LONDON (ShareCast) - (Sharecast News) - Animal feed additives manufacturer Anpario said in an update on Thursday that group sales for the five months ended 31 May were "just ahead" of last year.

The AIM-traded firm, which was holding its annual general meeting, said it could consider that a "good performance" given recent Covid-19 lockdowns in China, and Russia's ongoing invasion of Ukraine, which affected its sales performance.

Chairman Kate Allum said that as expected, the company experienced "significant" raw material price inflation, which remained at elevated levels, and combined with historically-high logistics costs had led to a fall in gross margins.

"We have though, as a priority, been successfully passing on this inflation through planned sales price increases and overheads are being closely managed," Allum said.

"To mitigate the continued disruption in global supply chains we have increased finished goods inventory in our subsidiaries worldwide and increased raw material stockholding at our production site following the recent expansion and upgrade in storage capacity.

"It is vital that we maintain continuity of supply to our customers who are experiencing significant cost pressures from the high price of animal feed."

Allum said that encouragingly, international travel and tourism was increasing, which should lead to a corresponding uplift in meat consumption.

"We are excited by the potential of both existing and new products including 'pHorce' which is proving its value to pig producers worried about virus-contaminated feed and as a replacement for zinc oxide, which is banned in piglet diets from June in the European Union.

"Our new omega 3 supplement, 'Optomega Algae', has generated a lot of interest due to its sustainable source, from which we expect to convert this interest into growing sales."

The company was continuing to invest in both product technology and its global sales channels, the chairman explained, to deliver effective innovative solutions for the animal production industry.

"We expect the challenging environment to continue until the end of the year, but Anpario's broad range of products, geographic diversity and strong financial position makes for a robust business and gives us confidence in our ability to navigate the current uncertainties and continue with the profitable development of the company."

Anpario said it would report its interim results for the six months to 30 June on 14 September.

At 1416 BST, shares in Anpario were down 7.97% at 543p.

Reporting by Josh White at Sharecast.com.

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