,264 
 Trade and other 
  receivables                                         28,083                       19,896                       28,353 
 Income tax recoverable                                1,964                        1,416                        1,265 
 Other taxes and social 
  security                                               359                          420                          652 
 Cash and cash 
  equivalents                                         17,058                       13,411                       11,877 
                                 ---------------------------  ---------------------------  --------------------------- 
                                                      67,746                       55,790                       59,411 
 Total assets                                        112,716                      101,713                      105,405 
                                 ---------------------------  ---------------------------  --------------------------- 
 Current liabilities 
 Trade and other 
  payables                                          (16,304)                      (9,653)                     (14,486) 
 Borrowings                                          (4,117)                            -                      (2,032) 
 Income tax                                             (25)                         (55)                        (940) 
 Other taxes and social 
  security                                                 -                        (690)                            - 
 Amounts due under 
  leases                                               (375)                        (431)                        (342) 
 Dividends                                              (50)                      (4,803)                         (50) 
                                 ---------------------------  ---------------------------  --------------------------- 
                                                    (20,871)                     (15,632)                     (17,850) 
 
 Total assets less 
  current 
  liabilities                                         91,845                       86,081                       87,555 
 
 Non-current 
 liabilities 
 Deferred tax                                          (686)                        (309)                        (636) 
 Amounts due under 
  leases                                             (1,208)                      (1,677)                      (1,424) 
                                 ---------------------------  ---------------------------  --------------------------- 
 Total assets less 
  total 
  liabilities                                         89,951                       84,095                       85,495 
                                 ===========================  ===========================  =========================== 
 
 Equity 
 Capital and reserves 
 Issued share capital                                  3,377                        3,377                        3,377 
 Share premium account                                62,888                       62,882                       62,882 
 Revaluation reserve                                     572                          664                          572 
 Other reserves                                          106                          106                          106 
 Foreign exchange 
  reserve                                              1,064                          540                          526 
 Retained earnings                                    14,464                       11,320                       12,266 
                                 ---------------------------  ---------------------------  --------------------------- 
 Shareholders' funds                                  82,471                       78,889                       79,729 
 Non-controlling 
  interests                                            7,480                        5,206                        5,766 
 Total equity                                         89,951                       84,095                       85,495 
                                 ===========================  ===========================  =========================== 
 
 *Details of the restatement, which is unaudited, is presented in 
  Note 3. 
 
 
                                         CONSOLIDATED STATEMENT OF CASH FLOWS 
 
                                                  Six months                      Six months 
                                                          to                              to                Year ended 
                                                    30.09.20                        30.09.19                  31.03.20 
                                                 (unaudited)                     (unaudited)                 (audited) 
                                                    GBP000's                        GBP000's                  GBP000's 
                                                                                   Restated* 
 Cashflows from operating 
 activities 
 Profit before income tax                              4,456                           1,133                     5,207 
 
 Adjustment for: 
 Net finance cost                                         39                               4                        30 
 Foreign exchange gain/(loss)                          (688)                           (212)                        62 
 Depreciation                                            155                             271                       334 
 Revaluation of investment 
  property                                                 -                               -                      (64) 
 Amortisation of right-of-use 
  assets                                                 187                             184                       389 
 Amortisation of intangible 
  assets                                                 789                             821                     1,685 
 Pension payments                                          -                            (29)                      (59) 
 Share of associate's results                              -                            (42)                      (42) 
 Share-based payments                                     85                             208                       284 
                                 ---------------------------  ------------------------------  ------------------------ 
 Operating cash flow before 
  movement 
  in working capital                                   5,023                           2,338                     7,826 
 
 Change in inventories                               (3,018)                         (1,002)                     2,212 
 Change in receivables                                   563                           3,278                   (5,209) 
 Change in payables                                      952                         (3,313)                       662 
                                 ---------------------------  ------------------------------  ------------------------ 
 Cash generated from operations                        3,520                           1,301                     5,491 
 Finance costs                                          (40)                              41                      (17) 
 Income tax                                            (116)                           (770)                   (1,076) 
                                 ---------------------------  ------------------------------  ------------------------ 
 Net cash from operating 
  activities                                           3,364                             572                     4,398 
                                 ===========================  ==============================  ======================== 
 
 Cash flows from investing 
 activities 
 Acquisition of property, plant 
  and 
  equipment                                            (231)                            (85)                     (767) 
 Disposal of property, plant 
 and 
 equipment                                                 -                               -                         - 
 Purchase of intangibles                                (17)                         (1,282)                   (2,115) 
 Finance income                                           64                              51                       112 
 Net cash (used in) investing 
  activities                                           (184)                         (1,316)                   (2,770) 
                                 ---------------------------  ------------------------------  ------------------------ 
 
 Cash flows from financing 
 activities 
 Change in borrowings                                  2,085                               -                     2,032 
 Proceeds from issue of share 
  capital                                                  6                             237                       237 
 Interest paid on lease 
  liabilities                                           (63)                            (70)                     (125) 
 Principal paid on lease 
  liabilities                                          (182)                               -                     (364) 
 Finance lease repayments                                  -                           (273)                         - 
 Dividends paid                                            -                         (2,699)                   (8,421) 
                                 ---------------------------  ------------------------------  ------------------------ 
 Net cash (used in) financing 
  activities                                           1,846                         (2,805)                   (6,641) 
                                 ---------------------------  ------------------------------  ------------------------ 
 
 Net (decrease)/increase in 
  cash 
  and cash equivalents                                 5,026                         (3,549)                   (5,013) 
 Foreign exchange movements                              155                              97                        27 
 Balance at the beginning of 
  the 
  period                                              11,877                          16,863                    16,863 
 
 Balance at the end of the 
  period                                              17,058                          13,411                    11,877 
                                 ===========================  ==============================  ======================== 
 Free cash flow                                        3,180                           (744)                     1,628 
                                 ---------------------------  ------------------------------  ------------------------ 
 *Details of the restatements, which are unaudited, 
  are presented in Note 3. 
 

NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2020

   1.   Basis of preparation 

The financial information for the period to 30 September 2020 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 year ended 31 March 2020.

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.

These Interim Statements have not been audited or reviewed by the Group's auditors.

   2.   Statement of compliance 

This interim financial statement is prepared in accordance with IAS 34 "Interim Financial Reporting". Accordingly, whilst the interim statements have been prepared in accordance with IFRS, and the primary statements follow the format of the annual financial statements, only selected notes are included - those that provide an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual reporting date. IAS 34 states a presumption that anyone who reads the Group's interim report will also have access to its most recent annual report. Accordingly, annual disclosures are not repeated in these interim condensed reports.

   3.    Changes to significant accounting policies and other restatements 

The principal accounting policies which are adopted by the Group in the preparation of its financial statements are set out in in the consolidated financial statements of the Group for the year ended 31 March 2020. These policies have been consistently applied to all prior years. Where necessary, and as detailed in the consolidated financial statements of the Group for the year ended 31 March 2020, any corrections to the application of the Group's accounting policies to comply with International Financial Reporting Standards have been made as restatements of prior period financial statements for the correction of errors in accordance with IAS8 . The correct application of the Group's accounting policies in accordance with IFRS continued into the six months ended 30 September 2020.

Since the September 2019 interim accounts the group has completed its review of the capitalization of historic development expenditure, and reviewed the amortization policy applied to such assets. This has had the effect of increasing the net book value of intangible assets held at September 2019. Full details are given in the Annual Report and Accounts for the year ended 31 March 2020, but the financial effect is summarized below.

Development costs adjustment: Impact on the Balance Sheet and Income Statement

 
                                               Adjustment        Adjustment 
                                              to retained    through Income 
                               As reported       earnings         Statement       Restated 
                                 Sept 2019                                       Sept 2019 
                                  GBP000's       GBP000's          GBP000's       GBP000's 
 Balance sheet 
 Cost                               44,922        (3,900)             (270)         40,752 
 Accumulated amortisation         (23,004)          4,735               385       (17,884) 
 Net Book Value                     21,918            835               115         22,868 
                            ==============  =============  ================  ============= 
 
 
 Income Statement 
                               As reported     Adjustment        Adjustment   Restated for 
                              for 6 months    to retained    through Income    6 months to 
                              to Sept 2019       earnings         Statement      Sept 2019 
                                  GBP000's       GBP000's          GBP000's       GBP000's 
 
   R&D Expense                       3,293              -               270          3,563 
 Amortisation 
  charge                             1,206              -             (385)            821 
                            --------------  -------------  ----------------  ------------- 
                                                                      (115) 
                                                           ================ 
 

NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2020 (Continued)

   3.    Changes to significant accounting policies and other restatements (continued) 

In addition, during the completion of the audit of the Group's financial statements for the year ended 31 March 2020 the Group identified some amendments that needed to be made to previously reported prior year adjustments. These amendments arose in respect of changes to the tax rates applied to the previously reported adjustments. The effect of these changes is reported in the Consolidated Statement of Changes in Equity that forms part of these results, and full details are contained in the Group's Annual Report and Accounts for the year ended 31 March 2020.

   4.   Revenue is derived from the Group's animal pharmaceutical businesses. 
   5.   Principal risks and uncertainties 

These were set out on pages 20-22 of the Group's Annual Report and Accounts for the year ended 31 March 2020. The key exposures are to foreign currency exchange rates, potential delays in obtaining marketing authorisations, single sources of supply for some raw materials and trade debtor recovery and have remained unchanged since the year end. In addition, the Annual Report and Accounts highlighted disease impact to growth in emerging markets as a key risk and this, in the form of ASF, is a principal uncertainty.

   6.   Earnings per share 
 
                                                       Six months           Six months      Year ended 
                                                      to 30.09.20          to 30.09.19        31.03.20 
                                                      (unaudited)          (unaudited)       (audited) 
                                                                              Restated 
 Weighted average number of shares in issue 
  (000's)                                                  67,530               67,493          67,530 
 Fully diluted weighted average number of 
  shares in issue (000's)                                  70,313               68,092          70,313 
 Profit attributable to equity holders of 
  the company (GBP000's)                                    2,113                1,133           2,582 
 Basic earnings per share (pence)                            3.13                 1.68            3.82 
 Fully diluted earnings per share (pence)                    3.01                 1.67            3.67 
 

NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2020 (Continued)

   7.   Intangible non-current assets 
 
                                                        Distribution      Development 
                                        Goodwill              rights            Costs            Total 
                                        GBP000's            GBP000's         GBP000's         GBP000's 
 Cost 
 At 1 April 2019 - restated               17,930               1,442           39,470           58,842 
 Additions - restated                          -                   -            1,282            1,282 
                              ------------------  ------------------  ---------------  --------------- 
 At 30 September 2019 
  - restated                              17,930               1,442           40,752           60,124 
 Additions                                     -                   -              833              833 
                              ------------------  ------------------  ---------------  --------------- 
 At 31 March 2020                         17,930               1,442           41,585           60,957 
 Additions                                     -                   -               17               17 
                              ------------------  ------------------  ---------------  --------------- 
 At 30 September 2020                     17,930               1,442           41,602           60,974 
                              ==================  ==================  ===============  =============== 
 
 Amortisation 
 At 1 April 2019 - restated                                      735           17,098           17,833 
 Charge for the period 
  - restated                                                      35              786              821 
                              ------------------  ------------------  ---------------  --------------- 
 At 30 September 2019 
  - restated                                   -                 770           17,884           18,654 
 Charge for the period                         -                  35              829              864 
                              ------------------  ------------------  ---------------  --------------- 
 At 31 March 2020                              -                 805           18,713           19,518 
 Charge for the period                         -                  35              754              789 
                              ------------------  ------------------  ---------------  --------------- 
 At 30 September 2020                          -                 840           19,467           20,307 
                              ==================  ==================  ===============  =============== 
 
 Net Book Value 
 At 30 September 2020                     17,930                 602           22,135           40,667 
                              ==================  ==================  ===============  =============== 
 
 At 31 March 2020                         17,930                 637           22,872           41,439 
                              ==================  ==================  ===============  =============== 
 
 At 30 September 2019 
  - restated                              17,930                 672           22,868           41,470 
                              ==================  ==================  ===============  =============== 
 
 At 1 April 2019 - restated               17,930                 707           22,372           41,009 
                              ==================  ==================  ===============  =============== 
 

This financial information was approved by the board on 3 February 2021.

Copies of this interim report are being sent to all the Company's shareholders.

 
 DIRECTORS AND OFFICERS    Andrew Jones                      (Non-Executive Chairman) 
                           Marc Loomes                       (Chief Executive) 
                           Chris Wilks                       (Chief Financial Officer) 
                           Anthony Rawlinson                 (Non-Executive Director) 
                            Frank Armstrong                   (Non-Executive Director) 
 
 REGISTERED OFFICE         78 Coombe Road, New Malden, Surrey. KT3 4QS 
                           Tel: 020 8447 8899 
 
 COMPANY NUMBER            01818170 
 INFORMATION AT            www.ecoanimalhealthgroupplc.com 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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