FY23 Results Announcement
Bendigo, Aug 28, 2023 AEST (ABN Newswire) - Apiam Animal Health Limited (ASX:AHX) today released its full year financial results for the year ended 30 June 2023 (FY23).
A summary of the Company's FY23 audited financial results are provided in the link below*. These are in-line with Apiam's trading update lodged with the ASX on 11 August 2023.
Apiam's revenue in FY23 remained resilient growing 22.6% on a reported basis 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 and 6.4% in H2 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. Revenue generated in the feedlot segment was lower than the previous year due to reduced feeder steer inductions and improved health outcomes. The pig segment delivered 5.0% revenue growth in H2 FY23 (vs pcp) off the back of industry expansion and recovery in pig numbers from the Japanese encephalitis impacts of 2022.
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. Apiam's business support network costs declined 1.9% in H2 FY23 (vs H1 FY23) as the rate and the scale of the acquisition program slowed in this period.
Rising interest rates over the past 12 months, as well as increased borrowings to fund strategic acquisitions in H1 FY23, has increased Apiam's finance costs in FY23 to $3.8 million, up from $1.6 million in FY22. This has had a negative impact on the Company's underlying NPATA performance in FY23.
Additionally, Apiam's reported NPAT has been impacted by a one-off provision for inventory, which is reflected as a $1.7 million non-cash expense (post-tax basis). This has reduced reported NPAT to $2.3 million (FY22: $4.6 million).
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 2023 onwards. Redundancy costs incurred were $0.3 million and will be treated as non-recurring costs in Apiam's FY23 accounts.
Management continue to work with several dairy and mixed animal clinics around optimisation of staff rostering and achievement of greater operating cost efficiencies to improve their financial contribution to the Group.
New acquisitions & greenfield clinics
In Q4 FY23, Apiam completed the acquisition of Townsend Veterinary Clinic and entered an agreement to acquire Boyne Tannum Vet Surgery, two regional companion animal clinics in targeted high-growth locations. The acquisition of Boyne Tannum Vet Surgery, a full-service companion animal clinic located in Queensland, was completed by Apiam in July 2023. The clinic is located 25 kms from an existing Apiam Fur Life Vet clinic and expected to deliver synergies within a short timeframe.
Apiam acquired Townsend Veterinary Clinic in April 2023. Townsend Veterinary Clinic is 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.
Apiam remains confident in the resilient nature of its business model. The expansion over the past three years into the non-cyclical dairy & mixed animal segment is expected to deliver sustainable revenue outcomes in the year ahead.
The Company expects to also deliver improved operating earnings margins in FY24 as the benefits of its cost-saving redundancy & restructuring program takes effect from July 2023. In addition, further margin opportunities have been identified in several clinics and Management is focused on improving their earnings contribution to the Group.
*To view the FY23 audited financial results, please visit:
To view the Results Presentation, please visit:
To view the Annual Report, 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.