Anpario PLC on Wednesday reported a lower profit in 2022 as demand fell, while costs increased, as the company cautioned on bird flu having an impact on feed volumes.
Anpario shares fell 30% to 217.19 pence each in London on Wednesday midday.
The Nottinghamshire-based animal feed additive manufacturer said pretax profit fell 35% to £3.7 million in 2022 from £5.7 million the year prior, as its gross margin worsened to 43% from 49%.
Revenue edged down to £33.1 million from £33.4 million. The company noted that while it experienced sales growth in Asia, the Middle East & Africa and the Americas, this was offset by a fall in Europe.
Anpario said the year suffered from supply chain disruption and ‘significant and immediate’ raw material and logistics price inflation. It explained that this also hurt many of the farmers that are customers of Anpario.
Farmers experienced input cost pressures, notably feed and energy, cutting their profitability and in some cases viability, according to Anpario.
‘Some farmers, particularly across the UK and Europe, decided to forgo unprofitable production which is now leading to specific food shortages in the retail channels. With less animals being reared the demand for animal feed and therefore additives is inevitably lower and partly explains the group’s disappointing performance across Europe,’ it said.
Nonetheless, the firm proposed an increased final dividend of 7.35 pence, up from 7.0p the year prior. This brings the total dividend for 2022 to 10.5p, 5.0% higher than 10.0p in 2021.
Looking ahead, Anpario said that the year started weaker than anticipated, being at similar levels to the fourth quarter of 2022, citing continuing challenging in the global agricultural industry, such as high feed and energy costs.
It also cited the strong dollar, which caused some developing countries to implement currency controls that restrict the level of trade the company can do with its customers. Meanwhile, bird flu will have a worldwide impact on feed volumes, Anpario added.
However, the company expects performance to improve as the year progresses, anticipating inflation pressures to ease.
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