Interim Results
Animalcare Group PLC
31 March 2008
ANIMALCARE GROUP PLC
('Animalcare' or 'the Company')
Unaudited Interim Results for the six months ended 31 December 2007
Animcalcare, the supplier of pharmaceutical and other premium products and
services to the veterinary industry and the manufacturer and supplier of premium
quality livestock products to agricultural retailers to announces its interim
results for the six months ended 31 December 2007.
CHAIRMAN'S STATEMENT
The unaudited results for Animalcare Group plc for the six months to 31 December
2007, the period prior to the acquisition of Animalcare Ltd., when the Company
was trading as Ritchey plc ('Ritchey'), show group turnover of £3,406,000 (2006
- £3,684,000) and EBITDA (earnings before interest, taxation, depreciation and
amortisation) of £122,000 (2006 - £287,000). As a result of the fall in group
turnover, there was a small pre-tax loss for the period.
The Company is not declaring an interim dividend.
On 15 January 2008 we announced the acquisition of Animalcare Ltd, the
successful placing of new shares with institutional investors to raise £6.4
million net of expenses and the commencement of trading on AIM under our new
name of Animalcare Group plc. I am pleased to report that the integration of
Animalcare Ltd, which has transformed the profitability and growth prospects of
the group, is proceeding smoothly and that trading at Animalcare Ltd is also in
line with management expectations.
Trading, in what is traditionally the Company's slower half of the year, has
been challenging due to the damage suffered by the livestock industry, arising
from the disruption to livestock movements following the Foot and Mouth and
Bluetongue outbreaks. The restriction on livestock movements resulted in a
substantial reduction in livestock trading volumes and much lower selling
prices, particularly in the sheep industry. Furthermore, the business is
seasonal with the second half of the year traditionally yielding the majority of
profitability, largely due to the lambing season which runs from January to
April.
A trading arrangement with a major supplier was changed during the period, with
the effect that sales which were previously invoiced by Ritchey, have been
invoiced directly by the supplier, with Ritchey receiving a commission. This has
resulted in a reduction in sales of £100,000 during this period and we estimate
that the effect across the full financial year will be a reduction in sales of
£420,000. The increase in Gross Profit margin during this period from 57.4% to
59.6% is almost entirely due to the removal of the dilutive effect on gross
margin of these sales.
For the six months to 31 December 2007 the Company's profits were almost
neutral, making a small loss after taxation of £5,000 versus a small profit of
£110,000 during the same period in 2006. Net cash outflow from operating
activities across the period was -£133,000 (2006 - cash inflow of £275,000);
this broadly reflects the different trading performances in the two periods and
the movements in working capital. Despite this the Company retained a net cash
balance of £230,000 at the end of the period.
The livestock industry has shown encouraging signs of improvement across recent
months behind increased trading volumes and higher livestock selling prices.
However the trading environment remains highly challenging with significant
reductions in livestock numbers anticipated. I am, however, pleased to report
that trading in the second half of the year is showing signs of improvement and
that the outlook for the balance of the year appears favourable and in line with
market expectations.
Overall, we are confident that the integration of Animalcare Ltd will be
completed during 2008 and that we will make good progress in establishing a
platform for future, profitable growth.
J.S. Lambert
Chairman
For further information:
Animalcare plc
James Lambert (Chairman) 01765 689541
Simon Riddell (Chief Executive)
Brewin Dolphin (NOMAD) 0845 270 8610
Neil Baldwin
Bankside Consultants (Financial PR) 020 7367 8888
Simon Bloomfield or Andy Harris
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months ended 31 December 2007
Condensed consolidated income
statement Note 6 month 6 month 12 month
period ended period ended period ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
£'000 £'000 £'000
Revenue 3,406 3,684 8,286
Cost of sales (1,376) (1,571) (3,504)
-----------------------------------
Gross profit 2,030 2,113 4,782
Distribution costs (164) (173) (362)
Administrative expenses (1,870) (1,781) (4,101)
-----------------------------------
Operating (loss)/profit (4) 159 319
Investment income 12 9 15
Finance costs (15) (25) (32)
-----------------------------------
(LOSS)/PROFIT BEFORE TAX (7) 143 302
Tax 3 2 (33) (52)
-----------------------------------
(LOSS)/PROFIT FOR THE YEAR (5) 110 250
===================================
Basic (loss)/earnings per share 4 (0.1)p 1.9p 4.4p
Diluted (loss)/earnings per share 4 (0.1)p 1.9p 4.4p
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Six months ended 31 December 2007
Condensed consolidated statement 6 month period 6 month period 12 month
of recognised income and expenses ended ended period ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
£'000 £'000 £'000
(Loss)/profit for the financial year (5) 110 250
---------------------------------
Total recognised income and expense (5) 110 250
=================================
CONDENSED CONSOLIDATED BALANCE SHEET
31 December 2007
Condensed consolidated balance sheet 31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
£'000 £'000 £'000
NON-CURRENT ASSETS
Goodwill 2,677 2,916 2,677
Other intangible assets 94 140 115
Property, plant and equipment 1,670 1,548 1,670
----------------------------------
4,441 4,604 4,462
CURRENT ASSETS
Inventories 1,352 1,237 1,118
Trade and other receivables 1,200 1,449 1,400
Cash and cash equivalents 377 99 562
----------------------------------
2,929 2,785 3,080
------------------------------------
TOTAL ASSETS 7,370 7,389 7,542
===================================
CURRENT LIABILITIES
Trade and other payables (709) (891) (915)
Current tax liabilities (31) (98) (33)
Obligations under finance
leases - (5) -
Bank overdraft and loans (147) (23) (60)
Deferred consideration (65) (110) (111)
---------------------------------
CURRENT LIABILITIES (952) (1,127) (1,119)
----------------------------------
NET CURRENT ASSETS 1,977 1,658 1,961
----------------------------------
NON-CURRENT LIABILITIES
Deferred consideration (34) (66) (34)
Deferred tax liabilities (252) (232) (252)
-----------------------------------
(286) (298) (286)
-----------------------------------
TOTAL LIABILITIES (1,238) (1,425) (1,405)
------------------------------------
NET ASSETS 6,132 5,964 6,137
====================================
CAPITAL AND RESERVES
Called up share capital 1,132 1,132 1,132
Share premium account 943 943 943
Profit and loss account 4,057 3,889 4,062
-----------------------------------
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT 6,132 5,964 6,137
====================================
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 31 December 2007
Condensed consolidated cashflow 6 month period 6 month period 12 month
statement ended ended period ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
£'000 £'000 £'000
Operating (loss)/profit (4) 159 319
Adjustments for:
Depreciation of property, plant and
equipment and amortisation of
intangible fixed assets 126 128 257
Impairment of goodwill - - 237
Share based payment award - - 33
Loss on disposal of property,
plant and equipment - - 21
----------------------------------
Operating cash flows before
movements in working capital 122 287 867
Increase in inventories (234) (280) (161)
Decrease in receivables 200 349 390
Decrease in payables (206) (56) (32)
-----------------------------------
Cash (utilised)/generated
by operations (118) 300 1,064
Income taxes paid - - (57)
Interest paid (15) (25) (22)
----------------------------------
Net cash from operating activities (133) 275 985
----------------------------------
Investing activities:
Interest received 12 9 15
Payments to acquire property, plant and
equipment (105) (78) (325)
Receipts from sale of property, plant and
equipment - 2 4
Acquisition of Marabo Limited's trade - - (40)
Acquisition of Travik Chemicals Limited (46) (75) (75)
Receipts from issue of ordinary share
capital - 88 88
----------------------------------
Net cash used in investing activities (139) (54) (333)
----------------------------------
Financing:
Equity dividends paid - (102) (102)
Repayment of bank loan - (214) (214)
Capital element of finance lease
repayments - - (5)
---------------------------------
Net cash outflow used in financing
activities - (316) (321)
---------------------------------
Net (decrease)/increase in cash and cash
equivalents (272) (95) 331
Cash and cash equivalents at start
of period 502 171 171
---------------------------------
Cash and cash equivalents at end of
period 230 76 502
===================================
Comprising:
Cash and cash equivalents 377 99 562
Bank overdrafts (147) (23) (60)
-----------------------------------
230 76 502
==================================
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
31 December 2007
1. BASIS OF PREPARATION
The unaudited financial information contained in this interim report has been
prepared using accounting policies consistent with International Financial
Reporting Standards (IFRS). These condensed consolidated accounts do not include
all of the information required for full annual financial statements.
The interim report does not constitute statutory accounts as defined in section
240 of the Companies Act 1985. The information contained herein has not been
reviewed by the company's auditors, nor has it been delivered to the Registrar
of Companies.
The financial information for the year ended 30 June 2007 has been derived from
the audited financial statements of Animalcare Group plc (formerly Ritchey PLC)
as delivered to the Registrar of Companies and as restated in accordance with
IFRS as described in note 5. The report of the auditors on those statutory
accounts was unqualified and did not contain a statement under Section 237(2) or
(3) of the Companies Act 1985.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial information contained in this Interim Report has been prepared
under the historical cost convention.
The accounting policies are consistent with those followed in the preparation of
the AIM admission document which has been published on the Group's website at:
http://www.animalcaregroup.co.uk/
corporate-documents-and-shareholders-communications/default.aspx except as
described in note 3.
In addition, the following standards which have not been applied in these
financial statements were in issue but not yet effective:
IFRS 8 Operating segments
IAS 23 Amendment to borrowing costs
IFRIC 11 IFRS 2: Group and treasury share transactions
IFRIC 12 Service concession arrangements
The Group anticipates that the adoption of these standards in future periods
will have no material impact on the financial statements of the Group.
3. TAX ON PROFIT ON ORDINARY ACTIVITIES
The charge for taxation is based on an estimate of the likely effective tax rate
for the full year.
4. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the
year attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and
diluted earnings per share computations. No diluted loss per share has been
calculated for the 6 month period ended 31 December 2007 as the share options
are anti-dilutive:
4. EARNINGS PER SHARE (continued)
6 month period 6 month period 12 month
ended ended period ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
£'000 £'000 £'000
Net (loss)/profit attributable to
equity holders of the parent (5) 110 250
==================================
6 month period 6 month period 12 month
ended ended period ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
No. No. No.
Basic weighted average number of
shares 5,660,257 5,593,953 5,626,628
Dilutive potential ordinary
shares:
Employee share options - 38,590 64,242
-------------------------------------
Diluted weighted average number of
shares 5,660,257 5,632,543 5,690,870
========================================
5. FIRST TIME ADOPTION OF IFRS
The last statutory financial statements presented under UK GAAP were for the
year ended 30 June 2007.
The Group first presented its consolidated financial statements under
International Financial Reporting Standards (IFRS) in its AIM admission document
which has been published on the Group's website at http://
www.animalcaregroup.co.uk/corporate-documents-and-shareholders-communications/
default.aspx. These consolidated financial statements were for the year ended 30
June 2007 and the date of the Group's transition to IFRS was 1 July 2004. The
disclosures required in the period of transition are therefore contained within
the AIM admission document.
6. EVENTS OCCURING SUBSEQUENT TO THE YEAR END
On 15 January 2008 the company acquired 100% of the issued share capital of
Animalcare Limited and the company commenced trading on AIM with its new name
Animalcare Group plc.
ENDS
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