Eco Animal Health warns on profits due to swine flu; spots accounting errors

Mon, 11th Nov 2019

Animal pharmaceuticals company Eco Animal Health warned of a lower first-half profit and a full-year result potentially significantly below market forecasts. The company blamed the downgrade on an outbreak of African swine flu in China and the country's trade tensions with the US. It also said it would need to 'correct the application of certain existing accounting policies' in previous results following the appointment of new financial leadership and external auditors. Animal Eco Health said its revenue from China in the six months through September had fallen by about 60% on-year. The poor performance had more than offset better-than-expected performances in other markets, such as Brazil, Mexico and India. 'We see some encouragement for the second half of the current financial year with a reported reduction in the rate of new African swine flu (ASF) outbreaks in China,' Eco Animal Health said. The company also said that it had also seen an indication of some restocking of pig herds in certain high-value producers, including with some of its customers. 'However, there inevitably remains significant market uncertainty which we continue to monitor,' it added. 'Despite a historical second-half weighting to the group's trading performance, the continuing impact of ASF in China and South East Asia and the uncertainty as to timing of a market recovery in China, the board would expect that full-year trading performance will be significantly below current market forecasts if these trends continue.' The accounting issues, related to revenue recognition and R&D spending, were expected to lead to a restatement of the company's results for the year ended 31 March 2019 and the six months ended 30 September 2018. At 2:32pm: (LON:EAH) Eco Animal Health Group PLC share price was -94p at 263p Story provided by StockMarketWire.com

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