FY23 results ahead of expectations
ECO Animal Health Group reported revenue for the year to 31 March 2023 of £85.3m (+4%YoY) and adjusted EBITDA of £7.2m (+34%YoY), ahead of market expectations. Revenue growth was led by S&SE Asia (+42%YoY) and LatAm (+15%YoY). Gross profitability improved from a 42.7% margin in FY22 to 45.0%, whilst the (adj.) EBITDA margin was also up from 6.6% in FY22 to 8.5%. The year closed with net cash of £21.7m, with cash from operations of £15.9m (FY22: £(0.5)m), in addition to which the Group retained £10m in undrawn £10m RCF.ECO allocated the equivalent of 9.8% of revenue in R&D spend in FY23 (£8.34m). They reported that two late-stage development projects are to be submitted in FY24; we note the collaboration (from 2022) with Imperial College London, and Moredun Research Institute in Scotland. Our medium-term cashflow outlook indicates ample resources to maintain the level of investment for over a dozen major projects underway or planned, alongside a healthy c£22m cash balance. A well-planned and well-resourced R&D and product development programme – the fruits of which are not factored into near-term estimates – form the basis for additional revenue streams which we estimate could add >£70m by FY28. We expect the group to update on R&D progress and spend before the end of this financial year.
Eco Animal Health Group is engaged in the manufacture and supply of animal health products. Co.'s activities were conducted through a network including both regional offices, (notably in Shanghai and Princeton) and overseas subsidiaries. Co.'s patented molecule, Aivlosin® is used for the treatment of pigs and poultry diseases and is prescribed under veterinary control for the short duration treatment of diagnosed diseases. Co.'s products also include Ecomectin, an endectocide that controls worms, ticks, lice and mange in grazing stock and pigs.
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