Anpario (ANP) , a manufacturer of natural animal feed additives, released its unaudited interim results for H1 2023, detailing a ‘challenging’ first half, yet managing to increase gross margins by 2%. Encouragingly, it said its higher value products were exhibiting growth, even in difficult markets.
Sales growth in the United States and Australasia was offset by declines across Asia Pacific, Europe and Latin America, which meant overall sales fell 7% to £15.3m. Gross profit decreased by 3% to £6.7m, reflecting lower volumes sold despite the increase in gross margins from 41.9% to 43.9%, which it achieved by passing on raw material price inflation in prices, combined with declining logistics costs.
EBITDA came in at £1.9m, falling 37%, while profit before tax decreased 42% to £1.4m. Following these figures, Anpario said it remains "cautious but optimistic" that its markets are beginning to recover from a challenging first half.
For H2, Anpario expects improved gross margins due to lower raw material costs and increased sales volumes, while the benefits of cost-saving measures in H1 2023 will become more obvious in late H2 and 2024.
At 30 June 2023, Anpario had cash of £7.3m, after transferring £9.1m to an escrow account ahead of the completion of the tender offer in July.
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Anpario is an independent international manufacturer and distributor of natural feed additives for animal health, nutrition and biosecurity. Anpario’s portfolio is divided into four categories: Health and Performance, Toxin Management, Feed Quality, Hygiene and Insect Control.
The company’s strategy to offer sustainable and environmentally friendly products which help customers transition away from using antibiotics and some of the harsher chemical treatments puts Anpario in a good place to take advantage of current and future trends. For example, UK sales of antibiotics to treat food producing animals have halved since 2014, and, FDA data shows sales of medically important antibiotics for use in animal agriculture have dropped 25% overall since 2010 in the US.
Anpario noted that sales price increases played a crucial role in mitigating the decline in sales volumes, helping previously affected gross margins. Notably, the trend to reduce antibiotic use and demand for anti-viral feed mitigants has seen strong sales growth of higher value products Orego-Stim® and pHorce®, particularly in the US. Impressively, Optomega® Algae - which enhances omega-3 levels in meat - saw sales growth of 117%.
Ultimately, in light of these trends continuing and the regulatory environment surrounding feed additives tightening, Anpario is confident in the long-term profitability of the company.
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