Animalcare Group (ANCR) H1 2024 earnings summary

Executive summary

• Revenue grew 5% year-over-year to £36.9m in H1 2024, with strong performances from Production Animals (+14.3%) and Equine (+20.3%), and double-digit growth in Daxocox (+41%) and Plaqtiv+ (+36%).

• Statutory profit after tax surged to £18.8m, mainly from gains on Identicare and STEM disposals.

• Disposals of Identicare and STEM significantly strengthened the balance sheet, increasing net cash to £32.9m and enhancing deal-making capacity.

• VHH antibody development advanced to clinical studies, with new product launches and line extensions planned for 2025.

• Maintained strategic focus on organic growth, M&A, and new product development, supported by a capable team and improved processes.

Financial highlights

• Revenue from continuing operations rose to £36.9m (up 5% year-over-year, 7% at constant currency); FX negatively impacted revenue by 2%.

• Underlying EBITDA increased to £6.6m (up 2.5%), with margin at 18.0%; gross margin improved by 0.5 percentage points to 56.5%.

• Statutory profit after tax was £18.8m, driven by one-off gains from asset disposals.

• Underlying EPS at 5.8p (down 4.9% year-over-year), mainly due to higher effective tax rate; reported basic EPS was 31.2p, up from 2.7p.

• Net cash position (pre-IFRS 16) at £32.9m after disposals; free cash flow of £3.8m in H1 2024.

Outlook and guidance

• Full-year 2024 results expected to be in line with market expectations (£74.5m revenue, £11.7m underlying EBITDA), with positive momentum into Q3 and H2.

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

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

• Effective tax rate expected to normalize to around 23% in future years.

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