Interim results generate more cash

For the six months to 30 September Eco Animal Health reported revenue of £38.0m, +9%YoY, and (adj.) EBITDA of £0.7m (H1 22: £1.7m). Underlying currency-adjusted revenue growth was 15%YoY. Cash generated by operations of £4.8m compared to £3.0m a year earlier resulting in a period-end cash balance of £20.6m (H1 22: £12.9m). The loss per share was (1.93)p; (H1 22 1.95p). The gross margin at 40.8% contrasted with 45.3% in H1 22; we expect an H2 improvement based on sales mix and clarity of revenue outlook (the Group notes that 94% of market consensus outlook is covered by the order book and stock run rate), abetted by the traditionally strong demand in the northern winter months.

The combination of strong H1 performance in key markets (combined +19.6%YoY), continued strong cash generation and the seasonal nature of second half performance means that our full year FY24 and subsequent FY25 outlook is maintained.

On the basis of our FY24 and FY25 Eco Animal Health EBITDA outlook, and the peer group average EV/EBITDA multiple, the Group Fair Value indicated range is 137p – 146p per share.