Anpario confident despite fall in revenue, earnings
By Josh White
Date: Wednesday 20 Mar 2024
(Sharecast News) - Animal feed additives specialist Anpario reported revenue of £31m in its final results on Wednesday, down 6% year-on-year.
The AIM-traded firm said it saw gross margin improvement, rising to 45% for 2023 compared to 42.7% in 2022.
Adjusted EBITDA decreased 14% to £4.5m, while profit before tax saw a 25% decline to £2.8m.
Diluted adjusted earnings per share dropped 8% to 15.31p, and basic earnings per share decreased 16% to 13.51p.
Anpario proposed an increased final dividend of 7.5p per share, resulting in a total dividend for the year of 10.7p per share.
Cash generated from operations significantly increased to £8.1m from £1.8m, and the company maintained cash and bank deposit balances of £10.6m at the end of the year, down from £13.6m a year earlier.
On the operational front, Anpario saw sales growth in key regions such as the Middle East, South America, and the United States, offsetting decreases in other areas.
The company attributed an increase in weighted average selling prices to a higher value-add product mix and raw material cost recovery, leading to improved gross margins.
Notably, there was strong sales growth in added value products like 'Orego-Stim' and 'Optomega Algae'.
An Indian partnership agreement for local blending of Orego-Stim was established to support sales growth.
Anpario also received a UK patent for its flagship toxin-binder product 'Anpro' during the year, and was recognised with the King's Award for Enterprise for Sustainable Development.
Looking ahead, Anpario reported a strong start to trading in the current year, with expectations of increased volumes, cost reductions, and efficiency improvements to be fully realised in profitability measures in 2024.
"2023 was a challenging year for the global agricultural industry and Anpario's results reflect this," sid chairman Matthew Robinson.
"These challenges arose not only from energy, agricultural commodity and specific raw material prices, but also because many in the animal nutrition sector started 2023 with excessive stock levels, leading to de-stocking over the year.
"The group took some tough decisions during the period to reduce costs and improve margins in response to these challenges."
Robinson said the final quarter of 2023 delivered a "welcome improvement" in sales volumes and gross margins that had continued into 2024, suggesting that the global situation was improving and that management actions to improve margins were delivering results.
"Cash generation from operations was strong at £8.1m, driven by working capital reductions following on from reduced supply chain and logistics risks.
"Anpario's balance sheet remains strong with year-end cash of £10.6m after returning in aggregate £10.8m to shareholders in the year by way of the tender offer and dividends."
At 1048 GMT, shares in Anpario were up 2.39% at 235.5p.
Reporting by Josh White for Sharecast.com.
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