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Highlights
- Revenue Decline: Group revenue decreased by 13% to £33.2 million, with a constant currency decrease of 9%.
- Operational Growth in Key Markets: Revenue in the USA and Canada increased by 5%, while Latin America saw an 8% growth.
- Strategic Moves: The company made progress in key R&D projects and disposed of a non-core product for £1.0 million.
ECO Animal Health Group plc (LSE:EAH), a global leader in animal health, has announced its unaudited half-year results for the period ending 30 September 2024. The company reported a 13% decline in revenue to £33.2 million compared to £38.0 million in the same period last year. On a constant currency basis, the decline was 9%. Despite this decrease in revenue, the company’s gross margin remained relatively stable at 40.3%, only slightly down from 40.8% in H1 2023.
Adjusted EBITDA for the period was £0.4 million, down from £0.7 million in the previous year. The company reported a loss per share of 2.50p, compared to a loss of 1.93p in H1 2023. Cash generated by operations before working capital increased to £0.8 million, compared to £0.7 million in the prior year, though cash balances decreased to £18.3 million (down from £20.6 million at the same point last year).
Operational Highlights and Regional Growth
ECO Animal Health saw regional growth in its key markets. Revenue in the USA and Canada increased by 5% to £8.6 million (H1 2023: £8.2 million), while Latin American revenue grew by 8% to £8.3 million (H1 2023: £7.7 million). These increases were driven by improving pork prices and better profitability for producers in August and September 2024, which positively impacted revenue streams.
The company has been diligent in controlling input costs, helping to maintain gross margins close to the previous year’s levels. This strategy, alongside improving market conditions, has provided some stability despite a generally challenging global economic environment.
Progress in R&D and Strategic Moves
ECO Animal Health continues to invest in its proprietary R&D pipeline, with particular focus on its poultry vaccine projects. The company’s late-stage Mycoplasma vaccine projects are progressing towards regulatory submission, with anticipated product launches planned for 2025.
The company also made strides with regulatory approvals. Notably, ECO received new marketing approval for its Aivlosin® product in Paraguay, expanding its market presence in Latin America.
In terms of streamlining its portfolio, the company disposed of its non-core equine anti-parasitic product for £1.0 million, a move that is expected to allow ECO to focus more on its core animal health products and enhance its strategic direction.
Outlook
While ECO Animal Health faced a revenue decline in the first half of FY24, it remains committed to its long-term growth strategy. The company is focused on the successful launches of its poultry vaccines in 2025 and expanding its market presence in key regions, particularly in Latin America. With improved market conditions in specific regions, ECO remains confident in its ability to drive future growth despite current challenges in other parts of the business.
