FY22 Results Release
Bendigo, Aug 29, 2022 AEST (ABN Newswire) - Apiam Animal Health Limited (ASX:AHX) is pleased to release its full year results for the 12-months to 30 June 2022 (FY22).
Apiam embarked on its Accelerated Growth strategy in early 2022, with a target to increase the Company's pro-forma revenues to more than $300 million by the end of FY24 and deliver greater earnings leverage across the business. In FY22, Apiam progressed this strategy executing 11 acquisitions, pursuing organic growth initiatives and ramping up operations of three early-stage greenfield clinics.
Revenue in FY22 increased 24.6% to $157.2 million driven by excellent revenue growth in Apiam's dairy and mixed animal segment (+45.1% vs FY21 on a reported basis and +9.0% on a like-for-like basis). This segment was the focus of Apiam's acquisition program over the year, and on a FY22 pro-forma basis delivered 74% of the Group's revenues (vs 60% in FY21). Underlying EBITDA from the segment grew 44.5% year-on-year.
Dr Chris Richards, Apiam's Managing Director said "The strategic changes in Apiam's business mix over the past twelve months, significantly growing our dairy & mixed animal exposure is driving important business transformation for our Company. We are increasingly generating more resilient and less cyclical revenues streams with attractive earnings margins and growing free cash flows for our shareholders."
"Our strong results in FY22 demonstrate the advantages of this business model, particularly as we have faced COVID-19 impacts as well as economy-wide labor market and supply chain challenges over the period. I am pleased with the ability of our team to respond flexibly and innovatively to ensure we delivered continued growth."
Gross profit margins continued to increase in FY22, increasing to 62.0% up from 56.3% in the prior comparable period (PCP). Overall gross profit growth was 37.0% in FY22.
The beef feedlot and pig segments continue to be impacted by industry challenges with revenue in FY22 declining 6.5% (an improvement from FY21 where revenues fell in these segments by 11.4%, following the low-point in the beef feedlot industry cycle). The outbreak of Japanese Encephalitis has been a further challenge within the pig segment in FY22.
Importantly, despite these revenue challenges, gross profit for the beef feedlot and pig segments improved 1.5% vs PCP as Apiam management continued to focus on the provision of higher value consultancy services across this customer base.
Underlying EBITDA in FY22 increased 20.3%, a strong and resilient result despite the increased operating expense investment required to execute Apiam's Accelerated Growth strategy and in the context of the economy-wide challenges referred to above.
Operating investment over FY22 was required to support the integration of the eleven acquisitions executed and this saw additional personnel required in the Company's business support network (people & culture, IT, marketing, payroll and WHS). Following this investment, Apiam is better positioned to efficiently and more quickly integrate the planned acquisitions that will take place over FY23-FY24.
The opening of three new greenfield clinics in the past 18 months and Apiam's veterinary recruitment strategy (focusing on experienced vets) also added to the operating expense growth. Additional COVID-19 lockdown costs were also incurred in the first half where additional staff were required to assist vets given animal owners were not permitted in-clinic.
Underlying NPAT increased 15.0% in FY22 to $6.7 million, while reported NPAT of $4.6 million was impacted by a significant uplift in one-off expenses during the period (mostly the result of a $1.4 million stamp duty charges payable on Apiam's Queensland acquisitions in H1 FY22).
The Company's operating cash flow grew by 9.9% in FY22, and cash conversion of underlying EBITDA (pre AASB16 adjustments) remains above Management's target of 100%; at 117% for FY22.
Accelerated Growth strategy
Apiam embarked on its Accelerated Growth strategy in early FY22. Changes in demographics and lifestyles are continuing to drive strong growth in animal numbers in regional and peri-urban locations, and this presents a significant opportunity for Apiam.
The three main drivers of Apiam's Accelerated Growth strategy over FY22 were the execution of Apiam's extensive acquisition pipeline, organic growth initiatives across all business segments as well as the opening of new greenfield clinics.
In FY22, Apiam completed the acquisition of nine businesses and executed acquisition agreements to complete a further two acquisitions on 1 July 2022. This acquisition program increased Apiam's presence in important fast-growth markets such as South East Queensland and the equine segment.
Apiam's acquisition pipeline is extensive, and only high-quality acquisition targets are pursued.
Essential acquisition criteria include the ability for Apiam to generate strong organic growth and synergies from the business, the culture & management team, animal species exposure, earnings margins and geographic exposure.
The Board of Apiam have declared a 0.4 cents per share final dividend, which, together with the interim dividend, represents a payout ratio of reported NPAT of 50% for FY22.
Apiam's Board continually assess the best use of capital in the context of the Company's growth plans. As the Company trends towards its target to deliver pro-forma revenue of $300 million by FY24, earnings margins and free cash flow are expected to increase considerably. This compelling opportunity is expected to deliver substantial intrinsic value to shareholders. The Board therefore intends to invest all capital, during this rapid growth period, towards funding the Accelerated Growth strategy.
Significant growth in the year ahead is expected to occur via acquisition opportunities, supported by organic growth in the underlying business. Additional greenfield sites are also expected to be opened in FY23.
Delivering greater improvements in operating earnings margins and driving uplifts in free cash flow remains a key management goal for the year ahead.
To view the FY22 Results Presentation, please visit:
To view the FY22 Annual Report, please visit:
About Apiam Animal Health Limited
Apiam Animal Health Limited (ASX:AHX) is comprised of Australia's leading Production Animal and Mixed Animal veterinary practices. Apiam Animal Health incorporates over 150 highly experienced, industry leading veterinarians with expertise across the pig, dairy, feedlot, sheep, poultry, equine, and companion animal sectors, supported by an experienced administration, nursing, technical services and ancillary team. Apiam Animal Health is fully vertically integrated, including having veterinary wholesale, diagnostics laboratories, custom vaccines, logistics, and other ancillary services.
Apiam Animal Health Limited