Full year trading statement

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

Anpario plc

(“Anpario”, the “Group” or the “Company”)

Full year trading statement

Anpario plc (AIM:ANP), the independent manufacturer of natural sustainable animal feed additives for health, nutrition and biosecurity, provides the following trading update for the year ended 31 December 2023 (“FY 2023”). The figures used in this announcement remain subject to audit.

Trading update
The Group delivered a stronger operating performance in the second half of the year, notably within the Orego-Stim® product brand. Group Sales are expected to be not less than £30.8m and adjusted EBITDA¹ is now expected to be ahead of current market expectations and not less than £4.4m. As part of regular review processes, an impairment of research and development expenditure of around £0.4m has been identified, adjusted EBITDA¹ is stated before this charge. Our continued actions to recover raw material price inflation and a favourable sales mix have delivered a further recovery in gross margins, and the decision taken to reduce overheads will help support future profitable growth.

Financial position
Our financial position remains strong and has further improved following completion of the £9.0m tender offer in July 2023. Working capital has been carefully managed to reduce stock levels, held to overcome logistic and supply chain challenges, and improve cash generation. Year-end cash balances were £10.6m (30 June 2023: £7.3m, including short-term investments of £0.1m), an increase of £3.3m through the second half of the year, this is after £1.8m of dividend payments being paid during the period.

Our strong balance sheet enables the Group to invest in innovative natural product solutions, expand our global reach and explore earnings enhancing and complementary acquisitions to continue the profitable development of the Group. We remain confident in capturing the opportunities to grow the business for the long-term benefit of all stakeholders.

India Partnership Agreement
The year has been challenging but our geographic and product diversity affords the Group a measure of resilience. As such, we were also delighted to sign a new agreement with our Indian partner who has successfully represented Orego-Stim® since 2008. The agreement means Orego-Stim® will be blended locally under licence, helping to speed up sales growth and offer greater access to new market segments. Orego-Stim® is recognised as a leading phytogenic product in India and this enhanced partnership offers more sales opportunities in one of the world’s fastest growing agriculture and aquaculture markets.

Grant of patent
We are also pleased to announce the grant of a UK patent for our flagship toxin-binder product, Anpro®. It is expected that this will provide a tax benefit to the Group via the UK Patent Box scheme which allows companies to apply a lower rate of corporation tax to profits attributable to qualifying patents. We are working with our tax and patent advisors to clarify the scope of qualifying patents and the tax benefit, provisionally it is anticipated that there will be a £0.1m benefit to FY2023, around half of which is backdated for previous years. This will be in addition to the benefit already received under the same scheme related to our patent for Orego-Stim®.

FY2023 Results
The Group expects to publish its FY2023 final results on 20 March 2024.

1 Adjusted EBITDA represents operating profit for the year adjusted for: acquisition costs; share-based payments and associated costs; and depreciation, amortisation, and impairment charges.

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