Health: Poor pigs and dairy performance offsets feedlot wins at Apiam

Diversified animal health business Apiam Animal Health (ASX:AHX) has revealed mixed results for the 2019 financial year, with revenue rising but overall profit falling.

The company, which provides a range of animal health services for pigs, cows, sheep, chicken, horses and companion animals throughout their entire lifecycle, announced on Monday its companion animal and feedlot segments had big wins, but were offset by “dry and challenging” conditions in pigs and dairy.

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Revenue for the full year rose 5 per cent to $112m, but profit fell 4 per cent to $3.2m.

A feedlot is a type of animal feeding operation which is used in intensive animal farming for finishing livestock, notably beef cattle.

Dr Chris Richards said drought conditions had hit hard in the second half of the year.

“While Apiam had solid reported revenue growth in the 2019 financial year, second half revenues were impacted by dry and challenging Australian conditions in some of our operating segments, particularly pigs and dairy,” he said.

“In contrast, our companion animal and beef feedlot businesses performed extremely well, with feedlot recording double digit revenue growth thus highlighting the benefits of our diversified business model. Strategic initiatives to focus on higher-value product and services also delivered gross margin expansion in all animal segments.

“We have continued our focus on delivering our strategic growth plan in 2019, implementing new and innovative business growth initiatives and at the same time leveraging our infrastructure and technology network to deliver efficiencies. Our underlying cost base, excluding acquisitions and new clinic costs, did not increase over the financial year due to cost synergies being achieved.

“In the year ahead we are firmly committed to delivering greater revenue and earnings growth for our shareholders and maximising the benefits of our uniquely positioned regional and rural veterinary model.”

The company delivered a final dividend of 0.8c per share.

In other ASX health news today:

Recce (ASX:RCE) ramps up production. The company developing a “new class of broad spectrum antibiotics” announced a 500 per cent increase in production of its lead antibiotic compound RECCE 327, following positive feedback from the US Food and Drug Administration.

Exopharm (ASX:EX1) kicks off phase I trial. Exopharm claims it is the first human clinical trial using exosomes for wound healing. The trial will investigate autologous exosomes from blood platelets administered once by local injection, with a focus on safety.

Prescient (ASX:PTX), Japara (ASX:JHC), Oventus (ASX:OVN) all report: