Strong trading, especially in the Americas, Europe and China, helped Anpario plc increase sales by five percent to £30.5m and profit before tax by 22 percent to £5.4m in its results for the year ended 31 December 2020.
Anpario is a leading the independent manufacturer of natural sustainable animal feed additives for animal health, nutrition and biosecurity.
“I am delighted to report our Group’s best operating performance to date, notwithstanding that 2020 was an extremely challenging year because of the Covid-19 pandemic,” said Anpario chief executive Richard Edwards. “This performance was due to the swift implementation of our Covid-19 response plans and the commitment, flexibility and supreme efforts of our staff. The resilience of our systems and operating procedures have meant that we were able to operate as near normal as possible, ensuring customers did not experience disruption in supply.”
“The current financial year has started well, building on momentum from 2020. Our global sales team is supporting customers and we are continuing online customer meetings, technical training and business development very effectively,” added Mr Edwards.”
Anpario’s natural products, such as Orego-Stim®, have seen strong demand not only when legislation such as the banning of antibiotic growth promoters or formaldehyde is implemented, but also to improve animal health. This delivers performance benefits to farmers and meat processors in producing safe and sustainable food for consumers in a biosecure environment.
The company’s strategy to set up local subsidiaries and sales teams has seen success. The strongest growth has come through these channels which have been able to fully support end customers throughout the pandemic. Anpario has also invested in an automated pallet delivery system which has increased production capacity and streamlined the output processes at the Manton Wood production plant.
The company anticipates keeping most of its Covid-19 response measures in place for the foreseeable future given the prevalence of the second wave of infections across the world but expects that as the vaccination programs are implemented then business development initiatives, which require a more personal touch, will resume. The Company has not made use of any of the UK Government’s financial support measures available in relation to Covid-19.
Anpario’s Board is recommending a final dividend of 6.25 pence per share and (2019: 5.5 pence) making a total of 9.0 pence per share for the year (2019: 8.0 pence), an increase of 12.5 percent.
International round up
US growth accelerated in the second half driven by an increase in sales of the liquid version of Orego-Stim® and supplying smaller customers and orders through its relationship with the leading US animal health distribution company. Further trial work is being undertaken to support the marketing of Orego-Stim® as a natural coccidiostat to prevent the incidence of coccidiosis in poultry.
Anpario’s high strength acid-based eubiotic, pHorce®, showed excellent results in a trial undertaken by Pipestone Applied Research to evaluate the ability of feed additives to mitigate the risk of virus-contaminated feed. The company is now starting to capture swine business in the US following an investment in sales resource and a turnaround in the market there.
Latin America performance was supported with key contributions from Brazil, Argentina and Peru. Brazil continued to benefit from growth in Orego-Stim® and Prefect® with a strong sales performance of 34 percent growth. Brazil also benefited from supplying China as its production recovers from African Swine Fever and the switch away from US supply of meat protein as result of the US-China trade tensions. Other countries including Chile, Mexico and Bolivia were however badly affected by the Covid-19 pandemic.
A focus on aquaculture in the region is starting to mature with products such as Orego-Stim®, Prefect® and Mastercube®, a natural pellet binder, used to improve production performance and replace commonly used antibiotics.
China delivered a strong recovery in sales in the second half ending the year 50 percent ahead. The country’s quick recovery from the Covid-19 pandemic and the rebuilding of pig herds by farmers, helped drive volumes of Orego-Stim® and Prefect®. Anpario is seeing the emergence of larger farms with enhanced biosecurity and the industry taking the opportunity to modernise its approach.
Another key driver of growth in China has been the ban on antibiotic growth promoters in feed as essential oil products, like Orego-Stim®, are viewed as a natural replacement.
South East Asia had a strong first half but slowed during the rest of the year. The region was significantly impacted by reduced protein consumption and excess poultry production in Thailand which affected producer prices across the region. There was also an element of forward ordering by some distributors to reduce the chance of disruption to supply during the pandemic.
Anpario’s wholly owned subsidiaries showed strong performances with Indonesia and Thailand delivering sales growth of 67 percent and 14 percent respectively. South Korea also performed well with growth of 16 percent. However, Bangladesh and Taiwan experienced the most severe sales declines with certain parts of the region experiencing a second wave of coronavirus infections with a consequential reduction on meat protein consumption.
Anpario is targeting opportunities in aquaculture in the region where it hopes to capitalise on successful trials work in tilapia and shrimp in Latin America. It is also looking to set up a subsidiary in Vietnam which is a key market in both agriculture and aquaculture.
The Middle East and Africa
After last year’s strong performance, the region saw a decline in sales of 38 percent. The region has been severely affected by the Covid-19 pandemic as cancelled religious celebrations and pilgrimages, a fall in tourism and foreign workers returning home reduced meat protein consumption. There were some positive performances in Saudi Arabia, Syria and Jordan but offset by declines in Turkey, Egypt and Iraq. Anpario expects the region to remain challenging although business development initiatives should see an improvement in performance over last year.
Europe showed strong sales up 27 percent. The UK delivered a very strong performance through greater demand for raw materials and feed hygiene products which are benefiting from the ban in the use of formaldehyde. Russia, Belarus and Lithuania also saw double digit sales increases, as did Austria.
Sales and visits to the Anpario Direct online platform continued to grow monthly with the average order size being £85. The company has agreed a deal with Provita Eurotech, a main brand manufacturer of animal health products for cattle and sheep, to stock a focused range of their key lambing and calving products including colostrum, vitamin and mineral drenches and hoof-care treatments. Anpario hopes that stocking the UK’s leading brand manufacturer will attract new customers to the Anpario online channel, which offers 100 percent availability and next day nationwide delivery.
In anticipation of Brexit, Anpario put a number of measures in place, including building up raw material and finished stock levels and incorporating German and Irish companies. Raw material supplies, which are mostly sourced from Europe, have not experienced any disruption, and the company has been able to transport products to our customers into the European Union by resolving the challenges presented.
However, Anpario feels the new trading relationship with the EU is settling down and has set up a European stockholding hub in the Netherlands using a third-party warehousing and logistics provider. This dedicated hub will enable the company to grow direct to end-user business and offer quick delivery and high levels of service to European customers.