Anpario Plc – Half Year Report

 Anpario plc, the international producer and distributor of natural feed additives for animal health, hygiene and nutrition is pleased to announce its interim results for the six months to 30 June 2016.

 Financial and operational highlights

 Financial highlights

 
   — 9% increase in adjusted profit before tax from continuing operations1

      to GBP1.7m (2015: GBP1.6m)

    — 5% rise in adjusted EBITDA2 to GBP2.0m (2015: GBP1.9m)
 
   — 3% improvement in gross profit to GBP5.1m (2015: GBP5.0m)
 
   — Cash balances of GBP10.9m at 30 June 2016 (30 June 2015: GBP7.9m)
 

 Operational highlights

 
   — Successful launch of Ultrabond in the United States shows potential in

      the dairy sector

    — New regional commercial directors appointed
 
   — Regional office established in Dubai
 
   — Supply of Orego-Stim to a major US integrator for antibiotic free

      chicken

    — Distribution of Orego-Stim in China transferred to Anpario subsidiary
 

 Richard S Rose, Chairman, commented:

 “In the first half, the resilience and positioning of Anpario delivered both a modest profit growth and an improved cash position and we are building on that. We are still in a transition phase of building stronger commercial relationships with end users but we remain confident that the Group will continue to make steady progress growing the business. Our strong balance sheet gives Anpario a sound platform from which to implement change and build earnings growth organically while also seeking acquisition opportunities.”

 Chairman's Statement

 Anpario delivered a resilient profit performance for the six months to 30 June 2016. The Group's policy to focus on value added natural feed additives and efficiency improvements in our manufacturing plant, together with favourable foreign exchange movements, have helped to maintain profitability.

 The recent appointment of regional commercial directors is enabling the company to better understand local markets and to begin to build closer relationships with major end users. The sales process to these larger customers is demanding but by capitalising on the experience of our own local teams we are able to demonstrate the merits of our product portfolio in partnership with our key distributors.

 Financial Review

 In the six months to 30 June 2016 adjusted profit before tax increased by 9% to GBP1.7m (2015: GBP1.6m). Adjusted EBITDA for the period rose by 5% to GBP2.0m (2015: GBP1.9m).

 Revenues for the period were GBP10.7m (2015: GBP11.1m); this sterling reduction of 4% was equivalent to a 9% fall at constant exchange rates. The principal negative factors were lower sales of Orego-stim in China as a result of a legal dispute in addition to ongoing challenging economic and political factors in Middle East markets.

 Gross profit has continued to increase, advancing 3% to GBP5.1m (2015: GBP5.0m). This further improvement represents an uplift in gross margin percentage to 48% (2015: 45%), mainly as a result of product mix and foreign exchange gains.

 Operating expenses increased from GBP3.4m to GBP3.6m after including GBP0.3m of costs in connection with internal restructuring and the set-up of new operations. We continue to invest in plant automation with expenditure this year to date of GBP0.4m and further expenditure of GBP0.6m committed in the second half of the year. On completion all production and packaging lines will be fully automated. Development costs include GBP0.2m from product pipeline costs including university trials and GBP0.2m in respect of product and trademark registrations.

 The balance sheet is strong and debt free with further positive cash generation. The Group's cash position remains stable with a cash balance of GBP10.9m (30 June 2015: GBP7.9m).