Anpario records double digit sales and profits increase

Anpario plc, the international producer and distributor of natural animal feed additives for animal health, nutrition and biosecurity, saw sales rise 13 percent to £16.2m and a 24 percent improvement in adjusted EBITDA to £3.4m in the six months to 30th June 2020.

The company saw strong sales growth, particularly in the Americas, Asia and Europe and among its phytogenics and acid-based eubiotic products. Gross profits rose by 20 percent helped by the contribution from the liquid bottling plant, commissioned in July 2019, enabling the Group to bring previously toll-manufactured products in-house.

“I am delighted with this strong sales and profit performance, the period was extremely challenging as we faced the unprecedented impact of the Covid-19 global pandemic,” said Anpario chief executive Richard Edwards. “Looking forward, we will continue the on-line and direct marketing tactics that produced such a strong first half performance and we remain confident of continuing the profitable development of the Group.”

“Our strong balance sheet provides us with the resources to expand our global reach and to undertake earnings enhancing and complementary acquisitions which may arise in these uncertain times,” added Mr Edwards.

Americas

Latin America continued its strong performance with sales growth of 16 percent compared with the same period last year. Brazil delivered sales growth of 38 percent driven by strong volumes in Orego-Stim® and Salkil®. Ecuador achieved growth of 33 percent, where Anpario’s products are largely used in the aquaculture industry. The company sees further opportunities in aquaculture in this region and expect to capitalise on recent product registration approvals.

US growth picked up in the first half delivering a 13 percent improvement in sales. The agriculture market has been affected by both Covid-19 and the continuing US-China trade dispute.

Sales of Orego-Stim®, the market leading phytogenics product, delivered 20 percent growth and Anpario sees further opportunities supplying the poultry broiler and layer markets.

The swine sector was weak and the company has strengthened its sales resource to take advantage of any turnaround in the market. It is continuing to promote Orego-stim with new innovative methods of product application by “top-dressing” and also its triple action antibacterial, antiviral and antifungal acid-based eubiotic pHorce®.

Asia

Sales were ahead by 28 percent compared to the same period last year. This includes China where sales were flat but gross profit advanced 14 percent. China was the first country into lockdown in the first quarter of this year and this, combined with Chinese New Year celebrations, meant that sales activity only really started in the second quarter.

The swine industry is now showing encouraging signs of recovery as farmers re-stock following the African Swine Fever epidemic. The ban on the use of antibiotic growth promoters in animal feed, introduced after the period end, will be positive for Anpario.

South East Asia delivered the strongest performance of all regions with excellent sales and gross profit advances in the Philippines, Malaysia, South Korea and Indonesia. The region benefited from a number of business development initiatives including receiving important product registrations which now allows the local sales teams to market products directly to buyers. 

The Middle East and Africa

After last year’s strong performance, the region saw a decline in sales compared to the same period last year. The Middle East has been severely impacted by the Covid-19 pandemic as a result of cancelled religious celebrations and pilgrimages, a fall in tourism and redundancies of foreign workers in the region.

Anpario has however seen good growth in the region for its pellet binder, Mastercube™ and also new business gained with its Optomega® omega-3 product for dairy cow fertility.

Europe

The region showed strong sales and most countries had modest increases although the UK delivered a very strong performance through greater demand for raw materials and feed hygiene products. Further opportunities are being targeted as Anpario can offer a quick turnaround of supply in contrast to most mainland European suppliers.

Spain and Italy suffered with sales declines, both countries were badly affected by Covid-19.

Sales through the Anpario Direct online platform, which offers a variety of packaging options and sizes, continue to grow as the company engages with its target customers. Anpario’s field sales team will also be encouraging customers to place smaller orders online using new functionality which allows for customer specific pricing; this is an important feature where a large customer has multiple locations requiring smaller deliveries but on aggregate the volumes are significant. 

Covid

The Group reacted quickly by implementing its contingency plans which included: a split production system, remote working and using communication technology to support a global sales team and customers.

“We intend to keep most of these contingency measures in place for the time being and continue to monitor the global situation, as it will inevitably present challenges whilst the pandemic is still affecting trade and life in general,” said Richard Edwards 

Brexit

“We also face the challenges of Brexit and have prepared plans but, until the final details of our future trading relationship with Europe are determined, it is difficult to assess the impact,” said Richard Edwards. “In the first half of the year our sales to EU member states, excluding the UK, accounted for 9.5 percent of total sales and 36 percent of purchases.

“Anpario’s products and processes comply with EU regulations and the Group will continue to supply the same high standard of products to all jurisdictions around the world,” added Mr Edwards.