Animalcare Group (ANCR) H2 2024 earnings summary

Executive summary

• 2024 was described as transformational, combining strategic portfolio moves with organic growth across companion animals, production animals and equine.

• Revenue grew 5% reported and 7% at constant exchange rates; underlying EBITDA was £11.6m as investment continued in sales, marketing and talent.

• Randlab was performing on plan early after its 3 January 2025 completion, with potential to expand equine and companion-animal sales across Asia Pacific.

Financial highlights

• Revenue growth at constant exchange rates comprised 5% volume and 2% price; reported revenue growth was 5%.

• Underlying EBITDA was £11.6m, up 4% or approximately €1m; more than half of the increase supported the people base, alongside higher marketing spend.

• PBT was broadly flat; EPS rose 10%, primarily due to deferred tax, which was expected to normalize in 2025.

• Cash conversion was 103%; free cash generation was about £2m higher YoY, supported by working-capital control and lower cash taxes.

• FX reduced revenue by €1.6m and weighed on gross margin; excluding FX, the margin movement was modest, with positive sales mix offsetting higher cost of goods.

Outlook and guidance

• Positive sales mix was expected to return gross margin to similar levels in 2025, assuming constant exchange rates; the effective tax rate with Randlab was expected to be broadly 26%.

• R&D investment was expected to reach ~5% of revenue in 2025, rising toward the 5%-10% range over five years.

• Deleveraging was expected at ~0.5x annually, with net cash targeted around 2027, subject to bolt-on M&A.

• Organic growth was targeted at or above market level; smaller bolt-ons were planned over the next few years, with €5m-€10m additional revenue targeted from acquisitions over the next 2-3 years.

• New product launches planned for 2025 included ear and skin products and a new Daxocox strength; new pain indications could launch in late 2025 or, more likely, 2026.