FY2023 Trading Update
Bendigo, Aug 1, 2023 AEST (ABN Newswire) - Apiam Animal Health Limited (ASX:AHX) today announced a market update ahead of the release of its financial results for the year ended 30 June 2023 (FY23).
Apiam's revenue in FY23 remained resilient and was driven by growth in the Company's dairy & mixed animal segment which accounted for 77% of Apiam's revenues in FY23. This segment delivered like-for-like (LFL) revenue growth of 4.9% in FY23 vs the prior corresponding period (pcp).
The Company's beef feedlot and pig segment continued to operate in a challenging industry environment, with segment LFL revenue falling (4.1)% in FY23. While revenue generated in the feedlot segment was back on the previous year due to lower feeder steer inductions and improved health outcomes, pleasingly the pig segment delivered 5.0% revenue growth in H2 FY23 (vs pcp).
Apiam's earnings performance in FY23 was impacted by growth in wage costs (which increased 8.7% on a LFL basis in the dairy & mixed segment), reflecting the recruitment of higher skill-set veterinarians in H1 FY23, the broader inflationary environment as well as the full year impact of the business support required following the accelerated acquisition program that occurred throughout FY21-FY22.
Rising interest rates over the past 12 months, as well as increased borrowings to fund strategic acquisitions in H1 FY23, has increased Apiam's interest expense in FY23 to $3.8 million, up from $1.6 million in FY22. This has had a negative impact on the Company's NPAT performance in FY23.
Cost-saving redundancy & restructuring initiatives
In June 2023, Apiam finalised a cost-saving redundancy & restructuring program to reduce the amount of non-veterinarian staff both within the Company's centralised business support functions, as well as at various clinic locations.
This program is expected to result in a reduction to Apiam's wage expenses of approximately $2.6 million p.a. from July 2024 onwards. Redundancy costs incurred were not significant and will be treated as non-recurring costs in Apiam's FY23 accounts.
Additional cost synergies are expected as Management continue to work with several Apiam clinics around optimisation of staff rostering and achievement of greater operating cost efficiencies. New acquisitions & greenfield clinics
In Q4 FY23, Apiam completed the acquisition of two regional companion animal clinics in targeted high-growth locations. Boyne Tannum Vet Surgery, a full-service companion animal clinic located in Queensland, was acquired by Apiam in June. The clinic is located 25 kms from an existing Apiam Fur Life Vet clinic and expected to deliver synergies within a short timeframe.
Apiam also acquired Townsend Veterinary Clinic located in Albury NSW, a large regional city with an extensive surrounding border community. The total consideration for both acquisitions was $3.9 million.
In addition, Apiam opened two new greenfield clinics in Q4 FY23 - in the regional hubs of Yarrawonga (VIC) and Caboolture (QLD). Both clinics have been performing strongly since commencement of trading and have been targeted to meet the needs of a growing pet care market in these regional growth corridors.
Apiam extends debt facilities with NAB
Apiam is pleased to announce that its long-standing financier, National Australia Bank (NAB), has extended the current terms of the Company's existing debt facilities until January 2026, enabling Apiam to continue to execute on its growth strategy where financial and strategic criteria are met.
*To view tables and figures, please visit:
About Apiam Animal Health Limited
Apiam Animal Health Limited (ASX:AHX) is one of Australia's leading rural veterinary businesses made up of more than 80 Veterinary Clinics and 330 highly experienced veterinarians as part of a team of over 1300 dedicated professionals. The majority of Apiam's vet clinics, production animal, and allied businesses have been around a long time, many of them decades and are spread Australia wide reaching into the heart of dairy, beef, sheep and pig country and the regional towns that are at their centre.
Apiam Animal Health is committed to providing best in class care for its clients, the animals in their care and the communities where people live and work. The Company's purpose, to enrich the lives of animals, people and communities, is applied across all businesses from vet clinic to production animal consultancy, logistics and laboratory with vets and allied staff sharing expertise and specialist knowledge. Apiam is focused on meeting the needs of its clients and shaping the future of the industry to deliver best practice animal health and welfare at a local level and nationally.