Anpario plc
("Anpario", "Group" or the
"Company")
Final results
Anpario plc (AIM: ANP), the independent manufacturer
of natural sustainable feed additives for animal health, nutrition
and biosecurity is pleased to announce its full year results for
the twelve months to 31 December 2023.
Financial highlights
- 6% decrease in
revenue to £31.0m (2022: £33.1m).
- Improvement in
gross margins to 45.0% (2022: 42.7%).
- 14% decrease in
adjusted EBITDA1 to £4.5m (2022: £5.2m).
- 25% decrease in
profit before tax to £2.8m (2022: £3.7m).
- Diluted adjusted
earnings1 per share down 8% to 15.31p (2022:
16.67p).
- Basic earnings
per share down 16% to 13.51p (2022: 16.13p).
- Increase of
proposed final dividend to 7.50p (2022: 7.35p) per share, giving a
total dividend for the year 10.7p (2022: 10.5p) per share.
- Cash generated
from operations increased to £8.1m (2022: £1.8m).
- Cash and bank
deposit balances2 of £10.6m at the year-end (2022:
£13.6m).
Operational highlights
- Sales growth in
Middle East, South America and United States was offset by
decreases in other regions.
- Weighted average
selling price increased due to a higher value-add product mix and
raw material cost recovery, contributing to an improvement in gross
margins.
- Strong sales
growth of added value products Orego-Stim® and Optomega® Algae.
- Indian
partnership agreement for local blending of Orego-Stim® to support
sales growth.
- Grant of UK
patent for our flagship toxin-binder product, Anpro®.
- One of 148 organisations nationally to be recognised with the
first ever King's Award for Enterprise, with Anpario being one of
fifteen which received the award for Sustainable
Development.
Outlook
- Strong start to
trading in the current year.
- Increased
volumes, cost reductions and efficiency improvements expected to be
fully realised in profitability measures in 2024.
- The industry and
certain regions will continue to face specific challenges.
- The Group's
position as a leader in natural and sustainable feed additive
solutions combined with its geographic diversity and continued
structural industry movement towards natural and sustainable feed
additive solutions, gives the Board confidence in the long-term
profitable development of the company.
Matthew Robinson, Chairman of the Company, commented:
2023 was a challenging year for the global
agricultural industry and Anpario's results reflect this. These
challenges arose not only from energy, agricultural commodity and
specific raw material prices, but also because many in the animal
nutrition sector started 2023 with excessive stock levels, leading
to de-stocking over the year.
The Group took some tough decisions during the period
to reduce costs and improve margins in response to these
challenges.
The final quarter of 2023 delivered a welcome
improvement in sales volumes and gross margins that has continued
into 2024, suggesting both that the global situation is improving
and that management's actions to improve margins are delivering
results.
Cash generation from operations was strong at £8.1
million (2022: £1.8m) driven by working capital reductions
following on from reduced supply chain and logistics risks.
Anpario's balance sheet remains strong with year-end
cash of £10.6m (2022: £13.6m), after returning in aggregate £10.8m
to shareholders in the year by way of the Tender Offer and
dividends (2022: £2.2m).
1 Adjusted EBITDA and adjusted earnings
are defined in note 6 of the financial statements.
2 Cash and bank deposit balances include
amounts shown as short-term investments in the statement of
financial position, these are deposit accounts with notice periods
of more than three but less than six months which can be accessed
instantly at the penalty of lost interest, see note 20 of the
financial statements.
Enquiries
|
Anpario
plc
|
|
|
Richard Edwards, Chief Executive
Officer
|
+44(0)7776 417 129
|
|
Marc Wilson, Group Finance Director
|
+44(0)1909 537 380
|
|
|
|
|
Shore Capital
|
|
|
(Nominated Adviser and
Broker)
|
+44 (0) 20 7408 4090
|
|
Stephane Auton
|
Corporate Advisory
|
|
David Coaten
|
|
|
Tom Knibbs
|
|
|
Henry Willcocks
|
Corporate Broking
|
Chairman's statement
Overview
Anpario reports its revenue and profit performance
during a challenging year for the global agricultural industry.
Sales were £31.0m, a 6% decrease on the previous year (2022:
£33.1m) but gross margins improved to 45.0% (2022: 42.7%) due to an
increase in weighted average selling prices, some respite from raw
material price inflation and internal efficiency improvements,
resulting in Adjusted EBITDA of £4.5m (2022: £5.2m). Profit before
tax declined 25% to £2.8m (2022: £3.7m), further impacted by a
£0.4m impairment of the carrying value of R&D intangibles. The
final quarter of 2023 delivered a welcome improvement in sales
volumes and gross margins that has continued into 2024.
2023 saw a series of global events which affected
energy, agricultural commodity and specific raw material prices.
Meat protein producers experienced significant margin pressure
combined with lower consumption and heightened competition. These
conditions led to a reduction in the use of speciality feed
additives as producers looked to reduce input costs. Together with
the market's excess opening inventory, built up during 2022's
supply chain issues, overall volumes for Anpario's products
suffered. There are still some challenges to navigate, not least
those territories still affected by disease outbreaks, such as
avian influenza and African swine fever (ASF), and the financial
pressures on producers due to subdued meat protein consumption.
However, Anpario's resilience is borne from its geographic and
species diversity.
The Group took some very tough decisions during the
period to reduce costs and improve margins. These included
sensitive sales price increases and a cost reduction programme in
staffing and administrative expenses which, combined with the
investment into automation in our production facility, have
improved efficiency at lower volume levels.
Cash generation in the period has been strong. Like
much of the sector we have been able to normalise our global
inventory contributing to cash generation from operations
increasing to £8.1 million for the year (2022: £1.8m), comprising
operating cash flow of £4.4m (2022: £5.4m) and a reduction in
working capital of £3.7m (2022: increase of £3.6m).
Our strong balance sheet and cash generative qualities
enabled Anpario to return £9.0 million in cash to shareholders by
way of the Tender Offer which completed in July 2023. We propose an
increase in the final dividend to 7.50p (2022: 7.35p) per share,
bringing the total dividend for the year to 10.7p (2022: 10.5p) per
share, subject to shareholder approval at the Annual General
Meeting (AGM). In total, Anpario returned £10.8m to shareholders in
2023 (2022: £2.2m) whilst still leaving year end cash balances at
£10.6m (2022: £13.6m).
The first three quarters of the year were very tough
with lower volumes in the relatively competitive product markets of
acid-based eubiotics and mycotoxin binders, in contrast to
increases in sales of phytogenic and omega products, which are
positioned at the higher value-add end of our range. Regionally the
Middle East & Africa, United States and South America delivered
modest sales growth, but this was offset by sales declines in all
other regions. Orego-Stim® and our recently launched Optomega
Algae® omega 3 product delivered strong sales growth in several
territories including Brazil, Latin America and the Middle East.
pHorce®, our anti-viral feed mitigant product, continued to deliver
good growth. Outside of these three product lines the rest of our
portfolio suffered from decreases in volumes as producers looked to
reduce costs in response to input price pressures and declining
meat protein consumption. Encouragingly, the last three months of
2023 delivered an increase in demand across a broader range of
products.
Our business development activities continue to
strengthen our sales channels enabling us to expand market share in
key growth territories of the future. We were
delighted to sign a new agreement with our Indian partner who has
successfully represented Orego-Stim® since 2008. The agreement
means Orego-Stim® will be blended and packaged locally under
licence, helping to speed up sales growth and offer greater access
to new market segments. Orego-Stim® is recognised as a leading
phytogenic product in India and this enhanced partnership offers
more sales opportunities in one of the world's fastest growing
agriculture and aquaculture markets. We have also recently
appointed a distributor for Canada.
We continue to invest in our technologies with several
scientific trials and new product development initiatives,
including Orego-Stim® Forte, a water-soluble presentation
containing several natural plant extracts, which has recently
achieved initial sales in the aquaculture market, but can equally
be applied in other species markets.
Attaining the UK patent for our
flagship mycotoxin-binder product, Anpro®, is in line with our
strategy to maximise returns on our research and development
activities by providing a tax benefit to the Group via the UK
Patent Box scheme in addition to enhancing the marketability of our
products on a global basis. We now have two product technologies
covered by this scheme which account for a significant part of the
Group's earnings.
Environmental, Social and Governance (ESG)
Our position as the leading natural and sustainable
animal feed additive solutions provider, continually looking to
improve our processes, packaging, waste, and impact on the
environment was justly rewarded with being one of 148 organisations nationally to be recognised with the first ever
King's Award for Enterprise, with Anpario being one of fifteen
which received the award for Sustainable Development. We are very
proud of this achievement which demonstrates how our culture of
continual improvement in how we do things not only supports the
Group's financial performance but also reduces the impact of our
activities on the planet both directly and by offering
environmentally friendly and sustainable solutions in support of
global agriculture and aquaculture which is important to so many
communities around the world.
These efforts have resulted in a
reduction in our total Scope 1 and 2 greenhouse gas emissions,
measured in tonnes of CO2 equivalent, from 77.3 in 2022
to 46.6 in 2023 which, looking at tonnes of CO2
equivalent per £'million of turnover, represents a reduction in
intensity of 35%. This excellent outcome has been achieved through
a combination of our in-house solar panels, amended working
practices and better performance by our external energy
suppliers.
2023 also saw Anpario's
accreditation to membership of SEDEX (the
Supplier Ethical Data Exchange) giving supplier chain transparency
on a global platform.
People
This has been a year of tough and challenging
conditions for our staff to navigate across the globe but, as
always, they have shown great resilience, professionalism, and
ingenuity in supporting our customers and delivering on actions to
secure the long-term profitable growth of Anpario. I thank them for
their continued loyalty and commitment in all aspects of the
business which is exemplified through receiving recognition such as
the King's Award for Enterprise.
Board
In August 2023, we were very pleased to welcome Tim
Pollock to the Board as non-executive Director, following Kate
Allum's resignation in June 2023. Tim has an
extensive track record at executive director level in agriculture,
animal nutrition, soft commodities and the food ingredient sector
as well as public company markets experience. We thank Kate for the
contribution she made as Chairman of the Board including for her
contribution to the development of the Group's ESG initiatives. The
board now comprises two independent non-executive and three
executive directors and this composition will be kept under review
in light of QCA guidelines.
Dividend
The Board will be recommending at the forthcoming AGM
a final dividend of 7.50 pence per share (2022: 7.35 pence) making a
total of 10.7 pence per share for the year (2022: 10.5 pence), an
increase of 2%. This dividend, payable on 26 July 2024 to
shareholders on the register on 12 July 2024 (ex-dividend date of
11 July 2024), reflects the Board's continued confidence in the
prospects for the Group and its ability to generate strong
cashflows.
AGM
The Board plans to hold the AGM in London on Tuesday
25 June 2024, at 11.00am. We recognise that the AGM is a good
opportunity for shareholders to meet and ask questions of the
Board. We will let shareholders know nearer the time the
arrangements for the AGM.
Outlook
The year has started well continuing from the final
quarter of last year. The combination of improving gross margins,
increased volumes and a focus on overhead costs are expected to
deliver an improved operating performance. Some of the challenges
across the global agriculture industry have abated but we are
mindful that new ones, such as the Red Sea issues and subdued meat
protein consumption due to a higher cost of living, have heightened
competition for our customers and will impact further progress in
some areas. We expect individual territory performance to be
variable and dependent on local economics but one of the Group's
strengths is the breadth and diversity of its global client
base.
Our business development initiatives are focused on
increasing market share in both the ruminant and aquaculture
sectors where we have several new products offering significant
returns on investment for producers whilst also supporting them to
meet their environmental and sustainability obligations. We
continue to concentrate on key growth territories by establishing
stronger sales channels and partnerships, which allow us to present
Anpario's value proposition directly to the end customer.
Our strong balance sheet and cash generation allows us
to continue to invest in innovative natural feed additive
solutions, strengthen our sales and distribution channels to drive
organic growth, supplemented with complementary acquisition
opportunities which may arise.
Matthew Robinson
Chairman
20 March 2024
Chief Executive Officer's statement
Overview of the financial year
Group sales for the year to 31 December 2023 declined
by 6% to £31.0m (2022: £33.1m) with modest sales growth limited to
Middle East & Africa (MEA), United States (US) and South
America. However, this growth was offset by significant decreases
in Europe, Asia Pacific including China and Latin America which
declined by 11%, 10% and 29% respectively. Asia Pacific is our
biggest region accounting for more than a third of Group sales,
whereas Europe and Latin America account for just over a fifth and
less than a tenth of Group sales respectively. The product groups
exposed to price competition such as acid-based eubiotics,
mycotoxin binders and antioxidants, particularly in the Asia
Pacific region, experienced larger volume decreases than our added
value product range with a decline in sales of 23% compared to the
same period last year.
Our higher value differentiated product brands
Orego-Stim®, pHorce® and Optomega® Algae
delivered combined sales growth of 15%, accounting for over half of
Group sales. Overall, our product volumes declined by 23% compared
to the same period last year, largely due to reduced sales from
lower value-added price sensitive products, but these volume
declines were tempered by an increase in the weighted average
selling price of 23% as the full effect of price increases started
to feed through.
The decrease in gross profit was narrowed to just 1%
to £14.0m (2022: £14.1m) for the year to 31 December 2023 due to
the early implementation of price rises combined with the decline
in raw material and logistics costs during the period. Also, having
worked through most of our high inventory levels, the cost of goods
sold is now benefitting from lower raw material prices. We expect
further improvement from operational efficiencies should production
volumes continue to increase reflecting the Company's high
operational gearing. The investment in our factory automation in
recent years including last year's £200,000 automated palletiser
capital expenditure has helped to increase productivity such that
our operations team are achieving higher volumes per shift, thereby
increasing overall capacity at our Manton Wood facility.
Orego-Stim® continues to perform
well with sales increasing by 12% on volume increases of 18%.
During the period, Orego-Stim® was successfully launched in the US
to the young cattle market for inclusion in calf milk delivering
better performing calves. This leading phytogenic product also
delivered strong growth in the Middle East, South America and Asia
Pacific including China. Our recent development of a water-soluble
version using several natural phytogenic compounds is showing early
promise in commercial aquaculture trials. Specifically
designed for use in feed or on farm, to defend against infectious
pathogens, trials are showing a significant reduction in mortality
in the absence of antibiotics as well as other productivity
improvements. It is therefore pleasing to have recently achieved
initial sales with Orego-Stim® Forte and we look
forward to more success and demonstrating its application in other
species.
It was clear at the beginning of the
period that 2023 was going to be very challenging with pressure on
producers in terms of their margins and reduced meat consumption as
consumers reined in their expenditure to cope with the increase in
the cost of living. Producers also cut back loss making operations
which led to a reduction in overall demand for speciality animal
feed additives, resulting in increased price competition between
additive suppliers. High inventory levels at all points along the
supply chain only served to make the situation worse. As such it
was necessary to implement some cost reductions measures which
unfortunately included reducing headcount in several
areas.
Our higher value-add differentiated
products held up well during the period and points the way to
ensuring we continue to develop high quality feed additive
solutions which bring a proven return on investment for the
customer. Building strong global brands helps to build loyalty and
recognition with customers giving them the confidence to use our
products in their operations. In addition, we have expanded and
strengthened our sales and distribution channels with initiatives
such as the India partnership agreement and have a direct end
customer relationship supported by our new customer
relationship management (CRM) system, which is currently being
implemented across a number of regions in a phased approach.
It was encouraging to see the increase in sales in the
final quarter of last year which has continued into this year. Our
focus is to build on this momentum by targeting those territories
and species markets which will experience improved prospects in the
future. Several challenges do remain not least geopolitical events
in Ukraine and the Middle East and pressure on producers from input
costs and subdued meat protein demand. However, we are confident of
finding opportunities to exploit to help drive the business
forward.
Operational review
Americas
Overall, sales across the segment were slightly down
at minus 1% compared to the same period last year, although South
America and the United States delivered growth of 28% and 4%
respectively. Within the South America region, Brazil achieved
sales growth of 31% helped by sales of Orego-Stim® to poultry
integrators boosted by a strong export trade to both Europe and
Asia, which helped Brazil to post a record year for chicken product
exports. There was limited impact in Brazil from the high
pathogenic avian influenza (HPAI) that we highlighted at the half
year with no reported outbreaks on a commercial poultry farm unlike
the United States and several other countries where millions of
birds required culling to prevent contagion.
Venezuela is a new territory for the Group but has
quickly made a good sales contribution to the South America region.
Unfortunately, the foreign currency restrictions imposed by the
Argentinian government made trading conditions very difficult for
our long-term distributor culminating in a decrease in sales of 34%
compared to the same period last year.
Volume growth in the United States increased by 14%
driven by pHorce® and Orego-Stim® but sales growth was pared back
to 4% due to a reduction in average selling prices influenced by a
change in product mix within the Orego-Stim® range. The swine
industry was challenged during the period with lower export demand
to China and weak pork prices which meant producers were typically
at break-even levels at best.
Our move into the young cattle market was therefore
timely where Orego-Stim® is included in calf milk delivering
healthier better performing calves. We are supporting this
initiative with the recruitment of additional account managers and
local University trials looking at the effect of Orego-Stim® on
cryptosporidia and coccidiosis in pre and post weaned calves with
an estimated cost to the US calf industry of $76 million and $100
million respectively. These infections are currently managed by
electrolytes or certain antibiotics, the latter unable to be used
in organic systems and so we believe that Orego-Stim® could be a
more effective natural alternative in both cases. We also recently
launched a combination product to our US dairy customers where we
have combined our Anpro® mycotoxin binder with Orego-Stim®. This
new version to our product range offers enhanced differentiation
against competitor products bringing a number of combined benefits
to the farmer.
We recently appointed a distributor for Canada whose
initial focus is to register pHorce® for sales in the territory, as
Canada has followed the EU by capping the levels at which zinc
oxide (ZnO) can be used in piglet diets. We already have trials to
prove the efficacy of pHorce® for this purpose.
Latin America which accounted for just over a third of
the Americas sales had the biggest impact on the segment with a
decrease of 29% compared to the same period last year. Although
Honduras and Mexico experienced material decreases in sales, the
biggest impact was down to our Ecuador distributor which was
financially limited in the level of business they could transact
with us resulting in sales declining by 75%, particularly affecting
our Mastercube™ pellet binder business which delivered significant
growth in 2022. As a result, we are working on a solution with our
distributor where Anpario would directly invoice the larger end
customers to both spread the risk and take advantage of stronger
credit terms.
The Americas is a key segment because with cheaper
energy and locally grown raw materials animal feed producers have a
clear global advantage in supplying low-cost meat protein products
to regions including Europe and South-East Asia. The Middle East
would also be included as an importing region, but local
authorities view food security as a basic need and so are investing
and encouraging their industry to build up capacity.
Asia
The segment, which includes Australasia, China and
South-East Asia which accounted for 37% of Group sales delivered a
weak sales performance with a decline of 10%. Much of this decline
was from the South-East Asia region with sales decreasing by 16%
compared to the same period last year. China sales decreased by
just 2%. There were some positive performances from Australasia,
Malaysia and Indonesia with sales growth of 2%, 18% and 25%
respectively. Malaysia is particularly pleasing as at the half year
sales were significantly behind the prior year period, which
demonstrates how some territories and customers can effect a quick
turnaround if the conditions are favourable. In Malaysia's case,
the government are supporting the egg industry with subsidies and
the reduction in animal feed costs has improved the economics for
local producers. Reassuringly, avian influenza has had no lasting
impact on the industry.
Although South Korea and Thailand experienced sales
declines of 29% and 11% due to tough conditions for producers and
general high inventory levels in the supply chain it was the
Philippines which suffered the most; effectively contributing to
the total decline in sales at over £1 million for the whole
segment. We have several Philippines distributors and some direct
business to end customers. The territory has been severely affected
by African swine fever (ASF) leading to a smaller pig industry
which must also compete with imports from some of the largest pork
exporting nations such as Brazil and the US. The feed additive
products impacted the most were at the more price sensitive end of
our range of mycotoxin binders and antioxidants, the latter being
susceptible to cheaper imports from China using harmful substances
such as ethoxyquin. We have seen some improvement in volumes in the
Philippines since the year end.
Again, China accounted for 13% of Group sales during
the period and, although volumes declined by 33%, sales only
decreased by 2% because the average selling price increased due to
Orego-Stim® sales increasing by 17% in the territory. Product
volumes which suffered were acid-based eubiotics and mycotoxin
binders in a country which has local manufacturing of these
products and a local industry which is under severe pressure to
find growth in reduced demand. The swine industry is undergoing
structural changes and as such our team is redirecting efforts into
other species sectors with support from the wider Group.
Our aquaculture interests in the region are mainly
focused in Thailand and Vietnam where some major shrimp integrators
have been undertaking commercial trials with Orego-Stim® Forte for
a range of applications including parasite control, white faces
syndrome, and amoebic gill disease (AGD) in addition to
productivity gains such as growth rate and reductions in mortality.
Initial trials have been successful with positive feedback from
customers. There are also commercial aquaculture feed trials
happening with Mastercube®, our natural pellet binder.
Overall, the segment has had a stronger start to the
year with some of the poor performers last year beginning to grow
again.
The Middle East, Africa and India
Encouragingly the Middle East delivered sales growth
of 1% against a backdrop of some tough challenges in the region
including foreign currency restrictions in certain territories. The
sales team continues to focus on selling higher value add products
such that the weighted average selling prices increased by 39%
compared to the same period last year. This overall increase helped
offset sales declines in Egypt, Iran and Pakistan of 29%, 100% and
91% respectively, all small revenue generating territories for the
Group, which were impacted by our customers' not being able to
easily secure foreign currency for payment. Saudi Arabia also
experienced a 51% decline in sales due in line with our decision to
switch focus on higher value-added products and forgo competitive
tender processes.
There were strong performances in India and the United
Arab Emirates with sales growth of 31% and 121% respectively.
Furthermore, we won new business in Oman and Lebanon which the
Group didn't have in the previous period. The recently signed
Indian partnership agreement is expected to deliver further growth
of Orego-Stim® and we are additionally in discussions to expand the
relationship in some of our other product groups to help further
expand our market potential, which may include a number of African
countries where our partner already has a presence.
Europe
Overall sales and volumes declined 11% and 19%
respectively compared to the same period last year. Approximately
half of this decrease in sales was due to the loss of the UK feed
hygiene customer which we were still supplying in the first quarter
of 2022. In addition, sales reduced to a UK poultry customer that
was affected by high pathogenic avian influenza (HPAI) which
resulted in a reduction of output and pressures on the cost of
production. The other two territories with particularly weak
performances were Austria and Israel with sales declines 23% and
22% respectively. The weighted average selling price across the
segment increased by 11%.
There were good sales performances from Italy and the
Czech Republic with growth of 28% and 107% respectively. Spain,
Poland and the Baltic States also continued to deliver positive
performances helped by incremental improvements in pork prices
across the region which led to a temporary rebound of slaughter in
the second half of the period. However, overall pork production
continues to decline across Europe with the European Commission
forecasting a continued decline into 2024 because of the absence of
a full recovery in Chinese demand due to economic slowdown. The
European pig sector also faces dwindling domestic demand as
consumers show a preference for poultry over pork.
Poultry and egg production had more positive
experiences across Europe due to modestly increasing demand and
better prices. However, in terms of feed volumes, overall compound
feed declined by about 2% across the European Union in 2023 due to
weak swine and cattle markets. The Group has a stronger presence in
the poultry sector but equally it is important to diversify our
technology into other species sectors including ruminant,
aquaculture and pet.
Mastercube®, our 100% natural pellet binder, has been
adopted by a European dog food manufacturer following extensive
factory trials over a long period. Our sales team are cognisant
that there are other similar opportunities in this sector and are
actively pursuing these. We were also pleased to receive a European
Union complementary feed license through our Irish subsidiary which
now means we can market products such as Orego-Stim® liquid
directly to vet practises in the region.
Overall, the business across Europe is moderately
improving through a combination of better economics for producers
and our own initiatives. In overview there were essentially just
two countries across the Group's global network which impacted our
sales performance significantly, namely the Philippines and Ecuador
where combined sales declined by just under £2 million. Action is
underway to address the weaknesses in our sales structures in these
countries to ensure we can mitigate any similar future
challenges.
Innovation and development
Our development projects are typically focused on
demonstrating the efficacy of our existing technology in new
applications or species. Orego-Stim® is a pure and 100% natural
oregano essential oil with many compounds which bring numerous
potential multi-factorial benefits to animal health and explains
why it has both antimicrobial and parasiticidal properties to name
two applications. We can also enhance some of the effects and
characteristics by combining with other natural plant extract
compounds and manufacture using specialised techniques to produce
unique solutions such as the recently launched Orego-Stim® Forte,
which in commercial trials with major aquaculture companies has
demonstrated success outcomes. Orego-Stim® Forte is being trialled
across several aquatic species including shrimp, salmon, pangasius
and barramundi in commercial operations.
Anpario's original technology was a novel chemosensory
stimulant for fish and crustacea which enhanced palatability
improving the uptake of aquafeed, reducing waste, and thereby
helping to protect the aquatic environment. In addition to
improving the productivity and financial returns for fish farmers
it also has the benefit of allowing more sustainable forms of
protein to be used thereby reducing the reliance on fishmeal
sourced from wild fish stocks to support aquaculture
production.
This technology was originally branded as Aquatice®
but commercialisation was halted about ten years ago due to several
factors, one being that at the time fish meal was still being
included in formulations in high quantities and therefore
palatability was not so much of an issue. Secondly, Aquatice® was
only available in liquid form which means it needed to be applied
at farm level rather than in the feed which is a much simpler
method of delivery. In short, we believe the Aquatice® technology
was before its time and now with the industry focused on using
sustainable feeds such as vegetable or insect-based protein that
there is a potential opportunity for Aquatice® to be
commercialised. During the last year we therefore developed a
powder version for use in feed and adjusted the formulation to suit
current regulations. A shrimp trial is planned for later in the
year with a global aquafeed producer.
Growth Strategy
We continue to expand and strengthen our global sales
channels by recruiting local sales and technical teams because
being close to the end customer is the best long-term driver for
organic growth. We have already established a good network of local
subsidiaries in key markets and building a greater presence by
increasing our sales resource is a priority which will be supported
by our customer relationship management system (CRM) currently
being rolled out across the Group.
A proportion of our weak performance during the period
can be attributed to difficult conditions in monogastric (poultry
and swine) species, which accounts for a significant part of the
business. Therefore, it is crucial that we implement specific
initiatives to grow our presence in the ruminant, aquaculture and
pet sectors, which we are doing.
Our strategy to develop and market strong branded
products with high efficacy delivering consistent results and
return on investment for our customers means that we will keep
investing in marketing trials and product development to broaden
the appeal of our products. We will continue to position the Group
as the leading natural and sustainable animal feed additive
solutions provider and deliver this strategy through a combination
of internal development, supplemented with complementary
acquisition opportunities, the pursuit of which will remain a
priority for the Group where we can play a role in consolidating a
fragmented market to enhance shareholder returns through
operational synergies and expanding our product, species and
geographic portfolio.
Richard Edwards
Chief Executive Officer
20 March 2024
Key performance indicators
Financial
|
|
|
2023
|
2022
|
|
|
|
|
Note
|
£000
|
£000
|
change
|
% change
|
|
|
|
|
|
|
|
|
Revenue
|
3
|
30,998
|
33,103
|
-2,105
|
-6%
|
|
Gross profit
|
|
13,958
|
14,136
|
-178
|
-1%
|
|
Gross margin
|
|
45.0%
|
42.7%
|
+2.3%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
6
|
4,463
|
5,208
|
-745
|
-14%
|
|
Profit before tax
|
|
2,753
|
3,681
|
-928
|
-25%
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
12
|
13.51p
|
16.13p
|
-2.62p
|
-16%
|
|
Diluted adjusted earnings per share
|
12
|
15.31p
|
16.67p
|
-1.36p
|
-8%
|
|
Total dividend for the year
|
11
|
10.70p1
|
10.50p
|
+0.20p
|
+2%
|
|
|
|
|
|
|
|
|
Cash balances and short-term investments
|
20
|
10,649
|
13,567
|
-2,918
|
-22%
|
|
Net assets
|
|
33,649
|
41,311
|
-7,662
|
-19%
|
|
|
|
|
|
|
|
1 Includes both the interim dividend paid
during the year and the proposed final dividend which is subject to
approval by the shareholders at the AGM.
Non-financial
|
|
|
2023
|
2022
|
change
|
% change
|
|
|
|
|
|
|
|
|
GHG emissions1 (tCO2e)
|
|
46.6
|
77.3
|
-30.7
|
-40%
|
|
Carbon intensity1 (tCO2e per £m
sales)
|
|
1.5
|
2.3
|
-0.8
|
-35%
|
|
|
|
|
|
|
|
|
Major accidents reportable to the Board
|
|
nil
|
nil
|
|
|
|
|
|
|
|
|
|
1 Scope 1 and 2 Carbon emissions and
defined by the GHG protocol, for more information see the
environment and social responsibility report.
Anpario have begun to monitor and report on Scope 1
and 2 carbon emissions as part of its goal to achieve net-zero
carbon emissions by 2030. As such we track two related performance
indicators, total GHG emissions and carbon intensity. Anpario is
expected to grow as a Company and as a result total carbon
emissions may increase, as such our carbon intensity, defined as
carbon emissions divided by sales, will be a key measure in
tracking our progress towards our net-zero goals.
The Group also regards growth of business in key
target markets and the on-going achievement of product
registrations and quality assurance accreditations as other
KPIs.
Financial review
Revenue and gross profits
Performance through the second half of the year was
more consistent and stronger than through the first, with revenue
increasing by £0.5m (3%) and a gross margin improvement to 46.2%
(H1 2023: 43.9%), resulting in gross profits of £7.3m (H1 2023:
£6.7m) for this period.
On a full year basis, revenue declined by 6% to £31.0m
(2022: £33.1m), a reflection of the continued difficult market
conditions experienced through the year, albeit with signs of
improved stability and growth through the second half. Asia and
Europe suffered the most, experiencing a 10% and 11% decline
respectively, the Americas were down 1% with MEA up by 1% on prior
year. A full analysis of the sales performance is included in the
Chief Executive Officer Statement.
In terms of product performance, growth was seen in
our market leading products of Orego-Stim™, pHorce™ and Optomega™,
which collectively grew revenues by 15% and now represent a
combined 54% of sales. As highlighted in the interim statement the
more competitive product segments such as our Binders and some of
the Acid-based Eubiotic range contributed to all of the volume
decline and more than all of the revenue reduction. These
reductions are a result of a combination of both lower demand due
to reduced levels of meat production and price pressures leading
some producers to switch to lower quality and cheaper alternatives.
The Acid-based Eubiotic range has in recent years been most acutely
affected by input price pressures, the raw materials for which have
now steadily been reducing in cost but remain at materially high
levels that affect demand.
Full-year gross margins improved to 45.0% (2022:
42.7%) albeit, due to the lower sales level, gross profits saw a
slight decline by 1% to £14.0m (2022: £14.1m). Input costs overall
have stabilised, with some reductions seen through the year, albeit
still with historically high organic acid prices. This, alongside
the change in sales mix towards more premium positioned products
such as Orego-Stim™, have been the drivers for the improvement in
gross margins, up to 46.2% through the second half of the year as
previously stated.
Research and development impairment
As part of regular review processes, a £0.4m
impairment of research and development expenditure was identified
in the year. This relates to several projects which, whilst
demonstrating positive results, would have required further
investment and a decision was made to halt work on these
initiatives. Due to the exceptional and non-recurring nature of
this expense it has been excluded from our alternative performance
measures.
Administrative expenses
Administrative expenses were 8% higher at £11.4m
(2022: £10.6m). However, this £0.8m increase includes the
aforementioned R&D impairment of £0.4m, as well foreign
exchange charge of £0.3m (2022: nil), higher expected credit loss
provisions of £0.1m (2022: nil) and a lower level of capitalisation
of employment costs, down by £0.2m to £0.2m (2022: £0.4m).
Excluding these items, core administrative costs were 2% lower at
£10.8m (2022: £11.0m) despite a general level of high inflation in
the macroeconomic environment.
The inflationary pressures and reduced profitability
have led to a greater focus and emphasis on optimising expenditure
and operating more efficiently and the hard work and efforts by
staff in this regard have been greatly appreciated. However,
despite these efforts it has been necessary to implement a
restructuring and redundancy process and we have regrettably needed
to reduce headcount and external resource in several areas of the
business to right-size the operations for the current reduced
volumes and levels of profitability. This process was concluded in
the year by the end of Q3.
Employment costs, excluding R&D staff
capitalisation, decreased by 5% (£0.4m) in the year, as a result of
a part-year reduction from the redundancy and restructuring
exercise, though offset by inflationary wage increases. Travel
costs increased by 9% (£0.1m) due mainly to inflationary
pressures.
Taxation
Corporation tax is calculated at 23.5% (2022: 19.0%)
of the estimated assessable profit for the year. The UK government
announced on 3 March 2021 that the government are intending to
increase the corporation tax rate from 19% to 25% from April
2023.
As previously announced, Anpario was recently granted
another UK patent, this time for our flagship toxin-binder product,
Anpro™. This is expected to attract tax benefits, alongside those
already in place for Orego-Stim™, via the UK Patent Box Scheme
which allows companies to apply a lower rate of corporation tax to
profits attributable to qualifying patents.
IFRS accounting standards require tax to be recognised
on the most likely outcome, but as with all tax items, Her
Majesty's Revenue and Customs (HMRC) reserves the right to query
the Company's calculations. Work has continued with our tax and
patent advisors on the matter. The directors consider the
acceptance of our Patent Box tax computations to be more likely
than not and as such we expect a material reduction in UK
Corporation Tax because of the Patent Box application. Following
the grant of patent then we are able to apply this benefit back to
the original application in June 2021 and as such there is a
related prior year tax reduction of £0.1m.
The total benefit through Patent Box for the year was
£0.3m (2022: £0.2m), the amount in future periods will depend on
several factors, including the number of sales attributable to the
patent in any given year, any changes relating to the Patent Box
Scheme and the prevailing tax rates at the time.
The effective tax rate for the year was 8.2% (2022:
10.3%). However, excluding the prior year tax benefit from Patent
Box the underlying effective tax rate for the year was higher at
12.9% (2022: 10.3%), reflecting the increase in the corporation tax
rate.
Tender offer
In July 2023, Anpario completed a £9.0m Tender Offer
to purchase its own shares at a price of 225p per ordinary share.
Following the conclusion of the Tender Offer, the 4,000,000 shares
repurchased, together with a further 440,388 shares that were
already held in Treasury were subsequently cancelled.
As the reduction in shares occurred in July 2023, part
way through the year, then the time-weighted average shares in
issue is lower for 2023, as detailed in note 12 to the financial
statements, with a larger full-year reduction impact expected for
2024.
Profitability and earnings per share
As a result of the above factors, Adjusted EBITDA for
the year decreased by 14% to £4.5m (2022: £5.2m) and diluted
adjusted earnings per share, benefitting from the reduced number of
shares in issue, fell by a smaller 8% to 15.31p per share (2022:
16.67p).
Profit before tax fell by 25% to £2.8m (2022: £3.7m).
Basic earnings per share fell by 16% to 13.51p (2022: 16.13p).
Cash flows and balances
Operating cash flows before changes in working capital
reduced to £4.4m (2022: £5.4m), mirroring the fall in operating
profit for the year. However, offsetting this reduction there was a
£3.7m release into cash through reduced working capital levels,
compared with a prior year absorption of £3.6m. The reduction in
working capital came primarily through a decrease in inventory of
£3.3m. Which reverses successive years of increases in both raw
material and finished goods levels, held high to counter supply
chain risks and logistics delays. Combined, these factors led to a
significant improvement in cash generated from operations to £8.1m
(2022: £1.8m).
The corporation tax debtor at the end of the prior
year was repaid in the current year. This related in part to
overpayments made in advance and primarily the application and
catch up of the Patent Box scheme tax deductions for the Orego-Stim
patent. As such, a net tax refund of £0.6m was received, compared
with payments last year of £0.7m.
Excluding the movement in short-term investments,
which relate to cash held on deposit for greater than three months
and less than six months, then net cash used in investing
activities was down to £0.5m (2022: £1.4m). This is a result of
lower capital expenditure, with £0.3m (2022: £0.8m) on purchases of
property, plant and equipment, as well as a decline in payments to
acquire intangible assets to £0.5m (2022: £0.7m). In addition, as a
result higher Bank of England base rates then interest received
increased to £0.2m (2022: £0.1m).
The Tender Offer already mentioned expended £9.2m of
cash, including transactions costs. Due to the reduced number of
shares in issue, the Tender Offer reduced the outflow of cash
related to dividends by £0.4m to £1.8m (2022: £2.2m), despite a
continued increase in the amount paid per share. The total net cash
used in financing activities was £11.0m (2022: £2.0m).
Overall, after returning a total of £10.8m to
shareholders in the year through the Tender Offer and by way of
dividends, the total cash, cash equivalents and short-term
investments fell by only £3.0m to £10.6m (2022: £13.6m). The
primary purpose of holding these resources is to fund future
acquisitions and we continue to explore suitable opportunities.
Dividends
The Board is recommending a final dividend of 7.50
pence per share (2022: 7.35 pence) payable on 26 July 2024 to
shareholders on the register on 12 July 2024 (ex-dividend date of
11 July 2024). In addition to the interim dividend already paid,
this represents an increase to the total dividend for the year of
2% to 10.7 pence per share (2022: 10.5 pence).
Marc Wilson
Group Finance Director
20 March 2024
Our business model and strategy
Business model
Anpario is an independent manufacturer of natural
sustainable animal feed additives for health, nutrition and
biosecurity. Our products work in harmony with the natural aspects
of the animal's biology and Anpario's expertise is focused on
intestinal and animal health, and utilising this understanding to
improve animal performance and customer profitability.
Anpario supplies its customers with quality assured
products manufactured in the United Kingdom and has an established
global sales and distribution network in over 70 countries.
Anpario was built up through a combination of
acquisitions and organic growth by establishing wholly owned
subsidiaries in a number of key meat producing countries. The
portfolio of products has been developed with the customer and the
animal in mind, taking into account the life stages of the animal
and the periods when they will be more challenged.
Anpario is well positioned to benefit from the trends
in growth of the world's population, the increasing demand for meat
and fish protein in developing countries and the tightening of
global regulation which favours more natural feed additive
solutions. Seizing these opportunities is how Anpario intends to
deliver long-term shareholder value.
Anpario acknowledges the challenges facing livestock
producers in meeting environment and sustainability targets.
Anpario is contributing to the research and development progress
that the agricultural livestock industry is achieving in improving
its carbon footprint and GHG emissions. Anpario prides itself on
being a low carbon manufacturer of animal feed additives, with two
thirds of sales from products which can be described as from
sustainable sources and from non-carbon derived raw materials.
Our business model is based on:
Products
|
High quality efficacious products presented well that
meet the needs of our customers both now and through changes in the
regulatory environment.
|
Story
|
Powerful value add proposition demonstrating the
financial, performance and sustainability benefits of our product
solutions;
|
Quality
|
Quality in both manufacturing processes and through
the supply chain to provide consistent products that perform in a
reliable manner;
|
Branding
|
Build an impeccable Anpario brand which global
customers can trust as having innovative, high quality and
effective solutions for customers;
|
Channel
|
Control the sales channel to ensure we develop strong
technical and commercial relationships with the end users of
Anpario products.
|
Efficiency
|
Efficient automated production and effective
operations that can met the service level requirements of our
customers.
|
Sustainability
|
Our natural products help to reduce our customers
carbon footprint by improving the animal feed conversion rates, and
we also have a focus on reducing our own environmental impact.
|
Strategy
Regional focus
Developing local commercial and technical
relationships across the world.
|
Delivered through:
- regional
sales structure;
- local
language speakers;
- resource
that understands local market needs and challenges; and
- closer
relationships with key end customers.
|
Actions in 2023:
- rollout
of a new CRM system to increase and improve customer engagement and
communication;
-
collaboration with Indian partner to manufacture Orego-Stim locally
to provide greater market access.
- First
direct and local sales in both Malaysia and Vietnam; and
-
continued growth of direct sales channels.
|
Future plans:
- We now
have operations and personnel in our key target markets, and as
such the focus now is on developing a stronger market position
through increased resource and presence in these territories.
|
|
Technical & products
Add value by developing products that help overcome
the challenges of modern-day farming.
|
Delivered through:
-
scientific research and development, working closely with the end
customers' meat protein operations, to help improve gut function
leading to improved animal performance;
- support
the producer through prevention rather than treatment; and
- help the
customer meet disease and regulatory challenges.
|
Actions in 2023:
- took the
decision to halt progress on several R&D initiatives, to focus
on higher priority projects;
-
continued development of new applications and presentations of our
products to expand market opportunities, with £0.3m capitalised on
these projects in this year; and
- closer
co-ordination of technical and marketing strategy to enhance
effectiveness and efficiency.
|
Future plans:
- continue
to retain and recruit technical and animal production experts;
-
continued investment in research and development working closely
with key global customers and respected institutions; and
- look for
product opportunities which broaden our range and species
opportunities.
|
|
Acquisitions
Growth through complementary and earnings enhancing
acquisitions.
|
Delivered through:
-
successful integration to derive both operational and financial
synergies;
- specific
searches to identify suitable targets in the specialty feed
additive market; and
- applying
strict acquisition and valuation criteria; targets must either
complement our current product range, offer market consolidation
opportunities, or strengthen our sales and distribution
channels.
|
Actions in 2023:
- further
discussed and reviewed the acquisition strategy as part of our
Strategic Review process; and
- engaged
with, and evaluated, a number of other acquisition targets through
both formal and informal sale processes.
|
Future plans:
-
continued active search for acquisition opportunities within defined
criteria.
|
|
Operations
High quality, consistent and efficient
manufacturing.
|
Delivered through:
- further
automation of production facilities;
- key
industry quality accreditations; and
- quality
supply partners.
|
Actions in 2023:
-
installed an automated palletiser to reduce manual handling
requirements and increase automation;
-
installation of dust recirculation system to reduce dust particles
in production environment and reduce waste; and
- enhanced
quality control systems across a number of production lines.
|
Future plans:
- the
programme of plant automation projects, first started in 2016, is
now largely complete, though we will continue to evaluate new
potential improvements to efficiency and automation.
|
|
Environmental, Social and Governance
Anpario seeks to ensure a sustainable future,
conducting business in a socially, ethically and environmentally
responsible manner engaging with all our key stakeholders,
including the communities in which we operate.
|
Delivered through:
- our
three-pillar framework, 'People; Planet; and Promise';
- robust
governance structures appropriate for our business size; and
-
engagement with our stakeholders.
|
Actions in 2023:
-
membership of SEDEX (Supplier Ethical Data Exchange) giving
supplier chain transparency on a global platform.
- through
various activities with employees, we raised money and awareness
for the staff chosen charity of the year, Dementia UK; and
- A
further 36% reduction in Carbon intensity, representing a
cumulative reduction of 76% since 2019.
|
Future plans:
-
continued evaluation of ways to reduce our carbon emissions;
- continue
steps towards implementation of TCFD framework; and
- work
with our staff chosen Charity of the year, Save the Children.
|
Section 172 Statement
Introduction
As a Board, collectively and as individual Directors,
we recognise our obligations and our duties as Directors. Section
172 of the Companies Act 2006 requires a director of a company to
act in the way they consider, in good faith, would be most likely
to promote the success of the company for the benefit of its members
as a whole. In doing so, each Director has regard, amongst other
matters to:
- the likely
consequences of any decision in the long term;
- the interests of
the Company's employees;
- the need to
foster the Company's business relationships with suppliers,
customers and others;
- the impact of
the Company's operation on the community and the environment;
- the desirability
of the Company maintaining a reputation for high standard of
business conduct; and
- the need to act
fairly as between members of the Company.
How the Board fulfils its Section 172 duties
We ensure that the requirements of section 172 are met
and the interest of our stakeholder groups are considered through,
amongst other means, a combination of the following:
- review of
strategic objectives and achievement thereof;
- annual budgets
and review of resource allocations;
- results
presentations to shareholders and staff;
- audit and risk
management processes conducted through the year;
- health and
safety reports;
- reviews of
employee matters;
- annual
performance appraisals for all staff including personal development
reviews;
- consideration of
these matters in relation to major decisions made within the
year;
- regular meetings
with customers and key suppliers; and
- other ad-hoc
engagement with stakeholders.
Stakeholders and their key interests
The table below outlines the key stakeholders the
Company has identified, their key interests and where in this annual
report that further details on matters such as engagement and key
decisions made in the year in relation to each stakeholder group
can be found.
|
Shareholders
Anpario recognises the importance of engaging with
existing and potential investors to understand their views and
objectives. This can enhance strategic and governance decision
making processes of the Board. We welcome investor contact and
those wishing to engage with us can email on
investor@anpario.com.
Key interests
-
Delivering sustainable, profitable growth over the long-term.
- Robust
governance and appropriate controls to mitigate risk.
- ESG
initiatives and responsible management practices.
Key actions and decisions in the year relevant to this
stakeholder group
- Increase
in dividend per share proposed (see Chairman's statement).
-
Completion of a Tender-Offer to return £9m to shareholders by
purchasing 4m shares.
-
Cancellation of shares purchased through the Tender offer and
existing treasury shares.
- Held the
2023 AGM at our headquarters in the UK and gave shareholders who
attended a tour of the production facilities and recent capital
investments.
|
|
Customers
Anpario values our customers and has extensive
long-term relationships across the world. Our network of local and
regional account management teams are in place to understand the
needs and challenges faced by our customers so that we as a Group
can deliver the product and service solutions that they
require.
Key interests
-
Innovative, high-quality products that help overcome the challenges
of modern-day farming.
- Reliable
logistics networks with good stock availability and timely
delivery.
Key actions and decisions in the year relevant to this
stakeholder group
-
Continued to engage directly with customers to better understand
changing needs and challenges, leading to several innovations in
both presentation of products and further trial activity on new
applications.
- Worked
with customers to assist with their own sustainability policies and
practices including becoming a member of the Supplier Ethical
Database (SEDEX) provides a high-level transparency of operational
standards, employment practices and corporate ethics.
|
|
Employees
Anpario has over 100 employees across the world in a
range of different roles. All staff are key to delivering on the
strategic plans and success of the Group and we continue to develop
our HR strategy and policies.
Key interests
- Fair and
equitable recruitment and remuneration practices and policies.
- Safe
working environments.
- The
opportunity for personal growth and career progression.
Key actions and decisions in the year relevant to this
stakeholder group
- Regular
company newsletters and company updates distributed to keep all
staff well informed.
- Regular
onsite meetings across management groups and departments to
facilitate communication and decision making at all levels.
-
Continued to support staff training programmes and the internal
coaching programme, we now have several qualified coaches and
continually seek to encourage new coaching relationships for
staff.
|
|
Community and Environment
Anpario seeks to ensure a sustainable future,
conducting business in a socially, ethically, and environmentally
responsible manner. Anpario's team seek to meet environmental
challenges with sustainability at their heart and progressing on a
journey of continuous evolution and progression. Further
information to the below can be found in the Environment and Social
Responsibility Report.
Key interests
-
Conducting business in an ethically and environmentally responsible
manner.
Key actions and decisions in the year relevant to this
stakeholder group
- Continue
to evaluate and expand our climate related reporting and
disclosures
- Through
our Give Something Back Volunteer Day scheme we offer all staff one
paid day a year to support a charity of their choice
-
Employees vote for an annual charity of the year. For 2023 the
Charity chosen by staff was Dementia UK,
https://www.dementiauk.org/
|
|
Suppliers
Our external supply chains are critical to the success
of the business and integral in our ability to deliver high-quality
and consistent products to our customers.
Key interests
- Mutually
beneficial relationships with fair business practices.
- Supply
chain resilience.
- Prompt
payment.
Key actions and decisions in the year relevant to this
stakeholder group
- Ensuring
that in the current difficult economic conditions we have continued
to support our supply chain by making prompt payment for supplies
to ease any working capital pressure on our suppliers.
- Held
regular review meetings with key suppliers and Anpario management
to discuss and review matters such as pricing, supply and service
levels.
|
Key decisions affecting multiple stakeholders
The table below outlines the key decision which affect
more than one stakeholder group and outlines the actions taken and
the groups considered as part of the decision-making
process.
Review of operating budgets, expenditure plans and resource
levels in light of reduced performance
Actions taken
-
Reevaluated multi-year budgets considering difficult market
conditions and the impact of reduced demand on sales and profit
performance.
- Engaged
with management and staff and evaluated all sources efficiency and
costs savings from current activity and expenditure plans.
-
Considered the level of operating resource required and launched a
redundancy and restructuring exercise to right-size the
business.
- Clear
communication and processes established to keep the workforce
informed of both the reasons for and the processes related to the
restructuring.
Key stakeholder groups considered
- All
stakeholder groups were impacted through this process and the
related actions taken.
- This was
undoubtedly a difficult time for all staff and we deeply appreciate
the understanding, resilience and commitment to Anpario shown
through this period.
- The
impact of course was greatest on those directly affected for whom
we express our sincerest gratitude for their contributions to
Anpario.
|
Tender Offer
Actions taken
- Reviewed
capital allocation to optimise long-term returns for
shareholders.
-
Evaluated options for returning cash to shareholders in view of the
levels within the Group.
-
Determined that most appropriate action was a £9m Tender Offer to
repurchase 4,000,000 shares.
- The
decision was made to cancel the share purchased, alongside 440,388
existing shares held in treasury.
- Engaged
with professional advisers to launch and conclude the Tender
Offer.
Key stakeholder groups considered
- A number
of stakeholder groups were affected by the capital allocation
decision as it reduced levels of cash within the business that
could be used for further internal or acquisitive investment.
However, careful consideration was given to the investment
opportunities and requirements at the time, and cashflow
projections and anticipated inflows of cash through reduced working
capital levels.
- For
shareholders the Tender Offer gave them the ability to efficiently
sell their holding for cash if they so wished or retain their
holding and effectively have a larger share of Anpario following
the conclusion of the Tender Offer.
|
Risk management
Risk Register and Management Process
We continually examine in detail the key risks facing
our business in the context of our overall business strategy and
evaluate their likelihood and potential impact. The risks we have
examined are the most significant but not necessarily the only ones
associated with the Group and its businesses. In common with all
businesses, we face risks of a generic nature for example failure
of projects, foreign exchange impacts and the recruitment,
development and retention of employees. In considering our risks
during the year we have performed detailed assessments at a global
and regional level. We assess the likelihood of their occurrence
and potential impact and implement appropriate and proportionate
risk mitigation measures.
As part of our continual risk management process we
consider new and emerging risks. As supply chain pressures have
improved raw materials and stockholdings (including our own) have
reduced resulting in reduced demand during 2022 and 2023. The
Russian invasion of Ukraine and resulting impacts on agricultural
supply chains, logistics and energy costs continues to impact our
industry. Growing tensions in the Middle East and disruption to
shipping in the Suez Canal is also a concern. Price inflation and
recessionary factors will continue to depress worldwide economies
and agriculture and suppress demand for Anpario products. This
along with the oversupply of poultry, pork and shrimp has led to a
reduction in the use of speciality feed additives as producers
scaled back production and looked to reduce input costs. These
factors also increase credit risk in some territories and
customers. On the positive side recent raw material price increases
and supply issues have alleviated and in some instances reversed
which has helped recover gross profit margins.
We have also continued our focus on sustainability and
climate change related issues which has seen a substantial increase
in consumer and investor focus on climate. In addition, we consider
global meat consumption patterns and the potential impact on our
operations on the positive side as Anpario's products reduce
antibiotic use and demand for anti-viral feed mitigants.
The Group's risk management process through engagement
of the Executive Management team and global management team is
conducted on at least an annual basis and reviewed by the Board, as
follows:
1. Identify the
risk and likelihood for each function and regional operation;
2. Analyse and
assess the risk, its potential severity and the impact and priority
for the business;
3. Consider risk
rating and trends on a low to high scale;
4. Plan to
mitigate or treat the risk and identify resources or investment
required;
5. Implement
mitigation procedures by obtaining resources and approvals
necessary and put in place necessary actions; and
6. Monitor,
measure and control the risk and its likely impacts which will
change and evolve so that you we can respond and react in a timely
efficient manner.
The Risk Framework below shows those risks that are
more specific to our business together with details of the controls
and mitigation in place to manage our exposure. More information on
our approach to effective risk management can be found in the
Corporate Governance section, Principle 4.
Risk management actions taken in the year
Some of the key risk management actions taken in the
year include:
- strong growth of
sustainably sourced omega 3 supplement brand Optomega® Algae;
- development of
Orego-Stim® Forte to produce a water-soluble version for use in
aquaculture.
- collaboration
with Indian partner to manufacture Orego-Stim locally to provide
greater market access.
- UK Patent
granted in respect of market leading toxin binder Anpro.
- received first
ever King's Award for Enterprise for Sustainable Development.
- membership of
SEDEX (Supplier Ethical Data Exchange) giving supplier chain
transparency on a global platform.
- installation of
a state-of-the-art fully automated palletiser to enhance factory
efficiency and manage demand volatility.
- automation
investment in the production facility has improved efficiency;
- successfully
implemented an overhead reduction programme to reduce under
recoveries without impacting our product quality customer service;
and
- review and
updating of business continuity plans and procedures including
product and site security and defence plans.
Risk framework
|
|
|
|
|
Market Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- Gaining
market entry for products and access to end users.
-
Competition from global operators.
- M&A
activity resulting in market consolidation.
- Human
movement restrictions e.g. Covid-19, SARS.
- Animal
diseases e.g. African Swine Fever, Avian Influenza, PEDV.
- Global
commodity prices affecting both supply of inputs and demand for our
products.
- Climate
and environmental changes.
- IP
theft e.g. trademark infringements.
|
-
Establishing a global marketing strategy with clearly defined
product and species related goals for each region.
- Regular
monitoring of sales budgets and sales prospects by the management
and the Board.
-
Effective disaster planning communicated on a timely basis.
-
Regional and species diversity and an extensive range of products
with new product development and launches.
- A clear
and effective marketing strategy communicating the benefits of
Anpario sustainable solutions.
- Close
customer engagement, relationships to understand and address their
needs.
- Global
trademark watches and pre-emptive legal action.
-
Ensuring our trademark portfolio supports and is reflective of our
marketing strategy.
|
Likelihood:
|
Medium
|
| Impact: |
Medium
|
| Trend: |
Increasing
|
| |
|
|
Potential
impact
|
|
|
|
- Lower
sales revenue and profit.
-
Reduction in customers or target customers.
- Loss of
market share.
- Loss of
market.
|
|
|
|
Political and Economic Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- Wars in
Ukraine and Middle East
-
Interest and Inflationary pressures.
-
Customer pressures to reduce costs.
-
Exchange rate fluctuations.
-
Geopolitical risks including political and economic
instability.
-
International and individual targeting sanctions.
- Bad
debts or trade disputes.
|
-
Proactive and continual management of pricing.
- Close
communication with customers on key pricing and supply issues.
-
Limiting and hedging of foreign currency exposure.
- Wide
geographic diversity reduces dependency in a single country or
region.
-
Rigorous customer and supplier due diligence and monitoring of
regional and customer exposures.
- Use of
credit insurance and letters of credit.
|
Likelihood:
|
Medium
|
| Impact: |
Medium
|
| Trend: |
Increasing
|
| |
|
|
Potential
impact
|
|
|
|
-
Volatility in markets. Supply chain: delays, additional costs,
tariffs, or lack of continuity.
-
Regulatory changes.
- Border
delays.
- Reduced
revenue, increased costs and lower profitability.
|
|
|
|
Product Development Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- Failure
to deliver new products due to lack of innovation, pipeline delays
or products not meeting commercial expectations.
- Failed
or aborted trials during development or customer acceptance
stages.
- Lack of
significant financial, R&D and other resources.
- Failure
to meet regulatory requirements.
|
-
Continual monitoring and review of the lifestyle and potential
return from current products. Different regions have markets that
are at different points in development.
-
Potential new development projects are evaluated from a commercial,
financial and technical perspective. The pipeline is reviewed
regularly by the Board.
- Each
research project or trial is managed by qualified technical
managers. Projects and trials are monitored to ensure that they are
completed on time, deliver expected outcomes and provide useable
data. Final review and evaluation to ensure learning.
-
Multiple studies are conducted to assess the effects of a product
on target species.
- In
respect of all new product launches a detailed marketing plan is
established and progress against that plan is regularly
monitored.
- Patent
filings to retain competitive risk and tax advantages.
|
Likelihood:
|
Medium
|
| Impact: |
Medium
|
| Trend: |
No change
|
| |
|
|
Potential
impact
|
|
|
|
-
Reduction in competitiveness in the market. Lost opportunities.
- A
succession of trial failures could adversely affect our ability to
deliver shareholder expectations.
- Our
market position in key areas could be affected, resulting in
reduced revenues and profits.
- Where
we are unable to develop and launch a product this would result in
impairment of intangible assets.
-
Valuable resources may be wasted.
|
|
|
|
Production, Quality and Logistics Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- Failure
to source supply of raw materials.
-
Inadequate or poor adherence to quality systems allow faulty
product to reach customer.
-
Sub-standard raw materials.
- Failure
to secure timely shipping of goods to customers.
- Plant
or line closures due to major accident, incident, disaster, or
sabotage.
-
Defective plant and equipment in our manufacturing facility.
|
- Planned
increase in raw material and finished good storage facilities.
-
Rigorous planning of production runs and shipping container
requirements.
- All
products can be produced at approved toll manufacturers in the UK.
Business interruption and property insurance policies arranged.
-
Business Continuity Plan in place along with
- Product
Security, Food Defence and Product authenticity Plans.
- Third
party advisor utilised, and strict management controls enforced.
Employers' liability insurance arranged.
-
Supplier accreditation, UFAS and FEMAS certification, HACCP and
Trading Standards compliance. Public and product liability
insurance arranged.
- SEDEX
membership increasing transparency of supplier standards and
ethics.
|
Likelihood:
|
Medium
|
| Impact: |
Medium
|
| Trend: |
Decreasing
|
| |
|
|
Potential
impact
|
|
|
|
- Failure
or Increased lead-time to supply customers.
- Loss of
production for a significant period e.g., more than one month
potentially leading to loss of sales.
-
Accidents or fatality leading to possible closure or fine.
- Site
security compromised, external or internal acts of sabotage.
- Poor
product quality, contamination, counterfeit or passing off.
- Damage
to customer relationship, reputation, and financial loss.
|
|
|
|
Climate Change Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- Lack of
Board approved strategy to meet our specific challenges.
- Lack of
tangible verifiable measures and target. Failure to achieve carbon
zero targets in line with government and or industry
requirements.
- Failure
to make required disclosures in line with TCFD and regulatory
bodies.
- Impact
of climate change on suppliers' key raw materials, agricultural
commodities, and markets.
|
- Board
approved global sustainability strategy and implementation
plan.
-
Engagement of management in understanding and implementing
operational and reporting obligations.
-
Executive and management performance related targets in line with
Group strategic objectives.
-
Investment and research on emissions reduction in animal
production.
-
Collaboration with suppliers and other third parties with common
goals relating to climate change challenges.
-
Executive workshops to review key climate change risks and
opportunities.
-
Implementation of ISO 14001 Environmental Management Standard.
-
Industry and public recognition for example, King's Award for
Sustainable Development,
|
Likelihood:
|
Medium
|
| Impact: |
High
|
| Trend: |
Increasing
|
| |
|
|
Potential
impact
|
|
|
|
- Loss of
key customers, suppliers, investor base.
- Loss of
raw material sources and potential income stream.
- Lower
sales revenue and profit.
- Failure
to attract, recruit and retain high quality and skilled
employees.
|
|
|
|
Environmental, Social and Governance (ESG) Risks
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- Failure
to lead the feed additive market in supporting our customers
producing sustainable animal protein production.
- Breach
of bribery and/or corruption laws or international sanctions.
- Failure
to adhere to labour laws and standards globally.
- Poor
ESG ratings leading to failure to attract high quality
employees.
- Unsafe,
inadequate, or non-compliant health and safety issue or response to
environmental, infrastructure or other significant corporate
failures.
|
- Board
level role responsibility with the Corporate Responsibility
Director specifically focused on the risks and leading appropriate
action plans.
-
Attainment of ISO 14001 accreditation and training internal
auditors;
- 3
Pillars: People, Planet and Promise platform for action plans and
communication.
-
Specific ESG targets for all key Executive and group
management.
-
Established policies, procedures and training to ensure awareness
of obligations and compliance.
- High
standards of working conditions and market benchmarked pay
exceeding the living wage.
- Code of
Conduct requiring internal and third-party acceptance and
anti-bribery and anti-corruption guidance issued for business
partners.
- SEDEX
membership increasing transparency of own and business partners'
standards and ethics.
|
Likelihood:
|
Medium
|
| Impact: |
Medium
|
| Trend: |
Increasing
|
| |
|
|
Potential
impact
|
|
|
|
- Loss of
and negative Investor sentiment and withdrawal of support.
-
Shareholder action and votes against Board re-election.
- Fines,
criminal action against the Company, Directors, or employees.
|
|
|
|
Systems Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
- IT or
communications failure, due to, accident or sabotage.
-
Cyber-attack.
- Data
breach.
- Loss of
IP or sensitive data through AI or LLM.
|
-
Internal review and implementation of enhanced digital security
measures to detect and prevent possible cyber-attacks.
- Regular
back up of data, third party provider for storage and system
support.
-
Firewall, regular back up of data, crime and cyber insurance in
place.
-
Continual review and strengthening of processes, controls, and
security.
-
Information Policy, Privacy Policy, Breach Notification Policy and
Disaster Recovery Plan in place.
- Staff
and partner awareness communication and training.
|
Likelihood:
|
Medium
|
| Impact: |
High
|
| Trend: |
Increasing
|
| |
|
|
Potential
impact
|
|
|
|
- Unable
to operate.
-
Criminal attack could be aimed at stealing money, extortion, fraud,
data theft etc.
- GDPR
imposes heavy financial penalties, plus reputational damage.
- Serious
security breach and confidential information, IP or sensitive data
made available in public domain.
- Third
party rights violated and breach of agreements and financial
loss.
|
|
|
|
Legislation, Regulatory and Non-compliance Risk
|
|
Risks
|
Control and
mitigation
|
Risk
rating
|
|
-
Changing market, legislative and regulatory needs.
-
Divergence between UK and EU regulatory frameworks.
- Failure
to comply with export controls and sanctions.
- Failure
to comply with anti-bribery and anti-corruption legislation.
-
Non-compliance with tax, legal or regulatory obligations.
- Failure
to comply with regulatory requirements.
|
-
Vigilance and monitoring of all appropriate notifications to ensure
compliance and pre-emptive actions.
- Clear
communicated policies and Code of Conduct issued to all employees
and partners.
-
Internal training and awareness communications.
- Support
from external experts in all countries in which we operate.
-
Reasonable due diligence is carried out on all customers and end
users.
-
Sanction checking processes are implemented and documented.
|
Likelihood:
|
Medium
|
| Impact: |
Medium
|
| Trend: |
Increasing
|
| |
|
|
Potential
impact
|
|
|
|
- Loss of
market presence and or share.
-
Litigation against Anpario, potential fines and reputational
damage.
-
Financial penalties, reputational damage, unable to operate in
certain jurisdictions.
-
Prevented from trading with countries even though our products are
exempt from sanctions.
|
|
|
The strategic report was approved by the board and
signed on its behalf by:
Richard Edwards
Chief Executive Officer
20 March 2024
Board of Directors
Non-Executive Directors
|
Matthew Robinson, MA, ACA.
Non-Executive Chairman
(A,N,R)
Matthew Robinson was appointed to the Board in January
2021 and became Chair on 29 June 2023. Matthew has spent much of
his career working with and advising growth companies and was
formerly Chairman of Inland Homes plc and Non-Executive Chairman of
AIM listed Goldplat plc. Matthew started his career as a Chartered
Accountant and was previously a Corporate Finance Director at
finnCap and Panmure Gordon.
|
|
Tim Pollock
Non-Executive Director
(A,N,R)
Tim Pollock was appointed to the Board in August 2023.
Tim has an extensive track record at executive director level for
several multi-national groups covering agriculture, animal
nutrition, soft commodities, and the food ingredient sector. These
roles include Director of Strategic Development and M&A for
Lallemand Animal Nutrition, a leading global producer of specialty
feed additives and as the Food & Agriculture Investment
Director for British International Investment, the development
finance institution of the British Government. He founded AgCap in
2018, which provides consultancy advice to the food and
agribusiness sectors.
Tim also brings public markets experience from his
time as a Non-Executive Director and Interim Group Managing
Director of London Stock Exchange AIM quoted Zambeef Products plc,
the largest vertically integrated food retailing brand in
Zambia.
|
Executive Directors
|
Richard Edwards, B Eng (Hons), C Eng,
MBA.
Chief Executive Officer
(N)
Richard Edwards joined the Board in November 2006 as
Chief Executive following the acquisition of Agil. He was appointed
Executive Vice-Chairman in April 2011 with specific responsibility
for implementing acquisition strategy. In January 2016, Richard was
appointed to the position of CEO.
Richard has extensive general management and corporate
strategy experience gained in the sales and distribution sector
both in the UK and internationally. Previously he was Director and
General Manager of WF Electrical, a £140 million turnover division
of Hagemeyer (UK) plc, a distributor of industrial products, and
gained significant experience in corporate development at Saint
Gobain UK building materials business.
|
|
Marc Wilson, BA (Hons), ACMA.
Group Finance Director
Marc is a member of the Chartered Institute of
Management Accountants and currently Group Finance Director as part
of the Executive Management team for Anpario. Marc joined Anpario
in 2010 and his responsibilities have included the development and
rollout of Anpario's global ERP system along with the accounting
and integration of acquisitions during this time.
Marc Wilson joined the Board as Group Finance Director
with effect from 1 July 2021.
|
|
Karen Prior, BSc (Hons), FCA.
Corporate Responsibility Director & Company Secretary
Karen joined the board in October 2009, originally as
Group Finance Director until 1 July 2021 when she relinquished the
role and became Corporate Responsibility Director. Previously,
Karen has had roles as Finance Director of Town Centre Securities
PLC, a listed property group and UK Finance Director of Q-Park,
where she was instrumental in its establishment and growth in the
UK.
Karen spent 10 years of her early career with Ernst
and Young specialising in providing audit and business services to
entrepreneurial businesses.
|
Key
A: Audit Committee N: Nomination Committee R:
Remuneration Committee
The Terms of Reference of the Audit, Nomination and
Remuneration Committees are available on the Company's website:
www.anpario.com/aim-26/.
Corporate governance
Chairman's introduction
The Company's shares are traded on the Alternative
Investment Market ("AIM") of the London Stock Exchange. Anpario
applies the Quoted Companies Alliance Corporate Governance Code
("QCA Code").
Anpario offers natural solutions to the food farming
industry which work in harmony with the natural aspects of an
animal's biology to promote healthy growth at the least cost to the
environment and the producer. Our products enable the production of
top-quality protein that partners future farming practice around
the world. This objective and our engagement with stakeholders,
ensures that we act in a manner that is responsible and beneficial
to all.
The board and staff at the Company are committed to
behaving professionally and responsibly to ensure that the highest
standards of honesty, integrity and corporate governance are
maintained. Enshrining these values through the Company's culture,
objectives and processes is essential to support the success of the
Company in creating long-term shareholder value.
Anpario is committed to conducting business in a
socially, ethically and environmentally responsible manner. We do
this by focusing on a 3 Pillars framework: 'People; Planet; and
Promise'.
Principle 1: Our strategy and business model to promote
long-term value for shareholders
Anpario is well positioned to benefit from the trends
in growth of the world's population, the increasing demand for meat
and fish protein in developing countries and the tightening of
global regulation favouring more natural feed additive solutions.
Seizing these opportunities is how Anpario intends to deliver
long-term shareholder value. More information is included in the
Strategic Report.
Anpario has specific resource and processes in place to
proactively identify and manage risk to protect the continued
growth and long-term future that is possible as outlined above. Our
annual report details specific financial and non-financial risks and
uncertainties facing the business and measures in place to mitigate
them.
Principle 2: Understanding and meeting shareholder needs and
expectation
Communications with shareholders are given high
priority and Anpario recognises the importance and value in
reciprocal and open communication with its many investors. This is
key to ensure alignment between the motivations and expectations of
our shareholders and our strategy and business model.
This communication takes place in many forms to serve
different purposes. Our Interim Statements and Annual Reports
contain detailed information for shareholders to understand our
performance, strategy and future plans. Between these disclosures,
the Company also issues RNS announcements, as required, which serve
to keep shareholders updated about regulatory matters or changes
that they should be notified of. These RNS announcements, as well as
wider news articles about the Company, are available on our website
www.anpario.com/investor/.
The Annual General Meeting ("AGM") is the main
opportunity for all shareholders to engage with Anpario.
Shareholders are notified in advance of the date and location of the
meeting as well as the resolutions that are to be voted on. At the
meeting, the Board and key personnel give a presentation about the
most recent published results and our strategy. They are also
available to answer any questions that shareholders may have. The
Company's articles have been updated to enable the holding of
virtual meetings in future.
The Directors actively seek to build strong
relationships with institutional investors and investment analysts.
Presentations are given immediately following Interim Statement and
Annual Report announcements. Feedback directly from shareholders
via the Company's advisers after these regular analyst and
shareholder meetings ensures that the Board understands shareholder
views. The Board as a whole are kept informed of the views and
concerns of major shareholders and are made aware of any significant
investment reports from analysts.
Shareholders are encouraged to contact the Company
should they have any questions or concerns and can do so using a
dedicated email address investor@anpario.com. This is actively used
by our Shareholders and successfully enables them to engage with
the Board in addition to attaining assistance on individual
shareholder specific matters with which we may be able to help. The
Chairman and other Directors will meet or have contact with major
shareholders as necessary. Where appropriate on specific matters
the Board or its Committees will conduct shareholder
consultations.
The Executive Directors, management and staff as
appropriate hold shares and participate in incentive plans in the
Company which ensures that their interests are fully aligned with
those of other shareholders.
Principle 3: Corporate social responsibilities and wider
stakeholders
Anpario seeks to ensure a sustainable business,
behaving with social, ethical and environmental responsibility and
engaging with all of its key stakeholders, including the
communities in which the Group operates, its people and the
environment. As noted we have launched the 3 Pillars: 'People,
Planet and Promise' as a framework to focus our behaviours with
respect to sustainability and our ESG objectives. Full details of
the Group's approach to these matters are included in the
Environmental and Social Responsibility Report later in this annual
report and on the website:
www.anpario.com/about/sustainability/.
Principle 4: Effective risk management
Anpario has specific resource and processes in place to
proactively identify and manage risk to protect its continued
growth and long-term future. However, any such system of internal
control can provide only reasonable, but not absolute, assurance
against material misstatement or loss. The Board considers that the
internal controls in place are appropriate for the size, complexity
and risk profile of the Company and that they balance exploiting
opportunities and protecting against threats. The Risk Management
section of this annual report details specific financial and
non-financial risks and uncertainties facing the business and where
possible the measures in place to mitigate them.
Risk management and control
Effective risk analysis is fundamental to the
execution of Anpario's business strategy and objectives and our
risk management and control processes are designed to make
management of risk an integrated part of the organisation. The
framework is used to identify, evaluate, mitigate and monitor
significant risks and to provide reasonable but not absolute
assurance that the Group will be successful in achieving its
objectives. The focus is on significant risks that, if they
materialise, could substantially and adversely affect the Group's
business, viability, prospects and share price.
A formal Internal Audit function is not felt to be
suitable for the Group at the current time due to its size, however
this is kept under review alongside an appropriately robust
internal control system.
Risk management process
We recognise that a level of risk taking is inherent
within a commercial business. Our risk management process is
designed to identify, evaluate and mitigate the risks and
uncertainties we face.
The CEO is the ultimate Risk Manager. The Board
establishes our risk appetite, oversees the risk management and
internal control framework and monitors the Group's exposure to
principal risks.
The Executive Management Board (EMB) owns the risk
management process and is responsible for managing specific risks.
The EMB members are also responsible for embedding rigorous risk
management in operational processes and performance management and
review.
The EMB members are responsible for the risk analysis,
controls and mitigation plans for their individual section of the
business.
The Audit Committee reviews the effectiveness of the
risk management process and the internal control framework and
ensures appropriate executive ownership for all key risks.
These processes ensure that all Directors receive
detailed reports from management and are able to discuss the risks,
controls and mitigations in place and therefore satisfy themselves
that key risks are being effectively managed.
Internal control framework
Anpario's internal control framework is designed to
ensure the:
- effectiveness
and efficiency of business operations;
- reliability of
financial reporting;
- compliance with
all applicable laws and regulations; and
- assignment of
Authority and Responsibility.
Anpario's values underpin the control framework and it
is the Board's aim that these values drive the behaviours and
actions of all employees. The key elements of the control framework
are:
Management structure
The Board sets formal authorisation levels and
controls that allow it to delegate authority to the EMB and other
Managers in the Group. The management structure has clearly defined
reporting lines and operating standards.
Strategy and business planning
- Anpario has a
strategic plan which is developed by the EMB and endorsed by the
Board;
- Business
objectives and performance measures are defined annually, together
with budgets and forecasts; and
- Monthly business
performance reviews are conducted at both Group and business unit
levels.
Policies and procedures
Our key financial, legal and compliance policies and
procedures that apply across the Group are:
- Code of
Conduct;
- Designated
authorities and approvals;
- ISO 14001
Environmental Management Systems;
- Anti-Bribery and
Anti-Corruption Policy;
- Modern Slavery
Policy;
- GDPR and Privacy
Policy; and
- Due diligence
processes including rigorous sanctions checks.
Technical standards and operational controls
Our operational control processes include:
- Product pipeline review: product
pipeline is reviewed regularly to consider new product ideas and
determine the fit with our product portfolio. We assess if the
products in development are progressing according to plan and
evaluate the expected commercial return on new products;
- Lifecycle management: lifecycle
management activities are managed and reviewed for our key products
to meet the changing needs of our customers, environmental and
regulatory standards;
- Quality assurance: a manufacturing
facility with an established Quality Management System operating
under FEMAS and UFAS and designed to ensure that all products are
manufactured to a consistently high standard in compliance with all
relevant regulatory requirements;
- Product registration: a robust system
operated by our regulatory team to ensure all products are
correctly registered within the jurisdiction in which they are
sold; and
- Pricing: a pricing structure which is
managed and monitored to provide equitable pricing for all customer
groups and compliance with regulatory authorities.
Financial controls
Our financial controls are designed to prevent and
detect financial misstatement or fraud. This provides reasonable,
but not absolute, assurance against material misstatement or loss.
They include:
- a formalised
reporting structure which incorporates the setting of detailed
annual budgets and key performance indicators which are updated on
a regular basis to form forecasts;
- management and
Board meetings where all key aspects of the business are presented,
reviewed and discussed including comparison of current and
historical performance as well as budgets and forecasts;
- defined
authorisation levels for expenditure; the placing of orders and
contracts; and signing authorities;
- transactional
level controls operated on a day-to-day basis;
- daily
reconciliation and monitoring of cash movements by the finance
department and the Group's cash flow is monitored;
- segregation of
accounting duties;
- reconciliation
and review of financial statements and judgements;
- internal and
external training to ensure staff are aware of the latest standards
and best practice; and
- membership of
professional bodies and compliance with associated code of
ethics.
Principle 5: The Board
The Board of Directors is collectively responsible and
accountable to shareholders for the long-term success of the
Company. The Board provides leadership within a framework of
prudent and effective controls designed to ensure strong corporate
governance and enable risk to be assessed and managed.
The Board regularly reviews the operational
performance and plans of the Company and determines the Company's
strategy, ensuring that the necessary financial and human resources
are in place in order to meet the Company's objectives. The Board
also sets the Company's values and standards, mindful of its
obligations to shareholders and other stakeholders.
Full details and biographies of the Board are
available on our website, the Board comprises of two independent
Non-Executive Directors and three Executive Directors.
Executive Directors
|
|
|
|
Key Committees
|
|
Name
|
Role
|
Qualifications
|
Audit
|
Nom.
|
Rem.
|
|
Richard Edwards
|
Chief Executive Officer
|
B Eng (Hons), C Eng, MBA.
|
|
M
|
|
|
Marc Wilson
|
Group Finance Director
|
BA (Hons), ACMA.
|
|
|
|
|
Karen Prior
|
Corporate Responsibility Director
|
BSc (Hons), FCA.
|
|
|
|
Independent Non-Executive Directors
|
|
|
|
Key Committees
|
|
Name
|
Role
|
Qualifications
|
Audit
|
Nom.
|
Rem.
|
|
Matthew Robinson
|
Non-Executive Chair
|
MA, ACA.
|
C
|
C
|
M
|
|
Tim Pollock
|
Non-Executive Director
|
|
M
|
M
|
C
|
Audit = Audit Committee, Nom. = Nomination Committee,
Rem. = Remuneration Committee
C = Chair, M = Member
The Board considers that the Non-Executive Directors
are independent.
All Directors are subject to reappointment by
shareholders at the first AGM following their appointment and
thereafter by rotation.
The Board delegates its authority for certain matters
to its Audit, Remuneration and Nomination Committees. The Board
approves and reviews the terms of reference of each of the
Committees which are available on the Company's website,
www.anpario.com/aim-26/.
The Board meets formally at least four times per
annum. All Board members receive agendas and comprehensive papers
prior to each Board meeting. The Corporate Responsibility Director
is also the Company Secretary and is responsible to the Board for
ensuring that Board procedures are followed and that applicable
rules and regulations are adhered to.
In addition to formal Board and Committee meetings, ad
hoc decisions of the Board and Committees are taken after
discussion throughout the financial year as necessary through the
form of written resolutions.
All Directors in office at the time of the various
committee meetings were in attendance for all of the meetings
convened during 2023. A list of the meetings convened during the
year is set out below.
|
|
Number of meetings
convened
|
Full attendance of
meeting
|
|
Board meetings
|
9
|
Yes
|
|
Audit Committee meetings
|
2
|
Yes
|
|
Remuneration Committee meetings
|
4
|
Yes
|
|
Nomination Committee meetings
|
3
|
Yes
|
The Chief Executive Officer and Group Finance Director
work full time for the Group. The Corporate Responsibility Director
works part-time and ensures the roles and responsibilities of the
position are fully met. The Non-executive Directors have
commitments outside of Anpario plc. They are summarised on the
Board biographies available from
www.anpario.com/investor/aim-26/. All the Non-Executive
Directors give the appropriate amount of time required to fulfil
their responsibilities to Anpario.
Principle 6: Ensuring Directors have between them the necessary
up-to-date experience, skills and capabilities
The Nomination Committee aims to ensure that
composition of the Board reflects appropriate balance of skills and
experience required to ensure long-term shareholder value and
manage risk. Details of the role of the Nomination Committee and
the activities it performs in relation to these matters is included
in the "Maintaining governance structures" section later on in this
document.
The Board biographies available on the website give an
indication of their breadth of skills and experience. Each member
of the Board takes responsibility for maintaining their own skill
set, which includes roles and experience with other boards and
organisations as well as formal training and seminars.
Principle 7: Evaluating board performance
The performance of the Board is evaluated formally on
an annual basis, following the conclusion of the annual Audit and
finalisation of the Annual Report. The Chairman leads this process
which looks at the effectiveness of both the Board as a unit and
its individual members.
When addressing overall Board performance the factors
considered, include but are not limited to, underlying group
financial performance, the success of new strategy implementation
and the effectiveness of risk and control measures. This process
further looks at the performance of each member and considers their
individual successes, commitment and alignment to the overall Group
strategy. As appropriate, it will also look to confirm that members
have maintained their independence.
The Nomination Committee is responsible for
determining Board level appointments, details of its role and terms
of reference are provided later in this document. The Executive
Board members determine the appointments to the Executive
Management team, in line with Board approval procedures.
Succession planning is a key part in ensuring the
long-term success of the Company. The Executive team ensure that
potential successors are in place within the business and are given
the required support and guidance to develop further. At the
required time, it is the Nomination Committee's role to make
decisions about future appointments to the Board.
Principle 8: Promoting a corporate culture based on ethical
values and behaviours
Anpario has a strong ethical culture, the Board is
responsible for setting and promoting this throughout our processes
and behaviours. The policies related to these matters are regularly
reviewed and updated and distributed to employees and other
stakeholders as appropriate. Further, specific training is given to
keep staff updated on relevant changes, these sessions are often
recorded for future reference and new staff induction.
A copy of our Code of Conduct is available on our
website,
www.anpario.com/code-of-conduct/. Anpario has stated policies
on Corporate Social Responsibility, Anti-Bribery and
Anti-Corruption, Modern Slavery Policy and Whistleblowing Policy
that are applicable to all our employees, other workers, suppliers
and those providing services to our organisation.
The Company has achieved ISO 14001 standard on
Environmental Management Systems accreditation along with a
qualified internal audit function.
Anpario's Sustainability Report and accompanying video
is available on the website
https://www.anpario.com/about/sustainability/.
Principle 9: Maintaining governance structures
Anpario is confident that the governance structures in
place in the Company are appropriate for its size and individual
circumstances whilst ensuring they are fit for purpose and support
good decision making by the Board.
The Board defines a series of matters reserved for its
decision. These include strategy, finance, corporate governance,
approval of significant capital expenditure, appointment of key
personnel and compliance with legal and regulatory
requirements.
There is clear segregation of responsibility within
the Board. The Non-Executive Chairman is responsible for providing
leadership to and managing the business of the Board, in particular
ensuring strong corporate governance policies and values. The role
of Chief Executive Officer is concerned with the formulation and
implementation of the strategy of the Company and is responsible
for all operational aspects of the business. The role of the Group
Finance Director is to provide strategic and financial guidance and
to develop the necessary policies and procedures to ensure sound
financial management and control of the Company. The Corporate
Responsibility Director also acts as Company Secretary and is
further responsible for advising on corporate governance matters
and ensuring compliance with relevant legislative and legal
requirements.
Details of the key committees are set out below, the
terms of reference for each are available on our website as part of
the committee section of the AIM 26 disclosures
www.anpario.com/aim-26/.
Audit Committee
Details are contained within the Audit Committee
Report section of this Annual Report.
Remuneration Committee
Details are contained within the Remuneration
Committee Report section of this Annual Report.
Nomination Committee
The Nomination Committee is comprised of the two
Non-Executive Directors and the Chief Executive Officer and is
chaired by Matthew Robinson. Meetings are held as required by the
Chairman. The role of the committee is as follows:
- regularly review
the structure, size and composition (including the skills,
knowledge, experience and diversity) of the Board and make
recommendations to the Board with regard to any changes;
- give full
consideration to succession planning for Directors and other senior
executives taking into account the challenges and opportunities
facing the Company, and the skills and expertise needed on the
Board in the future;
- keep under
review the leadership needs of the organisation, both executive and
non-executive, with a view to ensuring the continued ability of the
organisation to compete effectively in the marketplace;
- keep up to date
and informed about strategic issues and commercial changes
affecting the Company and the market in which it operates;
- review and
approve selection procedures for potential Board members, whether
executive or non-executive, whether for immediate appointment to
the Board or after a probationary period;
- be responsible
for identifying and nominating for approval of the Board,
candidates to fill Board vacancies as they arise;
- ensure that on
appointment to the Board, non-executive Directors receive a formal
letter of appointment setting out clearly what is expected of them
in terms of time commitment, committee service and involvement
outside Board meetings;
- ensure that
following appointment to the Board, Directors undergo an
appropriate induction programme; and
- make
recommendations to the Board on membership of the Board's
committees, in consultation with the chair of such committees, the
reappointment of any non-executive at the conclusion of their
specified term of office, the reappointment by shareholders of
Directors under the Company's rotation requirements taking into
account the need for progressive refreshing of the Board.
Before any appointment is made by the Board, evaluate
the balance of skills, knowledge, experience and diversity on the
Board, and, in the light of this evaluation, prepare a description
of the role and capabilities required for a particular
appointment.
For the appointment of a Chairman or other
Non-Executive, the committee shall produce a job specification,
including the time commitment expected. A proposed Non-Executive's
other significant commitments should be disclosed to the Board
before appointment and any changes to commitments should be
reported to the Board as they arise.
Prior to the appointment of a Director, the proposed
appointee should be required to disclose any other business
interests that may result in a conflict of interests and be required
to report any future business interests that could result in a
conflict of interest. Full due diligence is undertaken by the
Company and NOMAD.
New appointments made in the year have gone through
the processes as described above and more information can be found
in the Board Changes section of the Chairman's Statement.
Principle 10: Communicating governance and performance matters
with shareholders and wider stakeholders
Communications with shareholders are given high
priority and we proactively promote engagement through a range of
measures. More details of which are provided earlier in this
document about how Anpario seek to engage with and understand
Shareholders and wider Stakeholders.
A General Meeting was held on 19 June 2023 to approve
a resolution related to the Tender Offer for which was approved
without a significant number of votes being cast against it.
The most recent AGM took place on 29 June 2023, the
results of the AGM are set out below. None of the resolutions had a
significant number of votes cast against it.
Ordinary resolutions
|
No
|
Resolution
|
Result
|
|
1
|
To receive the accounts for the year ended 31
December 2022, together with the reports of the Directors, the
strategic report, and the report of the auditors thereon.
|
Passed
|
|
2
|
To declare a final dividend for the year ended 31
December 2022 of 7.35p per Ordinary share payable on 28 July 2023
to shareholders on the register at close of business on 14 July
2023.
|
Passed
|
|
3
|
To re-elect Richard Edwards as a Director, who
retires by rotation.
|
Passed
|
|
4
|
To re-elect Matthew Robinson as a Director, who
retires by rotation.
|
Passed
|
|
5
|
To re-appoint BDO LLP as auditors.
|
Passed
|
|
6
|
To authorise the Directors to agree the auditors'
remuneration.
|
Passed
|
|
7
|
To grant the Directors' authority to allot shares or
grant rights to subscribe or convert any security into shares in
the Company pursuant to Section 551 of the Companies Act 2006.
|
Passed
|
Special resolutions
|
No
|
Resolution
|
Result
|
|
8
|
To authorise the Directors to allot equity
securities for cash as if Section 561(1) of the Companies Act 2006
did not apply to any such allotment.
|
Passed
|
|
9
|
To issue shares for cash, otherwise than in
connection with a pre-emptive offer, up to 10% of a company's
issued share capital together with an additional 10%.
|
Passed
|
|
10
|
To grant to the Company authority to exercise its
power to purchase its own shares.
|
Passed
|
Our Company website includes historical Annual Reports
and Interim Statements; both in RNS format as part of its News
section, and the published documents are available from
www.anpario.com/investor/annual-reports/. Included within these
documents are the notices of previous AGMs, the results of which
are released as RNS announcements and can be found in the News
Releases section of our website
www.anpario.com/investor/.
Environment and Social Responsibility Report
Environmental responsibility
Anpario seeks to ensure a sustainable future,
conducting business in a socially, ethically and environmentally
responsible manner engaging with all our key stakeholders,
including the communities in which we operate. The key issue of
climate change has highlighted the critical part played by
agriculture and food production and the necessity for collective
action to achieve a net-zero emissions economy for a world that
prioritises the health of people and our planet.
Anpario's team seek to meet environmental challenges
with sustainability at their heart and pursuing a journey of
continuous evolution and progression. We recognise that it is our
responsibility to identify problems faced by producers globally and
find effective sustainable solutions and as we continue to grow on
the strong foundations built over past decades. We aim to be a
leading light now and in the future.
We are leaders in the field of speciality feed
additives, our products capture natures ingenuity and work in
harmony with the animals' biology to deliver sustainable and
natural solutions. It is through our products that we can have the
greatest positive impact, empowering global animal protein
producers to produce more from less, preserving vital resources,
safeguarding food production and human health, whilst protecting
the planet. We promise to seek new ways of operating that protect
valuable resources and remain committed to high environmental
standards and robust health and safety measures.
We believe that through our product innovation,
management of our operations and aligning with stakeholders who
share our values and sustainability objectives, we can help our
global customers to achieve their own sustainable goals faster.
UN Sustainable Development Goals
The UN Sustainable Development Goals (SDG's) provide a
globally accepted roadmap for addressing many of the most urgent
global, economic, environmental and social challenges. Agreed at
international level in September 2015, the achievement of these 17
goals by 2030 requires extensive participation and creates a key
role for businesses in delivering entrepreneurial solutions that
can help meet these challenges. Anpario aligns with several SDG's
and the goals highlighted below are those where we recognise that
we can play our part in creating positive impact for people and the
planet, now and into the future.
SDG 2: Zero hunger - end hunger, achieve food security and
improved nutrition and promote sustainable agriculture
Agriculture and fisheries can provide nutritious food
for all and generate decent incomes, while supporting
people-centred rural development and protecting the environment.
Anpario's products work in tune with nature's inherent processes
within each of the animal species to support production of safe and
affordable food for a growing population and can help to:
- conserve,
protect and enhance natural resources;
- improve rural
livelihood, equity and social well-being through productive
farming; and
- enhance
resilience of people, communities and ecosystems.
SDG 3: Good health and well-being - ensure healthy lives and
promote wellbeing for all at all ages
We are leading work in collaboration with major feed
producers to successfully reduce the unnecessary use of antibiotics
and other substances such as zinc oxide and urea-formaldehyde. The
misuse of antibiotics in agricultural production is a significant
threat to animal and human health. Anpario provides products and
guidance to support farmers to:
- improve animal
gut health;
- defend against
mycotoxins;
- reduce and where
possible remove the unnecessary use of antibiotics; and
- safeguard the
use of antibiotics for effective treatment of sick animals and
humans.
SDG 12: Responsible consumption and production - ensure
sustainable consumption and production patterns
Anpario's phytogenic and organic acid products help
improve biosecurity and prevent animal diseases, which can
eliminate significant animal populations, leading to devastating
losses of food producing animals (e.g. Coccidiosis, Necrotic
Enteritis, Porcine Epidemic Diarrhoea (PEDv), and African Swine
Fever (ASF). Anpario's products are proven to work effectively
alongside vaccines to aid in disease control.
SDG 13: Climate action: take urgent action to combat climate
change and its impacts
Anpario is tackling climate change through
establishing energy reduction initiatives and making renewable
energy investments and commitments including our ambition Net Zero
Carbon by 2030. Our products help farmers to feed more nutritious
diets with a lower environmental footprint to their animals which
reduces negative environmental impacts such as:
- nutrient
loss;
- greenhouse gas
and ammonia emissions; and
- degradation of
ecosystems.
SDG 14: Life below water - conserve and sustainably use the
oceans, seas and marine resources for sustainable development
Anpario works to protect and enhance marine life by
working with aquaculture producers globally to improve production
systems, sourcing responsibly and reducing marine waste. Our 100%
natural, aquaculture products work on the same principles as for
land animals and are effective for shrimp and other farmed fish such
as salmon and tilapia. We have developed new formulations to
support both sustainable and antibiotic free, production in this
sector.
SDG 17: Partnerships for the Goals: strengthen the means of
implementation and revitalise the global partnership for
sustainable development
Anpario works collaboratively with other organisations
and stakeholders with the common goal of sustainable food
production. To achieve optimal circular sustainability means
educating distribution networks, employees, partners and working
with customers, our supply chain and leading global universities
who share our goals to lead initiatives to replace unsustainable
practices. It means leading by example and actively demonstrating
how we apply and achieve sustainable objectives to our partners to
inspire positive change.
Our Commitment and 3 Pillars
Anpario is committed to conducting business in a
socially, ethically and environmentally responsible manner. We will
do this by focusing on 3 Pillars: 'People; Planet; and Promise'.
Sustainability is a core focus for Anpario and driven
by our people, delivery of leading product innovations, operational
excellence and engagement with key stakeholders. We are building on
strong foundations and are committed to continuous responsible
development that will help to safeguard the planet now and for
future generations. Alongside our customers we work responsibly to
identify problems faced by protein producers globally and we
collaborate with leading industry and research partners to find
effective sustainable solutions.
People
Anpario is committed to:
- protecting and
empowering employees;
- embracing
diversity, equality and inclusion of our employees and their
communities; and
- working with our
customers, suppliers and other stakeholders for a better
tomorrow.
At Anpario we recognise the importance of nurturing
and developing lasting relationships with customers and suppliers.
Building and continually developing a stable, highly motivated and
skilled workforce is key to our approach. Anpario is an inclusive
organisation where everyone is treated equally irrespective of
gender, nationality, marital status, colour, race, ethnic origin,
creed, sexual orientation or disability. Together we drive a
positive culture with employee well-being prioritised and setting
high standards to ensure we effectively manage risk and health,
safety and ensuring a safe working environment. Our employees
embody Anpario's key values of "Integrity, Teamwork, Innovation and
Leadership".
It is Anpario's policy to involve colleagues in the
business and to ensure that matters of concern to them, our aims,
objectives and financial performance are communicated in an open
way. As far as possible, employees are offered the opportunity to
become shareholders to promote active participation and commitment
to our success.
The Employee handbook applies globally and includes
detailed policies and guides for employees which cover:
- Behaviour: Equal Opportunities and
Dignity at Work, Anti-Bribery and Anti-Corruption, Modern Slavery,
Communications and Privacy.
- Family: Parental, Dependents,
Maternity, Paternity, Flexible working, Adoption.
- General: Grievance, Whistle blowing,
Discrimination and Bullying, and Disciplinary.
- Safety: Health and Safety handbook,
Occupational Health Policy, Drug and Alcohol abuse.
Gender and diversity
109 employees work for Anpario in the UK and its
global operations. Employees are recruited from local communities
which has helped us build a very ethnically diverse team of which
we are very proud. The team includes 15 nationalities speaking 22
languages with 18 of positions of manager and above being held by
non-white. Females represent 3 out of 7 the Executive Management
team. Specific training is given to all employees in respect of key
policies including online training videos and in person equal
opportunities and diversity and health and safety training. An
analysis of Directors, managers and other employees by gender as at
31 December 2023 is as follows:
|
|
Male
|
Female
|
|
Directors
|
4
|
1
|
|
Group Management
|
14
|
13
|
|
Production
|
19
|
2
|
|
Administration
|
5
|
11
|
|
Sales and Technical
|
20
|
20
|
|
Total
|
62
|
47
|
Equal opportunities
Anpario is committed to equality of opportunity for
all of its current and prospective employees, and we ensure that we
treat people in a fair and equitable manner.
The Group considers applications for employment from
disabled persons equally with those of other applicants having
regard to their ability, experience, and the requirements of the
job. Where existing employees become disabled, appropriate efforts
are made to provide them with continuing suitable work within the
Group and to provide retraining if necessary.
Training and development
Anpario support a motivated and highly skilled
workforce, where talent is nurtured, and opportunities created for
all. Our belief in solving problems from new perspectives using
science, experience and technology continues to drive positive
change to our ways of working.
We recognise the importance of developing talent
within our business through continuous learning and development.
This is a key part of our succession planning and preparing our
business for the future to ensure that we retain key individuals,
develop high potential and future business leaders. We aim to
develop and promote from within where possible and three members of
our Executive team commenced at Anpario straight from school or
university.
Employees are encouraged to further develop their
skills and we provide appropriate training to support our people
and grow our organisational capabilities. Anpario currently:
- recruits
graduates and doctorates in disciplines such as biosciences,
accountancy, law and HR;
- works closely
with several global universities on joint scientific
initiatives;
- sponsorship of
prestigious Nuffield training for technical and sales staff;
- provides ongoing
professional training support, extensive coaching and management
development programmes;
- provides
financial and study leave for professional and work related
qualifications; and
- has several
apprentice places.
We value long service and retaining staff is
fundamental to our success and the creation of a strong, robust
business. Anpario has a wealth of long serving employees across its
global operation, these key staff continue to advance and develop
within the business and play a major part in nurturing future
Anpario talent.
Percentage of Employees with Extended Length of
Service:
|
5 years +
|
52%
|
|
10 years +
|
20%
|
|
15 years +
|
6%
|
Community Engagement
We believe in contributing and enriching the
communities in the which we operate by employing and offering
development opportunities to local people. We encourage active
participation by our employees in initiatives that support our
local communities, through social, educational, and charitable
contributions. Anpario supports charities and local communities
through donations and volunteering. We believe it is important to
give back and serve local people and their communities,
contributing to positive and measurable social change.
In 2022 Give Something Back Volunteer Days Scheme was
introduced globally, with all employees entitled to one paid day
release a year to volunteer at a charity of their choice.
Our charity of the year chosen for 2023 is Dementia UK
support and provide life-changing care for families affected by all
forms of dementia, including Alzheimer's disease. Our staff
supported several fundraising events, bake sales and the marketing
team completed a virtual walking challenge from Lands End to John
O'Groats in April raising £1,287.
Our Charity of the year for 2024 chosen by staff
nomination and voting is Save the Children.
The Anpario Green Team
Our staff are key to advancing processes and
initiatives that improve our ways of working and protect the
planet. Through our "Green Team" activities we encourage
participation and raise awareness across our entire workforce to
initiate more sustainable ways of working throughout the business.
Through ongoing commitment of our team and cross functional
projects we aim to improve our sustainable practice with current
objectives including: production efficiency improvements, identify
new "Ways of Working" to reduce waste in manufacturing our products
and office wastage reduction.
Planet
In aligning with UN SDG's Anpario is committed to:
- driving global
protein production and support our customers to build strong
sustainable businesses, without negatively impacting future
generations;
- minimise impact
of our global operations on the environment;
- continuous
product innovation; and
- improving our
supply chain's environmental, social and ethical practices.
Anpario seeks to optimise animal protein production by
using sustainable natural resources for the benefit of animals, our
customers and human health. Our ongoing commitment is to support,
influence, and assist farmers and food chain producers to switch to
healthier more sustainable feed ingredients, which will deliver
greater global food security and a reduction in feed poverty. We
partner with government, industry and leading research bodies
globally. Together we advance product innovation and create
long-term sustainable solutions, helping to maintain animal health
and optimise nutrition throughout the supply chain. Combatting
diseases that can destroy animals, impact welfare and livelihoods,
without negatively impacting the environment, is key to our
approach.
Our innovative products work in harmony with the
animals' biology to promote healthy growth and demonstrate value to
the animals fed directly throughout all life stages and indirectly
to their progeny; and ultimately within the human food chain. This
contributes to the more efficient use of feed ingredients, reduces
environmental impact and supports responsibly produced food.
Underpinning Planet objectives is a core strategy
"Anpario's 4R's" a programme to reduce antibiotic use in animal
production through "Review, Reduce, Replace, Responsibly" which
supports our customers to reduce reliance on antibiotics, whilst
maintaining efficient production using natural sustainable
solutions. Our products can replace harmful and outmoded
technologies such as formaldehyde and zinc oxide used for
antimicrobial control in the feed, and help reduce reliance on
antibiotic use in animal production thus improving and safeguarding
both animal and human health. The patent attained for Orego-Stim®
in reducing the proportion of bacteria and antimicrobial
resistance, when added to the diets of young cattle and also the
patent of our flagship toxin-binder product, Anpro® are examples of
how Anpario is providing environmentally safe and sustainable
solutions for the world's population.
Helping Customers to Reduce Carbon Footprint
Anpario is one of the leading companies helping global
livestock producers to meet environmental and sustainability
challenges and contributing to the research and development
progress that the agricultural livestock industry is achieving in
improving its carbon footprint and greenhouse gas emissions
(GHG's). Anpario prides itself on being a low carbon manufacturer
of animal feed additives, with two thirds of sales from products
which can be described as from sustainable sources. These products
are also the Group's fastest growing product categories.
Furthermore, our products help producers to be more efficient in
the resources they use by improving feed efficiency by supporting
gut health thus optimising nutrient utilisation. Use of Orego-Stim®
in chicken meat production Anpario led trials have shown on average
a 7% improvement in feed conversion efficiency.
Anpario's 100% natural oregano essential oil product,
Orego-Stim®, has also been shown to support greener egg production
by improving overall egg production, hen liveability and feed
efficiency. Meta-analysis from global trials show on average '8
Extra Eggs' per hen improvement (2.2% per hen) when fed
Orego-Stim®.
Optomega® Algae is a new, micro-algae derived,
Docosahexaenoic acid (DHA) supplement for use in all species
including aquaculture, targeted at breeding animals and producers
supplying enriched meat, milk and eggs containing higher levels of
omega-3 fatty acids. The product is 100% natural, from a
sustainable source. Furthermore, preliminary data from an in vitro
study at the University of Reading suggests that dairy cows fed
Optomega® Algae can reduce methane output by 7% in 24-hour period.
It is well known that supplementing dairy rations with DHA supports
cow fertility, reducing replacement frequency in the dairy herd
supporting lifelong milk production and contributing to carbon
footprint reduction.
Orego-Stim® Forte a proprietary blend of active
ingredients including Orego-Stim® for use in aquaculture, has been
shown to benefit producers of both shrimp and fish through
improvement of gut health and reduction in pathogens leading to
improved liveability and growth performance. Orego-Stim® Forte is
proven to support producers wishing to reduce reliance on
antibiotics in production.
Anpario has collaborated with a long-standing customer
in India where Orego-Stim® is recognised as a leading phytogenic
product to enable them to blend Orego-Stim® locally under licence
which whilst helping to speed up sales growth in the region and
offer greater access to new market segments will reduce
transportation requirements.
Partnerships and Accreditations
Anpario partners with organisations that work to
inspire and enable cutting edge science and sustainable farming
that is prosperous, enriches the environment and engages
communities. These partnerships help to assist with our goals and
work with our customers to achieve optimum animal performance
through sustainable, natural solutions.
Anpario has been honoured with
the first ever King's Award for
Enterprise, recognised for excellence
in Sustainable
Development. Anpario is one of 148 organisations to
be recognised with a King's Award for Enterprise, 15 of which
received the award for Sustainable Development. The King's Award
for Enterprise is the UK's most
prestigious business accolade, designed to
recognise and encourage the achievements of UK.
We retain key industry quality accreditations, UFAS
and FEMAS certifications which are subject to rigorous independent
audits which provide assurance of meeting highest quality products,
supply chain partners and operational processes.
We hold organic farming approvals in numerous global
territories, required by regional certifying bodies to permit the
use of several of our key products in organic production
systems.
Work is progressing alongside industry bodies and
peers to enable us to seek a recognised measure of product carbon
footprint. We are a member Centre of Innovation
Excellence in Livestock (CIEL) a collaboration of major
research and industry players in livestock production.
Anpario continues to support Vision 365, which is the
new 10-year plan for the International Egg Commission (IEC) and
supported by the United Nations and aligned with SDG's. Eggs are an
affordable, nutritious, and low impact food source and the plan
aims to develop the nutritional reputation of the egg on an
international scale and to accelerate global average egg
consumption per capita to 365 eggs per annum from 165 today.
We work with suppliers who share our aspiration to
deliver high quality, economic products without exploiting or
damaging the environment. Our key partners share the same ethos and
commitment to natural based farming solutions, including
circularity in production with no use of external resources except
rainwater, green energy and zero use of chemical pesticides.
Anpario's ambition is to cease to consume finite materials that
cannot be renewed or replenished, using only raw materials from
common minerals and plants with plentiful natural resources. For
example:
- Oregano oil used
in the production of Orego-Stim® is unique to Anpario and grown
using organic, pesticide-free principles.
- Microalgae used
in the production of Optomega® Algae is grown using sustainable
principles from natural waste of existing sugarcane production
processes. The waste sugarcane is also used to produce energy to
power the factory.
Anpario has ISO14001 certification, an internationally recognised standard for Environmental
Management Systems which provides a framework to identify, manage,
monitor and control environmental processes. Our membership of
Supplier Ethical Database (SEDEX) provides a high-level
transparency of operational standards, employment practices and
corporate ethics.
Anpario will only engage with suppliers operating
within international regulations who are capable of meeting our
high specification and operate rigorous quality standards quality
standards. Due diligence is undertaken for assurance that all
applicable ethical labour, trade laws and regulations are complied
with including the requirements of the UK Bribery and Modern
Slavery Acts. Anpario's employees and partners are contractually
bound by its Code of Conduct.
Operational Impact
We are focused on minimising the impact of our
operations on the Planet and aim to reduce our own carbon
emissions, whilst also helping our stakeholders to do the same.
Working with the UK Government and the Environment Agency our
industry trade association, Agricultural Industries Confederation
(AIC), has set out a road map for a sustainable food chain and an
open partnership across the industry to achieve the transition to
Net Zero Carbon (NZC) by 2050. Anpario's ambition is even more
ambitious to achieve NZC by 2030* and have started to implement
plans to achieve this.
Operational practices are kept under continuous review
to drive further improvements in efficiency, to eliminate waste,
reduce energy consumption and our carbon footprint. Examples
include:
- solar panels
generate electricity for use at our plant in Nottinghamshire
reducing our reliance upon fossil fuels and also feeds back into
the grid;
- almost all of
our carrier materials are supplied in bulk and directly added from
silos to minimise packaging waste;
- liquid
ingredients are stored in bunded storage silos;
- pre-used
reconditioned and cleaned intermediate bulk containers (IBC's) used
for packaging and supply of bulk liquids;
- product and
material waste is collected by a waste contractor and
environmentally recycled;
- our bottling
plant produces liquids in 100% recyclable plastic bottles;
- packaging design
is constantly reviewed resulting in improvements such as a recent
reduction box size;
- dust extraction
and recycling system minimises dust in the production area and
prevents emission into the environment;
- automated
palleting system has reduced forklift movements; and
- investment in
additional warehousing on site to reduce packaged raw material
movements in and out of third party storage.
We are dedicated to driving continuous improvement and
targeting operational efficiency though our production facility and
committed to developing and monitoring carbon reducing measures
throughout our operations, benchmarking to reduce waste, and
emissions to land, air and water. Positive environmental impact
assessments are expected for any new operational investments
submitted for approval and alignment with our clear goals and ESG
strategy which is focused on Net Zero Operations by 2030*;
*Scopes 1 and 2 plus Scope 3 relating to group
business travel & waste.
Energy Consumption & Carbon Emissions
Measurement of energy consumption & carbon
emissions by businesses is made universal by categorising into 3
areas:
Scope 1 - This
relates to emissions relating to: stationary consumption i.e. fuel
consumption used in our operations (to produce electricity, steam,
heat or power) and mobile consumption by our own vehicles, and
emissions to the air.
Scope 2 -
These are the emissions we create indirectly - like the electricity
or energy use for heating and cooling buildings, being produced on
our behalf by energy suppliers.
Scope 3 - In
this category go all the emissions associated, not within the
business itself, but those emissions for which the organisation is
indirectly responsible in its supply chain. e.g., associated with
the products from our suppliers and to the use of our products by
our customers. This is an area in which we are in the process of
gathering data and setting targets in collaboration with our
stakeholders.
|
|
baseline year
|
prior
year
|
year-on-year
|
current year
|
cumulative
|
|
|
2019
|
2022
|
change
|
% change
|
2023
|
change
|
% change
|
|
|
|
|
|
|
|
|
|
|
Scope 1
|
15.3
|
4.5
|
(2.8)
|
(62%)
|
1.7
|
(13.6)
|
(89%)
|
|
Scope 2
|
163.9
|
72.8
|
(27.9)
|
(38%)
|
44.9
|
(119.0)
|
(73%)
|
|
GHG emissions in
tCO2e
|
179.2
|
77.3
|
(30.7)
|
(40%)
|
46.6
|
(132.6)
|
(74%)
|
|
|
|
|
|
|
|
|
|
|
Group sales £m
|
29.1
|
33.1
|
(2.1)
|
(6%)
|
31.0
|
1.9
|
7%
|
|
Intensity (t
tCO2e: per £m sales)
|
6.2
|
2.3
|
(0.8)
|
(35%)
|
1.5
|
(4.7)
|
(76%)
|
|
|
|
|
|
|
|
|
|
|
Energy
use in kWh:
|
|
|
|
|
|
|
|
|
Natural
Gas
|
51,433
|
17,317
|
(11,512)
|
(66%)
|
5,805
|
(45,628)
|
(89%)
|
|
Electricity
|
641,366
|
376,619
|
(159,949)
|
(42%)
|
216,670
|
(424,696)
|
(66%)
|
|
|
|
|
|
|
|
|
|
Waste and packaging
Our aim is to maximise the value of the resources we
use and rely on, reduce all waste being generated across the Group
and divert waste away from landfill. We place specific emphasis on
the type of packaging used to protect our products and ensure as
far as possible the use of recyclable materials. The Group
continues to invest in infrastructure and management systems to
reduce waste and packaging.
The amount of waste generated in the year was reduced
by 79 Tons (25%), with a cumulative reduction from the 2019
baseline year of 246 Tons (51%).
Water
Our water consumption is low compared to manufacturing
industries due to the nature of our formulations and production
systems. With increasing pressure on this shared resource, we are
mindful of the importance of protecting water sources and are
committed to using water as efficiently as possible. We exercise
extreme care to ensure that all waste water complies with relevant
legislation and the Group continues to invest in infrastructure and
management systems to minimise potential spillages or other forms
of water contamination. We continuously look for ways to conserve
and re-use our water volumes and are currently investigating
initiatives to further reduce our reliance on water resources.
The amount of water consumed in the year was reduced
by 268 cubic metres (27%), with a cumulative reduction from the
2019 baseline year of 1,145 cubic meters (44%).
Delivery and Freight
Anpario's products are delivered through distribution
channels and direct to customer's using third party haulage and
global freight services. We note that there are carbon emissions
associated with the delivery of our products, however, this is
offset by the feed efficiency and improved liveability gains that
our products make for our customers.
Promise
Anpario is committed to:
- honest, ethical,
and responsible practice;
- positive
engagement and partnerships;
- best practice,
governance and stewardship; and
- helping
customers build strong and sustainable businesses.
Anpario recognises the importance of corporate social
responsibility. It is essential to our reputation that our team
offer honest and open advice, matched by the integrity and
provenance of our products. Anpario's positive culture ensures
honesty, ethical practice and responsibility is instilled into all
activity across the business. "Do the Right Thing" is a fundamental
message that creates a sound base to communicate our cultural
guidance and code of conduct throughout the entire group. Our Code
of Conduct represents our commitment to our values, to doing the
right thing, personally and professionally, and outlines the
expected standards by which Anpario leaders and employees should
work in the delivery of their duties, across all job functions,
departments, and global locations in which we operate.
Policies and guidance are provided to all staff on
expected behaviours at the point of induction and fortified through
training and appraisal procedures. Compliance to the Anpario Code
of Conduct is required from all employees and businesses partners
alike with a zero-tolerance policy to transgressions whilst also
facilitating whistleblowing internally and externally.
Anpario assures safety of its products, absolute
transparency and traceability of raw materials, and compliance with
international regulations through rigorous internal control
processes and quality standards.
Leadership
Anpario promises to lead by example and consistently
promote a culture of integrity by making ethical decisions and
acting responsibly and honestly in everything we do whilst striving
for excellence in our business objectives. Our leaders understand
the importance of our ethics framework to safeguard best practice
and excellence in governance and stewardship. The following
measures help to ensure compliance:
- the Board sets
overall business strategy and plans which include key ESG
initiatives;
- the Board
identifies key risks and opportunities which are regularly reviewed
and updated;
- Anpario's Board
structure is in line with best practice and Corporate Governance
Codes, including independent Chair and Senior Independent
Director;
- the Board has
clear and transparent division of roles;
- performance
related incentives are dependent on achievement of strategic
business and ESG objectives; and
- business
continuity and emergency response plans are in place and regularly
reviewed by the Board to ensure effective action and
communications.
Shareholder Delivery and Stewardship
We maintain strong relationships with shareholders,
ensuring they understand our strategy, progress and performance and
that we understand their views and address any concerns. Anpario's
Promise to our shareholders is to consistently strive to increase
corporate value via best business practices and to produce healthy
returns and profit growth and ensure:
- regular
informative communication through investor roadshows, meetings and
presentations;
- regular news
flow on key developments in the business;
- engagement with
investors regarding executive remuneration, sustainability issues
and Board changes;
- adherence to Aim
Rules for Companies and compliance with Quoted Companies Alliance
Corporate Governance Code;
- appointment of
external auditors who are tendered on a periodic basis and report
to the Audit Committee;
- Anpario's Board
and its committees are chaired by independent non-executive
directors; and
- regular Board
training on AIM Rules and Market Abuse Regulation.
Group Policies
We establish and communicate our policies to all staff
throughout the group through induction training using video and
provide regular updates for all staff.
Anti-Bribery and Anti-Corruption
policy
We are transparent and compliant with all applicable
laws and we ensure that our employees and our external business
partners are aware of their responsibilities, this includes
providing appropriate training and guidance. We expect each
individual acting on Anpario's behalf to be responsible for
maintaining our reputation by conducting business honestly,
transparently, professionally and ethically. Our Anti-Bribery and
Anti-Corruption policy and training outlines our zero tolerance and
articulates that no employee or representative of any Group
business is to offer or accept any bribe, including facilitation
payments, or engage in any form of corrupt practice.
Human Rights
We are committed to respecting human rights and labour
practices in our operations and supply chains and recognise the
importance of operating in an ethical and responsible manner. The
Group has procedures including a requirement for suppliers to
accept our stance in relation to preventing Modern Slavery.
Employees are given awareness training as part of their induction
programme with updates provided to all employees as appropriate. We
do not tolerate the use of forced or child labour, in any
operations connected with the Group.
Whistle-blower facilitation
It is our policy to encourage colleagues or external
business partners to speak up if they have any concerns about
wrongdoing in the workplace. Any employee who raises their concerns
in good faith will be supported for doing so and will be protected
from retaliation. We have a number of reporting channels through
which concerns can be confidentially raised both informally or
formally through our grievance procedure and to our Human Resources
Team or any Board member. In the event of a concern being raised we
promise to take it extremely seriously and carry out an independent
investigation as appropriate to validate the complaint, following
which the relevant process is implemented, with oversight and
reporting through to the case being resolved or closed.
Anpario plc has had no formal whistleblowing cases
reported during the year.
In addition to the Code of Conduct the Group's
Policies which are available on the website and internal server
include:
- Sustainability
Policy
- Anti-bribery and
Anti-Corruption Policy
- Modern Slavery
Policy
- Whistleblowing
Policy
- Supplier
Selection and Procurement Policy
- Health and
Safety Policy
- Equal
Opportunity and Dignity at Work
- Dealing with
Claims of Unlawful Discrimination Policy.
Directors' report
The Directors present their Annual Report and audited
consolidated financial statements for the year ended 31 December
2023.
The Directors believe that some of the requisite
components of this report are set out elsewhere in the Annual
Report and/or on the Company's website,
https://www.anpario.com/. The detail below sets out where the
necessary disclosures can be found.
Incorporation
Anpario plc is a public company traded on the
Alternative Investment Market ("AIM") of the London Stock Exchange
and is incorporated in the United Kingdom and registered in England
and Wales, 03345857. The Company's registered office is Manton Wood
Enterprise Park, Worksop, Nottinghamshire, S80 2RS, England.
Principal activity
Anpario plc ("the Company") and its Subsidiaries
(together "the Group") produce and distribute natural feed
additives for animal health, hygiene and nutrition. A review of the
performance and future development of the Group's business is
contained in the Chairman's Statement, Chief-Executive Officer's
Statement and Financial Review set out earlier in this Annual
Report.
Going concern
The Directors have, at the time of approving the
financial statements, a reasonable expectation that the Company and
the Group has adequate resources to continue in operation for the
foreseeable future. The Group is profitable and expects to continue
to be so, there has been an increase in working capital through the
year to manage supply-chain risks, however these pressures are now
easing and the Group has significant level of cash resources.
Accordingly, the financial statements have been
prepared on a going concern basis, more detail can be found in note
2.1 of the financial statements.
Results and dividends
The financial results for the year ended 31 December
2023 are set out in the consolidated financial statements later in
this Annual Report and summarised in the Financial Review earlier
in the Annual Report. The profit for the year after tax was £2.5m
(2022: £3.3m).
The Directors propose a final dividend of 7.50p per
share (2022: 7.35p) making a total of 10.70p per share for the year
(2022: 10.50p), amounting to an expected total dividend of £1.8m
(2022: £1.9m). The total dividend amount paid varies according to
the amounts due to employees under the Joint Share Ownership Plan
("JSOP") and depends on the share price at the dividend ex-date.
More information can be found in note 11 of the financial
statements.
Group research and development activities
The Group is continually researching and developing
new products. Details of expenditure incurred and impaired or
written off during the year are shown in the note 4 of the
financial statements. During the year, £309,000 (2022: £528,000)
was capitalised as development projects or product brands with
£63,000 (2022: £98,000) expensed to the income statement. In the
year, following annual review processes, an impairment of £399,000
(2022: £45,000) was identified.
Directors
The Directors during the year under review were:
Non-Executive Directors
|
Matthew Robinson
|
Non-Executive Chairman (previously Non-Executive
Director until 29 June 2023)
|
|
Tim Pollock
|
Non-Executive Director (appointed 1 August 2023)
|
|
Kate Allum
|
Non-Executive Chairman (resigned 29 June 2023)
|
Executive Directors
|
Richard Edwards
|
Chief Executive Officer
|
|
Karen Prior
|
Corporate Responsibility Director and Company
Secretary
|
|
Marc Wilson
|
Group Finance Director
|
The Board regards the Non-Executive Directors as being
independent. The biographies and roles of all Directors and their
roles on the Audit, Remuneration and Nomination Committees are set
out earlier in this report.
Details of the Directors' interests in the shares of
the Company are provided in the Directors' remuneration report.
Employees
Details of how the Directors have engaged with
employees are set out in the Section 172 report. The Group's
policies in relation to equal opportunities are explained in the
people section of the Environment and Social Responsibility
Report.
Stakeholder engagement
Details of how the Directors have engaged with it's
stakeholder groups are set out in the Section 172 report.
Indemnities
By virtue of, and subject to, Article 154 of the
current Articles of Association of the Company, the Company has
granted an indemnity to every Director, alternate Director,
Secretary or other officer of the Company. Such provisions remain
in force at the date of this report. The Group has arranged
appropriate insurance cover for any legal action against the
Directors and officers.
Share capital
As at 31 December 2023, the issued share capital of
the Company as 20,063,131 Ordinary Shares of 23p each. Details of
the share capital as at 31 December 2023, and movements during the
year, are shown in note 23 of the financial statements.
During the year a Tender Offer was undertaken to
purchase 4,000,000 Ordinary Shares at a price of 225 pence per
Ordinary Share, this was concluded on 7 July 2023. All 4,000,000
Ordinary Shares purchased were cancelled on the same day, 7 July
2023.
The Company also cancelled 440,388 Ordinary Shares
held in treasury on 7 July 2023. As at 31 December 2023, the
Company holds nil (2022: 440,388) Ordinary shares of 23p in
treasury.
During the year 50,000 (2022: 177,338) Ordinary shares
of 23p each were issued pursuant to the exercise of share options.
During the year the Company issued nil (2022: 600,000) Ordinary
shares of 23p at market price to the Trustees of the Anpario plc
Employees' Share Trust.
A Special Resolution will be proposed at the AGM to
renew the Directors' limited authority last granted in 2023 to make
market purchases of Ordinary shares in the capital of the
Company.
The closing share price on 31 December 2023 was
257.50p per share (31 December 2022: 500.00p per share).
Substantial shareholdings
At 29 February 2024, analysis of the share register
showed the following holdings of 3 per cent or more of its issued
share capital:
|
|
Ordinary Shares (000)
|
% held
|
|
JTC plc
|
3,650
|
18.0
|
|
Unicorn Asset Management
|
1,865
|
9.2
|
|
Interactive Investor
|
1,552
|
7.6
|
|
Gresham House Asset Management
|
1,399
|
6.9
|
|
Hargreaves Lansdown Asset Management
|
1,298
|
6.4
|
|
BGF
|
811
|
4.0
|
|
James Sharp
|
720
|
3.5
|
|
Foresight Group
|
616
|
3.0
|
In the listing above the holdings of JTC plc represent
the Anpario plc Employees' Share Trust.
Independent auditor
The auditor, BDO LLP, has indicated its willingness to
continue in office and a resolution seeking to re-appoint BDO LLP
as the Group's auditor will be proposed at the AGM.
Stockbrokers
On 23 May 2023, Shore Capital and Corporate Limited
were appointed as Nominated Adviser and Shore Capital Stockbrokers
Limited as Sole Broker. Prior to which, Peel Hunt LLP had acted for
the Company in both roles.
Financial risk management
Details of the Company's financial risk management
policy are set out in note 2.21 of the financial statements.
Statement of Directors' responsibilities
The directors are responsible for preparing the annual
report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that law the
Directors have elected to prepare the Group financial statements in
accordance with UK adopted International Accounting Standards and
the Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). Under company law the Directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group for that period.
The Directors are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange for
companies trading securities on AIM.
In preparing these financial statements, the directors
are required to:
- select suitable
accounting policies and then apply them consistently;
- make judgements
and accounting estimates that are reasonable and prudent;
- for the Group
financial statements, state whether they have been prepared in
accordance with UK adopted international accounting standards,
subject to any material departures disclosed and explained in the
financial statements;
- for the Parent
Company financial statements, state whether applicable UK
Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
and
- prepare the
financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in
business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain the
company's transactions and disclose with reasonable accuracy at any
time the financial position of the company and enable them to
ensure that the financial statements comply with the requirements
of the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Website publication
The Directors are responsible for ensuring the annual
report and the financial statements are made available on a
website. Financial statements are published on the company's
website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the company's website is the
responsibility of the directors. The directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
Statement of disclosure to auditor
So far as the Directors are aware:
- there is no
relevant audit information of which the Company's auditor is
unaware; and
- they have taken
all the steps that they ought to have taken as Directors in order
to make themselves aware of any relevant audit information and to
establish that the Company's auditor is aware of that
information.
The Directors' report was approved by the Board of
Directors on 20 March 2024 and is signed by order of the board:
Karen Prior
Company Secretary
20 March 2024
Report of the Remuneration Committee
Foreword
On behalf of the Board, I am pleased to present the
Remuneration Committee's report for the year ended 31 December
2023. The Committee continuously seeks to ensure alignment of the
strategy and values of the Company and the interests of all
shareholders. This includes the need to recruit, retain and
appropriately incentivise high calibre directors and managers to
deliver the Group's strategy.
Membership and attendance in the year
The Committee comprises solely of independent
Non-Executive Directors. Executive Directors and external advisors
are invited to attend meetings as required if thought advantageous
for consideration of a particular agenda item. The Committee is
chaired by Tim Pollock, Non-Executive Director. The other Committee
member is Matthew Robinson, Non-Executive Chairman.
The Remuneration Committee meets as necessary to
fulfil its objectives but as a minimum, at least once a year. The
Committee met four times during the year ended 31 December 2023
with full attendance by the Committee members. In addition, the
Committee chose to consult with shareholders on changes to
Remuneration Policy to ensure alignment with their interest as well
as Group strategy.
Key responsibilities
The Committee is responsible for reviewing the
performance of Executive Directors as well as determining the scale
and structure of their remuneration, their terms and conditions of
service and the grant of share awards, having due regard to the
interests of shareholders.
The Committee is also responsible for reviewing the
overall policy in respect of remuneration of all other employees of
the Company and establishing the Company's policy and operation of
share incentive schemes.
In determining the remuneration of senior executives,
the Committee seeks to enable the Company to attract and retain
executives of the highest calibre. The Committee also makes
recommendations to the Board concerning the allocations of options
to executives under the long-term incentive plan and for the
administration of the scheme.
The terms of reference of the Remuneration Committee
can be found on the Company's website
www.anpario.com/aim-26/.
Key activities in the year
During the course of the year, the main activities of
the Committee were:
- review of
Director remuneration, following which there were no changes to
base salary or fees for the year in review;
- evaluated the
structure and targets set in regards to the Annual Bonus in light
of the reduced level of performance;
- evaluated the
appropriateness of new awards under the LTIP policy in light of the
reduced level of performance; and
- continued to
review and evaluate talent management and succession planning
activities.
Remuneration policy for the year in review
The objectives of the remuneration policy are to
ensure that the overall remuneration of senior executives is
aligned with the performance of the Company and preserves an
appropriate balance of annual profit delivery and longer-term
shareholder value.
The Committee keeps the remuneration policy, in
particular the need for share ownership guidelines for Executive
Directors, regularly under review and will take action whenever
deemed necessary to ensure that remuneration is aligned with the
overall strategic objectives of the Company.
The Committee seeks advice, if appropriate, from
independent advisors where required on remuneration related
matters.
Executive Directors
Element and purpose
|
Operation
|
Base Salary
|
|
|
To provide a competitive base salary to attract and
retain Executive Directors of a suitable calibre to deliver the
Group's growth strategy.
|
Base salaries are usually reviewed on an annual basis
and consider:
-
individual experience and skills;
-
development in the role;
- changes
in responsibilities or the size or complexity of the business;
and
-
competitive salary levels and market forces.
|
Benefits
|
|
|
To provide a competitive benefits package as part of
total remuneration.
|
Executive Directors receive private medical insurance,
critical life and death in service insurance and a company car
allowance. Other benefits may be provided based on individual
circumstances as considered appropriate by the Committee.
|
Pension
|
|
|
To provide a competitive retirement benefit.
|
Executive Directors are entitled to receive
contributions towards defined contribution pension plans of up to
10% of their base salary. It may be permitted to take the benefit
as cash in lieu of pension contributions where appropriate.
The Company will also pass on part of the Employers'
National Insurance savings made that result from any pension salary
sacrifice's made by Executive Directors, in the form of increased
pension contributions.
|
Annual bonus
|
|
|
The incentivise and reward based on the achievement of
annual financial objectives.
|
Executive Directors' annual bonuses are based on
financial performance targets which are set each year by the
committee. For Executive Directors, the maximum bonus opportunity
is up to 100%. The Committee has discretion over the amounts
awarded and may make consideration to other corporate activities
such as acquisitions and disposals aligned with shareholder
returns.
The target for the year in review was to achieve a
minimum of 15% growth in adjusted EBITDA to £6.0m, which would give
rise to an award equivalent to 25% of base salary. Performance
above this target would lead to higher awards, increasing on a
straight-line basis, up to a maximum of 100% of base salary for
adjusted EBITDA growth of 34% to £7.0m in the year.
In-line with that structure and award calculation the
Committee has determined that there will be no bonus awarded to
Executive Directors for 2023.
|
LTIP
|
|
|
To incentivise and reward achievement of sustained and
long-term business performance and create alignment with
shareholders.
|
The Executive Directors receive remuneration under the
following term incentive plans: Enterprise Management Scheme ("EMI"
which is now closed; Joint Share Ownership Plan ("JSOP");
Performance Share Plan ("PSP") and Save As You Earn Scheme
("SAYE"). All of which have a three-year vesting period.
EMI, SAYE and JSOP
Schemes
The EMI and SAYE are market value option plans and as
such reward growth in the share price from the date of the award.
In the case of the JSOP scheme the final exercise price of the
award is equivalent to share price on the date of grant plus an
additional carrying cost, equivalent to simple interest, of 4.5 per
cent per annum. As such this scheme only rewards growth in excess
of expected equity market returns.
The Joint Share Ownership Plan ("JSOP") and the
Anpario plc Employees Shares Trust ("the Trust") were established
and approved by resolution of the Non-Executive Directors on 26
September 2011. The JSOP provides for the acquisition by employees,
including Executive Directors, of beneficial interests as joint
owners (with the Trust) of Ordinary Shares in the Company upon the
terms of a Joint Ownership Agreement ("JOA").
The terms of the JOAs provide, inter alia, that if
jointly owned shares become vested and are sold, the proceeds of
sale will be divided between the joint owners so that the
participating Director receives an amount equal to any growth in
the market value of the jointly owned Ordinary shares above the
initial market value, less a "carrying cost" over the vesting
period (equivalent to simple interest at 4.5 per cent per annum on
the initial market value) and the Trust receives the initial market
value of the jointly owned shares plus the carrying cost. Jointly
owned Ordinary shares will become vested if the participant remains
with the Company for a minimum period of 3 years.
PSP Award
Under the PSP award, the maximum opportunity is
nil-cost options to the value of 100% of base salary and is subject
to malus and clawback provisions. Performance is assessed against a
rolling three-year performance period and subject to the
achievement of performance targets set by the Remuneration
Committee.
The 2022 PSP award is subject to the achievement of
three performance conditions, being a financial target representing
75% of the total award and two further ESG components representing
the remaining 25% as described below.
Diluted adjusted
earnings per share:
75% of the PSP award is weighted on the achievement of
diluted adjusted earnings per share growth targets over a
three-year period. The minimum growth required is 6% per annum for
a 18.75% vesting of the overall PSP award, on a pro-rata
straight-line basis to a maximum 75% vesting of the overall PSP
award for annual growth of 16%.
Reduction of Carbon
Intensity:
The primary objective for ESG based targets is to
reduce Carbon Intensity in-line with our ambitions to achieve
net-zero emissions by 2030. 15% of the PSP award is weighted on the
reduction of annual Carbon Intensity cumulatively since the year
ended 31 December 2019. The minimum reduction required is 63% per
annum for a 4.5% vesting of the overall PSP award, on a pro-rata
straight-line basis to a maximum 15% vesting of the overall PSP
award for a cumulative reduction of 70%.
Other ESG
Objectives:
The final potential 10% of the PSP Award is based on
the achievement of progress towards other ESG objectives. This will
be based on a qualitative assessment by the Remuneration Committee
which will consider a range of quantitative and qualitative inputs,
including but not limited to: diversity, equality and
inclusiveness; training and development of staff; reductions in
waste and water usage; health and safety; and sustainable business
operations.
|
Non-Executive Directors
The table below sets out the elements of Non-Executive
Directors' remuneration as well as the purpose and operation.
Element and purpose
|
Operation
|
Fees
|
|
|
To attract and retain Non-Executive Directors of a
suitable calibre with the required skills and experience.
|
Remuneration of the Non-Executive directors is
determined by the Chairman and the Chief Executive Officer. The
Non-Executive Directors are not entitled to annual bonuses or
employee benefits and their fees are subject to annual review.
The Chairman's remuneration is determined by
Remuneration Committee in conjunction with the Chief Executive
Officer. However, the Chairman is not entitled to vote on the
matter.
Fees are reviewed on an annual basis and consider:
-
individual experience and skills;
- changes
in responsibilities or the size or complexity of the business;
and
-
competitive salary levels and market forces.
Reimbursements are made for business related
expenses.
|
Additional Policy Notes
Shareholding requirements
|
|
In-employment
shareholding requirements:
The Executive Directors are expected to build and
maintain a holding of shares to the value of 100% of salary.
Executive Directors are normally expected to retain all of the net
of tax number of shares they receive through share incentive plans
until the 100% of salary shareholding requirement has been met.
Post-employment
shareholding requirements:
For the first 12 months following cessation of
employment and in respect of awards made after 2020, an Executive
Director is normally expected to retain shares equal to 100% of the
in-employment guideline and in the following 12 months, retain
shares equal to 50% of the in-employment guideline.
|
Dilution limit policy
|
|
As previously announced by the Company on 16 March
2022, and following a consultation process with shareholders, the
Company adopted a policy on dilution limits, in which whilst the
potential dilution limit (including all share awards granted under
the Company's employee share incentive plans since January 2015)
was increased to 18%, this potential dilution limit was expected to
reduce by 2025 to 15% of the ordinary share capital of the Company
viewed over a 10-year rolling period (the "Dilution Limit
Policy").
The Tender Offer completed in 2023 and subsequent
cancellation of successfully tendered Ordinary Shares impacted the
Dilution Limit Policy, as there was a reduction in the issued
ordinary share capital upon which the Dilution Limit Policy is
based. This had the effect of increasing the potential dilution
limit to 20% (from 18% per cent) in the short term, before
subsequently falling (by 2026; previously 2025) to a limit of 15%
of the ordinary share capital of the Company viewed over a 10-year
rolling period.
Anpario operates an Employee Share Trust. When awards
issued under the Trust are exercised then any shares retained by
the trustee shall not be included for dilution purposes if
re-issued for further awards. This is because they have already
been included for dilution purposes at the date of initial
grant.
|
Remuneration in the year
Executive Directors
The remuneration of each Director for the year ended
31 December 2023 and the prior year is set out in the table
below.
|
Richard Edwards
|
Karen
Prior1
|
Marc Wilson
|
|
2023
£000
|
2022
£000
|
2023
£000
|
2022
£000
|
2023
£000
|
2022
£000
|
|
Base salary
|
250
|
250
|
53
|
60
|
140
|
140
|
|
Taxable benefits
|
10
|
10
|
5
|
9
|
8
|
9
|
|
Pension
|
25
|
25
|
2
|
6
|
14
|
16
|
|
Annual bonus
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Share-based payment3
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Share options vested3
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total
remuneration
|
285
|
285
|
60
|
75
|
162
|
165
|
|
Of which:
|
|
|
|
|
|
|
|
Fixed
remuneration
|
285
|
285
|
60
|
75
|
162
|
165
|
|
Variable
remuneration
|
-
|
-
|
-
|
-
|
-
|
-
|
1 Karen Prior's remuneration is adjusted to reflect
part-time service.
Non-Executive Directors
The remuneration of each Non-Executive Director for
the year ended 31 December 2023 and the prior year is set out in
the table below.
|
|
|
|
|
2023
£000
|
2022
£000
|
|
Matthew Robinson1
|
|
|
|
|
43
|
35
|
|
Tim Pollock2
|
|
|
|
|
15
|
-
|
|
Kate Allum3
|
|
|
|
|
25
|
58
|
|
Ian Hamilton4
|
|
|
|
|
-
|
10
|
|
Total fees
|
|
|
|
|
83
|
103
|
1 Appointed as Chair from 29 June 2023.
2 Appointed 1 August 2023.
3 Resigned 29 June 2023
4 Resigned 17 April 2022
Ad hoc payments
There were no ad hoc payments to any Directors in the
year (2022: £nil).
Payments to past Directors
There were no payments to past Directors in the year
(2022: £nil).
Loss of office
There were no loss of office payments made in the year
(2022: £nil).
Director's share interests and awards
Share interests
The interests of the Directors who served during the
period, as at 31 December 2023, in the Ordinary shares of 23p each
in the Company were as follows: -
|
31 Dec
2022
Number
|
Interests
acquired
in the year
|
Interests disposed
in the year
|
31 Dec
2023
Number
|
Shareholding
guidelines
|
Guidelines
met
|
|
Richard Edwards
|
168,396
|
35,000
|
-
|
203,396
|
100%
|
Yes
|
|
Karen Prior
|
157,445
|
-
|
-
|
157,445
|
100%
|
Yes
|
|
Marc Wilson
|
11,676
|
3,275
|
-
|
14,951
|
100%
|
No
|
|
Matthew Robinson
|
8,600
|
-
|
-
|
8,600
|
n/a
|
n/a
|
There have been no changes in Directors' interests
between 31 December 2023 and 20 March 2024.
Share awards
There were no share awards granted to Directors in the
year (2022: 326,168).
Under the Company's long-term incentive plans the
following Directors have the right to acquire Ordinary shares of
23p each as follows.
Director
|
Award plan
|
Exercise price
(pence per share)
|
31 Dec
2022
Number
|
Options exercised
in year
|
Options granted
in year
|
31 Dec
2023
Number
|
|
Richard Edwards
|
EMI
|
290.00
|
42,400
|
-
|
-
|
42,400
|
|
|
JSOP1
|
290.00
|
609,781
|
-
|
-
|
609,781
|
|
|
JSOP1
|
245.00
|
740,219
|
-
|
-
|
740,219
|
|
|
SAYE
|
322.72
|
5,577
|
-
|
-
|
5,577
|
|
Karen Prior
|
JSOP2
|
79.00
|
86,956
|
-
|
-
|
86,956
|
|
|
EMI
|
290.00
|
42,400
|
-
|
-
|
42,400
|
|
|
JSOP1
|
290.00
|
347,825
|
-
|
-
|
347,825
|
|
|
JSOP1
|
245.00
|
590,219
|
-
|
-
|
590,219
|
|
|
JSOP1
|
375.00
|
175,000
|
-
|
-
|
175,000
|
|
|
SAYE
|
322.72
|
5,577
|
-
|
-
|
5,577
|
|
Marc Wilson
|
JSOP1
|
330.00
|
20,000
|
-
|
-
|
20,000
|
|
|
SAYE
|
322.72
|
5,577
|
-
|
-
|
5,577
|
|
|
JSOP1
|
620.00
|
50,000
|
-
|
-
|
50,000
|
|
|
JSOP1
|
545.00
|
300,000
|
-
|
-
|
300,000
|
|
|
PSP3
|
nil
|
26,168
|
-
|
-
|
26,168
|
1 The exercise price upon vesting will increase by a
carrying cost equivalent to simple interest at 4.5% per annum on
the option price for three years.
2 The exercise price upon vesting will increase by a
carrying cost equivalent to simple interest at 4.5% per annum on
the option price until exercised.
3 Vesting is subject to performance criteria as
outlined in the remuneration policy section above.
Directors' service contracts
The Executive Directors are employed under service
contracts with the Group, these are available to view at the
Company's Registered Office. The key terms of the service contracts
for the year are set out below. The service contract of Karen Prior
was updated effective from the 1 May 2023 in respect of part-time
service.
|
|
|
Notice period
|
Executive Director
|
Position
|
Contract Date
|
From Company
|
From Director
|
|
Richard Edwards
|
Chief Executive Officer
|
5 November 2006
|
12 months
|
6 months
|
|
Karen Prior
|
Corporate Responsibility Director
|
1 October 2009
|
12 months
|
6 months
|
|
Marc Wilson
|
Group Finance Director
|
1 July 2021
|
12 months
|
6 months
|
Non-Executive Directors' terms of appointment
Each of the Chairman and Non-Executive Director have a
letter of appointment stating their annual fee and termination
terms.
The appointments are terminable on three months
written notice at any time by either the Company or the
Non-Executive Director.
|
|
Notice period
|
Executive Director
|
Date of current appointment
|
From Company
|
From Director
|
|
Matthew Robinson
|
11 January 2021
|
3 months
|
3 months
|
|
Tim Pollock
|
1 August 2023
|
3 months
|
3 months
|
Tim Pollock
Remuneration Committee Chairman
20 March 2024
Audit Committee report
Composition and meetings of the Audit Committee
The Audit Committee is comprised of the two
Non-Executive Directors, whom the Board considers to be independent
and is chaired by Matthew Robinson. Meetings are also attended, by
invitation, by the Group Finance Director, external auditors and
other management as appropriate.
The auditor, BDO LLP, has indicated its willingness to
continue in office and a resolution seeking to reappoint BDO LLP as
the Group's auditor will be proposed at the AGM.
The Committee meets at least twice each financial year
with the external auditors and considers any issues that are
identified during the course of their audit work. The Board is
satisfied that the Committee members have recent and relevant
financial experience.
The Committee met twice during the year ended 31
December 2023 with full attendance by the Committee members.
Role, responsibilities and terms of reference
The Audit Committee's role is to assist the Board in
the effective discharge of its responsibilities for financial
reporting and internal control. The Audit Committee's
responsibilities include:
Financial reporting
Monitor the integrity of the financial statements of
the Company, and to assist the Board in ensuring that the financial
statements and any formal announcements relating to financial
performance, when taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy. Ensuring that reviews are undertaken
on the significant financial reporting judgements contained in
financial statement focusing particularly on:
- the consistency
of and any changes to accounting policies and practices;
- the methods used
to account for significant or unusual transactions where different
approaches are possible;
-
whether the Company has followed appropriate accounting standards
and made appropriate estimates and judgements, taking into account
the views of the external auditor; and
- the clarity of
disclosure in the Company's financial reports and the context in
which statements are made.
Internal controls and risk management
- keep under
review the adequacy and effectiveness of the Company's internal
financial controls and internal control and risk management
systems;
- keep under
review the requirement for an internal audit function; and
- review and
approve the statements to be included in the annual report
concerning internal controls and risk management.
Compliance, whistleblowing and fraud
- review the
Company's arrangements for its employees to raise concerns, in
confidence, about possible wrong doing in financial reporting or
other matters so as to ensure that arrangements are in place for
the proportionate and independent investigation of such matters and
for appropriate follow-up action; and
- review the
Company's systems and controls for the detection of fraud and
prevention of bribery.
External audit
Consider and make recommendations to the Board, to be
put to shareholders for approval at the AGM, in relation to the
appointment, re-appointment and removal of the external auditor.
The Committee shall oversee the selection process for a new auditor
and if an auditor resigns, the Committee shall investigate the
issues leading to this and decide whether any action is required.
Oversee the relationship with the external auditor including (but
not limited to):
- recommendations
on their remuneration, whether fees for audit or non-audit services
and that the level of fees is appropriate to enable an adequate
audit to be conducted;
- approval of
their terms of engagement, including any engagement letter issued
at the start of each audit and the scope of the audit;
- assessing
annually the external auditor's independence and objectivity taking
into account relevant UK professional and regulatory requirements
and the relationship as a whole, including the provision of any
non-audit services;
- satisfying
itself that there are no relationships (such as family, employment,
investment, financial or business) between the auditor and the
Company (other than in the ordinary course of business);
- monitoring the
auditor's compliance with relevant ethical and professional
guidance on the rotation of audit partner;
- assessing
annually the qualifications, expertise and resources of the auditor
and the effectiveness of the audit process which shall include a
report from the external auditor on their own internal quality
procedures;
- develop and
implement a policy on the engagement of the external auditor to
supply non-audit services;
- discuss with the
external auditor(s) before the audit commences the nature and scope
of the audit, and ensure co-ordination where more than one audit
firm is involved;
- review the
findings of the audit, discussing any major issues which arose
during the audit, any problems and reservations arising from the
Final audit, and any matters the auditors may wish to discuss (in
the absence of management where necessary); and
- review the
external auditor's management letter and management's response.
The Committee regularly reviews its terms of reference
and makes recommendations to the Board for any changes as
appropriate. The current terms of reference are available on the
Company's website.
Independence of external auditor
The Committee reviews the independence of the external
auditor, BDO LLP on an annual basis. It receives a detailed audit
plan, from BDO LLP, identifying their assessment of the key risks.
The Committee assesses the effectiveness of the audit process in
addressing these matters through the reporting it receives from BDO
LLP.
Judgements and significant risks considered in respect to the
Annual Report
The Committee assesses whether suitable accounting
policies have been adopted and whether management has made
appropriate estimates and judgements. The Committee reviews
accounting papers prepared by management, which provide details on
the main financial reporting judgements.
The Committee also reviews report by the external
auditor on the full year results, which highlight and issues
arising from the work undertaken. Areas of audit and accounting
risk reviewed by the Committee included:
Recognition and measurement of product development
The Group holds assets on the statement of financial
position in relation to both current research and development
projects and developed products that have resulted in commercial
launches. These assets are subject to judgements such as whether
costs are eligible for capitalisation, the amortisation periods and
impairment reviews. The Committee reviewed management's accounting
papers and discussed the product portfolio with the Board along
with forecast sales and activity and was satisfied with the
accounting policy in force and with the estimates and judgements
applied by management in employing this policy.
Matthew Robinson
Audit Committee Chairman
20 March 2024
Independent auditors' report
Opinion on the financial statements
In our opinion:
- the financial
statements give a true and fair view of the state of the Group's
and of the Parent Company's affairs as at 31 December 2023 and of
the Group's profit for the year then ended;
- the Group
financial statements have been properly prepared in accordance with
UK adopted international accounting standards;
- the Parent
Company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice; and
- the financial
statements have been prepared in accordance with the requirements
of the Companies Act 2006.
We have audited the financial statements of Anpario
Plc (the 'Parent Company') and its subsidiaries (the 'Group') for
the year ended 31 December 2023 which comprise the Consolidated
statement of comprehensive income, the Consolidated statement of
financial position, the Consolidated statement of changes in
equity, the Consolidated statement of cash flows, the Company
statement of financial position and the Company statement of
changes in equity and notes to the financial statements, including
a summary of significant accounting policies.
The financial reporting framework that has been
applied in the preparation of the Group financial statements is
applicable law and UK adopted international accounting standards.
The financial reporting framework that has been applied in the
preparation of the Parent Company financial statements is
applicable law and United Kingdom Accounting Standards, including
Financial Reporting Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor's responsibilities for the audit of the
financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have
concluded that the Directors' use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate. Our evaluation of the Directors' assessment of the
Group and the Parent Company's ability to continue to adopt the
going concern basis of accounting included:
- Obtaining an
understanding of how the Directors undertook the going concern
assessment process to determine if we considered it to be
appropriate for the circumstances by way of enquiry with the
Directors in regards to who prepared the assessment and the
information and individuals consulted in the process;
- Obtaining the
Directors' trading forecasts which underly the going concern
assessment and challenging them on the key estimates and
assumptions within such with a particular focus on the forecast
levels of revenue, gross profit predictions and working capital
cycles, through analysis and comparison of the forecasts with prior
year actuals;
- Performing data
verification and logic checks to confirm the mathematical accuracy
of the forecast model;
- Reviewing
'stress tested' sensitivity analysis to assess the quantum of
adverse variance against forecast that could be sustained without
creating material uncertainties over the going concern
assessment;
- Undertaking an
analysis of post year end trading results and comparing to forecast
and current year figures in order to evaluate the accuracy and
achievability of forecasts; and
- Performing a
review of the disclosures in the financial statements to ensure
they are adequate, consistent with the Director's assessment.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant
doubt on the Group and the Parent Company's ability to continue as
a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described in the
relevant sections of this report.
Overview
|
Key audit
matters
|
Existence and valuation of, developed product and
development costs classified as intangible assets.
|
2023
|
2022
|
|
Yes
|
Yes
|
|
Materiality
|
Group financial
statements as a whole
|
|
£202,000 (2022: £246,000) based on 5% (2022: 5%) of a
3 year average of profit before tax (2022: 3 year average of profit
before tax).
|
An overview of the scope of our audit
Our Group audit was scoped by obtaining an
understanding of the Group and its environment, including the
Group's system of internal control, and assessing the risks of
material misstatement in the financial statements. We also
addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the
Directors that may have represented a risk of material
misstatement.
We determined that the Parent Company was the only
significant component within the Group and a full scope audit was
performed by the Group engagement team.
The remaining 16 components ('the components') were
not individually financially significant enough to require a full
scope audit for Group purposes, but did present specific individual
risks that needed to be addressed in accordance with the Group
audit approach. The components act as sales offices and all
purchases are made from the Parent Company, therefore, through
specific risk-focussed audit procedures over inventories, trade
receivables and cash, along with analytical review procedures we
gained sufficient audit assurance to form our opinion on the
financial statements as a whole. All work was conducted by the
Group engagement team, with the exception of year-end inventory
count attendance procedures at locations in Brazil, China,
Indonesia, the Republic of Ireland, Thailand and the United States
of America. Overseas inventory count procedures were performed by
other BDO network firms, operating in accordance with instructions
issued by the Group engagement team.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in our audit of
the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) that we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
|
Key audit
matter
|
How the scope of our
audit addressed the key audit matter
|
|
Existence and
valuation of developed product and development costs classified as
intangible assets.
(See accounting policies and Note 13 intangible
assets)
|
Valuation:
The Group has a material net book value for internally
developed products of £1.6m (2022 - £1.7m) forming part of the
Brands and developed products intangible asset with net book value
of £3.7m (2022 - £3.4m) disclosed in Note 13.
Following consideration of impairment indicators
management carried out an impairment assessment by considering the
net present value of future cash flows generated by the products in
comparison to their net book value.
Existence:
In addition the Group has cumulative capitalised
development costs of £0.5m (2022 - £1.2m) for products in
development at the year end date.
In accordance with accounting standards in order to
capitalise development costs management is required to make certain
judgements, including the stage of development, the technical
feasibility of completing the product development and the
commercial viability of the products
These judgements determine whether development costs
are eligible for capitalisation and the period of time over which
assets will be amortised.
There is also a risk of fraud through manipulation in
respect of the assessment made by management of which costs are
eligible for capitalisation.
Owing to the magnitude of the product development
intangibles, and the level of estimation and judgement involved in
determining both the eligibility of costs for capitalisation and
recoverable amount, we determined the existence and valuation of
brand, developed products and the development costs intangible
assets to be a key audit matter.
|
Valuation:
We analysed the level of revenue and gross profits
generated historically by developed products through review of
trading results and compared these to the carrying value of the
relevant intangible asset, in order to identify evidence of a fall
in demand or other indicators of impairment. This process allowed
us to challenge management's assessment of the expected future
returns and the anticipated life of the products.
We assessed the reasonableness of forecast future
trading assumptions by reference to current year results and
budgets and considered the sensitivity of the estimates of future
performance to material changes in the net realisable value of each
of the developed products. We checked that the anticipated
performance of the developed products was consistent with the
overall Group forecasts prepared for assessing the basis of going
concern.
We reviewed the impairment assessment models against
the requirements set out within the relevant accounting standard
and tested the integrity of the mathematical calculations in the
model.
We consulted with our internal valuation experts on
the reasonableness of the discount rate applied.
Existence:
We tested, on a sample basis, that internally
generated development costs capitalised in the year of £0.3m (2022
- £0.5m) were valid expenses, that they related to the development
of the relevant product and further that they met the eligibility
criteria in IAS 38 to be capitalised by corroborating the costs to
supporting evidence.
For the portfolio of projects under development,
including costs capitalised in previous years as well as the
current year we made enquiries of staff outside of the finance
function, including the technical director, who are involved in the
development of the products in order to gain an understanding of
the development process in order to assess if the development costs
should continue to be capitalised.
Key
observations:
We found the estimates and judgements made by
management in valuing the developed products and development costs
intangibles were reasonable and that costs that have been
capitalised relate to projects that exist have been appropriately
capitalised.
|
|
|
|
Our application of materiality
We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by
which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis
of the financial statements.
In order to reduce to an appropriately low level the
probability that any misstatements exceed materiality, we use a
lower materiality level, performance materiality, to determine the
extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also
take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined
materiality for the financial statements as a whole and performance
materiality as follows:
|
|
Group financial statements
|
Parent company financial statements
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Materiality
|
202
|
246
|
136
|
226
|
|
Basis for determining
materiality
|
5% of pre-tax profit,
based on a 3 year average
|
5% of pre-tax profit,
based on a 3 year average
|
5% of pre-tax profit,
based on a 3 year average
|
5% of Parent Company
pre-tax profit
|
|
Rationale for the
benchmark applied
|
Profit before tax remains
the key driver of the business' value and is the underlying driver
for management's key measure of performance. Due to the variability
in the reported profit in the recent years a 3-year average has
been applied in the current year.
|
|
Performance
materiality
|
152
|
190
|
102
|
170
|
|
Basis for determining
performance materiality
|
Set at 75% of
materiality
|
Set at 75% of
materiality
|
Set at 75% of
materiality
|
Set at 75% of
materiality
|
|
Rationale for the
percentage applied for performance materiality
|
Our rationale is that it
is the fourth year of our appointment as auditor and the history of
unadjusted differences over our period of appointment is low.
Performance materiality of 75% of financial statement materiality
was considered to give suitable level to determine the nature of
and extent of testing required.
|
Reporting threshold
We agreed with the Audit Committee that we would
report to them all individual audit differences in excess of £4,000
(2022: £5,000). We also agreed to report differences below this
threshold that, in our view, warranted reporting on qualitative
grounds.
Other information
The directors are responsible for the other
information. The other information comprises the information
included in the annual report other than the financial statements
and our auditor's report thereon. Our opinion on the financial
statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our
work performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain opinions
and matters as described below.
|
Strategic report and
Directors' report
|
In our opinion, based on the work undertaken in the
course of the audit:
- the
information given in the Strategic report and the Directors' report
for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
- the
Strategic report and the Directors' report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the
Group and Parent Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the Directors' report.
|
|
Matters on which we
are required to report by exception
|
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
- adequate
accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches
not visited by us; or
- the
Parent Company financial statements are not in agreement with the
accounting records and returns; or
- certain
disclosures of Directors' remuneration specified by law are not
made; or
- we have
not received all the information and explanations we require for
our audit.
|
Responsibilities of Directors
As explained more fully in the Statement of Directors'
responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Group's and the Parent Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
- Our
understanding of the Group and the industry in which it
operates;
- Discussion with
management and those charged with governance; and
- Obtaining and
understanding of the Group's policies and procedures regarding
compliance with laws and regulations
We considered the significant laws and regulations to
be the applicable accounting framework, UK tax legislation, the AIM
Listing Rules and Animal Feed product regulatory requirements.
The Group is also subject to laws and regulations
where the consequence of non-compliance could have a material
effect on the amount or disclosures in the financial statements,
for example through the imposition of fines or litigations. We
identified such laws and regulations to be health and safety
legislation.
Our procedures in respect of the above included:
- Review of
minutes of meeting of those charged with governance for any
instances of non-compliance with laws and regulations;
- Review of
correspondence with regulatory and tax authorities for any
instances of non-compliance with laws and regulations;
- Review of
financial statement disclosures and agreeing to supporting
documentation;
- Involvement of
tax specialists in the audit; and
- Review of legal
expenditure accounts to understand the nature of expenditure
incurred.
Fraud
We assessed the susceptibility of the financial
statements to material misstatement, including fraud. Our risk
assessment procedures included:
- Enquiry with
management and those charged with governance regarding any known or
suspected instances of fraud;
- Obtaining an
understanding of the Group's policies and procedures relating
to:
o Detecting and
responding to the risks of fraud; and
o Internal controls
established to mitigate risks related to fraud.
- Review of
minutes of meeting of those charged with governance for any known
or suspected instances of fraud;
- Discussion
amongst the engagement team as to how and where fraud might occur
in the financial statements;
- Performing
analytical procedures to identify any unusual or unexpected
relationships that may indicate risks of material misstatement due
to fraud; and
- Considering
remuneration incentive schemes and performance targets and the
related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas
most susceptible to fraud were:
- Manipulation of
revenue recognition, particularly in the period before the year end
or across group entities as this could be used to achieve market
expectations;
- Manipulation of
costs capitalised as product brands as this is judgemental and
increasing the amount capitalised improves reported profit as
referred to above in the key audit matter section; and
- Inappropriate
journals posted in to the financial system to manipulate the
reported results or conceal inappropriate activity.
Our procedures in respect of the above included:
- Testing a sample
of journal entries throughout the year, which met a defined risk
criteria, by agreeing to supporting documentation;
- Assessing
significant estimates made by management for bias including the
existence and valuation of developed product and development costs
classified as intangible assets;
- Review of
revenue nominal accounts for unusual transactions;
- Testing of a
sample of transactions in December 2023 to check that revenue had
been recorded in the correct period; and
- Testing of the
elimination of intra-group revenue and the provision for unrealised
profits to verify that all intra-group revenues and profits were
appropriately eliminated on consolidation.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members who were all deemed to have appropriate competence and
capabilities and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks
of material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example,
forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from
the events and transactions reflected in the financial statements,
the less likely we are to become aware of it.
A further description of our responsibilities is
available on the Financial Reporting Council's website at:
ww.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor's report.
Use of our report
This report is made solely to the Parent Company's
members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the Parent Company's members those matters
we are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Parent
Company and the Parent Company's members as a body, for our audit
work, for this report, or for the opinions we have formed.
Gareth Singleton (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Birmingham, UK
20 March 2024
BDO LLP is a limited liability partnership registered
in England and Wales (with registered number OC305127).
Consolidated statement of comprehensive income
for the year ended 31 December 2023
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Revenue
|
3
|
30,998
|
33,103
|
|
Cost of sales
|
|
(17,040)
|
(18,967)
|
|
Gross profit
|
|
13,958
|
14,136
|
|
Administrative expenses
|
|
(11,435)
|
(10,576)
|
|
Operating profit
|
4
|
2,523
|
3,560
|
|
|
|
|
|
|
Depreciation and
amortisation
|
4
|
1,237
|
1,225
|
|
Adjusting items
|
6
|
703
|
423
|
|
Adjusted EBITDA
|
6
|
4,463
|
5,208
|
|
|
|
|
|
|
Net finance income
|
9
|
230
|
121
|
|
Profit before tax
|
|
2,753
|
3,681
|
|
Income tax
|
10
|
(225)
|
(378)
|
|
Profit for the year
|
|
2,528
|
3,303
|
|
|
|
|
|
|
Other comprehensive income/(expense):
|
|
|
|
|
Items that may be subsequently reclassified to profit or
loss:
|
|
|
|
|
Exchange difference on translating
foreign operations
|
|
(221)
|
387
|
|
Cashflow hedge movements (net of
deferred tax)
|
19
|
722
|
(902)
|
|
Total comprehensive income for the year
|
|
3,029
|
2,788
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
12
|
13.51p
|
16.13p
|
|
Diluted earnings per
share
|
12
|
13.45p
|
15.10p
|
|
|
|
|
|
|
Adjusted earnings per
share
|
12
|
15.37p
|
17.81p
|
|
Diluted adjusted earnings per
share
|
12
|
15.31p
|
16.67p
|
All of the results arise from continuing
operations.
Consolidated statement of financial position
as at 31 December 2023
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Intangible assets
|
13
|
10,637
|
11,375
|
|
Property, plant and
equipment
|
14
|
4,626
|
4,864
|
|
Right-of-use assets
|
15
|
76
|
50
|
|
Deferred tax assets
|
16
|
537
|
859
|
|
Derivative financial
instruments
|
19
|
253
|
153
|
|
Non-current assets
|
|
16,129
|
17,301
|
|
|
|
|
|
|
Inventories
|
17
|
6,348
|
9,867
|
|
Trade and other
receivables
|
18
|
6,815
|
7,003
|
|
Derivative financial
instruments
|
19
|
67
|
21
|
|
Current income tax assets
|
|
186
|
774
|
|
|
|
|
|
|
Short-term investments
|
|
110
|
1,828
|
|
Cash and cash
equivalents
|
|
10,539
|
11,739
|
|
Cash, cash equivalents and
short-term investments
|
20
|
10,649
|
13,567
|
|
|
|
|
|
|
Current assets
|
|
24,065
|
31,232
|
|
|
|
|
|
|
Total assets
|
|
40,194
|
48,533
|
|
|
|
|
|
|
Lease liabilities
|
21
|
(46)
|
(17)
|
|
Derivative financial
instruments
|
19
|
(46)
|
(825)
|
|
Deferred tax liabilities
|
16
|
(1,762)
|
(1,724)
|
|
Non-current liabilities
|
|
(1,854)
|
(2,566)
|
|
|
|
|
|
|
Trade and other payables
|
22
|
(4,046)
|
(3,983)
|
|
Lease liabilities
|
21
|
(33)
|
(35)
|
|
Derivative financial
instruments
|
19
|
(377)
|
(638)
|
|
Current income tax
liabilities
|
|
(235)
|
-
|
|
Current liabilities
|
|
(4,691)
|
(4,656)
|
|
|
|
|
|
|
Total liabilities
|
|
(6,545)
|
(7,222)
|
|
|
|
|
|
|
Net
assets
|
|
33,649
|
41,311
|
|
|
|
|
|
|
Share capital
|
23
|
4,615
|
5,624
|
|
Share premium
|
23
|
15,047
|
14,934
|
|
Capital redemption
reserve
|
24
|
1,021
|
-
|
|
Other reserves
|
25
|
(8,577)
|
(10,461)
|
|
Retained earnings
|
|
21,543
|
31,214
|
|
|
|
|
|
|
Total equity
|
|
33,649
|
41,311
|
The financial statements were approved by the Board
and authorised for issue on 20 March
2024.
|
Richard
Edwards
Chief Executive Officer
|
Marc
Wilson
Group Finance Director
|
Company Number: 03345857
Consolidated statement of changes in equity
for the year ended 31 December 2023
|
|
|
Share
capital
|
Share
premium
|
Capital
redemption reserve
|
Other
reserves
|
Retained
earnings
|
Total
equity
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 Jan 2022
|
|
5,446
|
11,547
|
-
|
(6,788)
|
30,097
|
40,302
|
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
3,303
|
3,303
|
|
Currency translation
differences
|
|
-
|
-
|
-
|
387
|
-
|
387
|
|
Cash flow hedge reserve
|
19
|
-
|
-
|
-
|
(902)
|
-
|
(902)
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
-
|
(515)
|
3,303
|
2,788
|
|
Issue of share capital
|
23
|
178
|
3,387
|
-
|
-
|
-
|
3,565
|
|
Joint-share ownership
plan
|
23
|
-
|
-
|
-
|
(3,270)
|
-
|
(3,270)
|
|
Share-based payment
expense
|
25
|
-
|
-
|
-
|
183
|
-
|
183
|
|
Deferred tax regarding share-based
payments
|
|
-
|
-
|
-
|
(71)
|
-
|
(71)
|
|
Final dividend relating to
2021
|
|
-
|
-
|
-
|
-
|
(1,512)
|
(1,512)
|
|
Interim dividend relating to
2022
|
11
|
-
|
-
|
-
|
-
|
(674)
|
(674)
|
|
Transactions with owners
|
|
178
|
3,387
|
-
|
(3,158)
|
(2,186)
|
(1,779)
|
|
Balance at 31 Dec 2022
|
|
5,624
|
14,934
|
-
|
(10,461)
|
31,214
|
41,311
|
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
2,528
|
2,528
|
|
Currency translation
differences
|
|
-
|
-
|
-
|
(221)
|
-
|
(221)
|
|
Cash flow hedge reserve
|
19
|
-
|
-
|
-
|
722
|
-
|
722
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
-
|
501
|
2,528
|
3,029
|
|
Issue of share capital
|
23
|
12
|
113
|
-
|
-
|
-
|
125
|
|
Purchase and Cancellation of Tender
Offer shares
|
23, 24
|
(920)
|
-
|
920
|
-
|
(9,248)
|
(9,248)
|
|
Cancellation of treasury
shares
|
23, 24, 25
|
(101)
|
-
|
101
|
1,189
|
(1,189)
|
-
|
|
Share-based payment
expense
|
25
|
-
|
-
|
-
|
284
|
-
|
284
|
|
Deferred tax regarding share-based
payments
|
|
-
|
-
|
-
|
(90)
|
-
|
(90)
|
|
Final dividend relating to
2022
|
11
|
-
|
-
|
-
|
-
|
(1,228)
|
(1,228)
|
|
Interim dividend relating to
2023
|
11
|
-
|
-
|
-
|
-
|
(534)
|
(534)
|
|
Transactions with owners
|
|
(1,009)
|
113
|
1,021
|
1,383
|
(12,199)
|
(10,691)
|
|
Balance at 31 Dec 2023
|
|
4,615
|
15,047
|
1,021
|
(8,577)
|
21,543
|
33,649
|
Consolidated statement of cash flows
for the year ended 31 December 2023
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Operating profit for the
year
|
|
2,523
|
3,560
|
|
Depreciation and
amortisation
|
4
|
1,237
|
1,225
|
|
Impairment/Loss on disposal of
intangible assets
|
13
|
541
|
45
|
|
Loss on disposal of property, plant
and equipment
|
14
|
11
|
1
|
|
Share-based payments
|
25
|
284
|
183
|
|
Fair value adjustment to
derivatives
|
|
(243)
|
395
|
|
Operating cash flows before changes in working
capital
|
|
4,353
|
5,409
|
|
|
|
|
|
|
Decrease/(increase) in
inventories
|
|
3,277
|
(1,661)
|
|
Decrease in trade and other
receivables
|
|
163
|
254
|
|
Increase/(decrease) in trade and
other payables
|
|
267
|
(2,171)
|
|
Decrease/(increase) in working capital
|
|
3,707
|
(3,578)
|
|
|
|
|
|
|
Cash generated from operations
|
|
8,060
|
1,831
|
|
|
|
|
|
|
Income tax
refunded/(paid)
|
|
635
|
(744)
|
|
Net
cash from operating activities
|
|
8,695
|
1,087
|
|
|
|
|
|
|
Purchases of property, plant and
equipment
|
14
|
(277)
|
(809)
|
|
Payments to acquire intangible
assets
|
13
|
(466)
|
(731)
|
|
Interest received
|
9
|
236
|
124
|
|
Realisation of/(Investment in)
short-term investments
|
20
|
1,718
|
(25)
|
|
Net
cash from/(used in) investing activities
|
|
1,211
|
(1,441)
|
|
|
|
|
|
|
Purchase of shares through Tender
Offer
|
|
(9,248)
|
-
|
|
Joint share ownership
plan
|
25
|
-
|
(3,270)
|
|
Proceeds from issuance of
shares
|
|
125
|
3,565
|
|
Cash payments in relation to lease
liabilities
|
|
(69)
|
(70)
|
|
Lease interest paid
|
|
(6)
|
(3)
|
|
Dividend paid to Company's
shareholders
|
|
(1,762)
|
(2,186)
|
|
Net
cash used in financing activities
|
|
(10,960)
|
(1,964)
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents
|
|
(1,054)
|
(2,318)
|
|
|
|
|
|
|
Effect of exchange rate
changes
|
|
(146)
|
315
|
|
Cash and cash equivalents at 1
January
|
|
11,739
|
13,742
|
|
Cash and cash equivalents at 31 December
|
|
10,539
|
11,739
|
Notes to the financial statements
for the year ended 31 December 2023
1. General information
Anpario plc ("the Company") and its Subsidiaries
(together "the Group") produce and distribute natural feed
additives for animal health, hygiene and nutrition. Anpario plc is
a public company traded on the Alternative Investment Market
("AIM") of the London Stock Exchange and is incorporated in the
United Kingdom and registered in England and Wales. The address of
its registered office is Unit 5 Manton Wood Enterprise Park,
Worksop, Nottinghamshire, S80 2RS. The presentation currency of the
Group is pounds sterling. For details of the basis of consolidation
see note 2.2.
2.
Summary of significant accounting policies
2.1. Basis of
preparation
The Group has presented its financial statements in
accordance with UK adopted International Accounting Standards.
The financial statements have been prepared on the
historical cost basis, except for financial instruments that are
measured at fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is
generally based on the fair value of the consideration given in
exchange for goods and services.
The preparation of financial statements in conformity
with IFRS requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from those
estimates.
The estimates and underlying assumptions are reviewed
on an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period, or in a period of the revision
and future periods if the revision affects both current and future
periods. More information is available in note 2.22.
The principal accounting policies of the Group are set
out below, and have been applied consistently in dealing with items
which are considered material in relation to the Group's financial
statements.
Going concern
The Directors have, at the time of approving the
financial statements, a reasonable expectation that the Company and
the Group has adequate resources to continue in operation for the
foreseeable future and has been specifically assessed to the period
ending March 2025.
The Group has a strong balance sheet, with no debt and
a strong cash position and has traded profitably and cash
generatively through the financial year. The Group's forecasts and
projections, taking into account reasonable estimate of a possible
downturn in trading performance arising from the ongoing market and
geo-political uncertainty, show that the Group has sufficient
financial resources, both from the Group's robust balance sheet and
its expected cash flow generation, sufficient for the going concern
period. Accordingly, the Directors have adopted the going concern
basis in preparing these consolidated financial statements.
2.2. Basis of
consolidation
The consolidated financial statements comprise the
financial statements of the Company and its Subsidiaries drawn up
to 31 December 2023.
Subsidiaries are all entities over which the Group has
the power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting
rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
Inter-company transactions, balances, income and
expenses on transactions between Group companies are eliminated.
Profits and losses resulting from intercompany transactions that
are recognised in assets are also eliminated. Accounting policies
of Subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
2.3. Revenue
recognition
The Group applies IFRS 15 'Revenue from Contracts with
Customers'. Revenue comprises the fair value of the consideration
received or receivable for the sale of goods in the ordinary course
of the Group's activities. Revenue is shown net of value added tax,
returns and discounts and after eliminating sales within the Group.
Revenue is derived principally from the sales of goods.
The amount of revenue recognised reflects the
consideration to which the Group is or expects to be entitled to in
exchange for those goods. Revenue is recognised when the
performance obligations have been satisfied, which is once control
of the goods has transferred from Anpario to the buyer. In most
instances, control passes and sales revenue is recognised at the
point in time when the product is delivered to the vessel or
vehicle on which it will be transported once loaded, the
destination port or the customer's premises.
In some instances, the goods are sold on Cost and
Freight (CFR) or Cost, Insurance and Freight (CIF) Incoterms. When
goods are sold on a CFR or CIF basis, the Group is responsible for
providing these services (shipping and insurance) to the customer,
sometimes after the date at which Anpario has lost control of the
goods. Anpario considers revenue related to the shipping and
insurance service element of the contract to be immaterial and does
not consider there to be separate performance obligations.
2.4. Segment
reporting
Operating segments are reported in a manner consistent
with the internal reporting to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board.
2.5. Foreign currency
translation
Monetary assets and liabilities denominated in foreign
currencies are translated into pounds sterling at the rates of
exchange ruling at the balance sheet date. Transactions in foreign
currencies are recorded at the rate ruling at the date of the
transaction. All differences are included in the profit or loss for
the period.
Functional and presentational currency
Items included in the financial statements of each of
the Group's entities are measured using the currency of the primary
economic environment in which the entity operates ("functional
currency"). The consolidated financial statements are presented in
pounds sterling, which is the Group's functional and presentational
currency.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using exchange rates prevailing at the date of
the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at
period end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
statement, except when deferred in equity as qualifying cash flow
hedges and qualifying net investment hedges.
Group companies
The results and financial position of all Group
entities that have a functional currency different from the
presentational currency are translated into the presentational
currency as follows:
- assets and liabilities
for each balance sheet presented are translated at the closing
exchange rate at the date of the balance sheet;
- income and expenses
for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates,
in which case the income and expenses are translated at the rate on
the dates of the transaction); and
- all resulting exchange
differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from
the translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of
such investments, are taken to shareholders' equity. When a foreign
operation is partially disposed of or sold, exchange differences
that were recognised in equity are recognised in the income
statement as part of the gain or loss on sale. Goodwill and fair
value adjustments arising on the acquisition of a foreign entity
are treated as assets and liabilities of the foreign entity and
translated at the closing exchange rate.
2.6. Intangible
assets
Goodwill
Goodwill represents the excess of the cost of an
acquisition over the fair value of the Group's share of the
identifiable net assets acquired. Goodwill is reviewed for
impairment at least annually or more frequently if events or
changes in circumstances indicate a potential impairment. Goodwill
is carried at cost less accumulated impairment losses and is
allocated to the appropriate cash-generating unit for the purpose
of impairment testing. Any impairment is recognised immediately
through the income statement and is not subsequently reversed.
Brands
Brands are stated at cost less accumulated
amortisation and impairment. Brand names acquired in a business
combination are recognised at fair value based on an expected
royalty value at the acquisition date. Useful lives of brand names
are estimated and amortised over a period of 20 to 30 years on a
straight-line basis and included in administrative expenses in the
income statement. The Optivite Brand has already existed for over
30 years and is expected to continue to have a useful life into the
foreseeable future, however management felt it appropriate to
assign a finite life rather than an indefinite one and as such
assigned a life of 30 year's to this asset. This change was made in
the current year and amortisation has commenced on this basis.
Brands are allocated to appropriate cash-generating units and
subject to impairment testing on an annual basis. Any impairment is
recognised immediately through the income statement and is not
subsequently reversed.
Patents, trademarks and registrations
Separately acquired patents, trademarks and
registrations are shown at historical cost. Patents, trademarks and
registrations have finite useful lives and are carried at cost less
accumulated amortisation. Amortisation is calculated using the
straight-line method to allocate the cost of patents, trademarks
and registrations over their estimated useful lives of 5 to 20
years and included in administrative expenses in the income
statement.
Development costs
Development costs are stated at cost less accumulated
amortisation and impairment. Development costs are recognised if it
is probable that there will be future economic benefits
attributable to the asset, the cost of the asset can be measured
reliably, the asset is separately identifiable and there is control
over the use of the asset.
The assets are amortised when available for use on a
straight-line basis over the period over which the Group expects to
benefit from these assets and included in administrative expenses
in the income statement. Research expenditure is written off to the
income statement in the year in which it is incurred.
Where appropriate, once development work has been
completed the asset(s) generated is reclassified to the Developed
Products intangible asset category and is amortised over a period
of 10 years.
Development costs that are directly attributable to
the design and testing of identifiable and unique products
controlled by the Group are recognised as intangible assets when
the following criteria are met:
- it is technically
feasible to complete the product so that it will be available for
use;
- management intends to
complete the product and use or sell it;
- there is an ability to
use or sell the product;
- it can be demonstrated
how the product will generate probable future economic
benefits;
- adequate technical,
financial and other resources to complete the development and to
use or sell the product are available; and
- the expenditure
attributable to the product during its development can be reliably
measured.
Directly attributable costs that are capitalised as
part of the product include the development employee costs and an
appropriate portion of relevant overheads.
Software and licenses
Software and licenses are stated at cost less
accumulated amortisation and impairment. Cost includes the original
purchase price of the asset and the costs attributable to bringing
the asset to its working condition for its intended use.
Amortisation is calculated using the straight-line method to
allocate the cost of software and licenses over their estimated
useful lives of 5 to 7 years and included in administrative
expenses in the income statement.
2.7. Impairment of
non-financial assets
The carrying amounts of the Group's assets are
reviewed at each balance sheet date to determine whether there is
any indication of impairment, if so the asset's recoverable amount
is estimated. The recoverable amount is the higher of its fair
value less costs to sell and its value in use. For intangible
assets that are not yet available for use, goodwill or other
intangible assets with an indefinite useful life, an impairment
test is performed at each balance sheet date.
In assessing value in use, the expected future cash
flows from the asset are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. An
impairment loss is recognised in the income statement whenever the
carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount.
A previously recognised impairment loss is reversed if
the recoverable amount increases as a result of a change in the
estimates used to determine the recoverable amount, but not to an
amount higher than the carrying amount that would have been
determined (net of depreciation and or amortisation) had no
impairment loss been recognised in prior years. For goodwill, a
recognised impairment loss is not reversed.
If an impaired asset is highly unlikely to see future
increases in it's recoverable amount then the cost and accumulated
amortisation will be written off as a disposal.
2.8. Property, plant and
equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment. Cost includes the original
purchase price of the asset and the costs attributable to bringing
the asset to its working condition for its intended use. Land is
not depreciated. Depreciation is provided at rates calculated to
write off the cost less estimated residual value of each asset over
its expected useful life using the straight-line method, as
follows:
Buildings
|
50 years or period of lease if shorter
|
Plant and machinery
|
3-10 years
|
Fixtures, fittings and equipment
|
3-10 years
|
The carrying amounts of the Group's assets are
reviewed at each balance sheet date to determine whether there is
any indication of impairment and an impairment loss is recognised
in the income statement where appropriate.
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and are recognised
within the income statement.
2.9. Inventories
Inventories are valued at the lower of cost and net
realisable value. Cost is determined using the weighted average
cost method. The cost of finished goods comprises raw materials,
direct labour, other direct costs and related production overheads
that have been incurred in bringing the inventories to their
present location and condition. Net realisable value is the
estimated selling price in the ordinary course of business.
2.10. Trade receivables
Trade receivables are recognised initially at fair
value and subsequently measured at amortised cost, less provision
for impairment. A provision for impairment of trade receivables is
established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original
terms of the receivables. The provision is recognised in the income
statement as an administrative expense.
The Group applies the simplified approach when using
the expected credit loss (ECL) impairment model for trade
receivables. Under the simplified approach the Group always
measures the loss allowance at an amount equal to the lifetime ECL
for trade receivables.
The measurement of ECL is a function of the
probability of default, loss given default (i.e. the magnitude of
the loss if there is a default) and the exposure at default. Loss
given default is an estimate of the loss arising on default. It is
based on the difference between the contractual cash flows due and
those that the lender would expect to receive. Probability of
default constitutes a key input in measuring ECL. Probability of
default is an estimate of the likelihood of default over a given
time horizon, the calculation of which includes historical data,
assumptions and expectations of future conditions.
The ECL on these financial assets are estimated using
a provision matrix based on the Group's historical credit loss
experience, adjusted for factors that are specific to the debtors,
general economic conditions and an assessment of both the current
as well as the forecast direction of conditions at the reporting
date, including time value of money where appropriate.
The ECL's are updated each reporting period to reflect
changes in credit risk since initial recognition. The Group writes
off a trade receivable when there is information indicating that
the debtor is in severe financial difficulty and there is no
realistic prospect of recovery, e.g. when the debtor has been
placed under liquidation or has entered into bankruptcy
proceedings. None of the trade receivables that have been written
off is subject to enforcement activities.
2.11. Trade and other
payables
Trade and other payables are initially recognised at
fair value and are subsequently measured at amortised cost. Trade
and other payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business from
suppliers. Trade payables are classified as current liabilities if
payment is due within one year or less (or in the normal operating
cycle of the business if longer). If not, they are presented as
non-current liabilities.
2.12. Cash, cash equivalents
and short-term investments
Cash and cash
equivalents
Cash and cash equivalents comprise cash at bank and
short-term deposits that are readily convertible into cash with a
notice period of less than three months.
Short-term
investments
Short-term investments comprise short-term deposits
that are readily convertible into cash with a notice period more
than three months and less than a year.
2.13. Financial
instruments
The Group's principal financial instruments comprise
derivatives and cash and cash equivalents. These financial
instruments are used to manage currency exposures, funding and
liquidity requirements. Other financial instruments which arise
directly from the Group's operations includes trade and other
receivables (note 18) and trade and other payables (note 22). The
main risks arising from the Group's financial instruments and
related policies are detailed in note 2.21.
Financial instruments, excluding derivatives, are held
at amortised cost. Derivative financial instruments are detailed in
note 2.14.
The Group uses the following valuation hierarchy to
determine the carrying value of financial instrument that are
measured at fair value:
Level 1
|
Quoted (unadjusted) prices in active markets for
identical assets or liabilities.
|
Level 2
|
Inputs other than quoted prices included within level
1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from
prices).
|
Level 3
|
Inputs for the asset or liability that are not based
on observable market data (that is, unobservable inputs).
|
2.14. Derivative financial
instruments
Where qualifying for hedge accounting, derivative
financial instruments are held at fair value through other
comprehensive income, non-qualifying derivatives are held at fair
value through profit or loss.
The Group designates certain hedging instruments,
which include derivatives, in respect of foreign currency risk, as
cash flow hedges. Hedges of foreign exchange risk on firm
commitments are accounted for as cash flow hedges.
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income and accumulated in
reserves in equity. The gain or loss relating to the ineffective
portion is recognised immediately in profit or loss. Amounts
accumulated in equity are reclassified to profit or loss in the
periods when the hedged item affects profit or loss (for instance
when the forecast sale that is hedged takes place).
2.15. Exceptional items
Exceptional items are disclosed separately in the
financial statements where it is necessary to do so to provide
further understanding of the financial performance of the Group.
They are no material items of income or expense that have been
shown separately due to the significance of their nature or
amount.
2.16. Taxation
The tax expense for the period comprises current and
deferred tax. Tax is recognised in the income statement, except to
the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case the tax is
also recognised in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the Company's
Subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability
method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial statements. Deferred income tax is
determined using tax rates and laws that have been enacted or
substantively enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to the
extent that it is probable that future taxable profit will be
available against which the temporary differences can be
utilised.
Deferred income tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income
tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle
the balances on a net basis.
2.17. Employee benefits
Share-based payments
The Group issues equity-settled share-based payments
and shares under the Joint Share Ownership Plan ("JSOP"), Company
Share Option Plan ("CSOP") and Unapproved schemes to certain
employees. These are measured at fair value and along with
associated expenses are recognised as an expense in the income
statement with a corresponding increase (net of expenses) in
equity. The fair values of these payments are measured at the dates
of grant using appropriate option pricing models, taking into
account the terms and conditions upon which the awards are granted.
The fair value is recognised over the period during which employees
become unconditionally entitled to the awards subject to the
Group's estimate of the number of awards which will lapse, either
due to employees leaving the Group prior to vesting or due to
non-market based performance conditions not being met.
The Group operates a number of equity-settled,
share-based compensation plans, under which the entity receives
services from employees as consideration for equity instruments
(options) of the Group. The fair value of the employee services
received in exchange for the grant of the options is recognised as
an expense. The total amount to be expensed is determined by
reference to the fair value of the options granted:
- including any market
performance conditions (for example, an entity's share price);
- excluding the impact
of any service and non-market performance vesting conditions (for
example, profitability, sales growth targets and remaining an
employee of the entity over a specified time period); and
- including the impact
of any non-vesting conditions (for example, the requirement for
employees to save).
Non-market performance and service conditions are
included in assumptions about the number of options that are
expected to vest. The total expense is recognised over the vesting
period, which is the period over which all of the specified vesting
conditions are to be satisfied.
In addition, in some circumstances employees may
provide services in advance of the grant date and therefore the
grant date fair value is estimated for the purposes of recognising
the expense during the period between service commencement period
and grant date.
At the end of each reporting period, the Group revises
its estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new
shares. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and
share premium. The grant by the Company of options over its equity
instruments to the employees of Subsidiary undertakings in the
Group is treated as a capital contribution. The fair value of
employee services received, measured by reference to the grant date
fair value, is recognised over the vesting period as an increase to
investment in Subsidiary undertakings, with a corresponding credit
to equity in the Parent entity financial statements.
The social security contributions payable in
connection with the grant of the share options is considered an
integral part of the grant itself, and the charge will be treated
as a cash-settled transaction.
Pension obligations
The Group operates a defined contribution pension
scheme and contributes a percentage of salary to individual
employee schemes. Pension contributions are recognised as an
expense as they fall due and the Group has no further payment
obligations once the contributions have been paid.
2.18. Equity and reserves
Share capital
Share capital is determined using the nominal value of
Ordinary shares that have been issued.
Share premium
The share premium account includes any premiums
received on the initial issuing of the share capital. Any
transaction costs associated with the issue of shares are deducted
from the share premium account, net of any related income tax
benefits.
Capital redemption reserve
The capital redemption reserve has arisen following
the purchase by the Company of its own shares and comprises the
amount by which the distributable profits were reduced on these
transactions in accordance with the Companies Act 2006.
Treasury shares
Treasury shares represents consideration paid,
including any directly attributable incremental costs, to acquire
shares held by the Company in Anpario plc.
Joint Share Ownership Plan
The JSOP shares reserve arises when the Company issues
equity share capital under the JSOP, which is held in trust by
Anpario plc Employees' Share Trust ("the Trust"). The interests of
the Trust are consolidated into the Group's financial statements
and the investment in the Company's shares is deducted from equity
as if they were treasury shares.
Merger reserve
The premium arising on the issue of consideration
shares to acquire a business is credited to the merger reserve.
Cash flow hedge reserve
The cash flow hedge reserve represents the cumulative
amount of gains and losses on hedging instruments deemed effective
as cash flow hedges. The cumulative deferred gain or loss on the
hedging instrument is recognised only when the hedged transaction
impacts the profit or loss.
Share-based payment reserve
The share-based payment reserve is credited with
amounts charged to the income statement in respect of the movements
in the fair value of equity-settled share-based payments and shares
issued under the JSOP.
Translation reserve
Exchange differences relating to the translation of
the net assets of the Group's foreign operations, from their
functional currency into the Parent Company's functional currency,
being pounds sterling, are recognised directly in the foreign
exchange reserve.
Retained earnings
All other net gains and losses and transactions with
owners (e.g. dividends) not recognised elsewhere.
2.19. Dividend
distribution
Dividend distribution to the Company's shareholders is
recognised as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders.
2.20. Leases
The Group assesses whether a contract is or contains a
lease, at inception of the contract. The Group recognises a
right-of-use asset and a corresponding lease liability with respect
to all lease arrangements in which it is the lessee, except for
short-term leases (defined as leases with a lease term of 12 months
or less). For these leases, the Group recognises the lease payments
as an operating expense on a straight-line basis over the term of
the lease unless another systematic basis is more representative of
the time pattern in which economic benefits from the leased assets
are consumed.
The lease liability is initially measured at the
present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the
lease. If this rate cannot be readily determined, the Group uses
its incremental borrowing rate.
The lease liability is presented as a separate line in
the consolidated statement of financial position.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the
carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
- the lease term has
changed or there is a significant event or change in circumstances
resulting in a change in the assessment of exercise of a purchase
option, in which case the lease liability is remeasured by
discounting the revised lease payments using a revised discount
rate; or
- the lease payments
change due to changes in an index or rate or a change in expected
payment under a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease payments
using an unchanged discount rate (unless the lease payments change
is due to a change in a floating interest rate, in which case a
revised discount rate is used); or
- a lease contract is
modified and the lease modification is not accounted for as a
separate lease, in which case the lease liability is remeasured
based on the lease term of the modified lease by discounting the
revised lease payments using a revised discount rate at the
effective date of the modification.
Right-of-use assets relating to the Group's leasing
activities are recognised in the consolidated statement of
financial position at an amount equal to the lease liability on
initial measurement and any subsequent adjustments such as
modifications to lease terms. Right-of-use assets are depreciated
over the shorter period of lease term and useful life of the
underlying asset.
2.21. Financial risk
management
The Group is exposed to a number of financial risks,
including credit risk, liquidity risk, exchange rate risk and
capital risk.
Credit risk
Credit risk is the risk of financial loss to the Group
if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the
Group's receivables from customers and deposits with financial
institutions. The Group's exposure to credit risk is influenced
mainly by the individual characteristics of each customer. The
Group has an established credit policy under which each new
customer is analysed for creditworthiness before the Group's
payment and delivery terms and conditions are offered. Where
possible, risk is minimised through settlement via letters of
credit and purchase of credit insurance. The Group's investment
policy restricts the investment of surplus cash to interest bearing
deposits with banks and building societies without high credit
ratings.
Liquidity risk
Liquidity risk is the risk that the Group will not be
able to meet its financial obligations as they fall due. The
Group's approach to managing liquidity is to ensure that it will
always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring
unacceptable losses or damage to the Group's reputation.
Exchange rate risk
The Group's principal functional currency is pounds
sterling. However, during the year the Group had exposure to Euros,
US dollars and other currencies. The Group's policy is to maintain
natural hedges, where possible, by matching revenue and receipts
with expenditure and put in place hedging instruments as considered
appropriate to mitigate the risk.
Capital risk
The Group's objectives when managing capital are to
safeguard the Group's ability to continue as a going concern in
order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. The Group's overall strategy remains unchanged
from 2022.
The capital structure of the Group consists of equity
of the Group, comprising issued capital, reserves and retained
earnings as disclosed in notes 23 to 25. In order to maintain or
adjust the capital structure, the Group may adjust the amount of
dividends payable to shareholders, return capital to shareholders
or issue new shares.
2.22. Critical accounting
judgements and key sources of estimation uncertainty
The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are:
Critical accounting judgements
Capitalisation of development costs
Development costs are capitalised as per the Group
accounting policy outlined in note 2.6, which identifies several
criteria to be met in order for capitalisation to occur in
accordance with IAS 38. Inherently due to the nature of developing
new products and applications there is uncertainty as to the
outcome and judgements are required to make a determination as to
the suitability of costs for capitalisation.
Hedge accounting
Judgement is required to assess if hedging instruments
qualify for hedge accounting in accordance with IFRS 9. The Group's
accounting policy related to this is outlined in note 2.14.
Deferred tax recognition
Deferred tax is provided in full on temporary
differences under the liability method using substantively enacted
rates to the extent that they are expected to reverse. Provision is
made in full where the temporary differences result in liabilities,
but deferred tax assets are only recognised where the Directors
believe it is probable that the assets will be recovered. Judgement
is required to determine the likelihood of reversal of temporary
differences in establishing whether an asset should be
recognised.
Key sources of estimation uncertainty
Estimated impairment value of intangible assets
The Group tests annually whether intangible assets
have suffered any impairment. Impairment provisions are recorded as
applicable based on Directors' estimates of recoverable values.
Following the assessment of the recoverable amount of goodwill and
intangibles of the Group that totalled £10.6m as per note 13 of the
financial statements, the Directors consider the recoverable amount
of goodwill and intangibles to be supported by their value in use
calculation. Budgets comprise forecasts of revenue, staff costs and
overheads based on current and anticipated market conditions that
have been considered and approved by the Board. Whilst the Group is
able to manage aspects of costs, the revenue projections are
inherently uncertain due to the short-term nature of business and
unstable market conditions driven by external factors. The
sensitivity analysis in respect of the recoverable amount of
goodwill is presented in note 13.
2.23. Adoption of new and
revised accounting standards
New standards, interpretations and amendments effective from 1
January 2022
During the year, the Group has adopted the following
new and revised standards and interpretations. Their adoption has
not had any significant impact on the accounts or disclosures in
these financial statements except changes to the disclosure of
accounting policies which has led to more focused policies on
material accounting areas:
- IFRS 17 Insurance
Contracts;
- Disclosure of
Accounting Policies (Amendment to IAS 1 and IFRS Practice Statement
2);
- Definition of
Accounting Estimates (Amendment to IAS 8);
- Deferred Tax related
to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12); and
- International Tax
Reform - Pillar Two Model Rules (Amendment to IAS 12 Income
taxes).
New standards, interpretations and amendments not yet
effective
The Group has not early adopted the following new
standards, amendments or interpretations that have been issued but
are not yet effective:
- Liability in a
Sales and Leaseback (Amendments to IFRS 16 Leases);
- Classification
of Liabilities as Current or Non-Current (Amendments to IAS 1
Presentation of Financial Statements);
- Non-current
Liabilities with Covenants (Amendments to IAS 1 Presentation of
Financial Statements);
- Supplier Finance
Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS
7 Financial Instruments: Disclosures); and
- Lack of
Exchangeability (Amendments to IAS 21 The Effects of Changes in
Foreign Exchange Rates).
3.
Operating segments
Management has determined the operating segments based
on the information that is reported internally to the Chief
Operating Decision Maker, the Board of Directors, to make strategic
decisions. The Board considers the business from a geographic
perspective and is organised into four geographical operating
divisions: Americas, Asia, Europe, Middle-East and Africa (MEA) and
Head Office.
All revenues from external customers are derived from
the sale of goods and services in the ordinary course of business
to the agricultural markets and are measured in a manner consistent
with that in the income statement.
|
for
the year ended 31 Dec 2023
|
Americas
|
Asia
|
Europe
|
MEA
|
Head
Office
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
Total segmental revenue
|
9,057
|
11,367
|
13,832
|
3,872
|
-
|
38,128
|
|
Inter-segment revenue
|
-
|
-
|
(7,130)
|
-
|
-
|
(7,130)
|
|
Revenue from external customers
|
9,057
|
11,367
|
6,702
|
3,872
|
-
|
30,998
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
(3)
|
(75)
|
(13)
|
(4)
|
(1,142)
|
(1,237)
|
|
Net finance income
|
-
|
(2)
|
-
|
1
|
231
|
230
|
|
Profit/(loss) before income tax
|
1,763
|
2,788
|
2,263
|
1,359
|
(5,420)
|
2,753
|
|
for
the year ended 31 Dec 2022
|
Americas
|
Asia
|
Europe
|
MEA
|
Head
Office
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
Total segmental revenue
|
9,149
|
12,617
|
16,071
|
3,848
|
-
|
41,685
|
|
Inter-segment revenue
|
-
|
-
|
(8,582)
|
-
|
-
|
(8,582)
|
|
Revenue from external customers
|
9,149
|
12,617
|
7,489
|
3,848
|
-
|
33,103
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
(3)
|
(55)
|
(13)
|
(4)
|
(1,150)
|
(1,225)
|
|
Net finance income
|
-
|
1
|
-
|
-
|
120
|
121
|
|
Profit/(loss) before income tax
|
3,301
|
3,530
|
2,641
|
972
|
(6,763)
|
3,681
|
No customer accounts for more than 10% of revenue.
Management review and control the Net and Total assets
of the Group and individual Companies, however, these are not
monitored by Operating Segment and as such they are not presented
as such above.
4.
Operating profit
Operating profit for the year has been arrived at
after charging the following items:
|
|
|
2023
|
2022
|
|
|
Notes
|
£000
|
£000
|
|
|
|
|
|
|
Cost of inventories recognised as an
expense
|
|
11,937
|
12,449
|
|
Employment costs
|
7
|
6,743
|
6,539
|
|
Share-based payment
charges
|
6
|
304
|
213
|
|
Amortisation of intangible
assets
|
13
|
663
|
646
|
|
Depreciation of property, plant and
equipment
|
14
|
504
|
509
|
|
Depreciation of right-of-use
assets
|
15
|
70
|
70
|
|
Loss on disposal of tangible and
intangible assets
|
|
552
|
46
|
|
Research and development
expenditure
|
|
63
|
98
|
Our specialist technical team includes experts in
poultry, swine, ruminant & aquaculture species. During the year
we have capitalised internal costs of £153,000 (2022: £447,000) and
expended a further £156,000 (2022: £81,000) on external trials in
respect of current development projects.
The charge for the year in respect of share options
granted and associated expenses amounts to £304,000 (2022:
£213,000) of which a charge of £20,000 (2022: £30,000) relates to
professional
fees.
5.
Auditor's remuneration
During the year the Group obtained the following
services from the Company's auditor:
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Fees payable to Company's auditor
for the audit of Parent Company and consolidated financial
statements
|
115
|
111
|
|
Fees payable to Company's auditor
for other services:
|
|
|
|
Other non-audit services
|
6
|
5
|
|
The audit of Company
Subsidiaries
|
6
|
5
|
|
Total fees payable to Company's auditor
|
127
|
121
|
6.
Alternative performance measures
In reporting financial information, the Group presents
alternative performance measures (APMs), which are not defined or
specified under the requirements of IFRS. The Group believes that
these APMs, which are not considered to be a substitute for or
superior to IFRS measures, provide depth and understanding to the
users of the financial statements to allow for further assessment
of the underlying performance of the Group.
The Board considers that adjusted EBITDA is the most
appropriate profit measure by which users of the financial
statements can assess the ongoing performance of the Group. EBITDA
is a commonly used measure in which earnings are stated before net
finance income, amortisation and depreciation. The Group makes
further adjustments to remove items that are non-recurring or are
not reflective of the underlying operational performance either due
to their nature or level of volatility. EBITDA is often used as a
proxy for cash flows and accordingly the Group adjusts for
share-based payment charges which are a non-cash measure.
As part of regular review processes, an impairment of
research and development expenditure was identified in the year.
This relates to a number of projects which, whilst demonstrating
positive results, would have required further investment and a
decision was made to halt work on these initiatives. Due to the
exceptional and non-recurring nature of these costs, they have been
excluded from our APMs.
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Operating profit
|
2,523
|
3,560
|
|
|
|
|
|
R&D Impairment
|
399
|
-
|
|
Non-recurring acquisition
costs
|
-
|
210
|
|
Share-based payments
|
304
|
213
|
|
Total adjustments
|
703
|
423
|
|
|
|
|
|
Adjusted operating profit
|
3,226
|
3,983
|
|
|
|
|
|
Depreciation and
amortisation
|
1,237
|
1,225
|
|
|
|
|
|
Adjusted EBITDA
|
4,463
|
5,208
|
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Adjusted operating profit
|
3,226
|
3,983
|
|
|
|
|
|
Income tax expense
|
(225)
|
(378)
|
|
Income tax impact of
adjustments
|
5
|
42
|
|
Impact of prior year Patent Box tax
reduction
|
(130)
|
-
|
|
|
|
|
|
Adjusted profit after tax
|
2,876
|
3,647
|
7.
Employment costs
|
|
|
2023
|
2022
|
|
|
Notes
|
£000
|
£000
|
|
|
|
|
|
|
Wages and salaries
|
|
5,806
|
5,522
|
|
Social security costs
|
|
643
|
692
|
|
Other pension costs
|
|
294
|
325
|
|
Share-based payment
charges
|
26
|
304
|
213
|
|
Employment costs
|
|
7,047
|
6,752
|
Employment costs stated above includes Director's
remuneration. The key management of the Group is deemed to be the
Board of Directors who have authority and responsibility for
planning and controlling all significant activities of the
Group.
Wages and salaries is shown net of an adjustment for
capitalised internal costs of £153,000 (2022: £447,000) in respect
of current development projects, see note 13.
Director's remuneration details can be found in the
Remuneration Committee Report.
|
|
|
2023
|
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Director's emoluments
|
|
548
|
581
|
|
Company contributions to defined
contribution pension schemes
|
|
41
|
47
|
|
Share-based payment
charges
|
|
128
|
80
|
During the year retirement benefits were accruing to 3
Directors (2022: 3). Richard Edwards and Karen Prior opted to take
their entitlement as cash in lieu of contributions to a defined
contribution pension schemes.
The highest paid Director received remuneration as
outlined below.
|
|
|
2023
|
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Director's emoluments
|
|
260
|
410
|
|
Company contributions to defined
contribution pension schemes
|
|
25
|
25
|
|
Share-based payment
charges
|
|
2
|
2
|
8.
Number of
employees
The average monthly number of employees, including
Directors, during the year was:
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Directors
|
5
|
5
|
|
Production
|
26
|
33
|
|
Administration
|
22
|
23
|
|
Sales and Technical
|
62
|
63
|
|
Average headcount
|
115
|
124
|
In addition to employees, sales and technical
specialists are engaged on a consultancy basis in several
countries.
9. Net
finance income
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Interest receivable on short-term
bank deposits
|
236
|
124
|
|
Finance income
|
236
|
124
|
|
|
|
|
|
Lease interest paid
|
(6)
|
(3)
|
|
Finance costs
|
(6)
|
(3)
|
|
|
|
|
|
Net
finance income
|
230
|
121
|
10. Income tax
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Current tax on profits for the
year
|
|
198
|
263
|
|
Adjustment for prior
years
|
|
(6)
|
(89)
|
|
Current tax
|
|
192
|
174
|
|
|
|
|
|
|
Origination and reversal of
temporary differences
|
|
188
|
226
|
|
Adjustment for prior
years
|
|
(155)
|
(22)
|
|
Deferred tax
|
16
|
33
|
204
|
|
|
|
|
|
|
Income tax expense charged to the income
statement
|
|
225
|
378
|
The tax on the Company's profit before tax differs
from the theoretical amount that would arise using the standard
domestic tax rate applicable to profits of the Company as
follows:
|
|
|
2023
|
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Profit before tax
|
|
2,753
|
3,681
|
|
|
|
|
|
|
Tax
at the UK domestic rate 23.5% (2022: 19.0%)
|
|
648
|
699
|
|
|
|
|
|
|
Prior year tax
adjustments
|
|
(161)
|
(111)
|
|
Patent Box reductions - Prior
year
|
|
(130)
|
-
|
|
Patent Box reductions - Current
year
|
|
(203)
|
(163)
|
|
Non-deductible expenses
|
|
138
|
4
|
|
Losses not recognised for deferred
tax
|
|
70
|
22
|
|
Research and development tax
credits
|
|
(81)
|
(152)
|
|
Tax charge recognised directly in
equity
|
|
21
|
9
|
|
Difference in overseas tax
rates
|
|
(77)
|
70
|
|
Tax
adjustments
|
|
(423)
|
(321)
|
|
|
|
|
|
|
Income tax expense charged to the income
statement
|
|
225
|
378
|
Corporation tax is calculated at 23.5% (2022: 19.0%)
of the estimated assessable profit for the year. The UK government
announced on 3 March 2021 that the government are intending to
increase the corporation tax rate from 19% to 25% from April
2023.
In addition to the amount charged to the income
statement, the following amounts relating to tax have been
recognised in other comprehensive income.
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Current tax on profits for the
year
|
|
-
|
-
|
|
Current tax
|
|
-
|
-
|
|
|
|
|
|
|
Origination and reversal of
temporary differences
|
|
309
|
(202)
|
|
Deferred tax
|
16
|
309
|
(202)
|
|
|
|
|
|
|
Income tax recognised in other comprehensive
income
|
|
309
|
(202)
|
11. Dividends
Amounts recognised as distributions to equity holders
for the year ended 31 December:
|
|
2023
|
2023
|
2022
|
2022
|
|
|
per
share
|
total
|
per
share
|
total
|
|
|
pence
|
£000
|
pence
|
£000
|
|
|
|
|
|
|
|
Interim dividend - Paid
|
3.20p
|
534
|
3.15p
|
674
|
|
|
|
|
|
|
|
Final dividend - Paid
|
-
|
-
|
7.35p
|
1,228
|
|
Final dividend - Proposed
|
7.50p
|
1,253
|
-
|
-
|
|
Final dividend
|
7.50p
|
1,253
|
7.35p
|
1,228
|
|
|
|
|
|
|
|
Total dividend
|
10.70p
|
1,787
|
10.50p
|
1,902
|
The proposed final dividend is subject to approval by
the shareholders at the AGM and has not been included as a
liability in these financial statements.
The total amount of dividend paid to shareholders in
the year was £1,762,000 (2022: £2,186,000), being the final
dividend for the year prior and the interim dividend for current
year.
Under the Joint Share Ownership Plan ("JSOP") the
proceeds of dividends received on jointly owned shares will be
divided between the employees and the Trust according to any growth
in the market value. Dividend amounts due to the Trust are waived.
The calculation of the split is made at the time of payment and the
estimated dividend amount shown above includes an estimate of the
amounts to be waived.
12. Earnings per
share
The Group presents basic and diluted earnings per
share ("EPS") data, both adjusted and non-adjusted for its ordinary
shares. Basic EPS is calculated by dividing profit attributable to
ordinary shareholders by the weighted average number of ordinary
shares fully outstanding during the period. Potential ordinary
shares and shares held in the Joint Share Ownership Plan ("JSOP")
are only treated as dilutive when their conversion to ordinary
shares would decrease EPS.
The calculation of earnings per share is based on the
following data:
|
|
Note
|
2023
|
2022
|
|
|
|
|
|
|
Basic weighted average number of shares
|
|
18,716,282
|
20,481,713
|
|
Number of dilutive potential
shares
|
|
73,034
|
1,392,327
|
|
Diluted weighted average number of shares
|
|
18,789,316
|
21,874,040
|
|
|
|
|
|
|
Profit for the year attributable to
owners of the Parent (£000's)
|
|
2,528
|
3,303
|
|
Basic earnings per share
|
|
13.51p
|
16.13p
|
|
Diluted earnings per share
|
|
13.45p
|
15.10p
|
|
|
|
|
|
|
Adjusted profit attributable to
owners of the Parent (£000's)
|
6
|
2,876
|
3,647
|
|
Adjusted earnings per share
|
|
15.37p
|
17.81p
|
|
Diluted adjusted earnings per share
|
|
15.31p
|
16.67p
|
13. Intangible
assets
|
|
Goodwill
|
Brands
and
developed
products
|
Customer
relationships
|
Patents,
trademarks
and registrations
|
Development costs
|
Software
and Licenses
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
5,960
|
4,553
|
786
|
1,807
|
806
|
797
|
14,709
|
|
Additions
|
-
|
78
|
-
|
115
|
528
|
10
|
731
|
|
Reclassifications
|
-
|
135
|
-
|
-
|
(135)
|
136
|
136
|
|
Disposals
|
-
|
-
|
-
|
-
|
(45)
|
-
|
(45)
|
|
Foreign exchange
|
-
|
-
|
-
|
2
|
-
|
-
|
2
|
|
As at 31 December 2022
|
5,960
|
4,766
|
786
|
1,924
|
1,154
|
943
|
15,533
|
|
Additions
|
-
|
50
|
-
|
153
|
259
|
4
|
466
|
|
Reclassifications
|
-
|
529
|
-
|
-
|
(529)
|
-
|
-
|
|
Disposals
|
-
|
-
|
-
|
(1,051)
|
(399)
|
(22)
|
(1,472)
|
|
As
at 31 December 2023
|
5,960
|
5,345
|
786
|
1,026
|
485
|
925
|
14,527
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation
|
|
|
|
|
|
|
|
As at 1 January 2022
|
-
|
992
|
722
|
1,068
|
-
|
632
|
3,414
|
|
Charge for the year
|
-
|
326
|
23
|
195
|
-
|
102
|
646
|
|
Reclassifications
|
-
|
-
|
-
|
-
|
-
|
98
|
98
|
|
As at 31 December 2022
|
-
|
1,318
|
745
|
1,263
|
-
|
832
|
4,158
|
|
Charge for the year
|
-
|
362
|
10
|
227
|
-
|
64
|
663
|
|
Impairment provision
|
-
|
-
|
-
|
-
|
399
|
-
|
399
|
|
Disposals
|
-
|
-
|
-
|
(909)
|
(399)
|
(22)
|
(1,330)
|
|
As
at 31 December 2023
|
-
|
1,680
|
755
|
581
|
-
|
874
|
3,890
|
|
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
5,960
|
3,561
|
64
|
739
|
806
|
165
|
11,295
|
|
As at 31 December 2022
|
5,960
|
3,448
|
41
|
661
|
1,154
|
111
|
11,375
|
|
As
at 31 December 2023
|
5,960
|
3,665
|
31
|
445
|
485
|
51
|
10,637
|
Brands relate to the fair value of previously acquired
brands. The Optivite brand was acquired in 2009 and has a net book
value at 31 December 2023 of £1,401,000 (2022: £1,451,000). The
Meriden brand was acquired in 2012 and has a net book value at 31
December 2023 of £292,000 (2022: £328,000). These are deemed to
have a useful economic life between 20 and 30 years due to the
inherent intellectual property contained in the products, the
longevity of the product lives and global market opportunities.
Goodwill related to previously acquired operations is
reviewed on a global basis with a further consideration of the
sales attributable to each of the trading brands as identified in
the table below.
Goodwill is allocated as follows:
|
|
|
|
|
|
|
|
£000
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Kiotechagil
operations
|
|
|
|
|
3,552
|
|
Acquisition of Optivite
operations
|
|
|
|
|
|
592
|
|
Acquisition of Meriden
operations
|
|
|
|
|
|
1,346
|
|
Acquisition of Cobbett
business
|
|
|
|
|
|
470
|
|
Goodwill as at 1 December 2022, 31 December 2022 and 31
December 2023
|
|
5,960
|
The recoverable amount of a CGU is determined based on
value-in-use calculations. These calculations use pre-tax cash flow
projections based on financial budgets approved by management
covering a five-year period. Cash flows beyond a five-year period
are extrapolated using estimated growth rates of 2.5% per annum
(2022: 2.5%).
The discount rate used of 14% (2022: 14%) is pre-tax
and reflects specific risks relating to the operating segments.
Based on the calculations of the recoverable amount of
each CGU, no impairment to goodwill was identified.
The Group has conducted a sensitivity analysis on the
impairment test of each CGU and the group of units carrying value.
A cut in the annual growth rate of 4.6 (2022: 6.2) percentage
points to a negative growth of minus 2.1 (2022: 3.7) percentage
points would cause the carrying value of goodwill to equal its
recoverable amount.
14. Property, plant and
equipment
|
|
Land
and
buildings
|
Plant
and machinery
|
Fixtures, fittings
and equipment
|
Assets
in the course
of construction
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
As at 1 January 2022
|
1,921
|
3,801
|
526
|
844
|
7,092
|
|
Additions
|
29
|
38
|
35
|
707
|
809
|
|
Transfer of assets in
construction
|
303
|
1,203
|
(139)
|
(1,503)
|
(136)
|
|
Disposals
|
(2)
|
(25)
|
(29)
|
-
|
(56)
|
|
Foreign exchange
|
-
|
-
|
2
|
-
|
2
|
|
As at 31 December 2022
|
2,251
|
5,017
|
395
|
48
|
7,711
|
|
Additions
|
2
|
11
|
12
|
252
|
277
|
|
Transfer of assets in
construction
|
-
|
282
|
9
|
(291)
|
-
|
|
Disposals
|
-
|
(67)
|
(37)
|
(9)
|
(113)
|
|
Foreign exchange
|
-
|
-
|
(4)
|
-
|
(4)
|
|
As
at 31 December 2023
|
2,253
|
5,243
|
375
|
-
|
7,871
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
As at 1 January 2022
|
313
|
1,811
|
365
|
-
|
2,489
|
|
Charge for the year
|
47
|
391
|
71
|
-
|
509
|
|
Reclassification
|
(8)
|
9
|
(98)
|
-
|
(97)
|
|
Disposals
|
(2)
|
(24)
|
(29)
|
-
|
(55)
|
|
Foreign exchange
|
-
|
-
|
1
|
-
|
1
|
|
As at 31 December 2022
|
350
|
2,187
|
310
|
-
|
2,847
|
|
Charge for the year
|
51
|
414
|
39
|
-
|
504
|
|
Disposals
|
-
|
(65)
|
(37)
|
-
|
(102)
|
|
Foreign exchange
|
-
|
-
|
(4)
|
-
|
(4)
|
|
As
at 31 December 2023
|
401
|
2,536
|
308
|
-
|
3,245
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
As at 1 January 2022
|
1,608
|
1,990
|
161
|
844
|
4,603
|
|
As at 31 December 2022
|
1,901
|
2,830
|
85
|
48
|
4,864
|
|
As
at 31 December 2023
|
1,852
|
2,707
|
67
|
-
|
4,626
|
Held within land and buildings is an amount of
£500,000 (2022: £500,000) in respect of non-depreciable land.
15. Right-of-use
assets
|
|
Land
and
buildings
|
Plant
and
machinery
|
Fixtures, fittings
and equipment
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
As at 1 January 2022
|
270
|
-
|
3
|
273
|
|
Additions
|
-
|
23
|
-
|
23
|
|
Modification to lease
terms
|
12
|
-
|
-
|
12
|
|
Foreign exchange
|
14
|
-
|
-
|
14
|
|
As at 31 December 2022
|
296
|
23
|
3
|
322
|
|
Additions
|
-
|
11
|
-
|
11
|
|
Modification to lease
terms
|
87
|
-
|
-
|
87
|
|
Foreign exchange
|
(19)
|
-
|
-
|
(19)
|
|
As
at 31 December 2023
|
364
|
34
|
3
|
401
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
As at 1 January 2022
|
191
|
-
|
1
|
192
|
|
Charge for the year
|
68
|
1
|
1
|
70
|
|
Foreign exchange
|
10
|
-
|
-
|
10
|
|
As at 31 December 2022
|
269
|
1
|
2
|
272
|
|
Charge for the year
|
62
|
7
|
1
|
70
|
|
Foreign exchange
|
(17)
|
-
|
-
|
(17)
|
|
As
at 31 December 2023
|
314
|
8
|
3
|
325
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
As at 1 January 2022
|
79
|
-
|
2
|
81
|
|
As at 31 December 2022
|
27
|
22
|
1
|
50
|
|
As
at 31 December 2023
|
50
|
26
|
-
|
76
|
Land and building right-of-use assets relate to leased
offices, other assets are less material and various in nature that
are required for the Group to conduct its activities.
Further information about the lease liabilities that
relate to the right-of-use assets above are contained in note 21.
Details of cash outflow for those leases are contained in the
Consolidated Statement of Cash Flows.
There are no material short-term or low value
leases.
16. Deferred tax
|
|
|
|
|
2023
|
2022
|
|
|
|
Notes
|
£000
|
£000
|
|
|
|
|
|
|
|
|
As at 1 January
|
|
|
|
865
|
912
|
|
Income statement charge
|
|
|
10
|
33
|
204
|
|
Deferred tax charged/(credited)
directly to equity
|
10
|
309
|
(202)
|
|
Foreign exchange
|
|
|
|
18
|
(49)
|
|
As
at 31 December
|
|
|
|
1,225
|
865
|
|
|
|
Accelerated
tax allowances
|
Fair
value
gains
|
Cashflow
hedge
|
Losses
|
Other
timing
differences
|
Total
|
|
Notes
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
|
1,444
|
805
|
15
|
(433)
|
(919)
|
912
|
|
Income statement
charge/(credit)
|
10
|
135
|
(25)
|
-
|
(54)
|
148
|
204
|
|
Deferred tax charged/(credited)
directly to equity
|
-
|
-
|
(273)
|
(94)
|
165
|
(202)
|
|
Foreign exchange
|
|
-
|
-
|
-
|
(49)
|
-
|
(49)
|
|
As at 31 December 2022
|
|
1,579
|
780
|
(258)
|
(630)
|
(606)
|
865
|
|
Income statement
(credit)/charge
|
10
|
(290)
|
108
|
-
|
51
|
164
|
33
|
|
Deferred tax charged directly to
equity
|
|
-
|
-
|
219
|
-
|
90
|
309
|
|
Foreign exchange
|
|
-
|
-
|
-
|
18
|
-
|
18
|
|
As
at 31 December 2023
|
|
1,289
|
888
|
(39)
|
(561)
|
(352)
|
1,225
|
|
|
2023
|
2022
|
|
£000
|
£000
|
|
|
|
|
|
Deferred income tax asset
|
(537)
|
(859)
|
|
Deferred income tax
liability
|
1,762
|
1,724
|
|
Net
deferred income tax liability
|
1,225
|
865
|
Included in 'Other timing differences' above is
£351,000 (2022: £529,000) that relates to the tax impact of the
elimination of intercompany unrealised profit held in
inventory.
The UK government announced on 3 March 2021 that the
government are intending to increase the corporation tax rate from
19% to 25% from April 2023.
A deferred tax asset has been recognised in the UK and
US for tax losses, carried forward on the grounds that sufficient
future taxable profits are forecast to be realised. No deferred tax
asset is recognised in respect of losses incurred in other overseas
subsidiaries, due to the uncertainty surrounding the timing of the
utilisation of those losses.
17. Inventories
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Raw materials and
consumables
|
3,064
|
4,664
|
|
Finished goods and goods for
resale
|
3,284
|
5,203
|
|
Inventory
|
6,348
|
9,867
|
18. Trade and other
receivables
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Trade receivables - gross
|
5,973
|
6,198
|
|
|
|
|
|
Less: expected credit
losses
|
(357)
|
(231)
|
|
|
|
|
|
Trade receivables - net
|
5,616
|
5,967
|
|
|
|
|
|
Taxes
|
475
|
450
|
|
Other receivables
|
74
|
56
|
|
Prepayments
|
650
|
530
|
|
Total trade and other receivables
|
6,815
|
7,003
|
The gross trade receivables are denominated in the
following currencies:
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Pounds sterling
|
1,843
|
1,724
|
|
US dollars
|
2,341
|
2,460
|
|
Euros
|
666
|
924
|
|
Other currencies
|
1,123
|
1,090
|
|
Trade receivables - gross
|
5,973
|
6,198
|
No interest is charged on trade receivables if
balances are paid in full and to terms, there has been no interest
charged in the current or previous financial year. There is no
security held against outstanding balances.
The Group applies the simplified approach to
provisioning for expected credit losses prescribed by IFRS 9, which
permits the use of the lifetime expected loss provisioning for all
trade receivables.
The Group measures the loss allowance for trade
receivables at an amount equal to lifetime expected credit loss
"ECL". The ECL on trade receivables are estimated using a provision
matrix by reference to past default experience of the debtor and an
analysis of the debtor's current financial position, adjusted for
factors that are specific to the debtors, general economic
conditions of the industry in which the debtors operate and an
assessment of both the current as well as the forecast direction of
conditions at the reporting date. The Group will also, using this
and all other information available, make specific judgements about
receivables which may need to be individually assessed for
impairment. Where required these are marked as Credit Impaired
amounts and detailed analysis undertaken to assess the amount
likely to be recovered including consideration of the effect of
credit enhancements.
The Group seeks to mitigate credit risk, in so far as
possible, through the use of credit insurance. The Group has
historically suffered low levels of credit losses, whilst there are
no guarantees on future performance, the credit losses experienced
in the past have come from customers that we were unable to obtain
specific credit insurance for. The credit insurance in place allows
for the recovery of 90% of trading debt with a customer according
to a pre-agreed insured limit. The Group sometimes trades beyond
this credit insured limit according to internal approval
procedures.
Accordingly, the Group have segmented customers
according to their credit insurance status. The following table
details the risk profile of trade receivables based on the Group's
provision matrix and individual assessments as at 31 December 2023.
The expected loss rates are the same for the Group and Company.
|
|
Not
past due
|
1-60
days
past due
|
61-120
days
past due
|
>121
days
past due
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
Specifically insured
customers
|
3,633
|
396
|
8
|
1
|
4,038
|
|
Uninsured customers
|
1,043
|
316
|
126
|
-
|
1,485
|
|
Credit impaired
|
33
|
32
|
62
|
323
|
450
|
|
Trade receivables - gross
|
4,709
|
744
|
196
|
324
|
5,973
|
|
|
|
|
|
|
|
|
Expected loss rates:
|
|
|
|
|
|
|
Specifically insured customers
|
0%
|
1%
|
6%
|
7%
|
0%
|
|
Uninsured customers
|
2%
|
6%
|
28%
|
35%
|
5%
|
|
Credit impaired
|
50%
|
50%
|
50%
|
61%
|
58%
|
|
|
|
|
|
|
|
|
Specifically insured
customers
|
15
|
5
|
-
|
-
|
20
|
|
Uninsured customers
|
22
|
18
|
36
|
-
|
76
|
|
Credit impaired
|
16
|
16
|
31
|
198
|
261
|
|
Expected credit losses
|
53
|
39
|
67
|
198
|
357
|
|
|
|
|
|
|
|
|
Trade receivables - net
|
4,656
|
705
|
129
|
126
|
5,616
|
The comparative table below shows the Group's
provision matrix and individual assessments as at 31 December
2022.
|
|
Not
past due
|
1-60
days
past due
|
61-120
days
past due
|
>121
days
past due
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
Specifically insured
customers
|
3,884
|
969
|
107
|
-
|
4,960
|
|
Uninsured customers
|
670
|
151
|
31
|
6
|
858
|
|
Credit impaired
|
136
|
101
|
80
|
63
|
380
|
|
Trade receivables - gross
|
4,690
|
1,221
|
218
|
69
|
6,198
|
|
|
|
|
|
|
|
|
Expected loss rates:
|
|
|
|
|
|
|
Specifically insured customers
|
0%
|
1%
|
6%
|
7%
|
1%
|
|
Uninsured customers
|
2%
|
6%
|
28%
|
35%
|
4%
|
|
Credit impaired
|
28%
|
34%
|
36%
|
100%
|
43%
|
|
|
|
|
|
|
|
|
Specifically insured
customers
|
16
|
11
|
6
|
-
|
33
|
|
Uninsured customers
|
14
|
9
|
9
|
2
|
34
|
|
Credit impaired
|
38
|
34
|
29
|
63
|
164
|
|
Expected credit losses
|
68
|
54
|
44
|
65
|
231
|
|
|
|
|
|
|
|
|
Trade receivables - net
|
4,622
|
1,167
|
174
|
4
|
5,967
|
The movement in expected credit losses under IFRS 9
are as follows:
|
|
|
|
Collectively
assessed
|
Individually
assessed
|
Total
|
|
|
|
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
|
|
65
|
172
|
237
|
|
Provisions for receivables
created
|
|
|
2
|
117
|
119
|
|
Amounts written off as
unrecoverable
|
|
-
|
(31)
|
(31)
|
|
Amounts recovered during the
year
|
|
|
-
|
(96)
|
(96)
|
|
Foreign exchange gains
|
|
|
-
|
2
|
2
|
|
As
at 31 December 2022
|
|
|
67
|
164
|
231
|
|
Provisions for receivables
created
|
|
|
29
|
148
|
177
|
|
Amounts written off as
unrecoverable
|
|
-
|
-
|
-
|
|
Amounts recovered during the
year
|
|
|
-
|
(47)
|
(47)
|
|
Foreign exchange gains
|
|
|
-
|
(4)
|
(4)
|
|
As
at 31 December 2023
|
|
|
96
|
261
|
357
|
19. Financial
instruments and risk management
Carrying amount of financial instruments:
|
As
at 31 December 2023
|
|
Measured
at amortised cost
|
Derivatives designated as hedging instruments
|
Derivatives not designated as hedging instruments
|
Total
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
Derivative financial
instruments
|
|
-
|
18
|
235
|
253
|
|
Non-current
|
|
-
|
18
|
235
|
253
|
|
|
|
|
|
|
|
|
Trade and other
receivables
|
18
|
6,815
|
-
|
-
|
6,815
|
|
Derivative financial
instruments
|
|
-
|
-
|
67
|
67
|
|
Short-term investments
|
20
|
110
|
-
|
-
|
110
|
|
Cash and cash equivalents
|
20
|
10,539
|
-
|
-
|
10,539
|
|
Current
|
|
17,464
|
-
|
67
|
17,531
|
|
|
|
|
|
|
|
|
Financial assets
|
|
17,464
|
18
|
302
|
17,784
|
|
|
|
|
|
|
|
|
Lease liabilities
|
21
|
(46)
|
-
|
-
|
(46)
|
|
Derivative financial
instruments
|
19
|
-
|
(32)
|
(14)
|
(46)
|
|
Non-current
|
|
(46)
|
(32)
|
(14)
|
(92)
|
|
|
|
|
|
|
|
|
Trade and other payables
|
22
|
(4,046)
|
-
|
-
|
(4,046)
|
|
Lease liabilities
|
21
|
(33)
|
-
|
-
|
(33)
|
|
Derivative financial
instruments
|
19
|
-
|
(191)
|
(186)
|
(377)
|
|
Current
|
|
(4,079)
|
(191)
|
(186)
|
(4,456)
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
(4,125)
|
(223)
|
(200)
|
(4,548)
|
|
As
at 31 December 2022
|
|
Measured
at amortised cost
|
Derivatives designated as hedging instruments
|
Derivatives not designated as hedging instruments
|
Total
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
Derivative financial
instruments
|
|
-
|
-
|
153
|
153
|
|
Non-current
|
|
-
|
-
|
153
|
153
|
|
|
|
|
|
|
|
|
Trade and other
receivables
|
18
|
7,003
|
-
|
-
|
7,003
|
|
Derivative financial
instruments
|
|
-
|
1
|
20
|
21
|
|
Short-term investments
|
20
|
1,828
|
-
|
-
|
1,828
|
|
Cash and cash equivalents
|
20
|
11,739
|
-
|
-
|
11,739
|
|
Current
|
|
20,570
|
1
|
20
|
20,591
|
|
|
|
|
|
|
|
|
Financial assets
|
|
20,570
|
1
|
173
|
20,744
|
|
|
|
|
|
|
|
|
Lease liabilities
|
21
|
(17)
|
-
|
-
|
(17)
|
|
Derivative financial
instruments
|
19
|
-
|
(417)
|
(408)
|
(825)
|
|
Non-current
|
|
(17)
|
(417)
|
(408)
|
(842)
|
|
|
|
|
|
|
|
|
Trade and other payables
|
22
|
(3,983)
|
-
|
-
|
(3,983)
|
|
Lease liabilities
|
21
|
(35)
|
-
|
-
|
(35)
|
|
Derivative financial
instruments
|
19
|
-
|
(533)
|
(105)
|
(638)
|
|
Current
|
|
(4,018)
|
(533)
|
(105)
|
(4,656)
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
(4,035)
|
(950)
|
(513)
|
(5,498)
|
Hedge
relationships
The Group has elected to adopt the hedge accounting
requirements of IFRS 9 Financial Instruments. The Group enters into
hedge relationships where the critical terms of the hedging
instrument and the hedged item match, therefore, for the
prospective assessment of effectiveness a qualitative assessment is
performed. Hedge effectiveness is determined at the origination of
the hedging relationship. Quantitative effectiveness tests are
performed at each period end to determine the continuing
effectiveness of the relationship. In instances where changes occur
to the hedged item which result in the critical terms no longer
matching, the hypothetical derivative method is used to assess
effectiveness.
Fair values of
financial instruments
Financial instruments are measured in accordance with
the accounting policy set out in note 2.13. Derivative financial
instruments, consisting of foreign exchange forward and options
contracts, are considered Level 2. There were no transfers between
levels in the period and the valuation technique used to measure
the instruments are forward exchange rates at the reporting date.
The carrying value of the financial instruments is at amortised
cost and is deemed to be approximate to fair value.
Credit
risk
Trade receivables and cash are financial instruments
deemed subject to credit risk. Note 18 details credit risk relating
to trade receivables. Cash balances are invested with banks and
financial institutions that have a minimum credit rating to
mitigate the credit risk. The Directors do not consider any losses
from non-performance of these institutions. The carrying value of
the trade receivables, cash balances and short-term investments
represents the maximum exposure to credit risk at the end of the
year.
Liquidity
risk
The Group maintains cash balances and monitors working
capital to ensure it has sufficient available funds for operations
and planned investment activity. The amounts due in more than one
year are immaterial.
The derivative financial assets are all net settled;
therefore, the maximum exposure to credit risk at the reporting
date is the fair value of the derivative assets which are included
in the consolidated statement of financial position.
Financial liabilities, excluding those related to
financial instruments, with a maturity of more than 3 months are
immaterial and comprise of lease liabilities, disclosed in note 21
and derivative financial liabilities details in the exchange rate
section below. For all other financial liabilities, the maturity is
less than three months and therefore the carrying value is the same
as the fair value.
Currently management consider liquidity risk to be
minimal.
Exchange rate
risk
The Group is exposed to foreign currency exchange rate
risk mainly as a result of trade receivables and intercompany
balances that will be settled in US dollars.
The Group seeks to minimise the effects of exchange
rate risk using various methods, including entering into foreign
currency forward and option contracts. Where applicable these are
designated as cash flow hedges against highly probable forecast
foreign currency sales. If cash flow hedge accounting is not
applicable then the value is taken through profit or loss.
Included within other comprehensive income is the
movement in the cash flow hedge reserve as outlined below.
|
|
|
|
2023
|
2022
|
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
|
Change in value of cash flow
hedges
|
|
|
941
|
(1,175)
|
|
Deferred tax
(liability)/asset
|
|
|
(219)
|
273
|
|
Cash flow hedge movements (net of deferred
tax)
|
722
|
(902)
|
The financial instruments in place are to mitigate the
risks associated with net future US dollar receipts. The Group uses
two types of hedging instrument: fixed forwards and participating
forwards. The fixed forward contracts are fixed agreements to
exchange currency at the hedged rate. The participating forwards
provide protection at the hedged rate, each contract is divided
into monthly windows, at the end of each month the Group has the
right but not the obligation to sell at the hedged rate, however if
spot trades below the barrier rate in the month then the Group must
sell USD at the hedged rate. This means that Anpario has protection
at the hedged rate, but may also benefit from exchange between the
barrier rate and hedged rate. The details of the notional amounts,
hedged rate and spot rate at 31 December are outlined below. The
maximum exposure to credit risk at the reporting date is the fair
value of the derivative assets in the Consolidated Statement of
Financial Position.
|
|
|
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
GBP/USD spot rate at 31 December
|
|
|
1.2732
|
1.2102
|
|
|
|
|
|
|
|
|
Fixed forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average forward
rate
|
|
|
|
1.2770
|
1.3049
|
|
|
|
|
|
|
|
|
Maturing in the next year (Notional
amount in US dollars 000's)
|
|
3,850
|
2,370
|
|
Maturing between one and two years
(Notional amount in US dollars 000's)
|
3,550
|
4,200
|
|
Maturing between two and three years
(Notional amount in US dollars 000's)
|
900
|
3,000
|
|
Notional amount (US Dollars 000's)
|
|
|
|
8,300
|
9,570
|
|
|
|
|
|
|
|
|
Participating forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average forward
rate
|
|
|
|
1.3026
|
1.3130
|
|
Weighted average barrier
rate
|
|
|
|
1.2049
|
1.2142
|
|
|
|
|
|
|
|
|
Maturing in the next year (Notional
amount in US dollars 000's)
|
|
5,800
|
7,050
|
|
Maturing between one and two years
(Notional amount in US dollars 000's)
|
2,800
|
5,800
|
|
Maturing between two and three years
(Notional amount in US dollars 000's)
|
800
|
1,900
|
|
Notional amount (US Dollars 000's)
|
|
|
|
9,400
|
14,750
|
20. Cash, cash
equivalents and short-term investments
Cash and cash equivalents comprise cash and short-term
deposits held by Group companies. Short-term investments comprise
of bank deposits, held with major UK financial institutions, with
notice periods greater than three months but less than six months.
The carrying amount of these assets approximates to their fair
value.
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Short-term investments
|
110
|
1,828
|
|
Cash and cash equivalents
|
10,539
|
11,739
|
|
Cash, cash equivalents and short-term
investments
|
10,649
|
13,567
|
21. Lease
Liabilities
At 31 December the Group had lease liabilities with
maturities as follows:
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Less than one year
|
33
|
35
|
|
Current lease liabilities
|
33
|
35
|
|
|
|
|
|
Between one and five
years
|
46
|
17
|
|
Non-current lease liabilities
|
46
|
17
|
|
|
|
|
|
Lease Liabilities
|
79
|
52
|
22. Trade and other
payables
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Trade payables
|
2,033
|
2,698
|
|
Taxes and social security
costs
|
132
|
169
|
|
Other payables
|
104
|
112
|
|
Accruals
|
1,777
|
1,004
|
|
Trade and other payables
|
4,046
|
3,983
|
There is no interest payable on trade payables and no
security against outstanding balances.
23. Share capital and
share premium
The authorised share capital is made up of:
|
|
|
|
|
Number
|
£000
|
|
|
|
|
|
|
|
|
Ordinary shares of 23p
each
|
|
|
|
86,956,521
|
20,000
|
|
'A' Shares of 99p each
|
|
|
|
1,859,672
|
1,841
|
|
Authorised share capital
|
|
|
|
|
21,841
|
The allotted, called up and fully paid share capital
is made up of Ordinary shares of 23p each as follows:
|
|
|
|
Share
capital
|
Share
premium
|
Total
|
|
|
Note
|
Number
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
|
23,676,181
|
5,446
|
11,547
|
16,993
|
|
Exercise of share options
|
26
|
177,338
|
40
|
255
|
295
|
|
Issue of shares to JSOP
|
25
|
600,000
|
138
|
3,132
|
3,270
|
|
As at 31 December 2022
|
|
24,453,519
|
5,624
|
14,934
|
20,558
|
|
Exercise of share options
|
26
|
50,000
|
12
|
113
|
125
|
|
Cancellation of Tender Offer
Shares
|
24
|
(4,000,000)
|
(920)
|
-
|
(920)
|
|
Cancellation of Treasury
Shares
|
24
|
(440,388)
|
(101)
|
-
|
(101)
|
|
As
at 31 December 2023
|
|
20,063,131
|
4,615
|
15,047
|
19,662
|
The company held shares in treasury, which were
cancelled in the year, as follows:
|
|
|
|
|
Number
|
£000
|
|
|
|
|
|
|
|
|
As at 1 January 2022 and 31 December
2022
|
440,388
|
1,189
|
|
Cancellation of Treasury
Shares
|
(440,388)
|
(1,189)
|
|
As
at 31 December 2023
|
|
|
|
-
|
-
|
The Anpario plc Employees' Share Trust holds shares in
relation to the Joint Share Ownership Plan as follows:
|
|
Number
|
|
|
|
|
As at 1 January 2022
|
2,800,000
|
|
Purchase of shares
|
600,000
|
|
As
at 31 December 2022 and 31 December 2023
|
3,400,000
|
24. Capital redemption
reserve
|
|
Note
|
£000
|
|
|
|
|
|
As at 1 January 2022 and 31 December
2022
|
|
-
|
|
Cancellation of Tender Offer
Shares
|
23
|
920
|
|
Cancellation of Treasury
Shares
|
23
|
101
|
|
As
at 31 December 2023
|
|
1,021
|
The shares acquired under the tender offer were
immediately cancelled, alongside and at the same time as the shares
previously held in Treasury. The capital redemption reserve
represents the cumulative par value of all shares bought back and
cancelled, less the associated transaction costs and stamp duty.
The capital redemption reserve is not distributable.
25. Other reserves
|
|
|
Treasury
shares
|
Joint
Share Ownership Plan
|
Merger
reserve
|
Share-based
payment
reserve
|
Cashflow
hedge
reserve
|
Translation reserve
|
Total
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
|
1,189
|
7,840
|
(228)
|
(2,281)
|
(61)
|
329
|
6,788
|
|
Joint-share ownership
plan
|
23
|
-
|
3,270
|
-
|
-
|
-
|
-
|
3,270
|
|
Share-based payment
charge
|
26
|
-
|
-
|
-
|
(183)
|
-
|
-
|
(183)
|
|
Share-based payment tax
adjustments
|
|
-
|
-
|
-
|
71
|
-
|
-
|
71
|
|
Movement in fair value (net of
tax)
|
19
|
-
|
-
|
-
|
-
|
902
|
-
|
902
|
|
Currency translation
differences
|
|
-
|
-
|
-
|
-
|
-
|
(387)
|
(387)
|
|
As at 31 December 2022
|
|
1,189
|
11,110
|
(228)
|
(2,393)
|
841
|
(58)
|
10,461
|
|
Cancellation of treasury
shares
|
23
|
(1,189)
|
-
|
-
|
-
|
-
|
-
|
(1,189)
|
|
Share-based payment
charge
|
26
|
-
|
-
|
-
|
(284)
|
-
|
-
|
(284)
|
|
Share-based payment tax
adjustments
|
|
-
|
-
|
-
|
90
|
-
|
-
|
90
|
|
Movement in fair value (net of
tax)
|
19
|
-
|
-
|
-
|
-
|
(722)
|
-
|
(722)
|
|
Currency translation
differences
|
|
-
|
-
|
-
|
-
|
-
|
221
|
221
|
|
As
at 31 December 2023
|
|
-
|
11,110
|
(228)
|
(2,587)
|
119
|
163
|
8,577
|
The nature and purpose of other reserves' items are
disclosed in note 2.18.
26. Share-based
payments
The Group operates, or has operated previously, a
number of equity-settled share based remuneration schemes for
employees. Including the following: Enterprise Management Incentive
("EMI") scheme; Save As You Earn ("SAYE") scheme; Company Share
Option Plan ("CSOP") and an unapproved scheme. These schemes are
subject to only one vesting condition being that the individual
remains an employee of the Group for a period of either 3 or 5
years.
Movements in the number of share options outstanding
are as follows:
|
|
Number
of options
|
Weighted
average
exercise price (p)
|
Number
of options
|
Weighted
average
exercise price (p)
|
|
|
2023
|
2023
|
2022
|
2022
|
|
|
|
|
|
|
|
Outstanding at 1 January
|
470,018
|
339
|
562,842
|
254
|
|
Granted during the year
|
-
|
-
|
84,514
|
565
|
|
Lapsed during the year
|
(20,545)
|
382
|
-
|
334
|
|
Exercised during the year
|
(50,000)
|
248
|
(177,338)
|
308
|
|
Outstanding at 31 December
|
399,473
|
348
|
470,018
|
339
|
|
|
|
|
|
|
|
Exercisable at 31 December
|
234,000
|
284
|
264,000
|
269
|
Share options outstanding at the end of the year have
the following expiry dates and weighted average exercise
prices:
|
|
Number
of options
|
Weighted
average
exercise price (p)
|
Number
of options
|
Weighted
average
exercise price (p)
|
|
|
2023
|
2023
|
2022
|
2022
|
|
|
|
|
|
|
|
2024
|
50,000
|
242
|
100,000
|
245
|
|
2025
|
84,800
|
290
|
84,800
|
290
|
|
2026
|
62,200
|
239
|
62,200
|
239
|
|
2027
|
76,675
|
323
|
91,504
|
323
|
|
2028
|
47,000
|
438
|
47,000
|
438
|
|
2032
|
78,798
|
535
|
84,514
|
535
|
|
Total outstanding share options
|
399,473
|
348
|
470,018
|
339
|
The range of exercise prices of outstanding share
options at the year end was 238p to 565p (2022: 238p to 565p) and
their weighted average remaining contractual life was 3.5 years
(2022: 4.2 years).
The fair value of services received in return for
share options granted and the shares which have been issued into
the joint beneficial ownership of the participating Executive
Directors and the Trustee of The Anpario plc Employees' Share Trust
is calculated based on the Black-Scholes valuation model. The
expense is apportioned over the vesting period and is based on the
number of financial instruments which are expected to vest and the
fair value of those financial instruments at the date of the
grant.
The charge for the year in respect of share options
granted and associated expenses amounts to £304,000 (2022:
£213,000) of which a charge of £20,000 (2022: £30,000) relates to
professional fees.
27. Related party
transactions
The Group considers the Directors to be the key
management personnel. There were no transactions within the year in
which the Directors had any interest. The Remuneration Committee
Report contains details of the Board emoluments.
None of the Group's shareholders are deemed to have
control or significant influence and therefore are not classified
as related parties for the purposes of this note.
28. Capital
commitments
The Group had authorised capital commitments as at 31
December as follows:
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Property, plant and
equipment
|
-
|
140
|
|
Capital commitments
|
-
|
140
|
Company statement of financial position
as at 31 December 2023
|
|
|
|
restated1
|
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Intangible assets
|
33
|
10,127
|
10,855
|
|
Property, plant and
equipment
|
34
|
4,615
|
4,854
|
|
Right of use assets
|
|
29
|
26
|
|
Investment in
subsidiaries
|
35
|
11,353
|
11,353
|
|
Derivative financial
instruments
|
19
|
253
|
153
|
|
Non-current assets
|
|
26,377
|
27,241
|
|
|
|
|
|
|
Inventories
|
37
|
3,608
|
5,315
|
|
Trade and other
receivables
|
38
|
8,523
|
10,845
|
|
Derivative financial
instruments
|
19
|
67
|
21
|
|
Current income tax assets
|
|
186
|
971
|
|
|
|
|
|
|
Short-term investments
|
|
110
|
1,828
|
|
Cash and cash
equivalents
|
|
6,158
|
8,790
|
|
Cash, cash equivalents and
short-term investments
|
|
6,268
|
10,618
|
|
|
|
|
|
|
Current assets
|
|
18,652
|
27,770
|
|
|
|
|
|
|
Total assets
|
|
45,029
|
55,011
|
|
|
|
|
|
|
Lease liabilities
|
|
(4)
|
1
|
|
Derivative financial
instruments
|
19
|
(46)
|
(825)
|
|
Deferred tax liabilities
|
36
|
(1,761)
|
(1,576)
|
|
Non-current liabilities
|
|
(1,811)
|
(2,400)
|
|
|
|
|
|
|
Trade and other payables
|
39
|
(7,285)
|
(7,496)
|
|
Lease liabilities
|
|
(27)
|
(27)
|
|
Derivative financial
instruments
|
19
|
(377)
|
(638)
|
|
Current income tax
liabilities
|
|
-
|
-
|
|
Current liabilities
|
|
(7,689)
|
(8,161)
|
|
|
|
|
|
|
Total liabilities
|
|
(9,500)
|
(10,561)
|
|
|
|
|
|
|
Net
assets
|
|
35,529
|
44,450
|
|
|
|
|
|
|
Share capital
|
40
|
4,615
|
5,624
|
|
Share premium
|
|
15,047
|
14,934
|
|
Capital redemption
reserve
|
|
1,021
|
-
|
|
Other reserves
|
41
|
(6,393)
|
(8,498)
|
|
Retained earnings
|
|
21,239
|
32,390
|
|
|
|
|
|
|
Total equity
|
|
35,529
|
44,450
|
1 The prior year has been restated to reflect an
adjustment to the computation of the deferred tax liability between
the finalisation of the accounts and the submission of the tax
computation for the Company. See note 36 for more details.
The Company has elected to take the exemption under
Section 408 of the Companies Act 2006 to not present the Parent
Company income statement. The profit for the Parent Company for the
year was £1,048,000 (2022: £857,000).
The financial statements were approved by the Board
and authorised for issue on 20 March 2024.
|
Richard
Edwards
Chief Executive Officer
|
Marc
Wilson
Group Finance Director
|
Company Number: 03345857
Company statement of changes in equity
for the year ended 31 December 2023
|
|
|
Share
capital
|
Share
premium
|
Capital
redemption reserve
|
Other
reserves
|
restated1
Retained earnings
|
Total
equity
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 Jan 2022
|
|
5,446
|
11,547
|
-
|
(4,438)
|
33,719
|
46,274
|
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
857
|
857
|
|
Cash flow hedge reserve
|
|
-
|
-
|
-
|
(902)
|
-
|
(902)
|
|
Total comprehensive loss for the
year
|
|
-
|
-
|
-
|
(902)
|
857
|
(45)
|
|
Issue of share capital
|
23
|
178
|
3,387
|
-
|
-
|
-
|
3,565
|
|
Purchase of treasury
shares
|
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Joint-share ownership
plan
|
26
|
-
|
-
|
-
|
(3,270)
|
-
|
(3,270)
|
|
Share-based payment
adjustments
|
26
|
-
|
-
|
-
|
183
|
-
|
183
|
|
Deferred tax regarding share-based
payments
|
|
-
|
-
|
-
|
(71)
|
-
|
(71)
|
|
Final dividend relating to
2021
|
|
-
|
-
|
-
|
-
|
(1,512)
|
(1,512)
|
|
Interim dividend relating to
2022
|
11
|
-
|
-
|
-
|
-
|
(674)
|
(674)
|
|
Transactions with owners
|
|
178
|
3,387
|
-
|
(3,158)
|
(2,186)
|
(1,779)
|
|
Balance at 31 Dec 2022 -
restated1
|
|
5,624
|
14,934
|
-
|
(8,498)
|
32,390
|
44,450
|
|
Profit for the period
|
|
-
|
-
|
-
|
-
|
1,048
|
1,048
|
|
Cash flow hedge reserve
|
|
-
|
-
|
-
|
722
|
-
|
722
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
-
|
722
|
1,048
|
1,770
|
|
Issue of share capital
|
23
|
12
|
113
|
-
|
-
|
-
|
125
|
|
Purchase and Cancellation of Tender
Offer shares
|
23
|
(920)
|
-
|
920
|
-
|
(9,248)
|
(9,248)
|
|
Cancellation of treasury
shares
|
23
|
(101)
|
-
|
101
|
1,189
|
(1,189)
|
-
|
|
Share-based payment
adjustments
|
26
|
-
|
-
|
-
|
284
|
-
|
284
|
|
Deferred tax regarding share-based
payments
|
|
-
|
-
|
-
|
(90)
|
-
|
(90)
|
|
Final dividend relating to
2022
|
11
|
-
|
-
|
-
|
-
|
(1,228)
|
(1,228)
|
|
Interim dividend relating to
2023
|
11
|
-
|
-
|
-
|
-
|
(534)
|
(534)
|
|
Transactions with owners
|
|
(1,009)
|
113
|
1,021
|
1,383
|
(12,199)
|
(10,691)
|
|
Balance at 31 Dec 2023
|
|
4,615
|
15,047
|
1,021
|
(6,393)
|
21,239
|
35,529
|
1 The prior year has been restated to reflect an
adjustment to the computation of the deferred tax liability between
the finalisation of the accounts and the submission of the tax
computation for the Company. See note 36 for more details.
29. Significant
accounting policies
Please refer to note 1 for full details of the
Company's incorporation, registered office, operations and
principal activity.
The separate financial statements of the Company are
presented as required by the Companies Act 2006. The Company meets
the definition of a qualifying entity under FRS 101 (Financial
Reporting Standard 101) issued by the Financial Reporting Council.
The financial statements have therefore been prepared in accordance
with FRS 101 (Financial Reporting Standard 101) 'Reduced Disclosure
Framework' as issued by the Financial Reporting Council.
As permitted by FRS 101, the Company has taken
advantage of the disclosure exemptions available under that
Standard in relation to share-based payments, financial
instruments, capital management, presentation of comparative
information in respect of certain assets, presentation of a cash
flow statement and certain related party transactions. Where
required, equivalent disclosures are given in the Group financial
statements.
The financial statements have been prepared on the
historical cost basis. The principal accounting policies, and
critical accounting judgements and key sources of estimation
uncertainty adopted are the same as those set out in note 2 to the
Group financial statements except as noted below. These have been
applied consistently throughout the period and the preceding
period.
Investments
Fixed asset investments in subsidiaries are shown at
cost less provision for impairment.
Receivables from
Subsidiary undertakings
The Company holds intercompany receivables with
subsidiary undertakings subject to terms of less than one year. If
a significant change in credit risk occurs following initial
recognition then an impairment assessment is carried out. The
Directors assess periodically and at each period end whether there
has been a significant increase in credit risk. Where there has
been a significant increase in credit risk an impairment assessment
is carried out.
30. Profit for the
period
The auditor's remuneration for audit and other
services is disclosed within note 5 to the Group financial
statements.
Dividends declared and paid during the financial
period are disclosed in note 11 to the Group financial
statements.
31. Employment costs
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Wages and salaries
|
|
3,631
|
3,292
|
|
Social security costs
|
|
363
|
419
|
|
Other pension costs
|
|
222
|
265
|
|
Share-based payment
charges
|
26
|
304
|
213
|
|
Employment costs
|
|
4,520
|
4,189
|
Employment costs stated above includes Director's
remuneration. The key management of the Group is deemed to be the
Board of Directors who have authority and responsibility for
planning and controlling all significant activities of the Group.
Director's remuneration details can be found in the Remuneration
Committee Report.
32. Number of
employees
The average monthly number of employees, including
Directors, during the year was:
|
|
|
2023
|
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Directors
|
|
5
|
5
|
|
Production
|
|
26
|
33
|
|
Administration
|
|
15
|
16
|
|
Sales and Technical
|
|
34
|
32
|
|
Average headcount
|
|
80
|
86
|
33. Intangible
assets
|
|
Goodwill
|
Brands
and
developed
products
|
Customer
relationships
|
Patents,
trademarks
and registrations
|
Development costs
|
Software
and Licenses
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
As at 31 December 2022
|
5,490
|
4,677
|
559
|
1,915
|
1,154
|
943
|
14,738
|
|
Additions
|
-
|
50
|
-
|
153
|
259
|
4
|
466
|
|
Reclassifications
|
-
|
529
|
-
|
-
|
(529)
|
-
|
-
|
|
Disposals
|
-
|
-
|
-
|
(1,051)
|
(399)
|
(22)
|
(1,472)
|
|
As
at 31 December 2023
|
5,490
|
5,256
|
559
|
1,017
|
485
|
925
|
13,732
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation
|
|
|
|
|
|
|
|
|
As at 31 December 2022
|
-
|
1,229
|
559
|
1,263
|
-
|
832
|
3,883
|
|
Charge for the year
|
-
|
362
|
-
|
227
|
-
|
64
|
653
|
|
Impairment provision
|
-
|
-
|
-
|
-
|
399
|
-
|
399
|
|
Disposals
|
-
|
-
|
-
|
(909)
|
(399)
|
(22)
|
(1,330)
|
|
As
at 31 December 2023
|
-
|
1,591
|
559
|
581
|
-
|
874
|
3,605
|
|
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
|
|
As at 31 December 2022
|
5,490
|
3,448
|
-
|
652
|
1,154
|
111
|
10,855
|
|
As
at 31 December 2023
|
5,490
|
3,665
|
-
|
436
|
485
|
51
|
10,127
|
More information about Goodwill can be found in note
13 to the financial statements.
34. Property, plant and
equipment
|
|
|
Land
and
buildings
|
Plant
and machinery
|
Fixtures, fittings and equipment
|
Assets
in the course of construction
|
Total
|
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
As at 31 December 2022
|
|
2,251
|
5,017
|
337
|
48
|
7,653
|
|
Additions
|
|
2
|
11
|
6
|
252
|
271
|
|
Transfer of assets in
construction
|
-
|
282
|
9
|
(291)
|
-
|
|
Disposals
|
|
-
|
(67)
|
(37)
|
(9)
|
(113)
|
|
As
at 31 December 2023
|
|
2,253
|
5,243
|
315
|
-
|
7,811
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
As at 31 December 2022
|
|
350
|
2,187
|
262
|
-
|
2,799
|
|
Charge for the year
|
|
51
|
414
|
34
|
-
|
499
|
|
Disposals
|
|
-
|
(65)
|
(37)
|
-
|
(102)
|
|
As
at 31 December 2023
|
|
401
|
2,536
|
259
|
-
|
3,196
|
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
|
As at 31 December 2022
|
|
1,901
|
2,830
|
75
|
48
|
4,854
|
|
As
at 31 December 2023
|
|
1,852
|
2,707
|
56
|
-
|
4,615
|
Held within land and buildings is an amount of
£500,000 (2022: £500,000) in respect of non-depreciable land.
35. Investment in
subsidiaries
|
|
Unlisted
investments
|
|
£000
|
|
|
|
|
Cost
|
|
|
As at 1 December 2022
|
14,812
|
|
Investment in
Subsidiaries
|
18
|
|
As
at 31 December 2022 and 31 December 2023
|
14,830
|
|
|
|
|
Provisions for diminution in value
|
|
|
As at 1 January 2022
|
2,616
|
|
Provisions made in the
year
|
861
|
|
As
at 31 December 2022 and 31 December 2023
|
3,477
|
|
|
|
|
Net
book value
|
|
|
As at 1 January 2022
|
12,196
|
|
As
at 31 December 2022 and 31 December 2023
|
11,353
|
In the prior year, following an impairment review it
was determined that a provision for diminution of value of £861,000
was required in relation to the investment in Anpario Saúde e
Nutrição Animal Ltda to reflect the fair value of the investment.
Last year, investment balances in dormant subsidiaries that no
longer feature as part of the Group strategy were written off,
these totalled £7,000 and relate to Anpario Turkey Hayvan Sağlığı
ve Yem Katkıları İthalat İhracat Sanayi ve Ticaret Anonim
Şirketi.
Total investments in Subsidiaries in the year were
£nil (2022: £18,000). The prior year investment relates to the
establishment of Anpario (Vietnam) Company Limited.
Full list of
investments
The Group holds share capital in the following
Companies which are accounted for as Subsidiaries, all of which
have a principal activity of Distribution Services and the Group
holds 100% of the Ordinary Shares.
|
|
Country
of registration
or incorporation
|
|
|
|
|
Directly held
|
|
|
Anpario Pty Ltd
|
|
|
Level 1, 286 High Street, Penrith
2750
|
Australia
|
|
Anpario Saúde e Nutrição Animal Ltda
|
|
|
Rua Brigadeiro Henrique Fontenelle,
745 - room 4, Parque São Domingos, São Paulo, 05125-000
|
Brazil
|
|
Anpario (Shanghai) Biotech Co. , Ltd.
|
|
|
Room 703, No.8 Dong An Road, Xu Hui
District, Shanghai
|
China
|
|
Anpario GmbH
|
|
|
c/o Startplatz, IM Mediapark 5,
50670 Cologne
|
Germany
|
|
Anpario (Biotech) Limited
|
|
|
6th Floor, South Bank House, Barrow
Street, Dublin 4.
|
Ireland
|
|
PT.
Anpario Biotech Indonesia
|
|
|
Gedung 18 Office Park Iantai Mezz-
unit F2, Jl. , TB Simatupang Kav. 18, Jakarta 12520
|
Indonesia
|
|
Anpario Malaysia Sdn. Bhd.
|
|
|
Real Time Corporate Services Sdn.
Bhd. Unit C-12-4, Level 12, Block C, Megan Avenue II, 12 Jalan Yap
Kwan Seng, 50450 Kuala Lumpur
|
Malaysia
|
|
Anpario Biotech Malaysia Sdn. Bhd
|
|
|
Real Time Corporate Services Sdn.
Bhd. Unit C-12-4, Level 12, Block C, Megan Avenue II, 12 Jalan Yap
Kwan Seng, 50450 Kuala Lumpur
|
Malaysia
|
|
Anpario Latinoamerica SA de CV
|
|
|
Av. Technologico Sur # 134 cas 4,
Colonia Moderna, CP 76030, Queretaro
|
Mexico
|
|
Anpario (Thailand) Ltd
|
|
|
65/152 Chamnan Phenjati Building
Floor 18, Rama 9 Road, Huaykwang Sub-district, Huaykwang District,
Bangkok 10310
|
Thailand
|
|
Anpario Turkey Hayvan Sağlığı ve Yem Katkıları İthalat
İhracat Sanayi ve Ticaret Anonim Şirketi
|
|
|
Barbaros Mahallesi Halk Cad.
Palladium Residence, (A Blok) Apt. No: 8 A/3
Ataşehir/İstanbul.
|
Turkey
|
|
Anpario Inc
|
|
|
2 W. Washington Street, Suite 400,
Greenville, SC 29601
|
US
|
|
Anpario NZ Limited
|
|
|
Alliott NZ LTD, Level 2, 142
Broadway,
Newmarket, Auckland, 1023, NZ
|
New
Zealand
|
|
Anpario (Vietnam) Company Limited
|
|
|
No.8, Lane 265 Chien Thang
Street,
Van Quan Residential Area,
Van Quan Ward, Ha Dong District,
Hanoi, Vietnam.
|
Vietnam
|
|
Optivite International Limited - Company Number
02346087*
|
|
|
Agil Limited**
|
|
|
Anpario UK Limited**
|
|
|
Aquatice Limited**
|
|
|
Kiotech Limited**
|
|
|
Kiotechagil Limited**
|
|
|
Meriden Animal Health Limited**
|
|
|
Orego-Stim Limited**
|
|
|
Optivite Limited**
|
|
|
Unit 5 Manton Wood Enterprise Park,
Worksop, Nottinghamshire, S80 2RS
|
United
Kingdom
|
|
|
|
|
Indirectly held
|
|
|
Meriden (Shanghai) Animal Health Co. , Ltd.
|
|
|
Room 703, No.8 Dong An Road, Xu Hui
District, Shanghai
|
China
|
|
Optivite Latinoamericana SA de CV**
|
|
|
20 Boulevard de la Industria,
Cuautitlan-Izcalli, 54716
|
Mexico
|
|
Optivite SA (Proprietary) Limited
|
|
|
PO Box 578, Cape Town
8000
|
South
Africa
|
The Group has no associates or joint-ventures.
* Companies where the Directors have taken advantage
of the exemption from having an audit of the entities' individual
financial statements for the year ended 31 December 2023 in
accordance with Section 479A of The Companies Act 2006.
** Dormant companies
36. Deferred tax
|
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
|
As at 1 January
|
|
1,576
|
1,962
|
|
Income statement credit
|
|
(124)
|
(184)
|
|
Deferred tax charged/(credited)
directly to equity
|
309
|
(202)
|
|
As
at 31 December
|
|
1,761
|
1,576
|
|
|
|
Accelerated
tax allowances
|
Fair
value
gains
|
Cashflow
hedge
|
Losses
|
Other
timing
differences
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
|
1,444
|
805
|
15
|
-
|
(302)
|
1,962
|
|
Income statement
charge/(credit)
|
|
(13)
|
(25)
|
-
|
(148)
|
2
|
(184)
|
|
Deferred tax (credited)/charged
directly to equity
|
-
|
-
|
(273)
|
(94)
|
165
|
(202)
|
|
As at 31 December 2022
|
|
1,431
|
780
|
(258)
|
(242)
|
(135)
|
1,576
|
|
Income statement
(credit)/charge
|
|
(142)
|
108
|
-
|
(104)
|
14
|
(124)
|
|
Deferred tax charged directly to
equity
|
|
-
|
-
|
219
|
-
|
90
|
309
|
|
As
at 31 December 2023
|
|
1,289
|
888
|
(39)
|
(346)
|
(31)
|
1,761
|
|
|
2023
|
2022
|
|
£000
|
£000
|
|
|
|
|
|
Deferred income tax asset
|
-
|
-
|
|
Deferred income tax
liability
|
1,761
|
1,576
|
|
Net
deferred income tax liability
|
1,761
|
1,576
|
Following the approval of the financial statements in
the previous year further work was done as part of the finalisation
and submission of the tax computation for the company. This
work identified matters which lead to the deferred tax liability
being reduced by £148,000 as a result of revisions to the
calculation of capital allowances and research and development tax
credit. These matters could have been identified at the time the
tax provision was calculated for inclusion in the statutory
accounts if the finalisation of the tax computations had occurred
at this time. The amount was not material in the prior year but as
the amount is material to the reported profit for the period ended
31 December 2023 the correction to the prior year deferred tax has
been reported in the prior year results rather than as an
adjustment in the current year. The impact of the adjustment
is to increase the reported profit for the period ended 31 December
2022 included in the statement of changes in equity by £148,000 and
subsequently increase the closing retained earnings at 31 December
2022 reported in the statement of changes in equity and the
statement of financial position by the same amount. The deferred
tax liability in the statement of financial position at 31 December
2022 has been reduced by £148,000.
37. Inventories
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Raw materials and
consumables
|
3,064
|
4,664
|
|
Finished goods and goods for
resale
|
544
|
651
|
|
Inventory
|
3,608
|
5,315
|
38. Trade and other
receivables
|
|
|
2023
|
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Trade receivables - gross
|
|
3,860
|
3,958
|
|
|
|
|
|
|
Less: expected credit
losses
|
|
(282)
|
(149)
|
|
|
|
|
|
|
Trade receivables - net
|
|
3,578
|
3,809
|
|
|
|
|
|
|
Receivables from Subsidiary
undertakings
|
4,364
|
6,479
|
|
Taxes
|
|
18
|
56
|
|
Other receivables
|
|
1
|
2
|
|
Prepayments
|
|
562
|
499
|
|
Total trade and other receivables
|
|
8,523
|
10,845
|
No interest is charged on trade receivables if
balances are paid in full and to terms, there has been no interest
charged in the current or previous financial year. There is no
interest charged on receivables from subsidiary undertakings and
payment is expected within terms of less than one year. There is no
security against outstanding balances.
The Group applies the simplified approach to
provisioning for expected credit losses prescribed by IFRS 9, which
permits the use of the lifetime expected loss provisioning for all
trade receivables. More information about how ECL is calculated is
contained in note 18 to the Group financial statements.
Credit risk related to receivables from subsidiary
undertakings are individually assessed based on an assessment of
changes in credit risk and there was no impairment provision as at
31 December 2023 (2022: £nil).
The movements in expected credit losses under IFRS 9
are as follows:
|
|
Collectively
assessed
|
Individually
assessed
|
Total
|
|
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
As at 1 January 2022
|
45
|
121
|
166
|
|
Provisions for receivables
created
|
-
|
117
|
117
|
|
Provisions for receivables
released
|
(13)
|
-
|
(13)
|
|
Amounts written off as
unrecoverable
|
-
|
(31)
|
(31)
|
|
Amounts recovered during the
year
|
-
|
(90)
|
(90)
|
|
As
at 31 December 2022
|
32
|
117
|
149
|
|
Provisions for receivables
created
|
31
|
145
|
176
|
|
Amounts recovered during the
year
|
-
|
(43)
|
(43)
|
|
As
at 31 December 2023
|
63
|
219
|
282
|
39. Trade and other
payables
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Trade payables
|
1,982
|
2,620
|
|
Amounts due to subsidiary
undertakings
|
4,224
|
4,202
|
|
Taxes and social security
costs
|
100
|
127
|
|
Other payables
|
47
|
44
|
|
Accruals and deferred
income
|
932
|
503
|
|
Trade and other payables
|
7,285
|
7,496
|
There is no interest payable on trade payables or
amounts due to subsidiary undertakings and no security against
outstanding balances.
40. Share capital
The movements in share capital are disclosed in note
23 to the Group financial statements.
41. Other reserves
|
|
2023
|
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Treasury shares
|
-
|
1,189
|
|
Joint Share Ownership
Plan
|
11,110
|
11,110
|
|
Merger reserve
|
(228)
|
(228)
|
|
Unrealised reserve
|
(2,021)
|
(2,021)
|
|
Share-based payment
reserve
|
(2,587)
|
(2,393)
|
|
Cash flow hedge reserve
|
119
|
841
|
|
Other reserves
|
6,393
|
8,498
|
The nature and purpose of other reserves' items are
disclosed in note 2.18 to the Group financial statements.
A reconciliation of each component of other reserves
that has a movement is shown in the note 24 to the Group financial
statements.
42. Related party
transactions
Transactions between the Company and its subsidiaries
are on an arm's length basis or in accordance with local transfer
pricing regulations.
The following amounts were outstanding at the
reporting date:
|
|
|
2023
|
2022
|
|
|
Note
|
£000
|
£000
|
|
|
|
|
|
|
Amounts owed by
Subsidiaries
|
38
|
4,364
|
6,479
|
|
Amounts owed to
Subsidiaries
|
39
|
4,224
|
4,202
|
The amounts outstanding are unsecured and will be
settled in cash. No guarantees have been given or received. No
provisions have been made for doubtful debts in respect of the
amounts owed by related parties.