Bendigo,
Apiam has recorded strong growth across key Group profit metrics. Over the period Apiam also continued its accelerated acquisition program to capture opportunities in fast-growing regional locations. Apiam is the leading regional veterinary services provider in
Revenue growth in the dairy & mixed animal segment for H1 FY23 was 36.5% vs the prior corresponding period (PCP) and was driven by a combination of acquisition growth as well as underlying organic growth. On a like-for-like basis (excluding acquisitions) segment revenue growth was 3.5% for H1 FY23 and for FY23 year-to-date (to
In H1 FY23, Apiam completed 4 mixed animal acquisitions, following the settlement of 9 mixed animal acquisitions during FY22. A further two acquisitions have been settled on
The number of clinics Apiam operates grew from 61 as at the end of FY21 to 79 currently.
Acquisitions are performing well under Apiam's ownership, with the clinics acquired in FY22 delivering average revenue growth of 7.8% in H1 FY23 (vs H1 FY22).
The beef feedlot and pig segments also remain integral to Apiam's rural vet services. Market cycles however did continue to impact revenue growth in Apiam's beef feedlot segment, with overall revenue in the feedlot and pig segments down 3.7% in H1 FY23 vs PCP. Apiam expects to deliver further recovery in beef feedlot revenues in-line with industry forecasts. Recent events impacting H1 FY23 include an over-supply of beef in the US which adversely affected domestic export markets, as well as workforce shortages in local abattoirs. Pleasingly, revenues and gross profit have been stabilising in the pig segment.
Apiam also continues to play a leading role in industry innovation within these segments, making strong progress in H1 FY23 in the areas of vaccine development, client-centric technologies and sustainable production.
From an earnings perspective, the Company's gross margin continued to increase strongly in H1 FY23 to 65.5% up from 61.5% in the PCP. This is a direct result of the strategic changes in Apiam's business over the past 18 months and the growth in the dairy & mixed animal segment.
Underlying EBITA grew 26.7% in H1 FY23 to
Underlying NPAT was
Apiam's operating cash flow in H1 FY23 increased 24.2% to
Accelerated growth program
The focus of Apiam's acquisition strategy has been to capture growth in attractive regional growth centres and in animal segments with fast-growth profiles.
In H1 FY23 Apiam completed four mixed animal acquisitions that are expected to add
Apiam also completed two further veterinary business acquisitions on
Apiam's revised greenfields program, with a greater focus on the scale-up of costs, also delivered strong outcomes for the Company. In H1 FY23 revenue growth in greenfields clinics (opened across FY21 -
FY23 YTD) was 31% vs PCP, with operating costs reduced by 7.3% for these clinics in the same period.
In H2 FY23, Apiam plans to focus on the delivery of integration benefits and growth synergies from recent acquisitions in order to maximise free cash flow generation. The Company's acquisition pipeline remains strong with phasing of future acquisitions to reflect optimisation of capital resources and cash flow.
FY23 YTD trading (to
Veterinary services revenues continue to grow into early H2 FY23 as demand for pet care continued to be resilient and non-discretionary.
Following revenue phasing impacts that affected the dairy & mixed animal segment in H1 FY23, Apiam delivered strong earnings leverage in January with double-digit like-for-like Group revenue growth recorded for
Average Transaction Values also continued to increase driven by consumer demand for high standards of animal care.
Underlying EBITA for FY23 Jan YTD (being the seven months to
Outlook & strategy
Apiam's financial and operational progress during H1 FY23 provides strong momentum for FY23 and beyond.
Revenues and earnings from the Company's dairy & mixed animal segment are expected to continue to perform strongly as they have over recent periods. The financial performance of Apiam's beef feedlot and pig segments is expected to rebound in-line with industry forecasts.
Dr
Delivering greater improvements in operating earnings margins and maximising free cash flow generation remains a key priority for Apiam's Management team.
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About
Contact:
Dr
Managing Director
E: chris@apiam.com.au
Investor Relations
E: catherine.ross@apiam.com.au
T: 0421 997 481
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