Anpario, the UK-based manufacturer of natural feed additives, has reported a slightly lower profit on 3% higher sales from its latest full year’s trading. Growing export revenues, especially in Latin America, the Middle East and Asia, offset reduced European sales.
The AIM-listed business made a pre-tax profit of £4.39 million on revenues of £29.05m in the year to December 31st 2019, compared to £4.56m and £28.28m in the previous year. Net assets were £35.55m at the year-end (£33.15m).
Sales of its three main value-added branded product ranges – phytogenics, mycotoxin binders and acid-based eubiotics, grew during the year. Anpario completed its £1m investment in an automated bottling plant at its Manton Woods headquarters site in Nottinghamshire during the period, meaning that all previous toll manufacturing can now be done in house.
The company continues to invest in new product development, especially for products to reduce the need for and replace antibiotics in feed and livestock biosecurity. It is engaged in new formulations and trials work with leading universities and producers.
The recent introduction of the Anpro mineral mycotoxin product has been well received in the US and Europe, while a new aqua product has been launched in targeted Latin American markets. Anpario has filed a patent for what it describes as a ground-breaking new dietary supplement for calves that focuses on antibiotic reduction and gut health benefits.
The company’s sales in Europe fell by 5%, primarily due to a withdrawal from low margin, non-core business which was worth almost £1m in revenues during 2018. But underlying growth was positive. The UK market was stable, with rising demand for organic acid products for feed and imported raw material hygiene and decontamination.
The Anpario Direct online platform launched last year in the UK has increased its presence through the company website and social media channels. It is particularly targeted towards smaller farm customers. The company is marketing disinfectant products from a third party over the website and hopes to extend this to other complementary suppliers.
Belgium and Italy were particularly strong European markets, and Anpario has now incorporated a German subsidiary. It intends to launch a German version of Anpario Direct later this year.
Brexit progress is being closely monitored – Anpario’s products and processes comply with European Union regulations and it will continue to supply the same high standard of products to all markets around the world. “The ideal outcome is that both the UK and EU agree to an equivalence or common arrangement for agricultural products, similar to the way we currently supply our US subsidiary and its customers,” it notes.
Outside Europe, Anpario saw strong performances in its Latin American and Middle Eastern markets, with an improved second half performance in Asia, despite the impact of African Swine Fever (ASF) on sales – the business has invested in the Chinese poultry market over the last two years to spread its risk.
But the ongoing US – China trade dispute during 2019 affected US agricultural markets and depressed Anpario’s trading there, as did the weak US dairy market.
“The board is encouraged by the performance in the second half of 2019, driven by strong trading in Latin America and the Middle East, and a welcome recovery in sales in our Asia region,” says Anpario chairman Peter Lawrence. “It is also pleasing that the recent targeting of China’s poultry industry has helped to reduce the impact of ASF on our business there. Costs continue to be managed closely and our strategy to market higher value-added products and develop more direct routes to market has helped to improve gross margins.”
The outbreak and subsequent spread of COVID-19 is a concern. “There may be some disruptions to shipping around the world but as most of our raw material supplies come from Europe, we expect to be able to fulfil orders effectively.
“With governmental financial support offered to the agriculture industry to ensure continuity of food supplies, Anpario is well positioned to take full advantage of the situation during the recovery period from COVID-19 and beyond. While we have not yet experienced any material impact on our business, we continue to monitor the situation closely.”