Animalcare Group (ANCR) H1 2024 earnings summary

Executive summary

• Revenue grew 5.0% year-over-year to £36.9m in H1 2024, with strong performances from key products Daxocox (up 41%) and Plaqtiv+ (up 36%), and robust growth in Production Animals (+14.3%) and Equine (+20.3%) segments.

• Disposed of Identicare and minority stake in STEM, significantly strengthening the balance sheet and increasing deal-making capacity.

• Statutory profit after tax surged to £18.8m, driven by gains from the sale of Identicare and STEM.

• VHH antibody development program advanced, with clinical studies ongoing and new product launches planned for 2025.

• Continued focus on organic growth, M&A, business development, and new product development, with an active pipeline and ongoing expansion into new geographies and indications.

Financial highlights

• Revenue from continuing operations rose to £36.9m (up 5.0% year-over-year, 7% at constant currency); FX negatively impacted revenues by 2%.

• Gross margin improved by 0.5 percentage points to 56.5% due to favorable sales mix.

• Underlying EBITDA increased 2.5% to £6.6m; EBITDA margin at 18.0% (down from 18.4%).

• Underlying cash conversion at 78.3% (H1 2023: 52.5%), with £33m cash on the balance sheet post-disposals.

• Statutory profit after tax was £18.8m, with reported basic EPS at 31.2p, reflecting one-off gains.

Outlook and guidance

• FY 2024 results expected to be in line with market expectations (£74.5m revenue, £11.7m underlying EBITDA), with positive momentum continuing into Q3.

• Full-year revenue growth guided to mid-single digits, with some softening expected in H2 for production animals.

• Companion Animals segment anticipated to return to growth in H2 as supply and launch delays ease.

• Six new products in launch planning for 2025, including line extensions and new indications.

• Board remains confident despite macroeconomic pressures, citing sector fundamentals and strong balance sheet.