TIDMEAH
RNS Number : 9854N
Eco Animal Health Group PLC
04 February 2021
ECO Animal Health Group plc ("ECO")
(AIM: EAH)
Results for the six months ended 30 September 2020
ECO REPORTS A BUOYANT FIRST HALF AND POSITIVE FULL YEAR
INDICATIONS
HIGHLIGHTS
Financials
-- Sales at GBP42.5m (2019 restated*: GBP28.3m)
-- EBITDA at GBP6.7m (2019 restated*: GBP1.7m)
-- Profit before taxation of GBP4.5m (2019 restated profit*: GBP1.1m)
-- Profit after taxation of GBP3.9m (2019 restated profit*: GBP1.3m)
-- Earnings per share of 3.13p (2019: restated Earnings per share*: 1.68p)
-- Cash generated by operations of GBP3.5m (2019 restated*: GBP1.3m)
-- Net cash at 30th September 2020 of GBP12.9m (2019: GBP13.4m)
* Prior period figures have been restated to reflect adjustments
arising from the March 2020 audit.
Operations
-- Exceptionally strong recovery in China following the African Swine Fever impact in 2019
-- USA recovery following the easing in geopolitical trade tensions between China and the USA
-- Latin America performing strongly, led by Brazil
-- New marketing authorisation from the European Medicines
Agency for the use of Aivlosin(R) 625 mg/g Water Soluble Granules
in pigs for the treatment of Mycoplasma hyopneumoniae
-- Strong trading in the third quarter
Dr Andrew Jones, Non-executive Chairman of ECO Animal Health
Group plc, commented:
"This set of results for the first half builds upon the strong
trading seen in China during the latter part of last year with an
acceleration in sow restocking and an appreciation of the benefits
that Aivlosin(R) brings to animal health and productivity. We are
pleased to be releasing these Interim results at the same time as
the audited final results for March 2020 and together they mark a
turning point in the reassessment of the Group's prior accounting.
We are experiencing strong forward trading as evidenced by the
successive trading updates and we are also excited with the
continued new product development successes. The Directors are
confident and excited about the future prospects for the
business."
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"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
Contacts:
ECO Animal Health Group plc
Marc Loomes (CEO)
Christopher Wilks (CFO)
Andrew Jones (Chairman) 020 8447 8899
IFC Advisory
Graham Herring
Zach Cohen 020 3934 6630
N+1 Singer (Nominated Adviser & Joint Broker)
Mark Taylor
Iqra Amin 020 7496 3000
Peel Hunt LLP (Joint Broker)
James Steel
Dr Christopher Golden 020 7418 8900
ECO Animal Health Group plc ("ECO" or "the Group") researches,
develops and commercialises products for livestock. Our business
strategy is to generate shareholder value by achieving the maximum
sales potential from the existing product portfolio whilst
investing in Research and Development ("R&D") for new products,
particularly vaccines, and seeking to in-license new products.
Chairman's statement
I am pleased to report that despite the considerable challenges
presented by Covid-19 we report a set of interim results which
demonstrate considerable strength in revenue and profitability.
We welcome Dr Frank Armstrong to our Board. Frank joined us on
the 1(st) May 2020 and he brings a wealth of experience in life
sciences - businesses large and small - and in particular around
the areas of management of Research and Development. This is an
increasing feature of our business and his experience will add
greatly to our future endeavours.
Audit of the Group's results for the Year ended 31st March
2020
We are releasing this Interim statement on the same day as the
delayed release of the Annual report for the year ended 31st March
2020. We are pleased that the first audit by our new auditors, BDO,
is complete and the thorough review undertaken, together with the
comprehensive prior year restatements sets the Group on a positive
footing for future periods.
Covid-19
This trading period has coincided with the primary outbreak of
Covid-19 in Europe and the USA and necessary transition to remote
working and social distancing has by and large been a smooth and
uninterrupted process. Certainly in terms of order volumes,
reaching customers and the logistics of order fulfilment we could
not have hoped for a better process. The adoption of new ways of
working and utilising all that modern on-line communication offers
has been a great credit to the skills of our staff members,
customers and suppliers and on behalf of the Board I would like to
express our gratitude to them.
Financial Performance
Revenue was sharply higher in the first six months to 30th
September 2020 at GBP42.5 million (30th September 2019 - GBP28.3
million, driven in the main by a resurgence in China. This is
further discussed in the Business Performance comments below. At
GBP42.5 million this first half period is at roughly the same
run-rate with the GBP43.8 million revenue recorded in the second
half of the year ended 31st March 2020. Given the historical
pattern of second half weighting to revenue this underlines the
strength of the revenue performance in this period.
The gross margin in the first six months has been an average of
48%. This is ahead of the full year ended 31st March 2020 (46%) and
considerably stronger than that recorded in the six months ended
30th September 2019 (43%). As reported last year the gross margins
were negatively impacted in the USA and as a result of the stronger
pork market in the USA the margins have recovered to previously
seen levels.
Administrative expenses of GBP10.5 million (2019 - GBP7.2
million) were incurred, the increase being associated with variable
costs such as performance related bonus accruals, investment in new
members of staff and certain exceptional costs.
Research and development expenditure shown on the income
statement and together with the amount capitalised represented a
cash investment of 10% of revenue in the six months ended 30
September 2020 (17% in the six month period ended 30th September
2019 restated). In response to the Covid-19 pandemic the Board
instigated a prioritisation exercise in the R&D portfolio to
conserve cash. Additionally, the revenue in the period was ahead of
budget which also results in a slightly lower ratio for a budgeted
amount of R&D expenditure.
Earnings before interest, tax, depreciation, amortisation, share
based payments and foreign exchange movements ("Adjusted EBITDA")
were GBP6.7 million (2019 restated: GBP1.7 million). This increase
in profitability was directly a result of the higher revenue at
greater gross margins and partially offset by increased R&D
investment and overheads.
Cash generated from operations was GBP3.5 million (2019: GBP1.3
million). This was a particularly strong performance which was
inline with the cash generated in 2019 allowing for an element of
inventory build which was planned ahead of Brexit.
Net cash at 30th September 2020 was GBP12.9 million (31st March
2020: GBP9.8 million). The higher cash position arose from stronger
trading and judicious control of cash expenditure in the midst of
uncertainty surrounding Covid-19 and its impact on world economies.
This consolidated cash position at 30th September 2020 includes
GBP9.7 million (March 2020 - GBP5.3 million) which is held in the
Group's subsidiary in China. A portion of this cash is repatriated
from China once per annum by dividend declaration; the Group's
share which is received in the UK is 51%.
Business Performance
The geographical analysis of the Group's revenue in the six
months ended 30th September 2020 compared to the prior period in
2019 and the full year ended 31st March 2020 was as follows:
6 months ended 30th
Revenue Summary September Year ended
31(st)
March
2020 2019 2020 % change
(GBP'm) (GBP'm) (GBP'm) 2019 to 2020
Restated Restated
China and Japan 20.8 7.0 23.1 197%
North America (USA and Canada) 6.4 3.6 11.6 78%
South and South East Asia 4.0 7.1 14.2 (44%)
Latin America 6.4 5.1 12.6 25%
Europe 4.1 4.7 7.6 (13%)
Rest of World and UK 0.8 0.8 3.0 0%
42.5 28.3 72.1 50%
-------------------------------- ---------- ---------- ----------- -------------
Group revenue improved by 50% to GBP42.5 million compared to the
prior period in 2019 - a period which continued to be dominated by
the unprecedented impact of Covid-19.
The recovery from ASF in China has been widely reported. The
rate of restocking of the pig herd has been ahead of most
predictions; the strong pork commodity price driving a number of
mechanisms to increase the number of breeding sows and resulting in
extraordinary farm profitability. This is turn has resulted in the
greater use of premium medications such as Aivlosin(R). It is
believed that the efficacy benefits that new users have experienced
will result in a number of new, long term, customers.
Revenue in North America, USA in particular, has been strong
with a return to pre-2019 levels of business and margins. This has
been a result of a normalisation in pork prices in that market as
well as export markets (China) becoming available.
India had a steady six months; the poultry market has been badly
affected during the Covid-19 pandemic but commentators are
expecting a recovery during 2022.
Brazil continues to record strong revenue resulting from a
buoyant domestic and export swine market as well as an effective
in-country distributor.
Research and Development
In our core product area, a marketing authorisation was obtained
from the European Medicines Agency for the use of Aivlosin(R) Water
Soluble Granules in the treatment of pigs for Mycoplasma
hyopneumoniae. This, together with the equivalent authorisation in
the USA and Canada received in January 2021 further demonstrates
the strength and depth of our cornerstone product family and the
"evergreening" of the Group's core offering.
The Group will continue to invest in building a product pipeline
targeting both viral and bacterial diseases of economic importance
in pigs and poultry, with the intention of developing a range of
vaccines and new products to complement our existing antimicrobial
business. The product pipeline contains a mix of well-established
concepts as well as novel, potentially disruptive technologies and
approaches. These are in various stages of development thereby
ensuring that the Group has several mid and late stage projects
able to deliver revenues from 2022/23. We were very pleased to
announce the approval of the first of these vaccine projects - this
was received in January 2021 in Brazil and is for the combined
vaccination of pigs against Porcine Circovirus Type2 and Mycoplasma
hyopneumoniae.
Brexit
The Group has successfully transferred all EU marketing
authorisations to a new European subsidiary, ECO Animal Health
Europe Limited with a registered address in Dublin, Republic of
Ireland. All contingency planning is in place and the financial and
operational impact of Brexit is expected to be minimal.
Prior to 31(st) December 2020, the vast majority of orders for
delivery in the first quarter of the calendar year 2021 were
delivered to insulate the Group from any possible effects of
logistical issues, port delays and transport interruptions.
Dividend
The directors recognise the importance of the dividend to
shareholders. However, having due regard to the Group's significant
investment in new product development, operating cash flow, and
cash balances, the directors consider it prudent to defer the
declaration of a dividend at this time.
Outlook
Performance so far in the current financial year ending 31st
March 2021 has been strong with the strength seen in both our
Chinese and US markets continuing into the second half of our
current financial year. In October 2020, we announced that n
otwithstanding the historical second half weighting to the Group's
revenue, if the first half revenue trends continued through the
second half of the financial year the Board expected that the
Group's full year revenue for the year ending 31st March 2021 would
exceed market expectations. This resulted in an upgraded market
expectation both for revenue and profitability.
On 24th November 2020 we confirmed that strong trading had
continued during November and, being mindful of the continuing
global uncertainties and four months remaining until the end of the
financial year, we were confident of meeting the upgraded market
expectations.
On 21st January 2021 we issued a positive trading update,
confirming Group revenues and EBITDA were expected to be
significantly ahead of market expectations for the year ending 31st
March 2021. We noted that the strength in the Chinese market,
supported by the rebuilding of pig herds and the high price for
pork, continued through the third quarter and the outlook for the
final quarter sales continued these strong trading trends.
We look forward to the rest of this financial year and our
reporting prospects for 2021 with continuing optimism.
Dr Andrew Jones
Non-Executive Chairman
3 February 2021
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS TO 30th SEPTEMBER 2020
Six months Six months Year ended
to 30.09.20 to 30.09.19 31.03.20
Notes (unaudited) (unaudited) (audited)
GBP000's GBP000's GBP000's
Restated*
Revenue 4 42,530 28,316 72,106
Cost of sales (22,098) (16,197) (38,742)
----------------------- --------------------- ---------------------
Gross Profit 20,432 12,119 33,364
Other income 397 8 105
Administrative expenses (10,524) (7,154) (16,991)
R&D expense (4,093) (3,563) (8,775)
Currency profits/(losses) (843) 714 (539)
Amortisation of intangible assets (789) (821) (1,685)
Share based payments (85) (208) (284)
----------------------- --------------------- ---------------------
Profit from operating activities: 4,495 1,095 5,195
Net finance cost (39) (4) (30)
Share of profit of associate - 42 42
----------------------- --------------------- ---------------------
Profit before income tax 4,456 1,133 5,207
Income tax benefit/(charge) (598) 130 (1,032)
----------------------- --------------------- ---------------------
Profit for the period 3,858 1,263 4,175
----------------------- --------------------- ---------------------
Attributable to:
Owner of parent company 2,113 1,133 2,582
Non-controlling interest 1,745 130 1,593
----------------------- --------------------- ---------------------
3,858 1,263 4,175
======================= ===================== =====================
Earnings per share (pence 2019 -
restated) 6 3.13 1.68 3.82
Diluted earnings per share (pence
- restated) 6 3.01 1.67 3.67
Earnings before interest, taxation,
depreciation,
amortisation and share based payments
(EBITDA) 5,838 2,408 7,823
Exclude foreign exchange differences 843 (714) 539
Adjusted EBITDA excluding foreign
exchange differences 6,681 1,694 8,362
======================= ===================== =====================
*Details of the restatement, which is unaudited,
is presented in Note 3.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year ended
to 30.09.20 to 30.09.19 31.03.20
(unaudited) (unaudited) (audited)
GBP000's GBP000's GBP000's
Restated*
Profit for the period 3,858 1,263 4,175
Other Comprehensive income/(losses) (net
of related tax effects):
Items that will or may be reclassified
to profit/(loss) in future periods:
Revaluation of freehold property - - (92)
Adjustment for intangible assets - note
3 - 835 -
Adjustment to tax rates on previously
reported adjustments - note 3 - (617) -
Foreign currency translation differences 507 47 98
Items that will not be reclassified:
Defined benefit plan - actuarial losses - - 12
Other comprehensive income/(losses) for
the period 507 265 18
---------------------- ---------------------- ---------------------
Total comprehensive income for the period 4,365 1,528 4,193
Attributable to:
Owners of the parent Company 2,651 1,424 2,561
Non-controlling interest 1,714 104 1,632
4,365 1,528 4,193
====================== ====================== =====================
*Details of the restatement, which is unaudited,
is presented in Note 3.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign Minority
Share Share Revaluation Other Exchange Retained Total Total
Capital Premium Reserves Reserves Reserve Earnings Interest Equity
Account Account
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
FOR THE YEARED
31 MARCH 2020
Balance as
at 31 March
2019 3,372 62,650 664 106 467 17,214 84,473 5,102 89,575
Profit for
the year - - - - - 2,582 2,582 1,593 4,175
Other
comprehensive
income:
Foreign currency
differences - - - - 59 - 59 39 98
Revaluation
of freehold - - (92) - - - (92) - (92)
Actuarial
(losses)
on pension
scheme assets - - - - - 12 12 - 12
Total
comprehensive
income for
the year - - (92) - 59 2,594 2,561 1,632 4,193
------------- --------------- ------------------ --------------- --------------- -------------- ------------- ------------- ------------
Transactions
with owners
recorded directly
in equity:
Issue of shares
in the year 5 232 - - - - 237 - 237
Share-based
payments - - - - - 284 284 - 284
Deferred tax
on share-based
payments - - - - - (373) (373) - (373)
Dividends - - - - - (7,453) (7,453) (968) (8,421)
Transactions
with owners 5 232 - - - (7,542) (7,305) (968) (8,273)
------------- --------------- ------------------ --------------- --------------- -------------- ------------- ------------- ------------
Balance as
at 31 March
2020 3,377 62,882 572 106 526 12,266 79,729 5,766 85,495
============= =============== ================== =============== =============== ============== ============= ============= ============
FOR THE SIX MONTHSED 30 SEPTEMBER
2020
Profit for
the period - - - - - 2,113 2,113 1,745 3,858
Other
comprehensive
income:
Foreign currency
differences - - - - 538 - 538 (31) 507
Total
comprehensive
income for
the period - - - - 538 2,113 2,651 1,714 4,365
------------- --------------- ------------------ --------------- --------------- -------------- ------------- ------------- ------------
Transactions
with owners
recorded directly
in equity:
Issue of shares
in the period - 6 - - - - 6 - 6
Share-based
payments - - - - - 85 85 - 85
Total
transactions
with owners - 6 - - - 85 91 - 91
------------- --------------- ------------------ --------------- --------------- -------------- ------------- ------------- ------------
Balance as
at 30 September
2020 3,377 62,888 572 106 1,064 14,464 82,471 7,480 89,951
============= =============== ================== =============== =============== ============== ============= ============= ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign Minority
Share Share Revaluation Other Exchange Retained Total Total
Capital Premium Reserves Reserves Reserve Earnings Interest Equity
Account Account
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
FOR THE SIX MONTHSED 30 SEPTEMBER
2019
Balance as at
31 March 2019 3,372 62,650 664 106 467 17,214 84,473 5,102 89,575
Profit for the
period - as
reported - - - - - 1,018 1,018 130 1,148
Prior period
adjustments:
Adjustment for
intangible
assets
- note 3 - - - - - 115 115 - 115
------------- --------------- --------------- --------------- ----------------- -------------- ------------- ------------- -------------
Profit for the
period -
restated - - - - - 1,133 1,133 130 1,263
Other
comprehensive
income:
Adjustment for
intangible
assets
- note 3 - - - - - 835 835 - 835
Adjustment to
tax rates on
previously
reported
adjustments -
note 3 - - - - - (617) (617) - (617)
Foreign currency
differences - - - - 73 - 73 (26) 47
Total
comprehensive
income for the
period - - - - -73 1,351 1,424 104 1,528
------------- --------------- --------------- --------------- ----------------- -------------- ------------- ------------- -------------
Transactions
with owners
recorded
directly in
equity:
Issue of shares
in the period 5 232 - - - - 237 - 237
Share-based
payments - - - - - 208 208 - 208
Dividends - - - - - (7,453) (7,453) - (7,453)
Total
transactions
with owners 5 232 - - - (7,245) (7,008) - (7,008)
------------- --------------- --------------- --------------- ----------------- -------------- ------------- ------------- -------------
Balance as at
30 September
2019 3,377 62,882 664 106 540 11,320 78,889 5,206 84,095
============= =============== =============== =============== ================= ============== ============= ============= =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at As at
30.09.20 30.09.19 31.03.20
(unaudited) (unaudited) (audited)
Notes GBP000's GBP000's GBP000's
Restated*
Non-current assets
Intangible assets 7 40,667 41,470 41,439
Property, plant and
equipment 2,323 2,044 2,426
Investment property 305 200 305
Right of use assets 1,525 2,043 1,658
Investments 150 166 166
--------------------------- --------------------------- ---------------------------
44,970 45,923 45,994
Current assets
Inventories 20,282 20,647 17,264
Trade and other
receivables 28,083 19,896 28,353
Income tax recoverable 1,964 1,416 1,265
Other taxes and social
security 359 420 652
Cash and cash
equivalents 17,058 13,411 11,877
--------------------------- --------------------------- ---------------------------
67,746 55,790 59,411
Total assets 112,716 101,713 105,405
--------------------------- --------------------------- ---------------------------
Current liabilities
Trade and other
payables (16,304) (9,653) (14,486)
Borrowings (4,117) - (2,032)
Income tax (25) (55) (940)
Other taxes and social
security - (690) -
Amounts due under
leases (375) (431) (342)
Dividends (50) (4,803) (50)
--------------------------- --------------------------- ---------------------------
(20,871) (15,632) (17,850)
Total assets less
current
liabilities 91,845 86,081 87,555
Non-current
liabilities
Deferred tax (686) (309) (636)
Amounts due under
leases (1,208) (1,677) (1,424)
--------------------------- --------------------------- ---------------------------
Total assets less
total
liabilities 89,951 84,095 85,495
=========================== =========================== ===========================
Equity
Capital and reserves
Issued share capital 3,377 3,377 3,377
Share premium account 62,888 62,882 62,882
Revaluation reserve 572 664 572
Other reserves 106 106 106
Foreign exchange
reserve 1,064 540 526
Retained earnings 14,464 11,320 12,266
--------------------------- --------------------------- ---------------------------
Shareholders' funds 82,471 78,889 79,729
Non-controlling
interests 7,480 5,206 5,766
Total equity 89,951 84,095 85,495
=========================== =========================== ===========================
*Details of the restatement, which is unaudited, is presented in
Note 3.
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months
to to Year ended
30.09.20 30.09.19 31.03.20
(unaudited) (unaudited) (audited)
GBP000's GBP000's GBP000's
Restated*
Cashflows from operating
activities
Profit before income tax 4,456 1,133 5,207
Adjustment for:
Net finance cost 39 4 30
Foreign exchange gain/(loss) (688) (212) 62
Depreciation 155 271 334
Revaluation of investment
property - - (64)
Amortisation of right-of-use
assets 187 184 389
Amortisation of intangible
assets 789 821 1,685
Pension payments - (29) (59)
Share of associate's results - (42) (42)
Share-based payments 85 208 284
--------------------------- ------------------------------ ------------------------
Operating cash flow before
movement
in working capital 5,023 2,338 7,826
Change in inventories (3,018) (1,002) 2,212
Change in receivables 563 3,278 (5,209)
Change in payables 952 (3,313) 662
--------------------------- ------------------------------ ------------------------
Cash generated from operations 3,520 1,301 5,491
Finance costs (40) 41 (17)
Income tax (116) (770) (1,076)
--------------------------- ------------------------------ ------------------------
Net cash from operating
activities 3,364 572 4,398
=========================== ============================== ========================
Cash flows from investing
activities
Acquisition of property, plant
and
equipment (231) (85) (767)
Disposal of property, plant
and
equipment - - -
Purchase of intangibles (17) (1,282) (2,115)
Finance income 64 51 112
Net cash (used in) investing
activities (184) (1,316) (2,770)
--------------------------- ------------------------------ ------------------------
Cash flows from financing
activities
Change in borrowings 2,085 - 2,032
Proceeds from issue of share
capital 6 237 237
Interest paid on lease
liabilities (63) (70) (125)
Principal paid on lease
liabilities (182) - (364)
Finance lease repayments - (273) -
Dividends paid - (2,699) (8,421)
--------------------------- ------------------------------ ------------------------
Net cash (used in) financing
activities 1,846 (2,805) (6,641)
--------------------------- ------------------------------ ------------------------
Net (decrease)/increase in
cash
and cash equivalents 5,026 (3,549) (5,013)
Foreign exchange movements 155 97 27
Balance at the beginning of
the
period 11,877 16,863 16,863
Balance at the end of the
period 17,058 13,411 11,877
=========================== ============================== ========================
Free cash flow 3,180 (744) 1,628
--------------------------- ------------------------------ ------------------------
*Details of the restatements, which are unaudited,
are presented in Note 3.
NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30
SEPTEMBER 2020
1. Basis of preparation
The financial information for the period to 30 September 2020
does not constitute statutory accounts as defined by Section 435 of
the Companies Act 2006. It has been prepared in accordance with the
accounting policies set out in, and is consistent with, the audited
financial statements for year ended 31 March 2020.
The Group applies revised IAS 1 "Presentation of Financial
Statements (2007)". As a result, the Group presents all non-owner
changes in equity in consolidated statements of comprehensive
income and all owner changes in equity in consolidated statements
of changes in equity.
These Interim Statements have not been audited or reviewed by
the Group's auditors.
2. Statement of compliance
This interim financial statement is prepared in accordance with
IAS 34 "Interim Financial Reporting". Accordingly, whilst the
interim statements have been prepared in accordance with IFRS, and
the primary statements follow the format of the annual financial
statements, only selected notes are included - those that provide
an explanation of events and transactions that are significant to
an understanding of the changes in financial position and
performance of the Group since the last annual reporting date. IAS
34 states a presumption that anyone who reads the Group's interim
report will also have access to its most recent annual report.
Accordingly, annual disclosures are not repeated in these interim
condensed reports.
3. Changes to significant accounting policies and other restatements
The principal accounting policies which are adopted by the Group
in the preparation of its financial statements are set out in in
the consolidated financial statements of the Group for the year
ended 31 March 2020. These policies have been consistently applied
to all prior years. Where necessary, and as detailed in the
consolidated financial statements of the Group for the year ended
31 March 2020, any corrections to the application of the Group's
accounting policies to comply with International Financial
Reporting Standards have been made as restatements of prior period
financial statements for the correction of errors in accordance
with IAS8 . The correct application of the Group's accounting
policies in accordance with IFRS continued into the six months
ended 30 September 2020.
Since the September 2019 interim accounts the group has
completed its review of the capitalization of historic development
expenditure, and reviewed the amortization policy applied to such
assets. This has had the effect of increasing the net book value of
intangible assets held at September 2019. Full details are given in
the Annual Report and Accounts for the year ended 31 March 2020,
but the financial effect is summarized below.
Development costs adjustment: Impact on the Balance Sheet and
Income Statement
Adjustment Adjustment
to retained through Income
As reported earnings Statement Restated
Sept 2019 Sept 2019
GBP000's GBP000's GBP000's GBP000's
Balance sheet
Cost 44,922 (3,900) (270) 40,752
Accumulated amortisation (23,004) 4,735 385 (17,884)
Net Book Value 21,918 835 115 22,868
============== ============= ================ =============
Income Statement
As reported Adjustment Adjustment Restated for
for 6 months to retained through Income 6 months to
to Sept 2019 earnings Statement Sept 2019
GBP000's GBP000's GBP000's GBP000's
R&D Expense 3,293 - 270 3,563
Amortisation
charge 1,206 - (385) 821
-------------- ------------- ---------------- -------------
(115)
================
NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30
SEPTEMBER 2020 (Continued)
3. Changes to significant accounting policies and other restatements (continued)
In addition, during the completion of the audit of the Group's
financial statements for the year ended 31 March 2020 the Group
identified some amendments that needed to be made to previously
reported prior year adjustments. These amendments arose in respect
of changes to the tax rates applied to the previously reported
adjustments. The effect of these changes is reported in the
Consolidated Statement of Changes in Equity that forms part of
these results, and full details are contained in the Group's Annual
Report and Accounts for the year ended 31 March 2020.
4. Revenue is derived from the Group's animal pharmaceutical businesses.
5. Principal risks and uncertainties
These were set out on pages 20-22 of the Group's Annual Report
and Accounts for the year ended 31 March 2020. The key exposures
are to foreign currency exchange rates, potential delays in
obtaining marketing authorisations, single sources of supply for
some raw materials and trade debtor recovery and have remained
unchanged since the year end. In addition, the Annual Report and
Accounts highlighted disease impact to growth in emerging markets
as a key risk and this, in the form of ASF, is a principal
uncertainty.
6. Earnings per share
Six months Six months Year ended
to 30.09.20 to 30.09.19 31.03.20
(unaudited) (unaudited) (audited)
Restated
Weighted average number of shares in issue
(000's) 67,530 67,493 67,530
Fully diluted weighted average number of
shares in issue (000's) 70,313 68,092 70,313
Profit attributable to equity holders of
the company (GBP000's) 2,113 1,133 2,582
Basic earnings per share (pence) 3.13 1.68 3.82
Fully diluted earnings per share (pence) 3.01 1.67 3.67
NOTES TO THE PRELIMINARY RESULTS FOR THE SIX MONTHS TO 30
SEPTEMBER 2020 (Continued)
7. Intangible non-current assets
Distribution Development
Goodwill rights Costs Total
GBP000's GBP000's GBP000's GBP000's
Cost
At 1 April 2019 - restated 17,930 1,442 39,470 58,842
Additions - restated - - 1,282 1,282
------------------ ------------------ --------------- ---------------
At 30 September 2019
- restated 17,930 1,442 40,752 60,124
Additions - - 833 833
------------------ ------------------ --------------- ---------------
At 31 March 2020 17,930 1,442 41,585 60,957
Additions - - 17 17
------------------ ------------------ --------------- ---------------
At 30 September 2020 17,930 1,442 41,602 60,974
================== ================== =============== ===============
Amortisation
At 1 April 2019 - restated 735 17,098 17,833
Charge for the period
- restated 35 786 821
------------------ ------------------ --------------- ---------------
At 30 September 2019
- restated - 770 17,884 18,654
Charge for the period - 35 829 864
------------------ ------------------ --------------- ---------------
At 31 March 2020 - 805 18,713 19,518
Charge for the period - 35 754 789
------------------ ------------------ --------------- ---------------
At 30 September 2020 - 840 19,467 20,307
================== ================== =============== ===============
Net Book Value
At 30 September 2020 17,930 602 22,135 40,667
================== ================== =============== ===============
At 31 March 2020 17,930 637 22,872 41,439
================== ================== =============== ===============
At 30 September 2019
- restated 17,930 672 22,868 41,470
================== ================== =============== ===============
At 1 April 2019 - restated 17,930 707 22,372 41,009
================== ================== =============== ===============
This financial information was approved by the board on 3
February 2021.
Copies of this interim report are being sent to all the
Company's shareholders.
DIRECTORS AND OFFICERS Andrew Jones (Non-Executive Chairman)
Marc Loomes (Chief Executive)
Chris Wilks (Chief Financial Officer)
Anthony Rawlinson (Non-Executive Director)
Frank Armstrong (Non-Executive Director)
REGISTERED OFFICE 78 Coombe Road, New Malden, Surrey. KT3 4QS
Tel: 020 8447 8899
COMPANY NUMBER 01818170
INFORMATION AT www.ecoanimalhealthgroupplc.com
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END
IR ZZGGZVDRGMZG
(END) Dow Jones Newswires
February 04, 2021 02:02 ET (07:02 GMT)
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