Shares of York-based Animalcare Group plc, the international animal health business, rose about 5% after it announced 2022 results showing revenue slipped 3.3% to £71.6 million but profit before tax rose to £2.5 million from £945,000.
Final dividend of 2.4p is in line with 2021.
Animalcare said the decline in revenue “reflects a moderation in post-pandemic demand combined with factors such as the conclusion of product distribution agreements and the application of EU laws in Spain designed to reduce antibiotic usage.”
Animalcare CEO Jenny Winter said: “The way that Animalcare responded to a series of headwinds in 2022 underlines the resilience and agility of our business and the attractive fundamentals of the animal health market.
“Revenue growth for the full year was impacted by a combination of moderating market demand, the discontinuation of some distribution contracts and implementation of EU laws to limit the use of antibiotics.
“Nevertheless, I am pleased that we were able to deliver against several of our key performance indicators, notably gross margins which benefited from our continuing focus on the Top 40 selling brands.
“Good rates of cash conversion kept our year-end net debt position well below our leverage target, maintaining the strong financial platform that supports the group’s pursuit of its long-term growth strategy.
“It’s clear that much of the growth in veterinary pharmaceuticals is attributable to innovative new products. That’s reflected in our numbers. Daxocox, our treatment for osteoarthritic pain in dogs continues to grow, comfortably becoming a Top 10 Animalcare brand during the year.
“In addition, Plaqtiv+ our dental health range, the first brand to emerge from our STEM joint venture, was launched in the second quarter to an enthusiastic response from many of our customers. This was also a year that Identicare began to come to the fore.
“Returning double-digit revenue growth over the period, Identicare responded positively to the re-positioning of the business to a subscription-based services model under specialist digital leadership.
“Operationally, we continue to make progress against our strategic objectives, including the ongoing pursuit of growth opportunities through M&A, partnerships and in-licensing.
“The licensing and research collaboration agreement with Orthros Medical, which we signed in March 2022, provides us with an exciting foothold in the promising field of VHH antibodies and strengthens our early-stage pipeline.
“Investing in our people is critically important to the success of our business, not least in the field of sales and marketing excellence. Alongside this we reached all parts of our business with our tailored behavioural programme in 2022 and are now implementing a consistent approach to the development of our future leaders.
“Looking ahead to 2023, we have confidence in the continued resilience of our business and the attractive fundamentals of our markets. And while we recognise the inherent uncertainties in the current macroeconomic climate we anticipate a return to revenue growth over the full year.”