16th Sep 2015 09:53
LONDON (Alliance News) - Anpario PLC Wednesday reported a small lift in profit in the first half of 2015 after it focused on its higher margin products and said the momentum built in the first half of the year has continued into the second.
The manufacturer and provider of natural feed additives to agricultural and aquaculture markets reported a GBP1.6 million pretax profit in the first six months of 2015, a slight rise from GBP1.5 million a year earlier despite revenue falling to GBP11.1 million from GBP11.6 million. Although revenue fell, its margin improved as its gross profit rose 9% to GBP5.0 million from GBP4.6 million.
Earnings before interest, tax, deprecation, amortisation and share-based payments rose 11% year-on-year to GBP1.9 million from GBP1.7 million.
"Anpario has delivered a good performance for the six months to June 30, 2015 with further profit growth," said Chairman Richard Rose. "Anpario's strategy of establishing subsidiaries in its key sales regions continues to deliver value with strong organic growth in China, the UK and the US. The group is now focused on the manufacture and sale of higher margin feed additive products having disposed of its UK Organic feed business."
Operationally, Anpario said it experienced "strong" profit growth in the Americas and Asia Pacific regions of 17% and 11% respectively.
Within Latin America, sales to customers in Argentina, Bolivia, Chile, Colombia, and Costa Rica each delivered double-digit growth. There was a similar positive performance in Asia with sales in Bangladesh, India, Indonesia and the Philippines "advancing strongly".
Sales in the Philippines rose 48% in the first half after the company implemented a strategy of working alongside partners to directly access end users. It said it will now apply this method to other regions in the second half of the year following its success in the first.
"The objective over recent years has been to progressively rebalance sales away from higher volume, low margin commodity type products to focus on the added value, higher margin opportunities," it said.
That is reflected in the UK division, which reported a 37% year-on-year growth in gross profit despite a 3% fall in sales. Its subsidiary in China managed to grow sales by 31% in the period.
However, political challenges are affecting the company's performance in some countries and regions and Anpario said it is limiting its investment and exposure to high-risk countries.
Those high-risk regions include the Middle East and Africa, specifically Egypt, Nigeria and Iran whilst sanctions against Russia has also affected sales whilst Greece also continues to be hit by economic difficulties.
"The group continues its prudent approach limiting its financial exposure in high risk countries, including Greece. The geographical diversity of the group continues to demonstrate its value and there are early signs of improvement in some of these troubled territories which the group is well placed to capitalise on," it said in a statement.
"The second half has started well and we are confident of maintaining the momentum of the first six months? performance. Our strong balance sheet, backed by the cash generative nature of the business, leaves Anpario well positioned to finance further organic growth and also able to consider selective investments or earnings enhancing acquisitions as they arise," said Rose.
At the end of June, the company reported a cash balance of GBP7.9 million, higher than the GBP6.6 million stashed in the bank at the end of December.
Anpario shares were down 2.3% to 325.0 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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