Results for the year ended 31 March 2026

Summary by AI ^BETAClose X

ECO Animal Health Group PLC reported a 10% increase in revenue to £87.5 million for the year ended 31 March 2026, with adjusted EBITDA rising 16% to £8.5 million, exceeding market expectations. The company saw strong revenue growth of 22% in North America and 15% in Latin America, while gross margin improved to 49% due to disciplined cost control. Research and development expenditure increased to £8.8 million, and profit before tax grew by 35% to £5.4 million, resulting in earnings per share of 3.26p. Post-year-end, the company successfully launched its poultry vaccine ECOVAXXIN® MS in the EU, with further approvals anticipated for up to nine products in the next five to six years.

Disclaimer*

Eco Animal Health Group PLC

15 July 2026

ECO Animal Health Group plc

("ECO" or the "Group")

Results for the year ended 31 March 2026

ECO Animal Health (AIM: EAH), a leading global animal health company developing and marketing branded veterinary products to improve livestock productivity and welfare, announces its audited results for the year ended 31 March 2026.

Financial highlights

· Revenue ahead and adjusted EBITDA 4% ahead of upgraded market expectations following strong second half to the year

· Group sales of £87.5m (2025: £79.6m), an increase of 10%

o North America revenue growth of 22% (28% constant currency), contributing a growing share of Group revenues

o Latin America revenue growth of 15% (21% constant currency), driven by Brazil

· Constant currency revenue £91.0m (2025: £79.6m), an increase of 14%

· Gross margin increased to 49% (2025: 45%), due to disciplined cost control

· Adjusted EBITDA of £8.5m (2025: £7.3m), an increase of 16% and around 5% ahead of consensus

· Adjusted EBITDA margin improved to 9.8% (2025: 9.2%)

· Research and development expenditure increased to £8.8m (2025: £8.6m), as planned

· Profit before tax increased by 35% to £5.4m (2025: £4.0m)

· Earnings per share increased by 31% to 3.26p (2025: 2.49p)

· Net cash at the end of the period £25.4m (2025: £25.0m), reinforcing the Group's strong balance sheet with 39% of cash held outside China (2025: 40%)

Operational highlights

· Aivlosin^® demand continues to be robust in key markets, with particular growth in North America, Latin America and South East Asia

· EU marketing authorisation granted ahead of schedule for ECOVAXXIN^® MS, the Group's poultry vaccine against Mycoplasma synoviae with further submissions and approvals expected in next 12 months

· ECOVAXXIN^® MG, the Company's live poultry vaccine targeting Mycoplasma gallisepticum, received a favourable safety assessment from the United States Department of Agriculture (USDA)

· Broader progress across R&D pipeline, with up to 9 products expected to receive US or EU approval in the next 5 - 6 years

Post-year end highlights

· US revenue outperformance offsetting reduced revenue in China

· Gross margins further strengthening

· Continued growth in South East Asia with current order book covering a high proportion of full year management expectations in that region

· ECOVAXXIN^® MS successfully launched in July 2026; first orders received

· Dr Andrew Winder appointed as Head of Business Development, responsible for identifying and securing strategic opportunities

· RCF facility (£10m) and overdraft (£5m) renewed for a further 5 years on improved terms. Both facilities remain available and undrawn

· Continuing operational improvement including further ERP system roll-out across subsidiaries

David Hallas, Chief Executive Officer of ECO Animal Health Group plc, commented: "We are pleased to have delivered a year of significant operational and strategic progress, underpinned by a robust financial performance. Our lead product Aivlosin^® delivered growth in key geographies such as North America, China, Japan and Latin America, which combined with expanded gross margins has resulted in a material increase in adjusted EBITDA for the year.

"Alongside our core business, we have continued to use our generated cash to fund our proprietary R&D pipeline. We were delighted to receive EU marketing authorisation for our first vaccine, ECOVAXXIN^® MS in December 2025. The product successfully launched post-period end, marking our commercial entry into the preventatives medicine space. With further milestones expected over the coming year, we are well positioned to drive our next phase of growth and deliver long-term shareholder value."

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR") as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Forward-Looking Statements

This announcement contains certain forward-looking statements. The forward-looking statements reflect the knowledge and information available to the Company and Group during preparation and up to the publication of this announcement. By their very nature, these statements depend upon circumstances and relate to events that may occur in the future and thereby involving a degree of uncertainty. Therefore, nothing in this announcement should be construed as a profit forecast by the Company or Group.

Contacts

ECO Animal Health Group plc

David Hallas (Chief Executive Officer)

Christopher Wilks (Chief Financial Officer)

020 8447 8899

ICR Healthcare (Financial PR)

Mary-Jane Elliott

Jessica Hodgson

020 3709 5700

Singer Capital Markets (Nominated Adviser & Joint Broker)

Jennifer Boorer

Jalini Kalaravy

Samed Ethemi

020 7496 3000

Panmure Liberum (Joint Broker)

Emma Earl

Will Goode

Mark Rogers

Rupert Dearden

020 3100 2000

Equity Development

Hannah Crowe

Matt Evans

020 7065 2692

About ECO Animal Health

ECO Animal Health (AIM: EAH) is a leading global animal health company, developing and marketing branded veterinary products that optimise livestock wellbeing and productivity.

The Group's proprietary lead product, Aivlosin^® is a market leading antibiotic for the treatment of respiratory and intestinal diseases in pigs and poultry, distributed to over 70 markets through an established commercial platform.

ECO Animal Health is also investing in the next generation of animal health products through a self-funded R&D pipeline, with a particular focus on prevention and vaccines. The first product from ECO's pipeline, ECOVAXXIN^® MS, a poultry vaccine targeting Mycoplasma synoviae infection, was commercially launched in the EU in June 2026.

Headquartered in the UK, with a global presence, ECO Animal Health employs over 200 people worldwide.

View the Group's website or LinkedIn page for further information.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S COMBINED STATEMENT

FOR THE YEAR ENDED 31 MARCH 2026

Overview

We are pleased to report a year of significant operational, strategic and financial progress for ECO. We delivered strong growth from our flagship antimicrobial product Aivlosin^®, while achieving several milestones in our ongoing strategy to diversify our business and meet the growing need for preventative medicines in the animal health market. The first vaccine from our R&D portfolio, ECOVAXXIN^® MS, received EU marketing approval during the period, representing a key inflection point in ECO's evolution that paves the way for further approvals and new product launches.

Improved commercial performance with expanding profitability

Trading performance during FY26 was pleasing and ahead of expectations with revenues of £87.5m representing a year-on-year increase of 10% (2025: £79.6 million). We navigated currency headwinds and tariff challenges to deliver growth in North America, China and Japan and Latin America. In the USA, we secured new business wins and increased usage among existing customers, with Aivlosin^® emerging as the product of choice during severe disease outbreaks and for mycoplasma elimination programmes.

Full year revenue in China was strong, though trading slowed in the final quarter as reduced margins for pork producers decreased demand for our products.

The South and Southeast Asia region, excluding India, grew strongly. In India a combination of poor market conditions and distributor cash flow reduced revenue.

We continued to invest in defence against generic competition for Aivlosin^®, with ongoing technical and marketing initiatives proving successful in retaining customers and expanding the business.

Importantly, we again achieved a year on year improvement in gross margins to 48.6% (2025: 45.1%), primarily driven by improved product pricing, cost of goods, and favourable geographical mix towards higher margin markets such as North America. This combination of top-line growth and expanded gross margins has resulted in a material increase in adjusted EBITDA to £8.5m (2025: £7.3m).

As detailed in the report of the Chief Financial Officer, cash generation in the Group has been strong, cash balances held outside of China are consistent with last year and as a result, we have been able to continue fully funding our R&D projects from generated cash as well as end the year with cash ahead of the prior year at £25.4m.

Positioned for growth through R&D milestones

We delivered key milestones in our new product development programme, positioning ECO to begin commercialising its R&D pipeline in FY27 and underpinning the Group's next phase of growth.

ECOVAXXIN^® MS

The first product from our pipeline, ECOVAXXIN^® MS, a poultry vaccine against Mycoplasma synoviae, received marketing approval in the EU in December 2025, several months ahead of schedule. This reflects the high-quality work from our R&D, regulatory, marketing and technical teams in developing the dossier and providing technical responses.

EU commercial launch began with a successful launch event held post the period end on July 1^st and will be followed by several regional events between Q3 2026 and Q1 2027. Our commercial strategy for ECOVAXXIN^® MS leverages our existing EU network and established distribution channels, supplemented where necessary with additional technical and geographical capabilities.

Recent data confirmed ECOVAXXIN^® MS provides a 44-week DOI (duration of immunity) against Mycoplasma synoviae. This data will be submitted for addition to the product's label in July and will represent an important step in generating commercial traction.

The Group is pursuing regulatory approvals for ECOVAXXIN^® MS in additional markets beyond the EU. As announced at our interim results in December 2025, the United States Department of Agriculture (USDA) has now accepted the pivotal efficacy data, with marketing approval expected in the United States by the end of the calendar year. Post period end, dossiers have been submitted in Thailand and Argentina.

ECOVAXXIN^® MG

ECOVAXXIN^® MG is our second Mycoplasma poultry vaccine, targeted against Mycoplasma gallisepticum infection. The USDA delivered a favourable safety assessment of the product in March 2026, with final regulatory submission anticipated in the first half of calendar year 2028.

Additional assets

The mid‑stage portfolio includes our PCV2/Mhyo bivalent vaccine for pigs, where development has advanced to refining the Mhyo component and optimising the formulation, with marketing authorisation anticipated in 2028.

Our PRRS targeted monoclonal antibody programme continues to advance, with reproductive efficacy trials scheduled as the next major milestone with product approval in 2030.

Separately, we have ceased our earlier-stage necrotic enteritis monoclonal project due to a lack of sufficient clinical efficacy. Product development is inherently risky, we maintain a strict stage-gating approach and will terminate assets earlier rather than incur further costs. We were pleased to be able to replace this high risk project with another programme aimed at swine and this has a significantly lower risk profile.

As with ECOVAXXIN^® MS, our entire R&D pipeline is highly complementary to our existing business, and we expect to be able to leverage our infrastructure and experience a smooth progression from approvals into commercial success.

People

On behalf of the Board, we would like to thank our global team for their continued efforts to further our mission to deliver innovative animal health products that optimise livestock wellbeing and productivity. We were pleased to see a further year of strong results in our global engagement survey, reflecting the dedication and qualities of the team as well as the impact of our focussed efforts to enhance the workplace culture.

We have continued to strengthen the Group through targeted hires across science, development and commercial functions. Post-period end, this included the appointment of Dr Andrew Winder as our Head of Business Development, joining us in May 2026. Andrew brings extensive business development expertise to ECO, and will be responsible for identifying and securing strategic opportunities to grow the Group's business and R&D pipeline.

Board changes

On 31 March 2026, we announced that Frank Armstrong, Independent Non-Executive Director of the Company, had informed the Board of his intention to step down from his role, following his election as the Senior Lay Member (Chair) of the Court (Board) of the University of Edinburgh. Dr Armstrong, who also serves as Chair of the Remuneration Committee will step down at this year's Annual General Meeting, which is currently anticipated to be held in September.

On behalf of the Board, we would both like to again thank Frank for his extensive contributions to ECO during his tenure. The Board has commenced a thorough search process to identify a suitable replacement and will provide an update in due course.

Dividend

ECO's current investment strategy is to reinvest its profits to support its R&D pipeline, to deliver significant revenue and profit growth and long-term shareholder value. As such no dividend is recommended in respect of the year ended 31 March 2026.

The Board's intention is that as cashflows are generated from future revenue and profits from our R&D pipeline this will, over time, support a progressive dividend policy.

Outlook

FY2026 saw considerable uncertainty due to an evolving geopolitical and tariff landscape affecting many aspects of our business. Despite these challenges, we were able to deliver strong growth in revenue and profitability ahead of expectations.

Since the year-end, trading and orders received have been in line with the prior year except in China where we have seen weaker performance driven by lower pork prices, however, we expect to see a recovery associated with seasonal demand for Aivlosin^® and improvement in swine economics.

The Board is confident that the improved gross margin performance seen during FY2026 is sustainable, and that ECO will be able to deliver performance in FY2027 in-line with current market expectations for profitability. As with prior years, we expect performance for the Group to be second-half weighted.

Alongside our strong core business, we remain focused on generating shareholder value through our innovative new products, which will underpin our next phase of growth. We will continue the EU commercial roll-out of ECOVAXXIN^® MS and advance towards receiving marketing approvals in additional geographies and progress the rest of our R&D pipeline towards regulatory submissions. We are also actively assessing in-licensing and other strategic opportunities that would complement our pipeline and provide additional future revenue streams.

We look forward to updating shareholders as we continue to drive the next generation of veterinary innovation for animal welfare and sustainable food production.

Dr Joachim Hasenmaier David Hallas

Chairman Chief Executive Officer

REPORT OF THE CHIEF FINANCIAL OFFICER

FOR THE YEAR ENDED 31 MARCH 2026

Introduction

I am pleased to report a strong year with improving revenue, margins and profits alongside the progress made on our vaccine launch and deeper R&D pipeline.

At its core, the financial priorities are to ensure that ECO delivers on our stated investment case. We do this through optimisation of our existing portfolio of Aivlosin formats, managing our cashflow to support our R&D activity without recourse to external funding, and assessment of M&A, licensing and other business development activity.

We also continue in our role of stewards of the business, ensuring that shareholder's assets are safeguarded by robust controls and processes, and that as we deploy resources to parts of the business this is done in a way that will enhance shareholder value. In the year to 31 March 2026 we derived over £0.5m of savings and additional income through structural review of the finance department, optimisation of tax credits, elimination of wasteful spend and the optimisation of interest income on cash reserves. This is in addition to substantial and ongoing efficiency savings following our implementation of NetSuite.

We are now seeking to lead the implementation of AI across the business to further drive efficiencies by automating certain manual transaction processes, improving reporting by providing quicker and better analysis, providing an AI interrogation interface to the ERP system and enhancing our prospect models. Further use cases are emerging rapidly as the business embraces the opportunities provided by AI, whilst of course being mindful of the relative immaturity of the technology and the potential for emerging risks.

Trading

Previous years have seen a pattern of stronger trading in the second half of the year. This is associated with disease prevalence in pigs during the northern hemisphere winter. This pattern of trading has continued in the year ended 31 March 2026 with the second half accounting for 55% (2025: 58%) of the annual revenue. The lower second half weighting this year was due to the lower fourth quarter revenue in China (January to March 2026) as the pork market economics worsened. In other, non-China/Japan, markets the second half weighting of revenue averaged 57%.

The geographical analysis of revenue corresponding to the Group's operating segments is as follows:

Revenue summary - actual exchange rates		Year ended 31 March
	2026 (£'m)	2025 (£'m)	% change
China and Japan	24.1	22.9	5%
North America (USA and Canada)	26.1	21.4	22%
South and Southeast Asia	11.1	11.9	(7%)
Latin America	18.8	16.3	15%
Europe	4.8	4.9	(2%)
Rest of World and UK	2.6	2.2	18%
	87.5	79.6	10%

Most markets saw growth in this year, except S&SE Asia, where challenges in the Indian market held the segment back, and Europe which also broadly traded sideways. In India shipments were restricted to £0.9m (2025: £5.2m) in order to manage distributor credit risk. Taking into account the reduction in the India market the rest of the South East Asia segment increased by 52% from £6.7m to £10.2m showing good recovery from the previous difficulties in Thailand.

We faced currency headwinds throughout the year as sterling appreciated against other currencies, notably the Dollar and the Yuan. The geographical analysis of revenue on a constant currency basis is as follows:

Revenue summary - constant currency		Year ended 31 March
	2026 (£'m)	2025 (£'m)	% change
China and Japan	25.0	22.9	9%
North America (USA and Canada)	27.4	21.4	28%
South and Southeast Asia	11.6	11.9	(3%)
Latin America	19.7	16.3	21%
Europe	4.6	4.9	(6%)
Rest of World and UK	2.7	2.2	23%
	91.0	79.6	14%

Notwithstanding a very strong performance during the year ended 31 March 2026 in China, the decline in the pork price during the first quarter of calendar year 2026 resulted in slow trading during that final quarter of the financial year. The current pork market economics have been widely reported and the combination of over supply (more sows with a greater than previously recorded productivity rate (piglets/sow/year) and reduced demand (general economic slowdown resulting in less restaurant consumption and less in-home meat consumption is resulting in losses per farmed pig in all producers by as much as $60/pig. In such circumstances the decision to treat disease with all products including Aivlosin is impacted. Economists expect a re-balancing of the market in the Autumn.

At £26.1m (constant currency £27.4m), North America continued to grow volume despite the impact of tariffs. Volume growth arose from the superior efficacy of Aivloisin as well as successful initiatives to support pig producers "in barn" directly with mycoplasma disease eradication programs.

Excluding India, the South and South East Asia revenue segment increased by 52%. In Thailand a major customer lost in the prior period was regained. We continued to see good growth in Bangladesh and the Philippines building on last year's successful re-entry to this market.

Latin America, comprises Brazil and Mexico (where the Group operates through wholly owned subsidiaries) and a group of other countries in South America where trade is conducted through exclusive distribution arrangements. A decision was made during the year to sell to more product to Brazilian customers direct rather than through a distributor. This change has proved successful with Brazil revenue growing 25% in the year and at higher gross margins. Mexico recorded a slow year as excess stock in the distribution channel worked through to end users; new local leadership is now in place and key customers have been regained. Outside of Mexico and Brazil, Colombia performed strongly with distributor issues now resolved, and we saw strong growth across Peru, Uruguay and Ecuador.

The European market segment is dominated by sales into Spain - £2.1m (2025: £1.5m) and the UK - £1.2m (2025: £1.1m). A new distributor has been appointed in Spain with a consequent revitalisation of sales initiatives in that market.

Gross margins were 48.6% in the year ended 31 March 2026 (2025: 45.1%). This improvement in gross margins arose despite the foreign exchange impact of Sterling compared with the US Dollar and the Chinese Yuan. On a constant currency basis the revenues for the year are £91.0m; recalculating the gross margin based on constant currency revenue would provide a gross margin of 50.5%. These better gross margins have been achieved through reductions in product input costs, as well as robust sales pricing.

The Group hedges its largest currency exposures through a layering of forward contracts covering the four successive financial quarters and a portion of the anticipated US Dollar generation. On a quarterly basis these forward contracts are supplemented by additional layers, thus providing an averaging effect to the US Dollar- Sterling exchange rate. The hedging policy provides protection to net profit, earnings per share and cash but has no effect on gross profit or gross margin because the gains and losses are accounted for in finance costs.

Administrative expenses, at £31.7m (2025: £28.7m), increased 10%; personnel costs increased by 12% as a consequence of bonus accruals related to stronger financial performance. Furthermore, additional provisions were made in the year of £3.6m (2025: £0.5m) in respect of receivables and whilst full recovery is planned the ageing profile of the specific accounts requires a provision. Offsetting the above effects were savings in other administrative expense categories and FX gain.

The R&D portfolio progressed well during the year, and the milestone of marketing approval by the European Medicines Agency for our first mycoplasma poultry vaccine was reached - ECOVAXXIN® MS. The group expects further submissions and approvals in the next and following years supporting the targeted investment in innovative vaccine technology. The strong market potential and probability of technical and regulatory success supports the capitalisation of late stage R&D expenditure which showed no indications of impairment. At the current time the Group capitalises expenditure on ECOVAXXIN^® MG and ECOVAXXIN^® MS (work on marketing approvals in other non-EU jurisdictions) as well as a long acting Florfenicol based anti-infective, ECOFlor, for swine respiratory disease.

Total cash expenditure on R&D (inclusive of that amount capitalised) in the year was £8.8m (2024: £8.6m). The total expenditure on R&D is shown below.

	Year ended 31 March
	2026 (£'m)	2025 (£'m)
Research and development expenses - expensed in period	5.2	4.0
Development expenditure - capitalised in intangible assets	3.6	4.6
Total expenditure	8.8	8.6

Total R&D expenditure in the year was similar to the prior year. Expenditure on late stage assets (capitalised items) was 41% of total expenditure compared with 53% in the prior year. This reduction reflects the completion of the majority of the development work on ECOVAXXIN^® MS and a greater proportion of expenditure on earlier stage programmes. The R&D programme continues to be funded from the Group's cashflow. At 10% of revenue (2025: 11%) the Group is confident that programmes (late, mid and early stage) will receive the required funding to advance them according to plan. The measure of R&D expenditure as a % of revenue is a measure of affordability, not a target. The Group expects to update the market further during an R&D day to be held in the Autumn.

EBITDA is a key performance measure for the Group; the removal of amortisation, depreciation and other non-cash charges to profit provides a good indication of the underlying cash trading performance of the business. The charge for amortisation of intangible assets in the year was £1.1m (2025: £1.2m). The adjusted EBITDA, defined as operating profit excluding exceptional items, share based payments, depreciation, amortisation and foreign exchange gains and losses, at £8.5m (2025: £7.3m) was above market expectations and was achieved through stronger trading at higher gross margins, and in spite of higher bonus payments, expensed R&D investment and provisioning for doubtful debts compared with the year ended 31 March 2025. Furthermore, the adjusted EBITDA margin, expressed as a percentage of revenue in the period, improved further to 9.8% in the year ended 31 March 2026 compared with 9.2% in the year ended 31 March 2025 and 9.0% in the year ended 31 March 2024.

Profit before income tax also continued to improve to £5.4m for the year to 31 March 2026 (2025: £4.0m including an exceptional profit of £1.0m).

There were no exceptional items in the year to 31 March 2026 (the prior year exceptional items were profits on disposal of the non-core product line Ecomectin horse paste to an Italian distributor and parasite treatment licences for Southern Africa).

The Group's effective tax rate was 33% for the year ended 31 March 2026 (2025: 34%). Factors causing the effective rate to be greater than the headline UK rate of 25% are the withholding tax suffered on intragroup dividends received from China. In the year ended 31 March 2026, the Group received marketing approval for the first of its vaccines. The expected profits from this product together with the significantly weaker R&D tax credit regime now in place in the UK mean a deferred tax asset has been recognized in the year as we begin to have visibility of future profits in the Group. The Group expects to use all available tax losses over the next five years and has begun to increase the value of the deferred tax asset it recognises on its tax losses.

Earnings per share (EPS) has improved from 2.49 pence in the year ended 31 March 2025 to 3.26 pence per share in the year ended 31 March 2026. The Group's Employee Benefit Trust has purchased shares in the Group and is holding these shares to satisfy option exercises under all of the Group's share incentive programmes:

No. of shares

Bought in the year ended 31 March 2025	270,000
Bought in the year ended 31 March 2026	799,472
Total purchased by the EBT to date	1,069,472
Deferred bonus exercises Dec 2025	(24,754)
Shares held by the EBT at 31 Mar 2026	1,044,718

This will result in reduced dilution upon vesting as EBT shares will be transferred before new shares are issued.

Operating cash inflow before movements in working capital was £8.5m (2025: £7.3m). Operating cash flow was £10.2m (2025: £12.1m). The jurisdiction of cash balances were as follows:

	At 31 March
	2026 (£'m)	2025 (£'m)
Held in UK	6.2	8.4
Held in non-China subsidiaries	3.6	1.6
Held in China 100% owned subsidiary	4.2	4.0
Held in China 51% owned subsidiary	11.4	11.0
	25.4	25.0

The Group repatriates cash from China by annual dividend declaration; this is subject to withholding taxes of 5% and is paid according to the relevant shareholdings. On a day-to-day basis, the Board considers the cash held in the Group's subsidiaries in China to be unavailable to the Group outside of China; accordingly, treasury management decisions and funds available for investment in R&D are based upon the cash balances outside of China.

During June 2025, two dividends totalling £3.4m (post withholding tax) were received from China. In addition, during June 2026, a dividend of £3.1m (post withholding tax) was received from the Group's 100% owned subsidiary in China. In addition, a further dividend from the Group's 51% owned subsidiary is expected to be received during July or August 2026.

The Group's banking facilities were successfully renewed during June 2026 for a further five years on terms more favourable than the previous arrangements. The facilities total £15.0m, being a £5.0m overdraft facility and a committed £10.0m revolving credit facility. These facilities were undrawn as at 31 March 2026.

The Group's inventory balance reduced to £13.5m on 31 March 2026 from £14.6m on 31 March 2025. This reduction was principally in finished goods and reflected the strong end to the year particularly in USA, in particular. Overall inventory days declined from 122 days to 109 days.

Trade receivables decreased from £28.5m at 31 March 2025 to £24.0m on 31 March 2026 with average debtor days (expressed as an average of the annual revenue) declining from 131 days to 100 days.

Trade payables decreased from £15.1m as at 31 March 2025 to £11.9m as at 31 March 2026. This largely represented the timing of payment for large shipments of the key active pharmaceutical ingredient in the prior year. Payable days dropped accordingly from 126 to 97 days.

Simplified presentation of the Group

In response to certain stakeholder requests to provide a simplified description of the Group's performance we present the following analysis. The ECO Group can be thought of in three components, the first, a core trading business which manufactures and sells its products worldwide through wholly owned subsidiaries, distributors or direct to market. This applies to all territories except China where ECO operates through a 51% owned subsidiary. Cash returns from this China subsidiary is by way of a dividend.

The second component to this analysis of the Group is an investment in a China business that pays the Group an annual dividend. The third component of this analysis is an R&D business which employs a team of people undertakes studies and trials through third parties and has developed a body of intellectual property with rich potential for high future returns.

With these three components in mind one can disaggregate the Group results using already disclosed information, as follows:

ECO Animal Health Group plc - Disaggregation analysis
	ECO excluding ECO Biok* (£'m)	ECO Biok Note 15 (£'m)	ECO R&D operation (£'m)	Consolidated group (£'m)
Revenue	65.1	22.4	-	87.5
Cost of sales	(31.4)	(13.6)	-	(45.0)
Gross profit	33.7	8.8	-	42.5
	52%	39%	-	49%
Administrative expenses	(25.2)	(4.6)	(1.9)	(31.7)
Research & Development expenses	-	-	(5.2)	(5.2)
Other income	-	0.1	-	0.1
Profit/(loss) from operating activities	8.5	4.3	(7.1)	5.7

Net finance cost	(0.1)	(0.2)	-	(0.3)

Share of profit of associate	-	-	-	-
Profit before income tax	8.4	4.1	(7.1)	5.4
Income tax credit/(charge)	(0.9)	(1.1)	0.4	(1.6)
Withholding tax on dividends	(0.2)	-	-	(0.2)
Profit/(loss) for the year**	7.3	3.0	(6.7)	3.6

**Note rounding difference when compared with income statement.

ECO Animal Health Group plc - Disaggregation analysis continued

Profit:	ECO excluding ECO Biok (£'m)	ECO Biok Note 15 (£'m)	ECO R&D operation (£'m)	Consolidated group (£'m)
Profit from operating activities	8.5	4.3	(7.1)	5.7
Deprecation	0.7	0.8	-	1.5
Amortisation	1.1	-	-	1.1
Share based payments and foreign exchange differences	0.2	-	-	0.2
Exceptional items	-	-	-	-
Adjusted EBITDA	10.5	5.1	(7.1)	8.5

China dividend
Received by ECO group from China JV in year	2.6	(2.6)	-	-
Balance sheet
Intangible fixed assets	29.1	-	15.2	44.3
Tangible fixed assets	5.4	2.6	-	8.0
Deferred tax balance	1.3	0.2	-	1.5
Inventories	9.2	4.3	-	13.5
Receivables	20.6	3.4	-	24.0
Other current assets	1.6	-	-	1.6
Cash balance	14.0	11.4	-	25.4
Trade payables	(8.0)	(3.9)	-	(11.9)
Lease liabilities	(2.2)	(2.7)	-	(4.9)
Other payables	(5.1)	(0.9)	-	(6.0)
Net assets	65.9	14.4	15.2	95.5

Cash flow
Profit/(loss) before tax	8.4	4.1	(7.1)	5.4
Non-cash items	2.3	0.8	-	3.1
Net working capital movements/ net finance cost and tax payments	(1.9)	0.7	0.4	(0.8)
Cash flow from operating activities	8.8	5.6	(6.7)	7.7
Cash flow from investing activities	(0.1)	0.0	(3.6)	(3.7)
Cash flow from financing activities	(8.9)	(5.6)	10.3	(4.2)
Foreign exchange movements	0.2	0.4	-	0.6
Net increase in cash	-	0.4	-	0.4
Opening cash	14.0	11.0	-	25.0
Closing cash	14.0	11.4	-	25.4

*The Group own 51% of ECO Biok with 49% owned by a minority shareholder. Details of ECO Biok are disclosed in Note 15.

By performing this analysis for prior years the following comparative performance for the core group can be set out as follows:


Group excluding China and R&D	2023	2024	2025	2026
Revenue	61.2	67.8	60.1	65.1
Gross margin	45%	43%	48%	52%
Adjusted EBITDA	7.8	9.4	9.5	10.5
Adjusted EBITDA margin	13%	14%	16%	16%
Effective tax rate	18%	28%	10%	13%
Inventories	17.4	13.0	11.7	9.2
Receivables	22.9	27.6	23.9	20.6
Cash balance	6.8	10.4	14.0	14.0
Cash generated from Operations	7.2	10.3	14.0	8.8
Cash received from China 51% owned subsidiary dividend	1.9	2.9	1.1	2.6

R&D component
R&D cash expenditure (net of tax credits)	8.2	8.0	10.5	10.3
Effective R&D tax credit rate	14%	15%	1%	4%

China 51% Subsidiary
Revenue	24.1	21.6	19.5	22.4
Gross margin	44%	38%	37%	39%
Adjusted EBITDA	6.6	3.9	3.7	5.1
Adjusted EBITDA margin	27%	18%	19%	23%
Effective tax rate	29%	29%	27%	27%
Inventories	5.0	4.0	2.9	4.3
Receivables	3.9	4.5	5.1	3.4
Cash balance	14.9	11.9	11.0	11.4

The dividend from the China based 100% owned subsidiary in respect of the year ended 31 December 2025 has been received in June 2026 at £3.1m (2025: £0.9m). The dividend for the Group's interest in the 51% owned China subsidiary is expected to be declared in July 2026 and is expected to be not be less than £2.5m (2025: £2.5m).

In summary the Group can be described as a core trading business which has delivered consistent (and rising) profitability in the last four years approaching £11m, rising cash generation and cash balances and which receives a consistent annual dividend of £2m - £3m and from which a new product development programme is being funded which in turn is now creating new revenue streams.

Christopher Wilks

Chief Financial Officer

14 July 2026

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2026

		2026	2025
	Notes	£000's	£000's

Revenue	3	87,525	79,596
Cost of sales		(45,028)	(43,682)
Gross profit		42,497	35,914
		48.6%	45.1%

Administrative expenses		(31,676)	(28,727)
Research and development expenses		(5,250)	(3,988)
Other income	4	147	148
Exceptional items	5	-	954
Operating profit		5,718	4,301

Share of profit of associate	15	36	50
Finance income	6	79	110
Profit before financing and income tax		5,833	4,461

Finance costs	6	(399)	(452)
Profit before income tax		5,434	4,009

Income tax charge	8	(1,779)	(1,375)
Profit for the year		3,655	2,634

Profit attributable to:
Owners of the parent Company		2,190	1,686
Non-controlling interest	26	1,465	948
Profit for the year		3,655	2,634

Earnings per share (pence)	7	3.26	2.49

Diluted earnings per share (pence)	7	3.15	2.43

Adjusted EBITDA (Non-GAAP measure)	5	8,540	7,299

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2026

		2026	2025
	Notes	£000's	£000's

Profit for the year		3,655	2,634

Other comprehensive income/(loss):

Items that may be reclassified to profit or loss:
Foreign currency translation differences		152	(368)

Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit pension schemes	23	(154)	(14)
Other comprehensive income/(loss) for the year		(2)	(382)

Total comprehensive income for the year		3,653	2,252

Attributable to:
Owners of the parent Company		2,016	1,611
Non-controlling interest	26	1,637	641
		3,653	2,252

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2026

	Share Capital	Share Premium	Revaluation Reserve	Treasury Shares Reserve	Other Reserves	Foreign Exchange Reserve	Retained Earnings	Total	Non-controlling Interest	Total Equity
	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's
Balance at 31 March 2024	3,387	63,319	271	-	106	788	15,819	83,690	9,690	93,380
Profit for the year	-	-	-	-	-	-	1,686	1,686	948	2,634
Other comprehensive income:
Foreign currency differences	-	-	-	-	-	(41)	(20)	(61)	(307)	(368)
Actuarial gains on pension scheme assets	-	-	-	-	-	-	(14)	(14)	-	(14)
Total comprehensive income for the year	-	-	-	-	-	(41)	1,652	1,611	641	2,252
Transactions with owners:
Issue of shares in the year	1	-	-	-	-	-	-	1	-	1
Acquisition of shares by EBT	-	-	-	(204)	-	-	-	(204)	-	(204)
Share-based payments	-	-	-	-	-	-	401	401	-	401
Dividends	-	-	-	-	-	-	-	-	(1,065)	(1,065)
Transactions with owners	1	-	-	(204)	-	-	401	198	(1,065)	(867)
Balance at 31 March 2025	3,388	63,319	271	(204)	106	747	17,872	85,499	9,266	94,765

Profit for the year	-	-	-	-	-	-	2,190	2,190	1,465	3,655
Other comprehensive income:
Foreign currency differences	-	-	-	-	-	(20)	-	(20)	172	152
Actuarial losses on pension scheme assets	-	-	-	-	-	-	(154)	(154)	-	(154)
Total comprehensive income for the year	-	-	-	-	-	(20)	2,036	2,016	1,637	3,653
Transactions with owners:
Acquisition of shares by EBT	-	-	-	(732)	-	-	(18)	(750)	-	(750)
Share-based payments	-	-	-	-	-	-	330	330	-	330
Dividends	-	-	-	-	-	-	-	-	(2,494)	(2,494)
Transactions with owners	-	-	-	(732)	-	-	312	(420)	(2,494)	(2,914)
Balance at 31 March 2026	3,388	63,319	271	(936)	106	727	20,220	87,095	8,409	95,504

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2026

Company

	Share Capital	Share Premium	Revaluation Reserve	Treasury Shares Reserve	Other Reserves	Retained Earnings	Total
	£000's	£000's	£000's	£000's	£000's	£000's	£000's
Balance at 31 March 2024	3,387	63,319	-	-	106	6,920	73,732
Loss for the year	-	-	-	-	-	(658)	(658)
Other comprehensive income:
Actuarial gains on pension scheme assets	-	-	-	-	-	(14)	(14)
Total comprehensive income for the year	-	-	-	-	-	(672)	(672)
Transactions with owners:
Issue of shares in the year	1	-	-	-	-	-	1
Acquisition of shares by EBT	-	-	-	(204)	-	-	(204)
Share-based payments	-	-	-	-	-	401	401
Transactions with owners	1	-	-	(204)	-	401	198
Balance at 31 March 2025	3,388	63,319	-	(204)	106	6,649	73,258

Loss for the year	-	-	-	-	-	629	629
Other comprehensive income:
Actuarial gains on pension scheme assets	-	-	-	-	-	(154)	(154)
Total comprehensive income for the year	-	-	-	-	-	475	475
Transactions with owners:
Acquisition of shares by EBT	-	-	-	(732)	-	(18)	(750)
Share-based payments	-	-	-	-	-	330	330
Transactions with owners	-	-	-	(732)	-	312	(420)
Balance at 31 March 2026	3,388	63,319	-	(936)	106	7,436	73,313

STATEMENTS OF FINANCIAL POSITION (CO. NUMBER: 01818170)

AS AT 31 MARCH 2026

		Group		Company
		2026	2025	2026	2025
	Notes	£000's	£000's	£000's	£000's

Non-current assets
Intangible assets	11	44,279	41,834	-	-
Property, plant and equipment	12	3,438	4,038	-	-
Right-of-use assets	14	4,524	3,399	6	20
Investments	15	324	316	22,020	21,690
Amounts due from subsidiary company	17	-	-	51,104	48,937
Deferred tax assets	18	1,496	1,074	-	-
Total non-current assets		54,061	50,661	73,130	70,647

Current assets
Inventories	16	13,510	14,553	-	-
Trade and other receivables	17	23,955	28,516	387	1,664
Income tax recoverable	13	345	1,143	-	-
Other taxes and social security		1,252	724	638	182
Cash and cash equivalents	19	25,432	25,006	133	1,515
Total current assets		64,494	69,942	1,158	3,361
TOTAL ASSETS		118,555	120,603	74,288	74,008

Current Liabilities
Trade and other payables	20	(11,949)	(15,071)	(862)	(673)
Provisions	22	(5,359)	(4,964)	-	-
Income tax payable	13	(625)	(801)	-	-
Other taxes and social security payable		(128)	(305)	-	-
Lease liabilities	21	(760)	(621)	(5)	(15)
Dividends		(50)	(50)	(50)	(50)
Total current liabilities		(18,871)	(21,812)	(917)	(738)
Net current assets		45,623	48,130	241	2,623
Total assets less current liabilities		99,684	98,791	73,371	73,270

Non-current liabilities
Deferred tax liabilities	18	(7)	(862)	(58)	(9)
Lease liabilities	21	(4,173)	(3,164)	-	(3)
TOTAL ASSETS LESS TOTAL LIABILITIES		95,504	94,765	73,313	73,258

EQUITY
Issued share capital	25	3,388	3,388	3,388	3,388
Share premium account		63,319	63,319	63,319	63,319
Revaluation reserve	27	271	271	-	-
Treasury shares reserve	27	(936)	(204)	(936)	(204)
Other reserves	27	106	106	106	106
Foreign exchange reserve	27	727	747	-	-
Retained earnings		20,220	17,872	7,436	6,649
Shareholders' funds		87,095	85,499	73,313	73,258
Non-controlling interests	26	8,409	9,266	-	-
TOTAL EQUITY		95,504	94,765	73,313	73,258

Approved by the Board and authorised for issue on 14 July 2026.

Joachim Hasenmeier, Chairman.

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2026

		Group		Company
		2026	2025	2026	2025
	Notes	£000's	£000's	£000's	£000's
Cash flows from operating activities
Profit/(loss) before income tax		5,434	4,009	499	(725)
Adjustment for:
Finance income	6	(79)	(110)	(992)	(1,124)
Finance cost	6	399	452	3	4
Foreign exchange (gain)/loss	5	(172)	720	(55)	(132)
Depreciation	12	860	984	-	-
Depreciation of right-of-use assets	14	664	681	-	32
Amortisation of intangible assets	11	1,140	1,166	-	-
Share of associate's results	15	(36)	(50)	-	-
Share based payment charge	24	330	401	-	162
Exceptional items	5	-	(954)	-	-
Operating cash flows before movements in working capital		8,540	7,299	(545)	(1,783)

Decrease in inventory		1,243	2,088	-	-
Decrease/(increase) in receivables		4,494	4,156	(1,345)	1,995
(Decrease)/increase in payables		(3,940)	(1,339)	188	(211)
Decrease in provision and pensions		(117)	(90)	(154)	(14)
Cash generated from/(used in) operations		10,220	12,114	(1,856)	(13)

Finance costs	6	(112)	(200)	(2)	-
Income tax		(2,453)	(1,466)	(20)	(9)
Net cash from/(used in) operations		7,655	10,448	(1,878)	(22)

Cash flows from investing activities
Acquisition of property, plant and equipment	12	(192)	(356)	-	-
Purchase of intangibles	11	(3,585)	(4,648)	-	-
Net cash flow from disposal and acquisition activities		-	288	-	-
Finance income	6	79	110	992	1,124
Dividends received		-	-	199	85
Net cash (used in)/from investing activities		(3,698)	(4,606)	1,191	1,209

Cash flows from financing activities
Proceeds from issue of share capital		-	1	-	1
Acquisition of shares by EBT		(750)	-	(750)	-
Interest paid on lease liabilities	21	(287)	(252)	(1)	(4)
Principal paid on lease liabilities	21	(674)	(638)	2	(38)
Dividends paid		(2,494)	(1,065)	-	-
Net cash used in financing activities		(4,205)	(1,954)	(749)	(41)
Net (decrease)/increase in cash and cash equivalents		(248)	3,888	(1,436)	1,146
Foreign exchange movements		674	(1,256)	54	6
Balance at the beginning of the period		25,006	22,374	1,515	363
Balance at the end of the period	19	25,432	25,006	133	1,515

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2026

1. General information

ECO Animal Health Group plc ("the Company") and its subsidiaries (together "the Group") manufacture and supply animal health products globally.

The Company is traded on the AIM market of the London Stock Exchange and is incorporated and domiciled in the UK. The address of its registered office is The Grange, 100 High Street, Southgate, N14 6BN.

2. Summary of the Group and Company's significant accounting policies

2.1 Basis of preparation

These financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards. There were no changes to accounting policies on adoption of UK IFRSs.

The preparation of financial statements, in accordance with UK-adopted international accounting standards, requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Further details of estimates and judgements are provided in note 2.29 and 2.30.

The principal accounting policies are set out below and have been applied consistently in dealing with items which are considered material in relation to the financial statements. They are prepared under the historical cost convention with the exception of certain items which are measured at fair value as described in the accounting policies below.

Going concern

After making appropriate enquiries, the Directors have, at the time of approving the financial statements, formed a judgement that there is a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.

This conclusion is based on a review of the resources available to the Group, taking account of the Group's financial projections together with available cash and committed borrowing facilities. The Directors have performed a reverse stress test on the business, by considering what quantum of revenue and gross margin reduction would be required to exhaust all available funds within 12 months of the date of approving the accounts, having due regard to the identified strategic risks. The Directors concluded that the likelihood of such a reduction was remote, and therefore that no material uncertainty exists in respect of going concern.

2.2 Adoption of new and revised standards

The below are the standards and amendments that are new/amended for accounting periods that begin on or after 1 January 2025 and have been adopted by the Group in the current financial year:

· Lack of Exchangeability (Amendments to IAS 21); and

· Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28).

No new standards or amendments that became effective in the financial year ended 31 March 2026 had a material impact in preparing these financial statements.

In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued by the IASB that are mandatorily effective for an accounting period that begins on or after 1 January 2026. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements:

· IFRS 7 & 9: Amendments to the classification and measurement of financial instruments;

· IFRS 7 & 9: Contracts referencing Nature-dependent Electricity;

· Annual improvements to IFRS Accounting Standards - Volume 11;

· IFRS 1: Practice Statement 1 Management Commentary; and

· Disclosures about Uncertainties in the Financial Statements.

Certain standards, amendments to, and interpretations of, published standards have been published that are mandatory for the Group's accounting years beginning on or after 1 January 2027 or later years and which the Group has decided not to adopt early:

· IFRS 18: Presentation and Disclosure in Financial Statements;

· IFRS 19: Subsidiaries without Public Accountability Disclosures; and

· Amendments to IAS 21: Translation to a Hyperinflationary Presentation Currency.

Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these future standards until a detailed review has been completed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.3 Basis of consolidation

The consolidated financial statements comprise the accounts of the Company and its subsidiaries drawn up to 31 March 2026.

An entity is classed as a subsidiary of the Company when, as a result of contractual arrangements, the Company has the power to govern its financial and operating policies so as to obtain benefits from its activities.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value, the difference is recognised directly in the income statement.

Accounting policies of subsidiaries have been changed where material to ensure consistency with the policies adopted by the Group. Although the subsidiaries in Brazil and China and the joint operations in the USA and Canada all have December year ends, the Group uses management accounts to the end of March to prepare the Group accounts.

Subsidiaries are wholly consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation.

The Group initially recognises any non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the acquiree's net assets. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group has not elected to take the option to use fair value in acquisitions completed to date.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

2.4 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting to the chief operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments has been identified as the Board.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('functional currency'). The consolidated and Company financial statements are presented in Pounds Sterling, which is the Group and the Company's functional currency.

(b) Transactions and balances

Monetary assets and liabilities denominated in foreign currencies are translated into Pounds Sterling at the rates of exchange ruling at the date of the financial statements.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement within administrative expenses.

Foreign exchange gains and losses that relate to borrowing and cash and cash equivalents are presented in the income statement within administrative expenses.

The results and financial position of all Group entities that have a functional currency different from the Group's functional and presentation currency are translated into the Group's functional and presentation currency as follows:

· assets and liabilities for each statement of financial position presented are translated at the closing exchange rate at the date of the statement of financial position;

· income and expenses for each income statement are translated at average exchange rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case the income and expenses are translated at the rate on the dates of the transaction; and

· all resulting exchange differences are recognised through other comprehensive income as a separate component of equity.

When a foreign operation is partially disposed or sold, exchange differences that were recognised in equity are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate.

2.6 Financial instruments

Financial assets

Financial assets comprise mainly trade and other receivables and cash and cash equivalents in the consolidated statement of financial position. These financial assets arise principally from the provision of goods to customers and are measured at amortised cost.

Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed with reference to historical data adjusted by forward-looking information. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administrative expenses in the consolidated income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, 12-month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The group uses forward foreign exchange contracts to manage its currency exposure. Certain foreign currency inflows that would typically be translated to sterling at spot to meet liabilities are sold forward to reduce the Group's exposure to fluctuations in exchange rates. The group has not opted to use hedge accounting for these instruments, and any changes in fair value are recognised in the income statement.

Financial liabilities

Financial liabilities comprise mainly trade and other payables and bank overdrafts in the consolidated statement of financial position. These financial liabilities are initially recognised at fair value and subsequently measured at amortised cost in accordance with IFRS 9.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.7 Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the costs of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Please refer to note 11 for further details.

Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not subject to amortisation but is tested for impairment annually. The impairment test requires an allocation of the goodwill balance to the cash-generating units that are expected to benefit from the synergies of the combination. The balance is then compared with the present values of the cash flows expected to be generated by that cash-generating unit. In practice the cash generating unit which is used to test goodwill for impairment corresponds with the relevant operating segment identified in note 3.

Negative goodwill arising on an acquisition is recognised directly in the income statement. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss recognised in the income statement on disposal. Goodwill arising before the date of transition to IFRS, on 1 April 2004, has been retained at the previous UK GAAP amounts, subject to being tested for impairment at that date. Goodwill written off to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in determining any subsequent profit or loss on disposal.

2.8 Other intangible assets

Other intangibles are detailed in note 11. IAS 38 - Intangible Assets includes guidance on the accounting for research and development expenditure. Such an intangible asset is a resource that is controlled by the entity as a result of past events (for example, purchase or self-creation) and from which future economic benefits (inflows of cash or other assets) are expected. The three critical attributes of an intangible asset are:

· identifiability;

· control (power to obtain benefits from the asset); and

· future economic benefits (such as revenues or reduced future costs).

Identifiability

An intangible asset is identifiable when it:

· is separable (capable of being separated and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract); or

· arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

Development expenditure - whether purchased or self-created (internally generated) is an example of an intangible asset, governed under IAS 38.

Recognition criteria

IAS 38 requires an entity to recognise an intangible asset (at cost) if, and only if:

· it is probable that the future economic benefits that are attributable to the asset will flow to the entity; and

· the cost of the asset can be measured reliably.

IAS 38 includes additional recognition criteria for internally generated intangible assets.

Expenditure on the research phase of an internal project is expensed as incurred. Expenditure in the development phase of an internal project is capitalised if the entity can demonstrate:

a) the technical feasibility of completing the intangible asset so that it will be available for use or sale.

b) its intention to complete the intangible asset and use or sell it.

c) its ability to use or sell the intangible asset.

d) how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

The probability of future economic benefits must be based on reasonable and supportable assumptions about conditions that will exist over the life of the asset.

If an entity cannot distinguish the research phase of an internal project to create an intangible asset from the development phase, the entity treats the expenditure for that project as if it were incurred in the research phase only.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.8 Other intangible assets (continued)

The Group context of IAS 38

Since the early start-up stages of the business, the Group has and continues to invest significant expenditure in research and development into new animal treatments and therapies. This has resulted in a significant family of pharmaceutical treatments for pigs and poultry. Branded as Aivlosin®, this product has developed over 20 years into treatments for multiple respiratory and intestinal infections - each of which have separate regulatory and marketing approvals in each target market. The work to bring Aivlosin® from the laboratory to the commercial farm has moved through the classical phases of pharmaceutical development and the ECO Animal Health R&D model can be described by the following broad phases:

• The discovery phase - in vitro, in laboratory.

• The proof of concept phase - key efficacy trials in small groups of animals.

• The exploratory development phase - optimisation of dose, economic validation.

• The full development phase - building the data set for dossier submission.

• Submission of an application for regulatory approval.

• Marketing and regulatory approval granted - commercial revenue begins.

The application of the principles of IAS 38 to the above model is to treat expenditure on research and development as an expense until the likely commercial benefits that will flow from the project can be judged to be highly probable. This means that the technical feasibility (judged by reference to efficacy) must be certain, the economic feasibility (judged by reference to manufacturing methodology, market intelligence, overall programme cost) has to be highly probable and the likelihood of gaining regulatory approval must be judged to be highly probable. The Directors consider that capitalisation will generally commence once a project enters the full development phase.

In practice, work that is undertaken to build towards regulatory approval for a new treatment claim using Aivlosin®, vaccines or other technologies, or an approval for marketing new technologies of applications in a new geographical market can be viewed as starting at the full development phase and are likely to meet the capitalisation criteria whereas costs in relation to some of the Group's recently announced projects, on vaccine development, for example, are likely to meet the capitalisation requirements once they are approved internally to commence the full development phase, subject to careful consideration of residual technical feasibility/risk.

The Group's R&D team prepare a technical profile for new products in development, with timings for development activity reflecting the technical challenges that must be overcome in order to obtain a marketing authorisation for the relevant regulator. In turn the R&D team work with the Group's marketing team to develop a business case for a new product by considering a number of additional factors. These additional factors will include local intelligence on the appetite for new products gathered through the Group's global network of existing sales channels, third-party data on the size of potential markets for new products, and suitable pricing strategies in the context of potential competitor products.

Amortisation of capitalised expenditure is determined with reference to the point at which regulatory approval is given to the product to which the expenditure relates. For historic periods, the approach adopted has been to amalgamate the expenditure incurred on all projects relating to the same product since the last regulatory approval and then identify the next nearest regulatory approval given for that product in either the same or a subsequent half-year. Amortisation begins in the half-year following the receipt of regulatory approval. A full six months of amortisation is charged in the first half-year for which costs are amortised.

Where it is possible to allocate an individual capitalised cost to a single identifiable project the start date for amortisation is the half-year following the half-year period in which the project receives regulatory approval. Where regulatory approval has not been received for a project, the amortisation has not started.

Amortisation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Aivlosin® 5% on cost

Ecomectin® 10% on cost

Vaccines 5% on cost

Trade marks and patents 10% on cost

2.9 Property, plant and equipment and depreciation

Plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Plant and machinery 10%-20% on cost

Fixtures, fittings and equipment 10%-20% on cost

Motor vehicles 25% on cost

Leasehold improvement 18%-25% on cost

Freehold land and buildings valuations are measured as a level 3 recurring fair value measurement. The property is professionally valued by a qualified surveyor at least once every three years. Surpluses (which are not reversals of previous deficits) arising from the periodic valuations are taken to other comprehensive income, and deficits (which are not reversals of previous surpluses) are taken to the income statement within administrative expenses. Depreciation is provided at a rate calculated to expense the valuation less estimated residual value over the remaining useful life of the building at a rate of 2% per annum on a straight-line basis. Land is not depreciated.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.10 Impairment of non-financial assets

The carrying amounts of assets are reviewed at each year end to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated in order to determine the impairment loss if any. The recoverable amount is the higher of its fair value and its value in use. For intangible assets with an indefinite useful life or not available for use, an impairment test is performed at each year end.

In assessing value in use, the expected future cash flows from the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised in the income statement whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

A previously recognised impairment loss for costs other than goodwill is reversed if the recoverable amount increases as a result of a change in the estimates used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior years and no reversal of impairment losses recognised on goodwill.

2.11 Investments in subsidiaries

An investment in a subsidiary is where the Group own a controlling interest in an entity. Investments in subsidiaries are stated at cost less impairment in the parent Company's statement of financial position.

Other non-current asset investments are stated at fair value. They are recognised or derecognised on the date when the contract for acquisition or disposal requires the delivery of that investment.

Investments are assessed for impairment at the end of each reporting period. An impairment is recognised in profit or loss when the recoverable amount of an asset is less than its carrying amount, with the value of any impairment being the difference between the recoverable amount and carrying amount.

Impairments can be reversed in subsequent periods where there is any indication that the impairment loss recognised in a prior period may no longer exist or have decreased.

During the year the Group established an Employee Share Ownership Trust (the 'ESOT'). The assets, liabilities and returns of the ESOT are consolidated within the results of the ESOT's sponsoring company, Eco Animal Health Group plc.

During the year the ESOT acquired shares in Eco Animal Health Group plc. The shares held by the ESOT are treated as treasury shares in the accounts of Eco Animal Health Group plc.

2.12 Joint arrangements

A joint arrangement is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control; that is, when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

The Group classifies its interests in joint arrangements as either:

- Joint ventures: where the Group has rights to only the net assets of the joint arrangement; or

- Joint operations: where the Group has both the rights to assets and obligations for the liabilities of the joint arrangement.

In assessing the classification of interests in joint arrangements, the Group considers:

- The structure of the joint arrangement;

- The legal form of joint arrangements structured through a separate vehicle;

- The contractual terms of the joint arrangement agreement;

- Any other facts and circumstances (including any other contractual arrangements).

The Group has interests in joint operations. The Group recognises its share of the assets, liabilities, income, expenses and cash flows of joint operations combined with the equivalent items in the consolidated financial statements on a line-by-line basis.

2.13 Investments in associates

An associate is an entity in which an investor has significant influence but not control or joint control. Significant influence is defined as "the power to participate in the financial and operating policy decisions but not to control them".

The Group reports its interests in associates using the equity method of accounting. Under this method, an equity investment is initially recorded at cost (subject to initial fair value adjustment if acquired as part of the acquisition of a subsidiary) and is subsequently adjusted to reflect the Group's share of the net profit or loss of the associate. If the Group's share of losses of an associate equal or exceed its "interest in the associate", the Group discontinues recognising its share of further losses. If the associate subsequently reports profits, the investor resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.14 Leasing

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group applies a single recognition and measurement approach for all leases under IFRS 16, except for short-term leases and leases of low-value assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease, which is the date the underlying asset is available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date, less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in section 2.10 for further details.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of the lease payments to be made over the lease term. The lease liabilities include the present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable;

• variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable by the Group under residual value guarantees;

• the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (for example, changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise operational flexibility in terms of managing the assets used in the Group's operations. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.

The Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

Recognition exemptions

The Group applies the short-term lease recognition exemption to its short-term leases, being those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option.

The Group also applies the recognition exemption to leases of which the underlying asset is of low value, comprising assets below the Group's capitalisation threshold. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.

Practical expedients

The Group applies a single discount rate to a portfolio of leases with reasonably similar characteristics.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.15 Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined using the historical batch price of the principal raw materials and the weighted average cost for other ingredients and other product costs. The cost of finished goods comprises raw materials, packaging costs and sub-contracted manufacturing costs. Net realisable value is the estimated selling price in the ordinary course of business, less any costs which would be incurred in completing the goods ready for sale.

2.16 Trade receivables

Trade receivables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Trade receivables are presented net of discounts or other variable consideration adjustments earned, where the expectation and intention is to settle the balance net. Impairment provisions are recognised based on the simplified approach in accordance with IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. See impairment section in section '2.6 Financial instruments' for more details.

2.17 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held on call with banks, and other short‑term highly liquid investments with original maturities of three months or less. For the purpose of the statement of cash flows, bank overdrafts are included in the presentation of cash and cash equivalents.

2.18 Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in assets after deducting all of its liabilities.

2.19 Bank borrowings and loans

Interest-bearing bank loans and overdrafts are recorded as the proceeds received, net of direct issue costs (which equate to fair value). Finance charges including premiums payable on settlement or redemption and direct issue costs are accounted for on an amortised cost basis in profit or loss using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

2.20 Trade payables

Trade payables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method.

2.21 Provisions and Contingent Liabilities

Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation outstanding at the year end and are discounted to present value where the effect is material.

A Contingent Liability is disclosed where there is a possible obligation arising from a past event and whose existence and valuation will be confirmed only by the occurrence or non-occurrence of a future event. A Contingent Liability is also disclosed if the outflow in respect of the past event is neither probable nor remote, or if it is not possible to measure the obligation with sufficient reliability.

2.22 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Group's activities. The Group's revenue is principally derived from selling goods with revenue recognised at a point in time when control of the goods has transferred to the customer. This point in time is determined with reference to INCO terms with that customer, with control of goods deemed to have transferred as per the relevant INCO terms. The most common terms used by the Group are Carriage, Insurance and Freight (CIF), Free On Board (FOB), ExWorks (EXW) and Carriage and Insurance Paid to (CIP).

· For transactions under CIF and FOB, the revenue is recognised at the point the goods are loaded onto the vessel or aircraft and a bill of lading or airway bill is issued.

· For transactions under EXW, the revenue is recognised at the point the goods are collected from the Group's warehouses or factory.

· For transactions under CIP, the revenue is recognised at the point the goods are loaded on to a truck at the designated point of departure and a loading note is issued.

Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the Group. Transaction price is determined by the contract and variable consideration relating to discounts, free goods or volume rebates has been constrained in estimating contract revenue that is highly probable by using the most likely amount method.

The Group's contracts for delivery of goods are less than 12 months; there are no warranties within its sales contracts.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

Revenue is recognised when the performance obligation is fulfilled, and the amount can be measured reliably. The performance obligation is fulfilled when control of the goods passes to the customer, which is normally in accordance with Incoterms or receipt by customer. No goods are dispatched on a sale or return basis. Distributors trade on their own account and not as agents.

The Group also receives interest and royalty income, which are recognised on an accrual basis.

2.23 Pensions

Defined contribution scheme

The pension costs charged against operating profits represent the amount of the contributions payable to the schemes in respect of the accounting period.

Defined benefit scheme

The regular cost of providing retirement pensions and related benefits is charged to the income statement over the employees' service lives on the basis of a constant percentage of earnings. The present value of the defined benefit obligation less the fair value of the plan assets is disclosed as an asset or liability in the statement of financial position in accordance with IAS 19. The disclosure of a net defined benefit asset is limited to the present value of any economic benefit available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains or losses are recognised through other comprehensive income.

2.24 Share-based payments

The Group issues equity-settled share options to certain employees in exchange for services from those employees. Equity-settled share options are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant.

The fair value determined at the grant date of such equity-settled share options is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions (with a corresponding movement in equity).

Fair value is measured by use of the Black-Scholes model for those options granted with non-market performance conditions. The expected life used in the model has been established based on management's best estimate of the effects of non-transferability, exercise restrictions and behaviour considerations.

In addition, the binomial model has been used to model future market outcomes for those options granted with a market performance condition.

Further details of the inputs to the Black-Scholes and the binomial model can be found in note 24 to the accounts.

Share-based payment charges are credited to retained earnings.

2.25 Taxation

Tax expense for the period comprises current and deferred tax.

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the year end. Tax expenses are recognised in profit or loss or other comprehensive income according to the treatment of the transactions which give rise to them.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and their carrying amount in the financial statements.

Deferred income tax is determined using tax rates (and laws) that have been enacted, or substantially enacted, by the date of the statement of financial position and are expected to apply when the related deferred tax asset is realised or deferred tax liability is settled.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

IFRIC 23 Uncertainty over Income Tax Treatments

IFRIC 23 provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The interpretation requires:

· the Group to determine whether uncertain tax treatments should be considered separately or together as a group, based on which approach provides better predictions of the resolution;

· the Group to determine if it is probable that the tax authorities will accept the uncertain tax treatment; and

· if it is not probable that the uncertain tax treatment will be accepted, measure the tax uncertainty based on the most likely amount or expected value, depending on whichever method better predicts the resolution of the uncertainty. The measurement is required to be based on the assumption that each of the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.26 Equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Amounts arising on the restructuring of equity and reserves to protect creditor interests are credited to the capital redemption reserve.

Amounts arising from share-based payment expenses are recorded within retained earnings.

The cost of its own shares bought into treasury is debited to retained earnings as required by the Companies Act 2006. A subsequent sale of these shares would result in this entry being wholly or partly reversed with any profit on the sale being credited to share premium.

Amounts arising from the revaluation of non-monetary assets and liabilities held in foreign subsidiaries, and joint operations are held within the foreign exchange revaluation reserve.

2.27 Non-controlling interest

For each business combination, the Group elects to measure any non-controlling interest in the acquiree either at fair value or at their proportionate share of the acquiree's identifiable net assets. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owner. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognised in the statement of profit or loss.

2.28 Dividend distribution

Dividends are recorded when they become a legal obligation of the Company. For final dividends, this will be when they are approved by the shareholders at the AGM. For interim dividends, this will be when they have been paid.

2.29 Critical accounting estimates

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Fair value measurement

A number of assets and liabilities included in the Group's financial statements require measurement, and/or disclosure of, fair value.

The fair value measurement of the Group's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):

- Level 1: Quoted prices in active markets for identical items (unadjusted).

- Level 2: Observable direct or indirect inputs other than level 1 inputs.

- Level 3: Unobservable inputs (i.e. not derived from market data).

The classification of an item into the above levels is based on the lowest level of inputs used that has a significant effect on the fair value measurement of the item.

The Group measures a number of items at fair value, including:

· land and buildings (note 12);

· forward foreign exchange contracts;

· pension and other post-retirement benefit commitments (note 23);

· share-based payments (note 24); and

· initial recognition of financial instruments (note 31).

For more detailed information in relation to the fair value measure of the items above, please refer to the applicable notes.

Pension scheme

The Group maintains one defined benefit pension scheme which has been accounted for according to the provisions of IAS 19. Although the assumptions were determined by a qualified actuary, any change in those assumptions may materially impact the financial position and results of the Group. Details of the assumptions used can be found in note 23 of the financial statements.

Share-based payments

The charge to the income statement in respect of share-based payments has been externally calculated using management's best estimates of the number of options expected to vest and various other inputs to the Black-Scholes and the binomial model, as disclosed in note 24. Variations in those assumptions in the model may have a material impact on the Group's results and financial position at the time of valuation. Those options that contain market conditions have been valued using the binomial model, and those without have been calculated using the Black-Scholes model. Management assesses whether the charge or vested portion should be amended based on an annual reassessment of the likelihood of non-market based vesting conditions being met.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.29 Critical accounting estimates (continued)

Leases - estimating the incremental borrowing rate

Where the Group cannot readily determine the interest rate implicit in the lease, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease.

In practice, the Group considered the following aspects in the assessment of IBR. Once decided, the IBR will remain unchanged unless there are modifications in lease terms or changes in the assessment of an option to purchase the underlying asset.

A base rate that reflects economic environment and the term of the lease. This is mainly derived from the yield of a government bond issued by the country in which the Group has in scope leases. Where the term of the lease does not conform with the maturity period of the bond, the Group considered other available information such as yields on the bonds with the nearest maturity period, or the yield curve published by the country's treasury department. Considering there is often a difference in the cash flow profile between a lease and government bond, the Group has decided to reduce the base rate by 0.05% to 0.10%.

Financing factors that reflect the lessee companies' risk premium on borrowing. Management considered the financial strength and credit risk of the lessee companies and has estimated the credit spread to be in the range of 1.50% to 5.00%.

Asset factors that reflect the quality of hypothetical security. Depending on the location and type of underlying assets, the Group expects the quality of security in this hypothetical borrowing transaction to vary. For example, the right to use a warehouse in rural areas may provide less relevant security compared to a commercial office in a major city's central business district. Based on the Group's assessment, the asset factor ranges between - 0.45% to - 0.50%.

The following are the critical judgements that have been made in the process of applying the Group's accounting policies and have the most significant effects on the amounts recognised in financial statements.

Income taxes

The Group is subject to income taxes in the United Kingdom and also in other jurisdictions.

Significant judgements are required in determining the provision for income taxes including the use of tax losses and in estimating deferred tax assets arising from unused tax losses or credits. There are some transactions and calculations for which the ultimate tax determination is uncertain, including tax credits for research and development expenditures. The Group recognises assets and liabilities based on estimates of the final agreed position.

Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets on timing differences are recognised to the extent by which the Directors estimate that future profits will be generated to utilise the underlying costs or losses to which they relate. The Directors use forecasts of future performance to determine the likelihood and timing of future taxable profits. In turn expectations about the Group's product portfolio and future product releases inform this assessment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

2.30 Critical accounting judgements

Capitalisation of intangible assets

The Group assesses development costs incurred for capitalisation in accordance with the requirements of IAS 38 and the Group's accounting policy described in note 2.8. In carrying out its assessment the Group considers a range of factors, each of which requires the use of judgement, in consultation with the new product development team. Factors considered include: the stage of development and assessment of technical and commercial feasibility of the project; the size of the markets in which the Group currently sells products; and the size of any additional markets in which the Group intends to sell the product. For key development projects, where there is a higher degree of estimation uncertainty over future product releases, independent external consultants are engaged to validate both technical progress and the overall market appetite for the new product in order to ensure that it remains reasonable to capitalise associated project costs.

Impairment review of intangible assets

The Group tests annually whether goodwill or other intangible assets with indefinite life, or not yet available for use, have suffered any impairment. Other intangible assets are reviewed for impairment when an indication of potential impairment exists. Impairment provisions are recorded as applicable based on Directors' estimates of recoverable values.

The impairment test requires an allocation of the intangible asset value to the cash-generating units that are expected to benefit from the synergies of the combination. The balance is then compared with the present values of the cash flows expected to be generated by that cash-generating unit. In practice the cash generating unit to which goodwill is allocated corresponds with the relevant operating segment identified in note 3.

The recoverable amounts of the cash-generating units (CGUs) to which intangible assets are allocated are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and the assumption of an indefinite future life for the assets giving rise to the cash flows. Where intangible assets relate to future product releases the key assumptions also relate to forecasts for market share and product pricing. The Group also reviews and quantifies the tax implications related to any recognised impairments and these are included within tax calculations as appropriate.

Further details of the impairment reviews performed can be found in note 11 of the financial statements.

Provisions

Certain aspects of a sales tax related to imported products in a Group subsidiary might have been applicable. The subsidiary has been importing an increasing volume of product in recent years but has recently implemented for its largest customer a new system to avoid this possible dispute. This matter has been reviewed by the groups local tax experts but is subject to further review of the tax legislation and ongoing case law. No tax payment has yet been determined. However, a substantial tax settlement may be required in due course and a provision has been recognised based on the principles outlined by IFRIC 23 Uncertainty over Income Tax Treatments.

The Group has disclosed a Contingent Liability in respect of payroll-related obligations in one of the Group's subsidiaries. There is uncertainty in this matter over whether the obligations will give rise to an outflow of resources and also over the quantum of any outflow, meaning that its treatment inherently incorporates the exercise of judgement and estimation uncertainty. Management have sought advice and applied judgement in reaching their conclusion that this matter is appropriately disclosed as a Contingent Liability.

Accounting for ECO Biok as a subsidiary

The Group has determined that it has control over Zhejiang ECO Biok Animal Health Products Limited ('ECO Biok') and its results are therefore consolidated within the Group accounts. The Group owns a 51% interest in ECO Biok, although decisions are made jointly, it is the entity through which the Group has chosen to enter the Chinese market. ECO Biok depends on the Group for the right to sell Aivlosin® products, which gives the Group power over ECO Biok's activities. Therefore it is appropriate to treat ECO Biok as a subsidiary.

Calculation of expected credit loss

The Group assesses on an annual basis the expected credit loss on the receivable it holds as at the balance sheet date. It does so by using the higher of historic loss rates experienced by the group, or a wider measure of likely default at a country or regional level and applying this against the receivable balance when profiled for age and origin.

Where there is indicator of possible non-recovery of a large receivable, management may separately assess the risk of irrecoverability via probabilistic modelling of possible outcomes or other means. Such modelling is inherently uncertain and requires judgement over market conditions, contractual arrangements and the commitment of the debtor to repaying in full.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

3. Segment information

Management has determined the operating segments based on the reports reviewed by the Board to make strategic decisions. The Board considers the business from a geographical perspective. Geographically, management considers the performance in the Corporate/UK, China and Japan, North America, South and Southeast Asia, Latin America, Europe and the Rest of the World.

Revenues are geographically allocated by the destination of customer.

The performance of these geographical segments is measured using earnings before interest, tax, depreciation and amortisation ('Adjusted EBITDA**'), adjusted to exclude share-based payments, revaluation, impairment and personnel related litigation matters. Adjusted EBITDA is a non-GAAP measure used by the management to assess the underlying business performance. The details of Adjusted EBITDA is given in note 5.

	Corporate /UK	China & Japan	North America	S & SE Asia	Latin America	Europe	Rest of World	Total
	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's
Year ended 31 March 2026
Sale of goods	1,206	24,059	26,148	11,076	18,806	4,798	1,432	87,525
Royalties	-	-	-	-	-	-	-	-
Revenue from external customers	1,206	24,059	26,148	11,076	18,806	4,798	1,432	87,525

Adjusted EBITDA**	(22,035)	8,812	10,372	4,528	4,840	1,517	678	8,712

Year ended 31 March 2025
Sale of goods	1,110	22,898	21,414	11,854	16,307	4,913	796	79,292
Royalties	-	-	-	-	-	-	304	304
Revenue from external customers	1,110	22,898	21,414	11,854	16,307	4,913	1,100	79,596

Adjusted EBITDA**	(16,986)	7,349	7,529	4,974	1,993	1,035	685	6,579

A reconciliation of Adjusted EBITDA for reportable segments to profit from operating activities is provided as follows:

	2026	2025
	£000's	£000's
Adjusted EBITDA for reportable segments	8,712	6,579
Depreciation	(860)	(984)
Depreciation of right-of-use assets	(664)	(681)
Amortisation of intangible assets	(1,140)	(1,166)
Other exceptional items	-	954
Share-based payment charges	(330)	(401)
Profit from operating activities	5,718	4,301

Foreign exchange differences	(172)	720
Adjusted EBITDA for the Group	8,540	7,299

**Adjusted EBITDA reported for the segments includes foreign exchange gains and losses. The Adjusted EBITDA for the Group is presented in note 5.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

3. Segment information (continued)

Product revenues

All product revenues are recognised at a point in time.

	2026	2025
	£000's	£000's

Aivlosin®	81,983	72,914
Ecomectin®	1,889	2,156
Others	3,653	4,526
Total	87,525	79,596

Contract balances

	2026	2025
Within one year or on demand	£000's	£000's

At 1 April	706	3
Amounts included in contract liabilities that were recognised as revenue during the period	(706)	(3)
Cash received in advance of performance and not recognised as revenue during the period	948	706
At 31 March	948	706

The Group recognised contract liabilities of £948,000 at 31 March 2026 (2025: £706,000). The Group does not hold any long-term sales contracts and any rebates, discounts or free goods incentives are settled and recognised as revenue within the next accounting period. Contract balances are reported within trade and other payables on the statement of financial position.

4. Other income

	2026	2025
	£000's	£000's

Sundry income	147	148
	147	148

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

5. Result from operating activities

		2026	2025
	Notes	£000's	£000's

Result from operating activities is stated after charging/(crediting):
Cost of inventories recognised as an expense		44,594	43,164
Employee benefits expenses	29	16,723	15,054
Amortisation of intangible assets	11	1,140	1,166
Depreciation	12	860	984
Depreciation of right-of-use assets	14	664	681
(Loss)/gain on foreign exchange transactions		172	(720)
Research and development		5,250	3,988
Impairment losses on trade receivables	17	3,585	485
Fees payable to the Company's auditor for the audit of the parent Company and Group annual accounts		335	334

Alternative performance measures

Earnings before interest, tax, depreciation, amortisation, revaluation, impairment, share-based payments and foreign exchange differences (Adjusted EBITDA)

	2026	2025
	£000's	£000's
Profit from operating activities	5,718	4,301
Depreciation	860	984
Depreciation of right-of-use assets	664	681
Amortisation of intangible assets	1,140	1,166
Other exceptional items	-	(954)
Share-based payments	330	401
	8,712	6,579
Foreign exchange differences	(172)	720
Adjusted EBITDA	8,540	7,299

Exceptional items

	2026	2025
	£000's	£000's
Profit on disposal of Ecomectin® Horsepaste assets	-	1,073
Aquilon 1st instalment	-	(249)
Profit on disposal of Southern African licences	-	176
Other	-	(46)
Total exceptional items	-	954

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

5. Result from operating activities (continued)

Management consider that adjusted EBITDA is an appropriate measure of the Group's performance as it is the initial source for all re-investment and for all returns to shareholders. Investors, bankers and analysts all focus on this important measure of underlying performance because it enables them to make judgements about the Group's ability to generate sufficient cash to meet all the re-investment needs of the business while still providing adequate returns to shareholders. Therefore, adjusted EBITDA has a direct relationship with the value of the Group and is seen by our investors as a key performance indicator for management.

The following items are adjusted for in the calculation of Adjusted EBITDA as defined by the Group.

Item	Rationale for Adjustment

Depreciation and amortisation	These items are a result of past investments and therefore, although they are correctly recorded as a cost of the business, they do not reflect current or future cash outflows. Additionally, depreciation and amortisation calculations are subject to judgement regarding useful lives and residual values of particular assets and the adjustment removes the element of judgement.
Impairment of right-of-use assets	This item is a result of past investments and therefore, although they are correctly recorded as income or cost of the business, they do not reflect current or future cash outflows.
Exceptional items	These items are a result of one-off changes to cessation of distribution business and property disposals and therefore, although they are correctly recorded as income or cost of the business, they do not reflect current or future cash outflows.
Share-based payments	This item is subject to judgement and will never be reflected in the Group's cash flows.
Foreign exchange differences	Since the key driver of this figure is the revaluation of monetary assets denominated in foreign currency at the period end, which may reverse prior to settlement, taking this figure out of the EBITDA figure removes volatility from the performance measure. Foreign exchange movements are largely outside of the Group's control, so this gives a better measure of the Group's progress than statutory profit measures which include them.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

6. Finance income/(expense)

	2026	2025
	£000's	£000's
Finance income
Interest received on short-term bank deposits	79	110

Finance costs
Interest paid	(112)	(200)
Interest paid on lease liabilities	(287)	(252)
	(399)	(452)
Net finance costs	(320)	(342)

7. Earnings per share

The calculation of basic earnings per share is based on the post-tax profit for the year divided by the weighted average number of shares in issue during the year.

		2026			2025
	Earnings	Weighted average number of shares	Per share amount	Earnings	Weighted average number of shares	Per share amount
	£000's	000's	pence	£000's	000's	pence

Weighted average number of shares		67,760			67,752
Less the weighted average number of shares held by the EBT		(575)			(122)
Earnings attributable to ordinary shareholders on continuing operations after tax	2,190	67,185	3.26	1,686	67,630	2.49
Dilutive effect of share options	-	2,309	-	-	1,812	-
Diluted earnings per share	2,190	69,494	3.15	1,686	69,442	2.43

The diluted EPS figure reflects the impact of historic grants of share options and is calculated by reference to the number of options granted for which the average share price for the year was in excess of the option exercise price.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

8. Taxation

	2026	2025
	£000's	£000's
Current tax charge
Foreign corporation tax on profits for the year	3,167	1,543
Foreign withholding tax	188	162
Research and development tax credits claimed in the year	(189)	(119)
Research and development tax credits - adjustment for prior year	(198)	16

Deferred tax
Origination and reversal of temporary differences	(1,189)	(227)
Income tax charge	1,779	1,375

	2026	2025
	£000's	£000's
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation	5,434	4,009

Profit on ordinary activities before taxation multiplied by the applicable rate of UK corporation tax of 25% (2025: 25%)	1,359	1,002
Effects of:
Non-deductible expenses	904	568
Non-chargeable credits	-	(3)
Right-of-use assets depreciation	-	-
Withholding tax on inter-company dividends	188	162
Enhanced allowance on research and development expenditure	(369)	(347)
Adjustment in respect of prior years	(173)	40
Different tax rate for foreign subsidiaries	293	6
Intra-Group dividend	-	-
Origin and reversal of temporary differences	(1,203)	(272)
Unused tax losses carried forward	872	1,003
Tax effect of share based payments	-	-
Patent Box claim	(92)	(784)
Income tax charge	1,779	1,375
Effective income tax rate	33%	34%

9. Parent profit/(loss) for the financial year

	2026	2025
	£000's	£000's

Parent profit/(loss) for the financial year	629	(658)

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the parent Company income statement.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

10. Dividends

The Board of Directors does not propose that a dividend be paid for the year ended 31 March 2026 (2025: Nil).

Proposed dividends on ordinary shares are subject to approval at the Annual General Meeting and are not recognised as a liability as at the date of the statement of financial position.

11. Intangible assets

Group	Goodwill	Distribution rights	Drug registrations, patents and licence costs	Total
	£000's	£000's	£000's	£000's
Cost
At 31 March 2024	17,930	407	29,546	47,883
Additions	-	-	4,648	4,648
Impairment	-	-	(105)	(105)
At 31 March 2025	17,930	407	34,089	52,426
Additions	-	-	3,585	3,585
At 31 March 2026	17,930	407	37,674	56,011

Amortisation
At 31 March 2024	-	(198)	(9,334)	(9,532)
Charge for the year	-	(20)	(1,146)	(1,166)
Written back on impairment	-	-	106	106
At 31 March 2025	-	(218)	(10,374)	(10,592)
Charge for the year	-	(20)	(1,120)	(1,140)
At 31 March 2026	-	(238)	(11,494)	(11,732)

Net book value
At 31 March 2026	17,930	169	26,180	44,279
At 31 March 2025	17,930	189	23,715	41,834
At 31 March 2024	17,930	209	20,212	38,351

The amortisation and impairment charges are included within administrative expenses in the income statement.

Distribution rights are amortised over their estimated useful life of 20 years and reviewed for impairment when any indication of potential impairment exists. The remaining amortisation period at the date of the financial statements ranged from 3 to 20 years.

The acquisition of ECO Animal Health Limited in October 2004 gave the Group ownership of the intellectual property and established distribution networks in respect of Aivlosin® and Ecomectin® and gave rise to £17,359,000 of goodwill. The acquisitions of Zhejiang Eco Biok Animal Health Products Limited in 2007 and ECO Animal Health Japan Inc in 2009 opened further distribution and sale opportunities for Aivlosin® and Ecomectin® and gave rise to £94,000 and £477,000 of goodwill respectively.

Goodwill acquired in a business combination is allocated at acquisition to the cash-generating units (CGUs) that are expected to benefit from the business combination. The cash generating unit to which goodwill is allocated corresponds with the relevant operating segment identified in note 3. This reflects Ltd has been determined to be the single cash generating unit, however, has always traded in geographies around the world, reselling through its subsidiaries as the most effective way in which to reach global markets and therefore this is incorporated into the goodwill assessment, thus incorporating the impact of operating segments into the review.

The Group has recalculated the headroom as it would have been at March 2026 when comparing the net present value of cash flows to the carrying value of goodwill. The goodwill impairment review uses cash flows from the Group's global revenues in respect of Aivlosin® and Ecomectin®. Expected future cash flows in respect of new vaccines - both the outflows on research and development of these new products and the forecast revenues from sales - are excluded. Intangible assets in respect of new vaccines are tested for impairment separately. This approach is appropriate given that the acquisitions which gave rise to the goodwill balance were made to enhance the Group's global capacity to sell Aivlosin® and Ecomectin® products rather than new products expected to be introduced following successful completion of current R&D projects.

The recoverable amount of the CGU is determined from value in use calculations. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and the estimated remaining useful life of the asset.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

11. Intangible assets (continued)

The Group prepares cash flow forecasts that cover the two-year period after the statement of financial position date and then extrapolates them assuming a 3% annual growth rate which is well below the past performance of the business. The Directors believe that the long-term growth rate assumed does not exceed the average long-term growth rate for the relevant markets.

Management estimates discount rates using the pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGU. In the current year management estimated the applicable rate to be 12% (2025: 11%). Management considers that there is adequate headroom when comparing the net present value of the cash flows to the carrying value of goodwill to conclude that no impairment is necessary this year. On assumptions as at each period end the excess of recoverable amount over carrying value is over £66m (2025: £107m).

Management believes that the most significant assumption in the calculation of value in use is the term over which the cash flows are modelled. However, even if the growth rate were to be zero, the present value of the cashflows over the next three years would exceed the carrying amount.

The Group estimates that the discount rate applied when calculating the value in use would have to increase to a rate in excess of 56% before there was an indication that the goodwill balance would need to be impaired (2025: recalculated as 48%).

The net book value of drug registrations, patents and licence costs can be broken down as follows:

	2026	2025
	£000's	£000's
Aivlosin®	10,661	11,653
Ecomectin®	251	360
Vaccines	15,234	11,649
Others	34	53
	26,180	23,715

Aivlosin® is a highly effective antibiotic that treats a range of specific enteric (gut) and respiratory diseases in pigs and poultry, ensuring a rapid return to health. In addition to the welfare benefits, healthy animals gain weight faster, digest food more efficiently and get to market earlier which all bring economic benefit to the farmer. Substantial ongoing product development covering more formulations, species and diseases is expected to substantially further increase its revenue generating potential. The remaining useful life ranges between 7 and 20 years, where the shortest period relates to assets on the balance sheet which received regulatory approval a number of years ago and have been amortised over a number of years, and where the remaining useful life of 20 years relates to capitalised assets which have not yet received regulatory approval and whose amortisation has not yet commenced. Ecomectin® is an endectocide that controls worms, ticks, lice and mange in grazing stock and pigs. The remaining useful life is 2 years.

At 31 March 2026 intangible assets included £15,331,000 (2025: £11,745,000) of assets capitalised that had not commenced their useful life, of which approximately £75,000 (2025: £75,000) were Aivlosin® related products.

The impairment review for intangible assets relating to ongoing development activity, for which regulatory approval is expected to be received at a future date, is performed with reference to cash flow projections modelled in each development project's business case. The cash flows in these business cases reflect the expected economic life of the new product (a period of more than twenty years) and the variables captured include the costs to complete the development activity, the future product sale price, expected future market share, the rate of market penetration for new product releases and overall market size. The market size comprises a number of factors, including the total population of the target animal species, the replacement rate (which in the case of poultry is the length of time during which they are productive layers), the proportion of the species population prone to the diseases to which ECO's product is directed and the proportion of the population which is subject to vaccination. In determining these factors uses the expertise of own teams, particularly members of the R&D, marketing, sales and finance teams. Third-party data is reviewed to enhance the accuracy of the estimates used. For key development projects, independent external consultants are engaged to validate both technical progress and the overall market appetite for the new product.

Drug registrations and licences are amortised over their estimated useful lives of 10 to 20 years, which is the Directors' estimate of the time it would take to develop a new product allowing for the Group's patent protection and the exclusivity period which comes with certain registrations. All such costs are recorded in the Corporate/UK reporting segment.

The Group continuously reviews the status of its research and development activity, paying close attention to the likelihood of technical success and the commercial viability of development projects. In the year to March 2026 there were no indications that an impairment was necessary (2025: no impairment).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

12. Property, plant and equipment

Group	Freehold land and buildings	Leasehold improvements	Plant and machinery	Fixtures, fittings and equipment	Motor vehicles	Total
	£000's	£000's	£000's	£000's	£000's	£000's
Cost or valuation

At 31 March 2024	98	751	4,736	1,616	373	7,574
Additions	32	-	94	230	-	356
Disposals	-	-	(42)	(98)	-	(140)
Foreign exchange movements	(4)	-	(57)	(34)	(28)	(123)
At 31 March 2025	126	751	4,731	1,714	345	7,667
Additions	-	-	50	53	89	192
Disposals	-	-	(161)	(9)	(7)	(177)
Foreign exchange movements	4	(2)	53	55	20	130
At 31 March 2026	130	749	4,673	1,813	447	7,812

Depreciation

At 31 March 2024	(19)	(460)	(812)	(1,247)	(234)	(2,772)
Charge for the year	(8)	(137)	(461)	(354)	(24)	(984)
Disposals	-	-	42	98	-	140
Foreign exchange movements	-	-	(13)	4	(4)	(13)
At 31 March 2025	(27)	(597)	(1,244)	(1,499)	(262)	(3,629)
Charge for the year	(10)	(68)	(651)	(107)	(24)	(860)
Disposals	-	-	161	9	8	178
Foreign exchange movements	(2)	(1)	(33)	(16)	(11)	(63)
At 31 March 2026	(39)	(666)	(1,767)	(1,613)	(289)	(4,374)

Net book value
At 31 March 2026	91	83	2,906	200	158	3,438
At 31 March 2025	99	154	3,487	215	83	4,038
At 31 March 2024	79	291	3,924	369	139	4,802

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

12. Property, plant and equipment (continued)

Company	Fixtures, fittings and equipment	Total
	£000's	£000's
Cost or valuation

At 31 March 2024	1	1
Additions	-	-
At 31 March 2025	1	1
Additions	-
Disposals	-	-
At 31 March 2026	1	1

Depreciation
At 31 March 2024	(1)	(1)
Charge for the year	-	-
At 31 March 2025	(1)	(1)
Charge for the year	-	-
Disposals	-	-
At 31 March 2026	(1)	(1)


Net book value
At 31 March 2026	-	-
At 31 March 2025	-	-
At 31 March 2024	-	-

13. Income tax recoverable and payable

Income tax recoverable	2026	2025
	£000's	£000's
UK repayable tax credit in respect of R&D expenditure	345	1,143
	345	1,143


Income tax payable	2026	2025
	£000's	£000's
Overseas tax payable	(625)	(801)
	(625)	(801)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

14. Right-of-use assets

Group	Property	Vehicles	Total
	£000's	£000's	£000's
Cost or valuation
At 31 March 2024	5,246	347	5,593
Additions	430	65	495
Disposals	(132)	(83)	(215)
Foreign exchange movements	(151)	-	(151)
At 31 March 2025	5,393	329	5,722
Additions	1,732	-	1,732
Disposals	(998)	(163)	(1,161)
Foreign exchange movements	99	-	99
At 31 March 2026	6,226	166	6,392

Depreciation
At 31 March 2024	(1,713)	(208)	(1,921)
Charge for the year	(610)	(71)	(681)
Disposals	132	68	200
Foreign exchange movements	79	-	79
At 31 March 2025	(2,112)	(211)	(2,323)
Charge for the year	(624)	(40)	(664)
Disposals	998	163	1,161
Foreign exchange movements	(42)	-	(42)
At 31 March 2026	(1,780)	(88)	(1,868)

Net book value
At 31 March 2026	4,446	78	4,524
At 31 March 2025	3,281	118	3,399
At 31 March 2024	3,533	139	3,672

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

14. Right of use assets (continued)

Company	Vehicles	Total
	£000's	£000's
Cost or valuation
At 31 March 2024	161	161
Disposals	(61)	(61)
At 31 March 2025	100	100
Disposals	(68)	(68)
At 31 March 2026	32	32

Depreciation
At 31 March 2024	(102)	(102)
Charge for the year	(32)	(32)
Disposals	54	54
At 31 March 2025	(80)	(80)

Disposals	54	54
At 31 March 2026	(26)	(26)

Net book value
At 31 March 2026	6	6
At 31 March 2025	20	20
At 31 March 2024	59	59

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

15. Investments

Group	Investment in associate	Unlisted investments	Total
	£000's	£000's	£000's

At 31 March 2024	259	9	268
Share of associate's result for the year	50	-	50
Foreign exchange differences	(2)	-	(2)
At 31 March 2025	307	9	316
Share of associate's result for the year	36	-	36
Foreign exchange differences	(28)	-	(28)
At 31 March 2026	315	9	324

Company			Unlisted investments (subsidiaries)
			£000's

Cost
At 31 March 2024			21,451
Additional investment			239
At 31 March 2025			21,690
Additional investment			330
At 31 March 2026			22,020

Impairment
At 31 March 2024			-
Impairment charge			-
At 31 March 2025			-
Impairment charge			-
At 31 March 2026			-

Net book value
At 31 March 2026			22,020
At 31 March 2025			21,690
At 31 March 2024			21,451

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

15. Investments (continued)

The Company holds more than 20% of the share capital of the following companies:

Subsidiary undertakings held by the Company

Company	Registered office address	Country of registration or incorporation	Class	Shares held %
Zhejiang ECO Biok Animal Health Products Limited	Zhongguan Industrial Area, Deqing, Zhejiang Province	P. R. China	Ordinary	3*
ECO Animal Health Limited	The Grange, 100 High Street, Southgate, N14 6BN	England & Wales	Ordinary	100

Subsidiary undertakings held by the Group

Company	Registered office address	Country of registration or incorporation	Class	Shares held %
ECO Animal Health Southern Africa (Pty) Limited.	228 Athol Road, Highlands North, Johannesburg 2192	South Africa	Ordinary	100
Zhejiang ECO Biok Animal Health Products Limited.	Zhongguan Industrial Area, Deqing, Zhejiang Province	P. R. China	Ordinary	51*
Shanghai ECO Biok Veterinary Drug Sale Company Ltd. (via Zhejiang ECO Biok Animal Products Ltd.)	Room 1502-3, Imago Plaza, No. 99 Wuning Road, Ptro District, Shanghai 200063	P. R. China	Ordinary	51
Zhejiang ECO Animal Health Limited	Zhongguan Industrial Area, Deqing, Zhejiang Province	P. R. China	Ordinary	100
ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda.	Av. Dr. Cardoso de Melo, 1470, Cl311, Villa Olimpia, CEP 04548-005, Sao Paulo	Brazil	Ordinary	100
ECO Animal Health Japan Inc.	1-2-1, Hamamatsu-cho, Minato-Ku, Tokyo	Japan	Ordinary	100
ECO Animal Health USA Corp.	344 Nassau Street, Princeton, New Jersey, 08540	USA	Ordinary	100
Interpet LLC.	3775 Columbia Pike, Ellicott City, Maryland, 21043	USA	Ordinary	100
ECO Animal Health de Mexico, S de R.L. de C.V.	Av Techologico Sur 134-4, Unidad Habitacional Moderna, Queretaro, 76030	Mexico	Ordinary	100
ECO Animal Health de Argentina S.A.	Calle 4 E 43/44 N: 581 P.6 D:B La Plata, Buenos Aires	Argentina	Ordinary	100
ECO Animal Health Malaysia Sdn. Bhd.	10^th Floor, Menara Hap Seng, No 1 & 3, Jalan P Ramlee, 50250 Kuala Lumpur	Malaysia	Ordinary	100
ECO Animal Health India (Private) Ltd	No 33/5, Second Floor, Mount Kailash Building, Meanee Avenue Road, Ulsoor Bangalore, Karnataka, 560042	India	Ordinary	100
ECO Animal Health Europe Ltd	6 Northbrook Road, Dublin 6, Eire	Republic of Ireland	Ordinary	100

*The Group's control over its China based subsidiary Zhejiang ECO Biok Animal Health Products Limited is achieved via a joint holding of 51% of the entity's ordinary share capital between the Company (3%) and its UK based trading subsidiary ECO Animal Health Limited (48%).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

15. Investments (continued)

Subsidiary undertakings held by the Group (continued)

The principal activity of these undertakings for the last relevant financial year was as follows:

Company name	Principal activity
ECO Animal Health Limited	Distribution of animal medicines
ECO Animal Health Southern Africa (Pty) Limited	Non-trading
Zhejiang ECO Biok Animal Health Products Limited	Manufacture of animal medicines
Shanghai ECO Biok Veterinary Drug Sale Company Ltd.	Distribution of animal medicines
Zhejiang ECO Animal Health Limited	Procurement of raw materials
ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda	Distribution of animal medicines
ECO Animal Health Japan Inc.	Distribution of animal medicines
ECO Animal Health USA Corp.	Distribution of animal medicines
Interpet LLC	Non-trading
ECO Animal Health de Mexico, S. de R. L. de C. V.	Distribution of animal medicines
ECO Animal Health de Argentina S.A.	Non-trading
ECO Animal Health Malaysia Sdn. Bhd	Non-trading
ECO Animal Health India (Private) Ltd	Non-trading
ECO Animal Health Europe Ltd	Distribution of animal medicines

In prior year the Group established an Employee Share Ownership Trust (the 'ESOT'). The assets, liabilities and returns of the ESOT are consolidated within the results of the ESOT's sponsoring company, Eco Animal Health Group plc.

The address of the ESOT is 26 New St, St Helier, Jersey JE2 3RA, Jersey.

Zhejiang ECO Biok Animal Health Products Limited, Zhejiang ECO Animal Health Limited and ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda all have 31 December year ends. The Group receives management accounts for the three months to 31 March for these subsidiaries for use in preparing the consolidated financial statements.

Interpet LLC has been excluded from consolidation as it holds no assets or liabilities and has ceased trading.

The following trading subsidiaries have no requirement for audit under local legislation:

ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda.

ECO Animal Health Japan Inc.

ECO Animal Health USA Corp.

ECO Animal Health de Mexico, S. de R. L. de C. V.

ECO Animal Health Group plc has given statutory guarantees against all the outstanding liabilities of ECO Animal Health Ltd, thereby allowing its subsidiary to be exempt from the annual audit requirement under Section 479A of the Companies Act, for the year ended 31 March 2026.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

15. Investments (continued)

Non-controlling interests

Zhejiang ECO Biok Animal Health Products Limited (Zhejiang ECO Biok) and Shanghai ECO Biok Veterinary Drug Sale Company Limited (Shanghai ECO Biok), both 51% owned subsidiaries of the Group, have material non-controlling interests (NCI). Summarised financial information in relation to these two subsidiaries is presented below together with amounts attributable to NCI.

Please note that as Shanghai ECO Biok is a 100% owned subsidiary of Zhejiang ECO Biok, the summarised results below are consolidated at Zhejiang ECO Biok level, before wider Group eliminations.

Summarised statement of comprehensive income	2026	2025
For the year ended 31 March	£000's	£000's
Revenue	22,373	19,523
Cost of sales	(13,623)	(12,324)
Gross profit	8,750	7,199

Administrative expenses	(4,621)	(4,517)
Operating profit	4,129	2,682

Other income	133	109
Finance income	(167)	(143)

Profit before tax	4,095	2,648
Tax expense	(1,105)	(713)
Profit after tax	2,990	1,935

Profit allocated to NCI	1,465	948

Other comprehensive income/(loss) allocated to NCI	172	(307)
Total comprehensive income	1,637	641

Summarised balance sheet	2026	2025
As at 31 March	£000's	£000's
Assets:
Property, plant and equipment	293	440
Right-of-use assets	2,298	2,572
Deferred tax assets	189	184
Inventories	4,307	2,875
Trade and other receivables	3,435	5,053
Cash and cash equivalents	11,391	10,951
	21,913	22,075
Liabilities:
Trade and other payables	3,855	2,126
Contract liabilities	923	705
Lease liabilities - short term	311	286
Lease liabilities - long term	2,446	2,673
	7,535	5,790

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

15. Investments (continued)

Summarised cash flows	2026	2025
For the year ended 31 March	£000's	£000's

Cash flows from operating activities	5,649	2,058
Cash flows from investing activities	8	(74)
Cash flows from financing activities	(5,569)	(2,622)
Foreign exchange movements	352	(359)
Net increase/(decrease) in cash and cash equivalents	440	(997)

Joint operations

The Group also holds (by means of its ownership of ECO Animal Health USA Corp.), a 50% interest in Pharmgate Animal Health LLC, which is resident in the USA. Pharmgate Animal Health LLC distributes the Group's products in the USA.

The Group also holds (by means of its ownership of ECO Animal Health Ltd) a 50% interest in Pharmgate Animal Health Canada Inc, which distributes its products into Canada.

The Group also holds (by means of its ownership of ECO Animal Health Europe Ltd) a 50% interest in ECO-Pharm Limited, based in the Republic of Ireland. ECO-Pharm Limited has not yet commenced trading.

Both Pharmgate Animal Health LLC and Pharmgate Animal Health Canada Inc. have accounting years which end on 31 December.

The Group's holdings in each of the joint operations' share capital is given in the table below:

Pharmgate Animal Health Canada Inc	Holding	Shares	Holding
	(shares)	in issue	%

Common shares	100	200	50
Class A shares	100	100	100
Class B shares	-	100	-

Pharmgate Animal Health USA LLC	Holding	Shares	Holding
	(shares)	in issue	%

Common shares	100	200	50
Class A shares	100	100	100
Class B shares	-	100	-

ECO-Pharm Limited	Holding	Shares	Holding
	(shares)	in issue	%

Common shares	25,000	50,000	50
Class A shares	1	1	100
Class B shares	-	1	-

In the case of Pharmgate Animal Health Canada Inc and Pharmgate Animal Health USA LLC, A shares carry the rights to dividends payable out of profits attributable to the Group. These are made up of profits made by products supplied by the ECO Group plus 50% of any profit relating to new products developed jointly by the partners to the joint operation.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

15. Investments (continued)

The Group previously held (by means of its ownership of ECO Animal Health Europe Ltd) a 50% interest in ECO-Pharm Limited based in the republic of Ireland. ECO-Pharm Limited was dissolved on 29 November 2024. It did not trade prior to dissolution.

The following amounts included in the Group's financial statements are related to its interest in these joint operations.

	Pharmgate Animal Health LLC		Pharmgate Animal Health Canada Inc
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Non-current assets	-	-	-	-
Current assets	4,777	2,292	504	418
Current liabilities	(4,750)	(2,265)	(503)	(418)
Sales	22,143	17,366	4,005	4,047
Profit after tax	-	-	-	-

Associated company

The Group also holds (by means of its ownership of ECO Animal Health Japan Inc.) a 47.62% interest in EcoPharma.com which is resident in Japan. This company distributes animal health products and other general merchandise within Japan.

ECO Animal Health Japan Inc's holding in EcoPharma.com is 10,000,000 shares out of a total of 21,000,000 shares.

The following amounts included in the Group's financial statements are related to its interests in this associated company.

	2026	2025
	£000's	£000's
Investments (share of net assets)

At 1 April	307	259
Share of results for the year	36	50
Foreign exchange movement	(28)	(2)
At 31 March	315	307

	2026	2025
Summarised financial information	£000's	£000's

At 31 March
Current assets	853	920
Non-current assets	95	90
Current liabilities	(224)	(282)
Non-current liabilities	(62)	(83)
Net assets (100%)	662	645
Group share of net assets (47.62%)	315	307

Year ended 31 March
Revenue	1,998	2,124
Net profit	75	105

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

16. Inventories

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Raw materials and consumables	6,929	6,542	-	-
Finished goods and goods for resale	3,014	3,832	-	-
Work in progress	3,567	4,179	-	-
	13,510	14,553	-	-

The above total includes the provision of inventory amounting to £184,000 (2025: £187,000).

£80,000 of stock was written off in the year ended 31 March 2026 (2025 £75,000). Inventory provisions total £150,000

were released in this period (2025 £439,000).

17. Trade and other receivables

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's
Non-current:
Amounts owed by group undertakings	-	-	51,104	48,937

The inter-company debt is due on demand, however the Company has classified the receivable as a non-current asset as it does not expect to realise the asset within 12 months after the reporting period.

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's
Current:
Trade receivables	21,735	25,435	-	-
Other receivables	804	2,217	135	1,393
Prepayments and accrued income	1,416	864	252	271
	23,955	28,516	387	1,664

The ageing analysis of these trade receivables is as follows:

Group 2026
	Trade receivables	ECL rate	ECL allowance	Net of impairment
	£000's	%	£000's	£000's
Current	17,538	2.2%	393	17,145
Up to 3 months past due	3,358	3.2%	107	3,251
3 to 6 months past due	573	0.9%	5	568
Over 6 months past due	5,663	86.4%	4,892	771
	27,132		5,397	21,735

Group 2025
	Trade receivables	ECL rate	ECL allowance	Net of impairment
	£000's	%	£000's	£000's
Current	18,572	2.09%	388	18,184
Up to 3 months past due	2,581	11.00%	284	2,297
3 to 6 months past due	2,592	5.75%	149	2,443
Over 6 months past due	3,587	30.00%	1,076	2,511
	27,332		1,897	25,435

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

17. Trade and other receivables (continued)

The Group measures its trade receivables at amortised cost and estimates the allowance for expected credit loss ("ECL") using a provision matrix based on the Group's historical credit loss experience. The market rates are then adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast conditions.

This approach enables the Group to determine unbiased and probability-weighted estimates of credit losses for the lifetime of those trade receivables as required by IFRS 9.

The allowance for ECL in FY26 makes up 19.9% of all trade receivable balances while in FY25, the allowance made up 6.9% of total trade receivable balances. The allowance for ECL in FY26 makes up 56.2% of all overdue balances (FY25 21.7%).

The increase in the provision is driven by:

- Worsening age profiles of outstanding trade debtors;

- Circumstances affecting certain of the Group's customers require additional allowance.

Movement on the Group provision for impairment of trade receivables is as follows:

Group	2026	2025
	£000's	£000's
Balance at 1 April	1,897	1,439
Additional provision made	3,853	753
(Recovered) in the year	(161)	(268)
Written off in the year	(107)	-
Other	(85)	(27)
Balance at 31 March	5,397	1,897

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

18. Deferred tax

Group

Deferred tax assets and liabilities are attributable to the following:

	Group
	Assets / (liabilities)	Assets / (liabilities)
	2026	2025
	£000's	£000's
Trade related temporary differences	(3,252)	(3,527)
Freehold property	-	-
Investment property	-	-
Plant and equipment	-	4
Pension scheme	(58)	(58)
Deferred tax on share options	279	97
Tax losses carried forward	3,024	2,622
Total deferred tax (liabilities)	(7)	(862)

Overseas deferred tax assets	1,496	1,074
Total deferred tax assets	1,496	1,074

Sum of assets minus liabilities	1,489	212

The movement on the deferred tax account can be summarised as follows:

Deferred tax	Trade related temporary differences	Tax losses carried forward	Plant and machinery	Pension scheme	Shares	Overseas temporary differences	Overseas tax losses	Total
	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's
At 1 April 2024	(3,875)	2,622	(96)	(58)	128	396	1,041	158
Credit/(Charge) for the year through income statement	348	-	100	-	(31)	(396)	33	54

At 31 March 2025	(3,527)	2,622	4	(58)	97	-	1,074	212
Credit/(Charge) for the year through income statement	275	402	(4)	-	182	-	329	1,184
FX	-	-	-	-	-	-	93	93
At 31 March 2026	(3,252)	3,024	-	(58)	279	-	1,496	1,489

Trade related temporary differences relate predominantly to research and development tax deductions claimed in advance of expense recognition in the income statement, carried forward trading losses and a provision for unrealised profit arising on consolidation. The tax losses carried forward are not expected to expire under current legislation.

Any future dividend received from the Chinese subsidiary Zhejiang ECO Biok Animal Health Products Limited will be subject to a 5% withholding tax. The deferred tax liability in respect of this has not been recognised.

Company	Pension scheme	Shares	Total
	2025	2025	2025
	£000's	£000's	£000's
At 1 April 2024	(58)	58	-
Charge for the year through income statement	-	(9)	(9)
At 31 March 2025	(58)	49	(9)
Charge for the year through income statement	-	(49)	(49)
At 31 March 2026	(58)	-	(58)

At the year ended 31 March 2026 the Group has unused unrecognised overseas tax losses amounting to £12,000 (2025: £332,000), and unused unrecognised UK tax losses amounting to £11,002,000 (2025: £12,315,000). These tax losses are not expected to expire.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

19. Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term deposits held by the Group net of amounts outstanding on bank overdraft. The carrying amount of these assets is not significantly different to their fair value.

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Cash and cash equivalents	25,432	25,006	133	1,515
Cash and cash equivalents presented in the statement of cash flows	25,432	25,006	133	1,515

Balances drawn on the bank overdraft facility are repayable on demand and form an integral part of the cash management of the Group and Company. In the statement of cash flows, the Group and the Company have presented cash and cash equivalents net of balances outstanding on bank overdrafts. Amounts drawn and repaid on the overdraft facility are therefore considered as part of changes in cash and cash equivalents and are not presented as financing cash flows.

Cash and short-term deposits held in China are subject to local exchange control regulations. These regulations provide for restrictions on exporting capital from those countries, other than through normal dividends. The carrying amount of the assets included within the consolidated financial statements to which these restrictions apply is £15.6m (2025: £14.9m).

Significant non-cash transactions from investing activities are as follows:

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Acquisition of property, plant and equipment by means of leases or not yet paid at year end	1,732	495	-	-
Acquisition of intangible assets not yet paid at year end	715	1,160	-	-

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

20. Trade and other payables

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Trade payables	5,774	9,794	119	149
Contract liabilities	948	706	-	-
Other payables	905	1,030	148	141
Accruals and deferred income	4,322	3,541	595	383
	11,949	15,071	862	673

21. Borrowings

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Cash and cash equivalents	25,432	25,006	133	1,515
Lease liabilities	(4,933)	(3,785)	(5)	(18)
Net cash	20,499	21,221	128	1,497

The Group has an overdraft facility in certain currencies in respect of a pool of bank accounts held with NatWest Bank plc.

The interest rate for all currency overdrafts is 1.8% over the relevant currency base rate and the borrowings are secured by two debentures held over the assets of the Group. Any drawdown of this facility is repayable on demand. The Company and ECO Animal Health Limited have each given a guarantee to the Group's bankers for the overdraft facility. The facility has a gross and net limit of £5,000,000, which may be borrowed and repaid at will.

At 31 March 2026, the undrawn facility was £5,000,000 (2025: £5,000,000).

At 31 March 2026, the Group has an undrawn revolving credit facility £10,000,000 (2025: £10,000,000) with NatWest. This facility is interest bearing and can be drawn by the Group on demand. The facility expires on 30 June 2031.

Reconciliation of lease liabilities

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's

Opening lease liabilities	(3,785)	(4,025)	(18)	(63)

New lease liabilities	(1,681)	360	-	-
Repayment	961	890	14	42
Lease liabilities interest	(287)	(252)	(1)	(4)
Disposal	-	25	-	7
Foreign exchange	(141)	(783)	-	-
Closing lease liabilities	(4,933)	(3,785)	(5)	(18)

Current lease liabilities	(760)	(621)	(5)	(15)
Non-current lease liabilities	(4,173)	(3,164)	-	(3)

The Group leases a number of properties and motor vehicles in the jurisdictions it operates in. At 31 March 2026 there were no termination or extension options on leases.

The Group expensed £66,000 for the year ended 31 March 2026 (2025: £70,000) for short-term leases.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

21. Borrowings (continued)

Group leases maturity

At 31 March 2026 the Group held the following number of leases in each of the maturity categories below.

At 31 March 2026	Property	Vehicle	Other	Total
	Number	Number	Number	Number
Up to 1 year	5	4	3	12
Between 1 - 5 years	6	1	1	8
Over 5 years	5	-	1	6
Total number of leases	16	5	5	26
Average remaining lease term (in years)	5.1	1.1	2.4	3.7

At 31 March 2025	Property	Vehicle	Other	Total
	Number	Number	Number	Number
Up to 1 year	9	2	1	12
Between 1 - 5 years	6	6	2	14
Over 5 years	1	-	2	3
Total number of leases	16	8	5	29
Average remaining lease term (in years)	1.7	1.6	3.2	1.9

Amounts payable under lease arrangements for the Group

The undiscounted contractual cash flows payable under the existing lease arrangements at 31 March are analysed into the following maturity categories.

Group	2026	2025
	£000's	£000's
Up to 1 year	811	1,036
Between 1 - 5 years	2,501	2,123
Over 5 years	1,999	748
Total	5,311	3,907

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

22. Provisions and Contingent Liabilities

	Litigation	Overseas tax	Customer goodwill	Other	Total
	£000's	£000's	£000's	£000's	£000's
At 31 March 2024	456	5,071	332	-	5,859
Charge/(credit) for year through income statement	-	216	(332)	-	(116)
Foreign exchange	-	(779)	-	-	(779)
At 31 March 2025	456	4,508	-	-	4,964

(Credit)/Charge for year through income statement	(456)	357	-	70	(29)
Foreign exchange	-	424	-	-	424
At 31 March 2026	-	5,289	-	70	5,359

During the year the Group settled a matter related to personnel litigation. The case was resolved in December 2025 and the provision has been released.

Provisions also include an amount of £5,289,000 in respect of overseas tax liabilities. Certain aspects of a sales tax related to imported products in a Group subsidiary might have been applicable. The subsidiary has been importing an increasing volume of product into this country in recent years. This matter remains uncertain and subject to further review of the tax legislation and case law. No tax payment has yet been determined. However, a substantial tax settlement may be required in due course and a provision has been recognised alongside a corresponding deferred tax asset.

Contingent liability in respect of payroll-related obligations

After the reporting date, it became apparent that there may be additional payroll-related obligations in one of the Group's subsidiaries. The potential obligations are in a single geography.

The Group has taken advice on relevant applicable law and established practice from a number of local advisors and obtained from them a view on the likelihood of restitution for non-compliance and the range of likely outcomes. A lack of official guidance over the periods for which any restitution would be required in relation to this matter means that uncertainty exists in relation to the magnitude of any future outflows.

In the light of the advice obtained, management has assessed that an outflow is possible but not probable. While it is possible such an outflow may be material, the most likely possible outflow is not considered material.

23. Pension and other post-retirement benefit commitments

Defined contribution pension scheme

The Group operates defined contribution pension schemes. The assets of the schemes are held separately from the Group and independently administered by insurance companies. The pension cost charge represents contributions payable to the funds in the year and amounted to £5,013 (2025: £56,269).

Defined benefit pension scheme

The Group operates a defined benefit pension scheme in the UK for a number of ex-employees which is closed to new members. A full actuarial valuation was carried out at 6 April 2022 and updated on 31 March 2026 for IAS 19 purposes by a qualified independent actuary. The major assumptions used by the actuary were:

	31 March 2026	31 March 2025
Discount rate	5.55%	5.25%
RPI inflation	n/a	n/a
Deferred revaluation rate CPI max 5% p.a.	n/a	n/a

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

23. Pension and other post-retirement benefit commitments (continued)

Mortality rates

No pre-retirement mortality is assumed (2025: none). Post retirement mortality is based on 100% of the SAPS 'S4' normal tables, based on the members' year of birth, improving in line with CMI 2025 projections with a 1.00% long-term trend rate (2025: 1.00%).

Under these mortality assumptions, the expected future lifetime for a member retiring at age 65 at the year-end would be 21.6 years for males (2025: 20.9 years) and 23.8 years for females (2025: 23.4 years). For members retiring in 20 years' time, the expectation of life would be 22.6 years for males (2025: 21.9 years) and 25.0 years for females (2025: 24.6 years).

The weighted average term of the liabilities is 5 years (2025: 5 years).

The scheme is exposed to a number of risks including:

§ Interest rate risk: Movements in the discount rate used could affect the present value of the defined benefit pension obligations.

§ Longevity risk: Changes in the estimated mortality rates of former employees could affect the present value of the defined benefit pension obligations.

§ Investment risk: Variations in the actual return from the scheme's investments could affect the scheme's ability to meet its future pension obligations

	2026	2025
	£000's	£000's
Assets at start of year	1,213	1,202
Defined benefit obligation at start of year	(983)	(969)
Net asset/(liability) at 1 April	230	233

Return on assets	61	54
Interest cost	(49)	(43)
	12	11

(Loss)/gain on return on plan assets in excess of interest income	(138)	77
(Loss)/gain on demographic assumptions	(30)	23
Gain on financial assumptions	14	26
Loss on experience adjustment	-	(140)
Statement of other comprehensive income	(154)	(14)

Employer contributions (gross)	-	-

Net asset at 31 March	88	230

Actual assets at end of year	1,047	1,213
Actual defined benefit obligation at end of year	(959)	(983)

Gain/(loss) on changes in assumptions was £30,000 loss (2025: £23,000) relating to changes in demographic assumptions and a gain of £14,000 (2025: £26,000 gain) relating to changes in financial assumptions.

The pension fund assets (principally made up of annuities for the benefit of active pensioners) are all held within a policy managed by an insurance company regulated by the Financial Conduct Authority of the United Kingdom and the United Kingdom Pensions Regulator. By law, the trustees are required to act in the best interests of participants to the schemes. Responsibility for governance of the plans - including investment decisions and contribution schedules - lies with trustees.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

23. Pension and other post-retirement benefit commitments (continued)

Reconciliation of changes in the asset value during the year	2026	2025
	£000's	£000's
Fair value of assets at 1 April	1,213	1,202
Return on assets	61	54
(Loss)/gain on asset return	(138)	77
Employer contributions (gross)	-	-
(Decrease)/increase in secured pensioners' value due to scheme experience	-	-
Benefits paid	(89)	(120)
Fair value of assets at 31 March	1,047	1,213

Reconciliation of changes in the liability value during the year

Defined benefit obligation at 1 April	983	969
Interest cost	49	43
(Loss)/gain on demographic assumptions	(14)	(26)
Gain/(loss) on financial assumptions	30	(23)
Gain on experience adjustment	-	140
(Decrease)/increase in secured pensioners' value due to scheme experience	-	-
Benefits paid	(89)	(120)
Defined benefit obligation at 31 March	959	983

No annual contribution to be paid by the employer is expected (2025: £nil).

Year ended 31 March	2026	2025	2024	2023	2022
	£000's	£000's	£000's	£000's	£000's
Fair value of plan assets	1,047	1,213	1,202	1,135	1,795
Present value of defined benefit obligation	959	983	969	954	1,799
(Deficit)/surplus in plan	88	230	233	181	(4)
Experience (losses)/gains on plan liabilities	(138)	77	40	17	-

Plan assets	2026	2025
	£000's	£000's
Assets under management	202	341
Insured annuities	845	872
Total	1,047	1,213

Assets under management composition

	2026	2025
Corporate bonds	42.7%	43.6%
Overseas equities	39.8%	37.7%
UK equities	9.4%	10.4%
Property	7.1%	7.3%
Cash	1.0%	1.0%
	100.0%	100.0%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

23. Pension and other post-retirement benefit commitments (continued)

Defined benefit obligation - sensitivity analysis

The following amounts are the effect (on the defined benefit obligation) of reasonably possible changes to the key actuarial assumptions, as required by IAS 19.

Actuarial assumptions	Reasonably possible change	(Decrease)/increase in defined benefit obligation
		2026		2025
		£000's	£000's	£000's	£000's
Discount rate	+/- 1%	(54)	61	(55)	61
Members' life expectancy	+/- 1 year	(70)	71	(72)	72

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the statement of financial position.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The Company has given a floating charge dated 1 December 2006 over all of its assets to the trustees of the pension fund to secure all present and future obligations and liabilities to the pension fund.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

24. Share-based payments

The expense recognised for share-based payments made during the year is shown in the following table:

	Group		Company
	2026	2025	2026	2025
	£000's	£000's	£000's	£000's
Total expense arising from equity-settled share-based payments transactions	330	401	-	162

The share-based payment plans are described below:

Movements in issued share options during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the period:

	Options		Options
	2026	2026	2025	2025
	000's	WAEP (£)	000's	WAEP (£)
Outstanding at 1 April	3,165	0.95	3,560	2.18
Granted during the year - Employee scheme	101	0.74	128	0.12
Granted during the year - LTIPs	566	0.05	535	0.05
Granted during the year - Deferred bonus	60	0.05	143	0.05
Granted during the year - Restricted stock units	210	0.05	182	0.05
Expired / cancelled during year	(669)	2.09	(1,368)	3.54
Exercised during the period	(25)	0.05	(15)	0.05

Outstanding at 31 March	3,408	0.51	3,165	0.95

Granted < 3 years ago and not vested	(2,686)		(2,530)
Exercisable at 31 March	722	1.48	635	3.76

722,000 options were exercisable at 31 March 2026 (2025: 635,000). The WAEP of exercisable options at 31 March 2026 was 148.0p (2025: 376.0p).

The average share price during the year was 77.8p (2025: 89.1p).

The maximum aggregate number of shares over which options may currently be granted cannot exceed 10% of the nominal share capital of the Company on the grant date. The options outstanding at 31 March 2026 had a weighted average exercise price of £0.51 (2025: £0.95) and a weighted average remaining contractual life of 8.6 years (2025: 7.6 years).

ECO Animal Health Group plc Executive Share Option Scheme

In accordance with the Executive Share Option Scheme, approved and unapproved share options are granted to Directors and employees who devote at least 25 hours per week to the performance of duties or employment with the Group.

94,500 share options have been granted in the year under this scheme (2025: 127,000). In addition, 566,379 options have been issued under the Group's Long Term Incentive Plan (2025: 535,260), 210,031 options have been issued under the Group's Restricted Stock Units scheme (2025: 182,225) and 60,295 under the Group's deferred bonus arrangements (2025: 143,452).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

24. Share-based payments (continued)

The exercise price of the options is equal to the market price of the shares at the date of grant. The options vest three years from the date of grant and if the option holder ceases to be a Director or employee of the Company due to injury, disability, redundancy or retirement on reaching pensionable age or any other age at which they are bound to retire at in accordance with the terms of their contract of employment, the option may be exercised within a period of six months after the option holders so ceasing, although the Board may, at its discretion, extend this period by up to 36 months after the date of cessation.

If the option holder ceases employment for any other reason, the option may not be exercised unless the Board permits. The approved and unapproved options will be forfeited where they remain unexercised at the end of their respective contractual lives of ten and seven years respectively.

An analysis of the expiry dates of the outstanding options at 31 March 2026 is given below:

Date of grant	Unapproved	Approved	Exercise price	Expiry date
12 September 2016	-	16,200	£ 4.330	12 September 2026
21 September 2017	-	28,250	£ 6.200	21 September 2027
23 October 2018	-	41,650	£ 3.800	23 October 2028
19 December 2018	-	7,800	£ 3.800	19 December 2028
28 April 2021	-	78,707	£ 3.500	28 April 2031
28 April 2021	95,793	-	£ 3.500	28 April 2028
12 December 2022	-	2,260	£ 0.050	12 December 2032
27 February 2023	450,828	-	£ 0.050	27 February 2033
25 April 2023	-	211,100	£ 1.010	25 April 2033
22 December 2023	44,562	-	£ 0.050	22 December 2033
22 March 2024	342,180	-	£ 0.050	22 March 2034
22 March 2024	-	240,700	£ 0.880	22 March 2034
28 August 2024	143,452	-	£ 0.050	28 August 2034
27 October 2024	85,675	-	£ 0.050	27 October 2034
27 October 2024	501,160	-	£ 0.050	27 October 2034
26 March 2025	-	130,100	£ 0.590	26 March 2035
26 March 2025	67,500	-	£ 0.050	26 March 2035
27 August 2025	-	94,500	£ 0.740	27 August 2035
27 August 2025	60,295	-	£ 0.050	27 August 2035
27 August 2025	566,379	-	£ 0.050	27 August 2035
27 August 2025	198,831	-	£ 0.050	27 August 2035
	2,556,655	851,267

The market price of the shares at 31 March 2026 was 96.0p (2025: 53.5p) with a range in the year of 51.5p to 114.0p (2025: 58.0p to 131.5p).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

24. Share-based payments (continued)

The Company uses a Black-Scholes model to value share-based payments for options with service conditions and/or non-market performance conditions and the following table lists the inputs to this model for the last five years.

	2026	2025	2024	2023	2022
Vesting period (years)	3 - 4	3 - 4	3 - 4	3 - 4	3 - 4
Option expiry (years)	10	10	10	10	7 - 10
Dividends expected on the shares	0.00%	0.00%	0.00%	0.00%	1.00%
Risk free rate (average)	4.28%	4.00% - 4.13%	3.74% - 4.13%	3.20% - 3.75%	0.18%
Volatility of share price	40%	40%	40%	40%	40%
Weighted average fair value (pence)	27.0-69.0	21.5 -103.3	47.0 -106.2	84.0 -108.0	101.0 - 316.0

The risk-free rate has been based on the yield from UK Government Treasury coupons. The volatility of the share price was estimated based on standard deviation calculations on the historic share price.

Long Term Incentive Plan

Under this plan share options may be granted to certain Executive Directors and members of the Company's Executive Leadership Team. The share options awarded under the LTIP are subject to an exercise price of £0.05 per share and performance conditions being achieved that have been set by the Remuneration Committee and relate to total shareholder return (TSR) and research and development targets.

Subject to the performance conditions being met, the share options will vest after the end of a three-year vesting period. The proportion of share options relating to each performance condition is: (i) 75% in relation to the TSR conditions; and (ii) 25% in relation to the R&D targets.

The TSR conditions mean that the share options subject to these conditions will vest subject to the following: (i) 25% of the share options will vest if the annual compound TSR over the performance period equals 7.5%; (ii) 50% of the share options will vest if the annual compound TSR over the performance period equals 10%; and (iii) 100% of the share options will vest if the annual compound TSR over the performance period equals 20%.

The R&D targets mean that the share options subject to these targets will vest subject to the following: (i) 25% of the shares options will vest if specified R&D targets agreed between Executive management and the Remuneration Committee during the performance period are achieved; and (ii) 100% of the shares options will vest if specified R&D targets agreed between Executive management and the Remuneration Committee during the performance period are achieved. The R&D targets comprise a range of identifiable and quantifiable criteria relating to the introduction of new R&D projects, the progress of existing R&D projects to later stages of the development cycle, the submission of projects for approval to relevant regulators and for the approval of projects by the relevant regulators.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

25. Share capital

	2026	2025
	£000's	£000's

Authorised
68,100,000 ordinary shares of 5p each	3,405	3,405
10,790 deferred ordinary shares of 10p each	1	1
32,334 convertible preference shares of £1 each	32	32
	3,438	3,438

Allotted, called up and fully paid
67,759,671 (2025: 67,759,671) ordinary shares of 5p each	3,388	3,388

During the year no shares were issued (2025: 14,782 shares were issued). The shares were issued following the exercise of share options. The exercise price was 5 pence per option and consideration of £1,000 was received.

All share issued are non-redeemable and rank equally in terms of voting rights (one vote per share); rights to participate in all approved dividend distribution for that class of shares; and right to participate in any capital distribution on winding up.

The shares in the original or any increased capital of the Company may be issued with such preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of capital as the Company may from time to time determine.

26. Non-controlling (minority) interests

	2026	2025
	£000's	£000's
Balance as at 1 April	9,266	9,690

Share of subsidiary's profit/(loss) for the year	1,465	948
Share of foreign exchange gain/(loss) on net investment	172	(307)
	1,637	641

Share of dividend paid by subsidiary	(2,494)	(1,065)

Balance as at 31 March	8,409	9,266

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

27. Other reserves

The Group held a revaluation reserve of £271,000 as at 31 March 2026 (2025: £271,000) relating to the acquisition of ECO Animal Health Japan Inc in 2009 and corresponding to the carrying value of its assets.

The Group and Company held a capital redemption reserve of £106,000 as at 31 March 2026 (2025: £106,000).

The Group held a Treasury Shares reserve of £(936,000) as at 31 March 2026 (2025: £(204,000)).

During prior year the Group established an Employee Share Ownership Trust (the 'ESOT'). The assets, liabilities and returns of the ESOT are consolidated within the results of the ESOT's sponsoring company, Eco Animal Health Group plc.

During the year the ESOT acquired shares in Eco Animal Health Group plc. The shares held by the ESOT are treated as treasury shares in the accounts of Eco Animal Health Group plc, with a debit to the Treasury Shares reserve (see note 15).

Included in the Group's foreign exchange reserve are the following exchange movements on consolidation of the subsidiaries and joint operations listed below:

	At 31 March 2025	Movement in the year	At 31 March 2026
	£000's	£000's	£000's
In respect of:
Zhejiang ECO Biok Animal Health Products Limited	11	179	190
Zhejiang ECO Animal Health Limited	(21)	158	137
ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda	683	(94)	589
ECO Animal Health Japan Inc.	(189)	(120)	(309)
ECO Animal Health USA Corp.	(48)	(17)	(65)
ECO Animal Health de Mexico, S. de R. L. de C. V.	355	(59)	296
ECO South Africa	(49)	(1)	(50)
Pharmgate LLC	5	(1)	4
ECO Europe Ltd	-	(1)	(1)
ECO Malaysia Ltd	-	2	2
ECO India	-	(66)	(66)
Foreign exchange reserve movements charged to consolidated statement of comprehensive income	747	(20)	727

28. Directors' emoluments

	2026	2025
	£000's	£000's
Emoluments for qualifying services	1,320	986
Company pension contributions to money purchase schemes	27	31
Share-based payments	236	108
Benefits in kind	17	22
	1,600	1,147

During the year one Director exercised share options (2025: one) realising a gain of £4,374 (2025: £10,000).

The highest paid Director received £770,403 (2025: £464,000) including £133,403 (2025: £33,000) of share-based payments and £nil (2025: £nil) of pension contributions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

29. Employees

Number of employees

The average number of employees (including Directors) during the year was:

	2026	2025
	Number	Number
Directors	5	5
Production and development	84	89
Administration	42	43
Sales	82	87
	213	224

Employment costs (including amounts capitalised)

	2026	2025
	£000's	£000's
Wages and salaries	14,245	12,354
Share-based payments	330	401
Social security costs	1,624	1,997
Other pension costs	524	302
	16,723	15,054

30. Related party transactions

There is no ultimate controlling party.

Interest and management charges from parent to the other Group companies

During the year the Company made management charges on an arm's length basis to ECO Animal Health Limited amounting to £3,460,000 (2025: £1,230,000) and charged interest of £970,000 (2025: £1,100,000) to the subsidiary company. Both of these transactions were made through the inter-company account and were eliminated on consolidation.

During the year Zhejiang ECO Animal Health Ltd paid dividends to ECO Animal Health Ltd of £970,228 (RMB 9,529,703).

During the year Zhejiang ECO Biok Animal Health Products Limited paid dividends of £198,979 (RMB 1,960,000) to ECO Animal Health Group plc (2025: £85,217) and £2,396,631 (RMB 23,540,000) to ECO Animal Health Limited (2025: £1,023,478).

During the year ECO Animal Health do Brasil Comercio de Produtos Veterinarios Ltda paid dividends to ECO Animal Health Ltd of £Nil (2025: £Nil).

Key management compensation

The Group regards the Board of Directors as its key management.

	2026	2025
	£000's	£000's
Salaries and short-term benefits	1,459	1,155
Retirement benefits	27	31
Share-based payments	236	108
	1,722	1,294

The number of Directors for which retirement benefits were accruing was 1 (2025: 1).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

31. Financial instruments

The Group uses financial instruments comprising borrowings, cash and cash equivalents and various items, such as trade receivables, trade payables etc. that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations. The Directors are responsible for the overall risk management.

The main risks arising from the Group's use of financial instruments are capital and liquidity risk, credit risk and foreign currency risk and they are summarised below. The policies have remained unchanged throughout the year.

Capital and liquidity risk

The Group manages its capital to ensure continuity as a going concern whilst maximising returns through the optimisation of debt and equity. As part of this, the Board considers the cost and risk associated with each class of capital. The capital structure of the Group consists of cash and cash equivalents in note 19, borrowings in note 21 and equity attributable to equity holders of the parent comprising issued capital, reserves and retained earnings as disclosed in the Group's statement of changes in equity.

Liquidity risk is managed by maintaining adequate reserves and banking facilities with continuous monitoring of the latest developments by management.

The Group's objectives when maintaining capital are:

- to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and

- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

As an AIM quoted company, our governance framework is underpinned by the AIM Rules and the Quoted Companies Alliance (QCA) Corporate Governance Code 2018 (the 'QCA Code'). In addition to the QCA Code, we monitor developments and guidance in the UK Corporate Governance Code, applicable to main market listed companies, to keep abreast of matters which we feel could also be embedded as best practice as part of a progressive approach. We also review the Investment Association guidelines and seek to comply with these where applicable.

At 31 March 2026, the Group was contractually obliged to make repayments as detailed below:

	2026	2025
Within one year or on demand	£000's	£000's
Trade payables	5,774	9,794
Other payables	905	1,030
Accruals	4,322	3,541
	11,001	14,365

Credit risk

Credit risk is that of financial loss as a result of default by a counterparty on its contractual obligations. The Group's exposure to credit risk arises principally in relation to trade receivables from customers and on short-term bank deposits. Customers' creditworthiness is wherever possible checked against independent rating databases and filing authorities or otherwise assessed on the basis of trade knowledge and experience. Exposure and customer credit limits are continually monitored both on specific debts and overall.

The credit risk in relation to short-term bank deposits is limited because the counterparties are banks with good credit ratings.

The Group operates in certain geographical areas which are from time to time subject to restrictions in the free movement of funds. The Board seeks to minimise the Group's exposure to these markets, but the nature of our business makes it impossible to eliminate this exposure completely.

None of those receivables has been subject to a significant increase in credit risk since initial recognition and, consequently, 12-month expected credit losses have been recognised, and there are no non-current receivable balances lifetime expected credit losses.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

31. Financial instruments (continued)

Foreign currency risk

The Group operates in overseas markets particularly through its subsidiaries in China, Brazil, Mexico, the USA and Japan as well as its joint operation in Canada and is therefore subject to currency exposure on transactions undertaken during the year. The Group does some simple economic hedging of receivables when the Board feels it is appropriate to do so and foreign exchange differences on retranslation of foreign monetary items are recorded in administrative expenses in the income statement.

The table below shows the extent to which the Group companies have monetary assets and liabilities in currencies other than in Sterling.

	US Dollar	Euros	Chinese RMB	Japanese Yen	Brazilian Real	Canadian Dollar	Mexican Peso	Other
2026	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's
Trade and other receivables	83,534	3,105	6,468	187	1,398	829	1,751	69
Trade and other payables	(68,131)	(2,099)	(5,031)	(58)	(1,683)	(543)	(3,418)	(55)
Cash and cash equivalents	5,367	650	15,662	269	2,031	198	885	42
Total	20,770	1,656	17,099	398	1,746	484	(782)	56

	US Dollar	Euros	Chinese RMB	Japanese Yen	Brazilian Real	Canadian Dollar	Mexican Peso	Other
2025	£000's	£000's	£000's	£000's	£000's	£000's	£000's	£000's
Trade and other receivables	50,589	3,660	6,626	542	669	699	2,374	55
Trade and other payables	(36,335)	(2,775)	(7,187)	(151)	(976)	(511)	(3,000)	(108)
Cash and cash equivalents	6,008	369	15,702	511	988	223	110	40
Total	20,262	1,254	15,141	902	681	411	(516)	(13)

At 31 March 2026 the Group was mainly exposed to the US Dollar, Euro, Chinese RMB, Japanese Yen, Brazilian Real, Canadian Dollar and Mexican Peso. The following table details the effect of a 10% movement in the exchange rate of these currencies against Sterling when applied to outstanding monetary items denominated in foreign currency as at 31 March 2026.

	2026	2025
	£000's	£000's
U S Dollar	2,308	2,251
Euro	184	139
Chinese RMB	1,900	1,682
Japanese Yen	44	100
Brazilian Real	194	76
Canadian Dollar	54	46
Mexican Peso	(87)	(57)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEAR ENDED 31 MARCH 2026

31. Financial instruments (continued)

Analysis of financial instruments by category

Group	Financial assets	Financial liabilities	Total
2026	£000's	£000's	£000's

Trade and other receivables¹	23,955	-	23,955
Cash and cash equivalents	25,432	-	25,432
Trade and other payables²	-	(11,001)	(11,001)
Amounts due under leases	-	(4,933)	(4,933)
Borrowings	-	-	-

^1. This includes prepayments and accrued income of £1,416,000.
^2. This excludes contract liabilities but includes accruals and deferred income of £4,322,000.

2025	£000's	£000's	£000's

Trade and other receivables¹	28,516	-	28,516
Cash and cash equivalents	25,006	-	25,006
Trade and other payables²	-	(14,365)	(14,365)
Amounts due under leases	-	(3,784)	(3,784)
Borrowings	-	-	-

^1. This includes prepayments and accrued income of £864,000.
^2. This excludes contract liabilities but includes accruals and deferred income of £3,541,000.

Company	Financial assets	Financial liabilities	Total
2026	£000's	£000's	£000's
Trade and other receivables¹	387	-	387
Cash and cash equivalents	133	-	133
Trade and other payables²	-	(862)	(862)
Amounts due under leases	-	(5)	(5)
Borrowings	-	-	-
Amounts due from group undertakings	51,104	-	51,104

^1. This includes prepayments and accrued income of £252,000.
^2. This excludes contract liabilities but includes accruals and deferred income of £595,000.

2025	£000's	£000's	£000's
Trade and other receivables¹	1,664	-	1,664
Cash and cash equivalents	1,515	-	1,515
Trade and other payables²	-	(673)	(673)
Amounts due under leases	-	(17)	(17)
Borrowings	-	-	-
Amounts due from group undertakings	48,937	-	48,937

^1. This includes prepayments and accrued income of £271,000.
^2. This excludes contract liabilities but includes accruals and deferred income of £383,000.

All financial assets and liabilities in the Group's and Company's statements of financial position are classified as held at amortised cost for both the current and previous year.

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