Anpario, the UK-based manufacturer and distributor of natural animal feed additives, has reported a 34% increase in profitability on slightly lower revenues. Growth in Europe, the US and Australasia was partially offset by results in China, the Far East and Latin America.
The company made a pre-tax profit of £4.55 million on revenues of £28.28m in the year ended December 31st 2018, compared to £3.40m and £29.24m in the previous twelve months. It had a year-end cash balance of £12.9m, from 2017’s £13.6m.
Operations in the UK and Europe saw 9% sales growth, with the recovery in milk prices helping demands for Anpario’s mycotoxin binders and Optomega Plus omega 3 supplement for dairy cow fertility. This product also enriches eggs with omega 3 oils to benefit human consumers. The Orego-Stim phytogenic additive, positioned as an alternative to antibiotic growth promoters, is finding favour with more poultry integrators, and the company is exploring its use in calves.
Spain (up 29%), Austria (31%) and Poland (157%) all saw strong sales performances. Sales in the US market were 31% higher, through sales of the Orego-Stim phytogenic additive to poultry integrators to support antibiotic-free production; organic farmers; and US dairy industry interest in mycotoxin binders. Australian sales grew by 45%, especially in the pig and poultry sectors.
Anpario’s sales in Latin America declined 21% year-on-year but were recovering in Brazil and Chile in the latest quarter. The company is confident its investment in the region’s aquaculture market, together with a new subsidiary in Mexico will grow revenues.
Middle East sales fell by 9% through a combination of geopolitical issues and a stronger dollar, with the bankruptcy of a major integrator in Turkey causing a 37% drop in revenues from that country. Anpario has now opened a wholly-owned subsidiary in Turkey. There was double digit growth from activities in Egypt, Iraq and Saudi Arabia. Asian revenues were down 10%, with China sales affected by African Swine Fever and the US: China trade dispute, and those in the Philippines by a withdrawal from low-margin business.
The company is investing £1 million in an automated bottling plant at its Manton Wood base to provide liquid versions of its products, which it says are increasing in popularity with customers such as vets, who are looking at feed additive alternatives to replace banned antibiotics.
The business is also opening an online sales channel, Anpario Direct to increase direct to farm sales of products backed with technical advice and support. This will initially be a UK-only service, offering liquid products to smaller farm enterprises and niche segments such as equine and game birds. The company is making production changes to allow smaller pack sizes for its powder products for sale online. “By extending the product range and offering express delivery, our goal is to be the destination of choice for tech-savvy farmers looking to purchase sophisticated products for animal health, nutrition and biosecurity,” says chief executive Richard Edwards.
The latest year saw the launch of Anpario’s next generation mycotoxin binder range under the Anpro brand, aimed at the pig, poultry and ruminant species markets, following a three-year testing programme.
On Brexit, Mr Richards says all Anpario products and processes comply with EU regulations, and the business has plans in place with its EU suppliers to try and minimise any disruption. It has increased raw material stocks in the UK and is support European distributors with additional stock. There was a £0.9m increase in group inventory levels to £4.0m (2017: £3.1m) due to Brexit planning and increased sales in the US and Australia needing more stock in transit.
“Trading in the current year is ahead of the same point in 2018,” says Anpario chairman Peter Lawrence. “However, we remain vigilant as there may be obstacles ahead due to Brexit and African Swine Fever in particular. Our strong balance sheet and cash generation capability provide Anpario with a firm platform from which to invest in new products and to develop the exciting Anpario Direct opportunity.
“Expanding profitable sales and distribution channels around the world remains our priority and the initiatives already implemented are gaining traction. This gives me confidence that we will return to sales growth as 2019 progresses.”