Anpario’s 2012 profits up 39%

Total underlying profits before tax and exceptional items increased by 39% to £3.1m (2011: £2.2m) on sales up 23% at £23.5m (2011: £19.2m).  Underlying earnings per share increased by 49% to 13.32p per share (2011: 8.94p per share) and there was also advance in gross profit, which was ahead by 33 per cent to £7.7m (2011: £5.8m) reflecting the contribution from Meriden’s portfolio, production efficiencies and a richer product mix in the UK.

The balance sheet remains strong and debt free with a year-end cash balance of £3.7m (2011: £4.4m) after a net cash outlay of £2.6m to acquire Meriden and associated costs and a final dividend of 3p per share is proposed, an increase of 25% over the previous year’s payment of 2.4p.

Anpario chief executive David Bullen commented:  “The Group’s performance has been excellent and shows that the investments made to our production plant and our focus on value-added feed additives is delivering the expected benefits. The acquisition of Meriden has enhanced our product range and global market share.

Operations – International Agriculture
Significant growth was achieved during the year by our operations in the key markets of Latin America, Asia Pacific and the Middle East. These territories, including China, will continue to be regions of priority as the combination of their size, population growth, increasing economic affluence and demand for meat protein, offer great potential for our agricultural sector.

China is the Group’s number one priority country, where poultry production is greater than Europe’s output and pig production is double that of Europe. Our subsidiary in China delivered sales growth of 122% compared with the level of the previous year. The Kiotechagil brand is now firmly established in the five key Chinese provinces that we have focused on since launch. In 2013 the business will continue to concentrate on increasing market penetration, as well as selective expansion into other provinces.

The Optivite brand will be introduced to China in order to target a different market segment using a separate distribution channel. Solid foundations have now been built and we look forward to further success in this crucial market.

The Middle East remains an important market and we are heartened by a number of sound performances in that region which have been achieved despite the political uncertainty in some countries. European markets continue to be challenging as economic growth remains generally low with little early prospect of improvement.

A feature of our international expansion has been our strategy of building local presence in key territories. Working with our partners and distribution network we are establishing local operations where appropriate. This approach is enabling the Group to be much closer to its customers and end markets, allowing us to better understand the local market and through short lines of communication, respond rapidly to opportunities and changing circumstances.

The Group also has an additional presence in China through Meriden’s distributor based in Guangzhou. Meriden China has strong representation with the top twenty feed mills and has continued to grow its business. Our central technical team has been working with Meriden to develop some new products to help broaden its range. The initial testing ground has been with the Meriden Australia joint venture, where some new products have recently been launched. Meriden is performing well and has opened up new markets on the African continent.

Our aquaculture interests, formerly a separate division developing and marketing the Aquatice brand, have now been combined with those of Meriden. This logical development will be more financially efficient and allow greater sales focus as Aquatice is marketed alongside Meriden’s Orego-Stim, Aquatract and Phyconomix. Customer trials are continuing with all three brands in South East Asia and although significant sales growth is some way off, we do believe farmers will gradually adopt these innovative products into their fish farm feeding regimes.

Operations – UK Agriculture
This Division has made excellent progress throughout the year with growth in sales reflecting the re-positioning of the business to focus on value-added products. Towards the end of the year, the Division took steps to target the home-mix market more aggressively by recruiting specific resource to provide a focused service and support for home-mix customers.

Economic pressures within the UK organic animal feed market have persisted. However, Vitrition, our Organic Division, has defied the trend and through strong control of its cost base has capitalised on operational improvements and specific targeting to successfully broaden and diversify its customer base. The Division delivered an exceptional set of results and is a leading player in this market committed to supplying the organic meat production industry and consolidating its market share.

Central operations
Further modest investment is currently being made in the UK with the introduction of a process control and inventory management system, which will streamline our production process further and automate certain functions.

Product development for all the brands is on-going and a feature of our growth strategy; it is expected to underpin the momentum of our trading businesses as the pipeline of new products is selectively and carefully launched into the market. This process has already begun and is showing promise as some of these new products start to increase their contribution to Group sales. In addition, there has been restructuring of the technical team to make it better able to support the sales teams and end users.

Outlook
The Group has a made a strong start to the current year with sales growth across all divisions. Our focus continues to drive organic growth by aggressively pursuing market share in key target regions and capitalising on the operational gearing that our scalable production plants offer. Whilst geopolitical and financial concerns remain, the resilience of our business, with its geographic spread, will help to offset these regional factors. The Group is very well positioned to capitalise on the opportunities in all its markets. The balance sheet remains strong with no debt and the cash generative nature of the business allows us to make those selective investments and earnings enhancing acquisitions which will drive progress and continue to enhance shareholder value.