Good afternoon and welcome to the Anpario plc Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Richard Edwards. Good afternoon to you.
Yes. Thank you. Look, thank you everyone for attending our interim results 2025. Marc will really kick off with the numbers and go through some of those in detail. I will then jump in later on and talk about the regional performance around the world, and then we'll close out just with a little bit of a reiteration of the strategy and where we feel we're going and the outlook. After that, we're very happy to take questions. Over to you, Marc.
Okay. Yeah. Like Richard said, thanks everyone for joining today. I'll just take you through firstly the key highlights I'm sure you've all read by now. Had a fantastic set of results with revenue up 34%, gross profit up even higher at 45%. Adjusted EBITDA again, even higher, 53% increase and profit before tax up 62%. That translated into a diluted adjusted earnings per share increase of 43%. We've approved an interim dividend increase of 11%. I'll talk you through some of the financial numbers. Richard, as he says, will take you through some of the segmental performance and then onto the outlook for the business. Firstly, in terms of the financial performance, as we said, revenue up 34%, from GBP 5.7 million to GBP 22.7 million.
We've seen significant growth across most of the operating segments and a lot of territories within those. The only slight exception to that being India, Middle East, and Africa. We saw a slight decline, but this comes on the back of really rapid growth that they experienced last year. It's more of a consolidation. There is some movements within the territory, which Richard can talk to a little bit more later. On a like for like basis, the four major product classes that represent 90% of the like for like sales show growth in the period. Just a few others that are sort of slightly non-core that saw a bit of decline through the period.
Gross profit was up 45%, with gross margins on a whole group basis up to 51.4%, thanks to that contribution from Bio-Vet. The like-for-like margins have improved to 49.8% and returning to sort of pre-2022 levels. Administrative expenses up 37%. Although most of that increase relates to the Bio-Vet operations, the like-for-like increase was 9% or GBP 0.6 million. The profitability, as I said, up. Adjusted EBITDA up 53% and profit before tax up 62%, and that effective tax rate marginally higher, 18.9% for the period compared to last year, which was 17.9%. EPS up 43% and then translating to that interim dividend payment, expected with an increase of 11% to 3.6 pence.
Just breaking down the kind of constituent parts of that growth because obviously we have the Bio-Vet acquisition, which was acquired on third of September last year. They contribute $3 million of sales for this first six-month period, by 18% of that growth we've experienced. They achieved margins in this first half of the year of 62%. That compares to the Q4 contribution that they had, where they contributed $2.2 million for that three-month period. At the time, we kind of highlighted that that was over and above the level of performance we were expecting when we did the deal to acquire Bio-Vet. They'd hit some really good sales in California around avian influenza. You know, that's not come through in this first half period.
It can be affected by, you know, weather and migration patterns of birds and avian influenza outbreaks. I was speaking to the president of Bio-Vet the other day, and they are starting to experience avian influenza outbreaks and some of the bird migrations are starting to occur. We could see the same uplift in performance through the second half. Nonetheless, Bio-Vet are performing at the level that we expected when we acquired the business and they're performing over and above the expectations to achieve their full earn-out and that will be paid early and likely to be paid by the end of September. A fantastic result and well done to all the Bio-Vet staff for the performance achieved in the period.
Taking that aside, we've got the like-for-like performance of the business, which was absolutely fantastic. We saw growth, probably one of our fastest periods of growth in absolute terms with sales up GBP 2.7 million. And as I said, that gross profit going to 49.8%. It's important. It's one of the last metrics. Obviously, we had a bit of a difficult period since 2020, you know, particularly in 2023 with a downgrade in performance in sales and margins. The gross margin recovery is particularly pleasing because it was the last metric we were trying to get back to at the kind of pre-2022 50% levels. We recovered the sales, we recovered the gross profit, the overall profitability, and now the margins.
We don't need to be looking in the rearview mirror. It's very much forward-looking. We've surpassed all of the previous metrics that the business achieved, and it's all about, you know, growing the business now in conjunction with the Bio-Vet team, and looking forward. And just really to demonstrate as well the operational gearing that we've been talking about for many years, you can see on that like for like column, the 16% revenue increase translated into a 40% Adjusted EBITDA increase, which is, you know, good to see. Just a very quick slide, so similar to the one at the year-end, just pulling out the EBITDA movement in a bridge showing last year's GBP 2.7 million.
We've got the contribution from the high level of sales, but at last year's margin, that added GBP 1.3 million with 16% increase in sales. We've had that gross margin percentage increase, which has added GBP 0.4 million as well to overall EBITDA. Offset slightly by that like-for-like overhead increase of GBP 0.6 million, giving us that GBP 3.8 million, like-for-like EBITDA of 40% with that Bio-Vet contribution of GBP 0.3 million, taking us to the GBP 4.1 million. In terms of like-for-like overheads, overall, most cost categories are generally neutral. The big increase, the largest increase there has been in people, which is a combination of general wage inflation, the increased national insurance expense, thanks to the changes in the budget.
There's been some increase in headcount and also some higher levels of bonus provisions for the sales staff, given the high level of performance we've achieved through the first half of the year. Moving on in terms of cash flow, there's been strong cash generated through operating profit up to GBP 3.7 million, which compares to GBP 2.6 million in the same period last year. There has been an absorption of cash into working capital, but I've got another slide in a second that kind of gives you some more detail. There's been an absorption into inventory, but I'll discuss that further in a second. The profile of the rest of the outflows are generally typical with tax paid of a normal level.
CapEx at a similar level to last year, slightly elevated, due to some additional purchase, sort of normalized purchases in Bio-Vet. And then we've got the closing adjustment, which is on the, you know, final completion accounts, which was paid in January to Bio-Vet as well. Taken all together, a GBP 0.6 million increase in cash in the period to GBP 11.1 million. And as we've said for a number of years now, the strategic priority is to utilize this cash for complementary acquisitions like we did with Bio-Vet. And we'll, you know, that's the continued purpose of holding those good cash reserves. On to the working capital cycles, then just really want to pull out some of the history to explain what's happened specifically in this period.
If you look on the chart on the left, you can see particularly at the end of FY 2022, like a number of businesses, we had a high level of working capital. We worked through that and released a lot of cash through FY 2023, bringing the overall working capital cycle days down to 159. That decreased further at the end of last year, but that was probably, you know, we weren't necessarily expecting that. Inventory levels both on a raw materials front and on a like-for-like finished goods front, because these numbers include Bio-Vet, were decreased due to the high level of sales that we were experiencing. High utilization meant that the number of inventory days overall that we had was lower than we would typically plan.
As we entered the new year, we kind of expected to absorb cash into inventory, both to build up those number of days, but then also at the same time, we've experienced this fantastic level of sales growth, and so the level to which we've had to build back to has been increased. That's part of the, you know, mostly the reason for the increase in inventory. As well, Bio-Vet had a slightly increased number of finished goods inventory days compared to our own, so there's a bit of a like-for-like impact in there as well. Taken together, you know, overall going back to a similar level that we were at the end of FY 2023.
There's no, it's more of a normalization factor than a particular increase in the policies or the way we're operating during the period. That's my section in terms of the financial results. Thanks for your time, and I'll hand over to Richard.
That's great. Thanks, Marc. Yeah, just really on the segments to take you around the world in a whistle-stop tour. You see, three out of the four segments are up, and the EMEA area was just down 4%. But within that, there are some quite bigger movements. There's a very strong performance from India, which we'll go through, and a weakness in Saudi Arabia regarding the pellet binder business. If we just start on the detail with Asia, we had significant growth in the Philippines of Orego-Stim and Anpro. The market conditions there generally improved. The new president, although I think he's been in a couple of years now, on the Marcos, or the son of the Marcos family, wants to be self-sufficient in food security.
They're capable of doing that, but I think it's about 50% of their food is also imported. There is a move, like in quite a few countries or regions around the world, to become more self-sufficient in terms of food security. Probably following COVID, where people were pretty worried in terms of could they feed their populations. We're benefiting from that, but we're also benefiting from a lot, some good work that we've done with our distributor stroke integrator because it doesn't just distribute for us. They also have their own operations in poultry and pig. That is helping. They're using Orego-Stim generally across the board. China there grew 15%. Again, Orego-Stim, some mycotoxin binder range.
As I've mentioned in the chairman's statement or my statement, there are trials taking place with Optomega algae as a replacement for fish meal, which is clearly a more sustainable approach in swine feed. We don't expect anything this year, and it'll probably take another nine months to 12 months before we see the follow-on trials and then maybe a decision on that. But the potential there is quite interesting. In China, Indonesia, just generally, again, an improving market, and, you know, better local conditions, and we've been selling a broader range of products across, you know, across a range of customers there. Those are sort of the highlights. The only one down or significant is Malaysia.
It's probably more timing on this. They had a very strong 2024, and maybe some of this is just a bit of indigestion. We think it's timing is working through some of that stock that they've got. We do expect that to start to come back with orders in the second half. Asia doing well, coming back, you know, across the region and across a number of countries. We expect that to sort of continue in the second half and into next year. The Americas, nearly 100% growth, but you know, obviously large, quite a bit of that effect is from the Bio-Vet acquisition.
I think it grew the Americas 21% organically. In any case, that was very pleasing. Just take Bio-Vet first, you're adding their $3 million sales. As Marc said, there was a strong quarter four last year because of this avian influenza, and particularly with the electrolytes and capsules that were being fed to the cows to help them get through the impact of that avian influenza. That might come back with migratory birds, we're not sure. It's, you know, it was a nice benefit that we hadn't necessarily appreciated when we're looking to buy the company in that, you know, Bio-Vet's products are required if there's avian influenza in the dairy herd.
If you get avian influenza in the poultry flocks, that's not as good for us because they cull most of the, they'll cull the chickens. Then if they're not there, they're not obviously eating our feed additives. Can be a quicker turnaround, obviously, in poultry because you can put new chickens down fairly quickly and start to grow them. Just on avian influenza, that's what impacted Italy. I'll come to that a little bit later, but that's what impacted our sales in Italy because they did have it across some of the farms that we were supplying. You know, but what's encouraging with that, the Bio-Vet QuadriCal and the Genex brand.
QuadriCal is a calcium bolus that goes into cows, and Genex is the direct-fed microbial in a powdered form that goes into the feed. Those grew nicely, and QuadriCal is the main first product that we are gonna launch and take internationally through the Anpario sort of sales and distribution network. Those continue to grow, and there's some nice differentiation and benefits that come out of those products that we'll be strongly trying to market. The cross-selling opportunities with both Anpario and Bio-Vet are being explored. Bio-Vet have sold a little bit of Orego-Stim and some Anpro, but as Marc said, we've now come to the end of the earn-out. They achieved that.
We're very pleased with that, so we can start to push that more aggressively and support them in that way and roll out some of these cross-selling synergies that will really start in earnest now. I'm actually there for the World Dairy Expo in Madison, which is in Wisconsin, at the beginning of October, so we'll be sort of kicking off things there. We have got a joint stand there, Bio-Vet and Anpario, together, so that's pleasing. Just in terms of U.S., excluding Bio-Vet, then the big story there is pHorce has recovered significantly, up 138%. That's getting it back into the swine market. It was originally sort of doing a lot of work there as a feed mitigant for PRRS virus.
Some of the customers then removed that product thinking that, okay, PRRS is solved, and we don't need a feed mitigant. We had a weak 2024, so it's now come back. The customers now are starting to recognize it, that it also has an in gut effect and a performance effect. You're getting you know, a dual benefit of, in the feed as well as in the gut. Farmers have seen that benefit. It's a good product. I don't think there's a competitive product on the market like it. It's just a case of you know, how should I say? Viral marketing is word of mouth is some of these farmers sort of, you know, recommending it, saying how good it is and they're moving on to the next.
That's sort of what's been happening in the U.S. in the first six months of this year. Orego-Stim also increased there, particularly, you know, into the cattle. But we've been trialing a new version, Orego-Stim Plus, which is a combination of the oregano oil and saponin, and that's having some really significant benefits. That's with a big integrator. We've done it across a lot of, I think it may be 1.7 or 2 million birds. You know, we've done some good work on that, and we hope to see some really good opportunities coming from that. It's still early days, but the results consistently saying, and we're working down at farm level, so contract farm level.
It's a liquid that goes into that, and these farms are saying they've never had sort of better flocks. The other little thing, it's very good high margin product is Orego-Stim Avian Complete, which is targeting the backyard poultry market through resellers or retailers like Tractor Supply. Our customer there who supplies this product into the retail sector has been talking to Walmart about the product. It's good high margin, and decent volumes, but not massively decent volumes as you get with the big integrators, but it's very good and lucrative business.
It also just gets that brand name up in front of the retail segment and particularly people, backyard poultry market, where I think the backyard layer market is people who've got a few chickens and are growing their own, and then producing their own eggs, is as big as the, you know, industrial, the conventional and industrial producers, the big producers. So people, you know, individuals and families are producing their own eggs as much as as companies in the US, partly because people wanna know where their food has come from, but also egg prices did shoot up, and it prompted people to go and get their own chickens. If we can get both of those markets, then that's good for us.
South America was, Mexico was good growth from one of our distributors there. We're also focusing on doing much more in Central America by going more direct. You'll have seen in the statement we have said that we are sort of phasing out our main distributor in that Central America, Caribbean area. As a result, we are setting up, I think we have set up a company in Panama, and we're in the process of doing that in Colombia, so we can get much more direct relationships. We did feel that the relationship with the distributor blocked us out of maybe growing our Orego-Stim sales and some toxin binder sales as much as we could have done, we could do more.
We think hopefully the floodgates are open, we can offer a broad range of products, and we have much better visibility and understanding of pricing against volume. If we feel that we can get more volume by being more competitive on price, then we can make that decision rather than the distributor getting involved in that and maybe overpricing our product so we don't get the volume. Getting that direct relationship brings, we feel, a lot of benefits and opportunities in there. It's welcome that. We've also got the staff that's come over from the distributor now employed through Anpario subsidiaries there. Brazil was again the weakness. It's a very competitive market. We don't manufacture down there.
Obviously, we manufacture in the U.K. and ship. Some of our competitors are manufacturers, have production facilities down in Brazil, and that, you know, we are subject to actually import tariffs and actually making a minimum percentage margin that the government requires us to make. We are just looking at how we can sort of restructure or go in a different way with certain products and looking at less price sensitive segments. There's been a few personnel changes down there. We're confident of a turnaround over time.
We do think, and the Bio-Vet guys I think are either there this week or next week, looking at their products getting into Brazil and the distribution network that we'll need to look at and set up there, where we do have our own company there, which as I say, you know, will help. Brazil just needs a little bit of going back to the drawing board and boxing clever on how we go to market to different customer segment groups and depending on the products as well. I think that really covers all the Americas. If we look at Europe, yeah, good organic growth, 17% in the region, particularly across premium product lines in Orego-Stim and the Optomega algae product for, you know, omega-3 DHA.
That's done well, I think, in Switzerland into the dairy market. Particularly for dairy cow fertility. That was a good driver of certainly Optomega. Israel's done well. I've spoken about Switzerland there. Israel's done well, significantly up over the same period last year. We did lose, I think we mentioned this, probably in the full year, where we did early last year, we lost some lower margin business in the UK on acid-based probiotics. We've grown despite that loss, and our margins are obviously, you know, a lot more healthier in that region. The UK has been strong as Orego-Stim, customers have bought more of it.
The only sort of down that is, and there were small drops really, is that Czech Republic, Estonia, and Austria. Italy, as I mentioned before, really was avian influenza wiping out some of the chickens. But they're getting restocked, and we do expect Italy to come back on stream, you know, any moment now with orders. We're anticipating that. Excuse me. Next I think, the one that got away, or went down by 4% overall. Obviously, India held up quite a majority of the losses in Saudi Arabia and Egypt. That is, we've been doing some big work with a big integrator there, broiler integrator. It has been sort of trial work.
We're hopeful some of that will carry on, but we are mindful that those volumes are quite strong. We have our partner there that we've set up working hard to you know get into other integrators in the poultry side, the dairy, and the aquaculture. We're looking across all the species there to a certain extent, and including swine actually, which is a market that is bigger than the U.K., not a massive market compared to poultry, but bigger than the U.K. and certainly worth going after. We're looking at broadening out our interests there. We do see India as long-term good growth opportunity for Anpario. The two that really kicked us in the shins were Egypt. That is really one of our customers. We have a couple of customers there, or distributors.
One of them has had payment issues, credit difficulties. It seems to be an ongoing issue with this customer quite regularly, but we've been with them for donkey's years. We stopped supplying them, I think, earlier on this year or end of last year. I think, Marc, they are promising to pay. They have got orders in for later this year. They won't get those orders until they pay down some of their outstanding debt. We are told that those payments will be forthcoming. Saudi was really the loss of pellet binder business or a customer there.
A lot of that is some internal politics with us, our product being replaced by a key manager there who I think appears to have been producing his own products or has got his own supply. There's a little bit of politics there. We're not quite sure what's going on. We are looking at that, investigating that. This can happen in some places where they potentially see a success of a product, and then they start to try and replace it with something that benefits them in that sense. We are sort of speaking to people in there, and we have other options as well in Saudi Arabia. It's a blip and disappointing, but this happens, you know, from time to time.
I think that's really just sort of explaining the Middle East and the regions. I won't go through the strategy in too much detail because we've probably said it before. I want to get to the questions 'cause I'm sure there's quite a few questions that people want answering. You know, we are totally focused on what we call specialty feed additives. It's the fastest-growing area of the animal nutrition market, and it's driven, you know, by the need for increased food production as a growing population and as people's GDP increases. Oh, actually, that's why you see in India the growth in the swine market, the middle classes are switching and actually eating more pork.
We've sort of seen that trend, and that's because they've got more money they spend on pork meat. It's also the drivers are, you know, again, antibiotic removal or reduction and removing other harmful substances like formaldehyde from the food chain and from the animal feed. It is a niche sector. We do have clear competitive advantages in terms of we've always been focused on the more natural, environmentally friendly, and sustainable type solutions. You know, we have very strong products with strong efficacy. Our global distribution network is a strength because we're with distributors, but quite a lot, and now over 50%, where we'd say we go direct, and we have local salespeople that can work with the end users, the people using and consuming the product.
We do have a number of, you know, competitive advantages that we feel from, compared to, obviously, competitors. We have a very high integrity supply chain. If any of you have been up to the production facility in Manton Wood, I would say it's the best in the industry. It's highly automated, high quality control, quality assurance. The suppliers that we work with have, you know, we have very good quality raw material. That's what we mean by high integrity supply chain. Some people say, what's the hedgehog concept?
It came from the author that wrote the book Good to Great, where, as you see at the top of the slide, we are focusing on what we can be better at than anyone else, and that is in the specialty feed additive market. If you look at a hedgehog compared to a fox, yeah, everyone thinks of a fox more wily, smarter, whatever. A hedgehog isn't that, but it does one thing well. When it's attacked, it curls up into a ball and puts its spikes out, and the fox can't do anything about it. That's where we are focused. Whenever we've been in a business or bought a business, an example would be Optivite, where we were into organic feed or into what they call cow fats, calcium soaps, or premix.
We've tended to exit out of those because we felt we didn't have that clear competitive advantage to be able to be better than anyone else at it. It's proven true because the only people who are good at premix are the big multinationals, who, you know, have invested in equipment and plant and equipment all around the world close to the market. We're focused on the high value added, where we know about gut health, where we know about clean feed, and where we can ship from one or two sort of production sites and still compete in various parts of the world at that premium. You know, and as part of that is building global power brands.
You know, Orego-Stim is obviously the great example, but we are putting money into pHorce, MasterCUBE as brands, Optomega, and we will be doing the same with Bio-Vet, with their Genex brand and particularly their QuadriCal bolus brand. You know, Anpario operates a multi-channel strategy that tries to get better control of our sales channels. You have to operate really in a multi-channel strategy if you're going across 80 countries worldwide and you want to continually have consistent growth and incremental growth. It means we've got to be capable of selling in the large strategic markets, and that's where we tend to have you know, our own subsidiaries or partner distributors.
We work with nutrition consultants and vets because they can be instrumental in specifying and using our product. As I say, we'll continue to sort of put local technical sales people down on the ground in certain market because we need to understand those local nuances, and that's really what you know we're doing at the moment with the Central America area, with sort of Panama. Colombia is a big country opportunity there that we can do more on. Having guys now down there and being able to supply direct really does help us. And not only that, just on the Bio-Vet side, Bio-Vet are very strong in Wisconsin because it's one of the, I think it's the second biggest dairy region after California.
They're also strong in California, and they're strong on that eastern seaboard with Pennsylvania, New York, and particularly around the Amish. They've got quite a lot of Amish customers in that area. There are also other dairy states that aren't as big but still warrant sales representation, so places like Florida, Georgia, Idaho, the Dakotas. Now we've got through the earn-out. We are switching on to deploy and recruit salespeople into some of those other states that warrant putting a salesperson in there, sufficient enough farms and cows to make it worthwhile for both Bio-Vet products and Anpario products, and that's what they will be doing.
You know, the having that attention to local market does mean that we have numerous business development initiatives that are aligned to those local requirements, i.e., they're customer-led. I've mentioned, you know, about the production centralized in two sites. That delivers significant economies of scale as well, which is helped by the automation. Just on outlook quickly, it's really just lifting what we've put in the statement, I think. The second half has started well, and we, you know, we're at the same momentum as the first half, and we're hoping that continues through to the end of the year and into next. We've got several business initiatives. As I've spoken about, the synergies, cross-selling, certainly synergies in Bio-Vet, following that earn-out completion.
More local, technical and sales teams down on the ground. Yeah, I don't need to go through those long-term drivers again. They're there. They do keep the market. If you look at generally all the forecasts and all the market research reports, some of which you can take with a pinch of salt, but they're all saying specialty feed additives, phytogenics, mycotoxin binders got you know good middle- to upper single-digit growth %. There is just always you have to put a bit of a word of caution. There are ongoing effects with current trade and tariff disputes and these potential challenges. You know, the tariffs on the U.S. haven't affected us. I think there is obviously a cost to that we have to pay that.
It's, you know, it hasn't impacted us too much, and maybe gradually we'll eat that back through price rises. You just, you know, there are other effects that can impact us from that you wouldn't necessarily realize from the tariffs. One of them a little bit in India, their currency has depreciated 10% against the pound because they've got this 50% tariff, I think it is, with Trump. Obviously their currency has dropped. It's not causing us too much issues at the moment. As I say, there are certain impacts. We think overall we're great.
We're geographically diversified, so overall we're positive and confident we can still make progress, and we have experience of trying to navigate all sorts of things that are thrown up in front of us, challenges. I don't think it's different with any business, any global business at the moment. Sometimes where there's a challenge, then there's an opportunity. I think that's that. I think if we can switch and see what the questions are. I'll just run through it probably.
Yeah. The first two are more related to me, so I'll pick up Richard while you change your screen around. The first question was what do we need to know about the working capital movements in H1? I note that trade receivables were down despite increased sales, the big increase in both types of inventory, and a reduction in trade payables. Well, obviously, we walked through the slide earlier, which should have given some answers, but they're specifically requested here. In terms of the trade receivables, they're they have been down. You've been generally collecting in cash from most of the customers. But the other aspect to it was that Bio-Vet have come in with a high level of contribution in terms of the sales mix, and in the U.S., payment terms are generally 30 days or less.
That is having a mixed impact, and reducing down the trade receivables days, at the end of the six months, because they've had a higher contribution through the period, relative to the overall sales. In terms of inventories, we walked through that, for the most part, it's a normalization. At the end of last year, they were down on levels that we'd normally expect, so we're expecting to build the levels of inventory back up. Obviously sales are increasing as well. Overall, from a working capital perspective there, not expecting any significant increase further from here, just more proportional movements. In terms of the trade payables then, it's trade and other payables, so includes accruals and things like the bonuses. You know, last year was a fantastic year.
There were bonuses earned and paid out following the annual results. They were paid through March and April. As we're only halfway through the year, while the performance is similarly very good, they haven't been accrued back to the same levels as yet and kind of contingent on the full year performance. Hopefully that answers that question. The next question was, I note comments on streamlining sales and distribution channels. Do you foresee that a minor plus for this will be to reduce the expected credit losses on trade receivables, which seem to be about 7% of receivables? Yeah, certainly 7% of receivables is a high number.
We do publish a fair amount of detail in the annual report, less in the interims, but I'll consider adding some more if it's useful. If you look back at the end of the year, for example, we kind of analyze out the expected credit loss provision across three categories. Customers that we've got some form of credit insurance in place, customers that are uninsured for trade, and then there's some others that we've specifically identified for impairment because they've got credit impairment issues. If you look at where the normal kind of levels of trade where we've got insured and uninsured customers, I think the percentage of receivables is sub 2%.
Two-thirds of overall provision at the end of last year, and that will have increased in percentage terms at the half-year, was related to customers specifically where we've identified the requirement for a provision. Richard obviously talked about Egypt. You know, there are a number of other areas where we've had customers that, you know, a year or over in terms of being late to pay. At that point, you know, we start to identify them as requiring a provision. For the most part, Anpario is always able to work through that. But you know, you never know, and it's prudent to make sure we've got the provisions in place, especially if someone is more than a year overdue in paying you.
That hopefully explains a large proportion of that expected credit losses is allocated to very specific customers. Hopefully we can work through those scenarios, and the provision is not needed. Certainly if someone's not paying you, then it makes sense to have a provision in place. Going on to the next question.
I'll do this one.
Okay.
Yeah, basically remember the time. I think I can't remember, was that the day that when did Trump announce his tariffs and the market was dropping significantly and Anpario dropped, so there appeared to be no buyers. We felt that it was right to sort of go into the market and mop up any excess shares that weren't being picked up. But we didn't feel that we should be driving the share price up, and in effect trying to manipulate share price up. We just felt we wanted to support it.
We also heard at the same time that there were actually fund managers who wanted to buy and were trying to buy as well, and we felt that that was more important to get certain fund managers with a bigger proportion and to get them in or let them buy. We didn't feel we should be competing against fund managers who wanted to come in and buy the stock because you know they are useful in the future if you need to raise funds for acquisitions and things. It was really a sort of defensive approach and the share price sort of went back quickly up over 350 and headed up into the high threes.
It was really just to mop up any sale and stop a free fall, and it turned around quite quickly, and it was just down onto the trough. That's why we did it. You know, if the share price had stayed down low and there were no other buyers coming in, yeah, we would have continued to do that. You've got any further buybacks under consideration? Not at the moment. I probably couldn't say anyway, but not at the moment. We feel, well, there are a number of funds that have indicated to us they would like to buy in, but and they are looking at how they can get in. The problem is they can't get hold of stock, and that's the issue.
The liquidity in Anpario, but of course it's a wider AIM issue, is preventing them from getting in. But they are and we are on this roadshow seeing more new institutions that want to speak to us. Seems to come out of the woodwork when you put out good results. We don't feel the need to do any buybacks at this level. We'd like to, you know, get some more, broaden out the institutional funds because they were reduced when we did that tender offer a couple of years ago at GBP 2.25.
If some of them now wanna come in at GBP 5 or more, very happy to, that they can go and buy some stock off the market. I think, Marc, you, hopefully that answers that question. Do you wanna do the R&D one?
Yeah, no problem. Yeah, so in terms of R&D, the profile's changed a little bit in the sense that we had probably a higher both in absolute terms and percentage terms spend maybe a couple of years ago. Around about now it's probably about 1%. Some of that spend has gone to the balance sheet and some of it's gone through the P&L. The level has reduced since we did the sort of redundancy restructure exercise. Generally, there's enough opportunity with the products that we've got to expand sales. It's been more a case of focus on the products that we have and extending their applications.
Generally our R&D is taking a product like Orego-Stim. It works in so many different animals, basically except for cats. It's even good for human health. It works in so many different ways, doing so many different functions that a lot of R&D goes into Orego-Stim and other products extending, you know, their market applications and the species that we can apply those products to. It tends to be more evolutionary than revolutionary.
We've been doing a lot on aqua, particularly recently with things like the Orego-Stim Forte. It's been about 1% level, and at the minute tends to be smaller projects. There's quite a lot of work that went into the Orego-Stim Forte, and that was taken to the balance sheet. There's a lot of projects these days that are kind of a smaller level, and they're running through the P&L. Generally the level of spend is about 1% of revenue.
I can do the next one on the acquisitions. Yeah, look, we're always looking for acquisitions. There's nothing particularly hot or live. Well, I couldn't say it anyway, but hot or live. Yeah, we are, you know, there's stuff coming across the desk. It's been, in terms of the activity in the markets, quiet over the last, well, since Trump announced his tariffs because everyone's trying to figure out what that means. It does look as though there will be a bit more activity with people maybe putting some of the businesses up for sale coming into the autumn and into next year, or that's what some of the bankers tell you, but they're trying to drum up fees.
There is one or two bigger ones that we know are coming up in the autumn, and one that's sort of close to closing, we think. That's a huge one. That's DSM, and it's well-known. It's and it's majors in premix. The type of companies, well, certainly, you know, with Bio-Vet gives us another platform. We've got a production plant there in their type of products. There are a couple of companies in the U.S. that we've got our eye on, and we've had initial sort of chat spoken with.
They're not ready to sell, or they're telling me they're not ready to sell yet, which probably means that their profits aren't in the right place to justify the price that they would want. Doing something like that and that allows us to consolidate the Bio-Vet type of business, you know, one of their competitors or so, into Barneveld. The more volume we can get into there, then we can start to automate that, and then you get the economies of scale and further synergies as well as, you know, greater market share in the U.S. market, which can then be driven even more by better efficiency 'cause you're producing your these products more in a more automated fashion as we've done at, you know, Manton Wood. That's certainly keeping our eye out in the U.S.
Other types of products, yeah, we'd like to, you know, and I've always felt that enzymes and a number of other product areas we'd be interested in is something maybe potentially in aquaculture. We do keep an eye on. There are certain companies out there where, you know, we've been trying to pursue, but it has to have a willing seller, and there's not many of those around at the moment. It's not, you know, there's nothing, say, imminent. We've got a lot to do with doing the cross-selling and taking Bio-Vet's products internationally and selling more of our products in the U.S. and pushing out more in Central America. That'll be the main focus.
You know, we do look at deals and acquisitions, and we do. If something's coming up for sale that is in the right sort of size for us, then a lot of the advisors who are selling it do contact me and send us information on it. So we are in the loop.
I can add on this next one.
Yeah, yeah.
Richard's already kind of answered some of this, but the question from Bill H. is, apart from Unicorn and Gresham House's paucity of institutional investors on your share register, why do you think this is the case, and is it a potential concern if the company ever needed to tap the market for new equity? I think Richard kind of walked through a little bit answering one of the previous questions. We obviously did the tender offer previously. That kind of, you know, a number of institutions did exit at that moment in time. It was a time when a lot of institutions were having redemptions. At the same time, our market cap significantly dropped.
You know, the share price was at GBP 0.07 and did drop, I think, at one point to sort of sub GBP 0.02. It meant that our market cap was too small for a number of the kind of larger institutions that were invested in us. It became difficult for them to hold us anymore from a compliance perspective. But it's pleasing with the recent share price increase that we're now back above GBP 100 million market cap, which will open us up to a number of new funds. There are, you know, it's not just Unicorn and Gresham, but you know, they're very strong supporters of us and high holders.
There are a number of others that are, you know, really good, strong backers of the company. Following that tender offer, we've got a high level of retail following, which is absolutely fantastic. Really appreciate everyone's support. Tools like this are great to engage with retail shareholders. Liquidity is just an issue in the sense that, you know, we believe there are a number of fund managers which want to come in and pick up stock. It is a little bit difficult for them to do so because they tend to want to come in with a, you know, a significant position rather than kind of building up a position through smaller trades.
Hopefully, you know, it's something that we're aware of, and we'll continue to address. In terms of being able to tap the market for new equity, well, as we said, you know, there are funds that you know, would be very happy to support us with a deal. Generally, equity markets are improving as well. They're starting to be inflows into funds. I think, you know, there's no lack of appetite or ambition for acquisitions. I'm fairly confident and have conversations recently about that. We're always having conversations about appetite and the capacity and stuff and I'm very confident that we'd be able to raise new equity if the right deal came along. Richard, do you wanna take the next one?
Yeah, I mean, yes. We are, as I said, we're gonna start with the QuadriCal. We'll take, as I said, I mentioned about global power brands. We want to certainly, as an example, we take QuadriCal and try and build that into a very strong brand name like we've done with Orego-Stim. When we take it international, it will be under the Anpario company branding, but it'll be QuadriCal as the brand name. The brand names tend to be more important in this industry than maybe the company names. That's why we're taking something like QuadriCal. We're gonna start with that. We'll have to sort of, in certain areas, we'll have to look at new distributors that can specifically do dairy or more aligned to that and have better links.
The areas that we're looking at, we think certainly Latin America, Brazil. I think I mentioned that the Bio-Vet guys, the president and their R&D director of research is down there. At a conference and sat with the Anpario guys as well to plan out how we tackle the Brazilian market for the ruminant sector, but also that Central America area that we're getting more control of, visibility of is high up on the list to be sort of attacking. Middle East, I think we know Vietnam, there's big opportunities there. China, potentially, and a little bit into Europe, certainly the QuadriCal.
We will be going more through distribution with those products because of the nature of them into these countries, and we've started working on the registration to get these products in there. Yeah, very much so we see that. That was one of the main drivers for buying the business because they're very U.S.-centric. They do bits. They have some sales in Czech Republic and South Korea. I think I mentioned that in the chairman's statement. They've already got some in Asia, but we can really help them get elsewhere into where there's bigger relatively bigger dairy markets. I think-
The next question is what are the headwinds, sorry, challenges do you expect in the next 12-18 months? For example, U.S. tariffs. I'll answer the tariffs. I'll let Richard sort of continue answering the question. In terms of tariffs, we did some work when the tariffs were first announced, and I don't think the situation has changed. If you take into account the corporation tax saving that would be made, then the impact over, you know, FY 2024 and for the previous five years was around GBP 150,000 impact through profitability and through higher costs. Not terrible. You know, it's not ideal.
Alongside the higher national insurance, you know, these results would have been further improved. We're managing that. You know, we are able to, there are various things we can do to offset and mitigate and navigate those challenges. You know, the results are significantly robust enough that the tariffs are not having a material impact on the results. There are secondary and other impacts that come from tariffs and trade flows and things. There are offsets and things like some cheaper freight rates around the world and various other factors. Richard, do you want to add anything in terms of headwinds and challenges?
No, I mean, look, the global market is, you know, very unpredictable at the moment. You just, you know, it has been for a while, so you just don't know what might hit you or what. We are very geographically spread, species spread, product spread, and that was a deliberate, you know, part of the strategy, so that we do get a little bit more insulated and more resilience built into the business. We are experienced, like I said in the last slide, at navigating all sorts of different things. We, you know, there might be things that affect us, but it will only be, we feel it may only be temporary, and it might just be in a certain area. Other than that, it's, for us, business as usual. There's nothing new.
It's just the nature of some of these challenges and headwinds are slightly different. Last one. Who's in charge of technical side of Anpario's growth? Generally, we have a corporate development director who looks after marketing and the technical team. Within the technical team, we have about three or four in the U.K. technical people who are also quite. I like them to be more commercial because the best ideas come from the customers and knowing the customer well. They are looking at what we should be developing.
One of the big mistakes people make in this industry and in businesses in general, they have a big technical team, R&D, and you know, people in white coats sit in the lab, come up with a product, and then go to the salespeople. "Right, this is a great product. Sell it." And then the salespeople say, "Yeah, but customers don't need that." And I've seen that in other companies. We try and bring the ideas back from the challenge in the market, down on the farm, and bring it back to the, you know, into getting it resolved. We're solution-led. We do have PhDs, MSCs, you know, people who have good, strong backgrounds. Dr. Nate Haas, President of Bio-Vet, is a vet, qualified vet. He was State Veterinarian for Wisconsin.
He is a PhD in microbiology, so he knows about microbiome, and we are probably leaders in understanding gut health and microbiome, and some of the work we're doing. Yeah, he is very strong technically, but he is also a good leader and good commercial guy. 'Cause he did come in as sort of director of research to Bio-Vet when the previous owner was, and founder was still alive. He brought him in. To backfill Nate's position about a year ago, I think it was, they recruited Wendy Lewis, who is head of director of research and product development. In, on that side of the business, they got a very strong guy. He is actually down in Brazil, I think, with Nate at the moment.
In terms of looking at the probiotic side, that guy has worked for Chr. Hansen, so has a very good background. We've just recruited a girl in Manton Wood in the U.K. that came from AB Agri's innovation department. They disbanded their innovation department. We managed to. We're very lucky to sort of snap her up and bring her in, but she'll understand the commercial side, certainly, 'cause she'll be out with the customers and with the sales team in Anpario and helping to develop products that, you know, for the future that customers actually want. We also do, you know, we're linking in with universities, so we are doing something actually on, I think it's AI. Well, it is AI, not think it is.
It is on AI and poultry, and we're doing some of that work in conjunction with a company in the Netherlands and Nottingham Trent University is doing the trial work where we can tell what's happening in the gut microbiome from chicken feces and how our products are affecting, beneficially affecting the gut microbiome. I haven't really mentioned that. That's, it's a bit of R&D development work that looks quite exciting. Every company's got to say AI, haven't they? 'Cause then it sends their share price up, apparently. But it's not gonna send. It's not gonna, you know, turbocharge our sales to what-whatever, like Nvidia. But in the future, that's where we're going.
The more we can learn about the gut microbiome and prove how our products are working within the gut, not just on the performance metrics, then the better. We have started some work on that, and that's been led out of our Manton Wood team. Nate will get involved because he's the U.S. guys have got a strong understanding of microbiology and gut health. Yeah, we feel, you know, certainly on the future scientific products and things, we're, you know, we've got the right approach and practical approach to getting products commercially launched. I think that, I mean, that's it. There's no more questions.
That's correct, Richard and Marc. You have addressed all those questions from investors today, so thank you very much indeed for that. Of course, the company can review all questions submitted and will publish those responses on the Investor Meet Company platform. Richard, if I may just ask you for a few closing comments before I redirect investors for their feedback.
Yeah, just look, thank you to the retail investors who have supported us. You know, we don't need to say it's no secret, we do look at the bulletin board, so we do take on your comments and read them. Not all of them maybe, but you know, certainly over the past few years, institutions have found it difficult to support, you know, buying into companies because they've had a lot of redemptions, and it's been difficult for fund managers. I think now that that's started to subside, and they're getting inflows, so hopefully it should be positive. You know, we have had a high proportion of retail investors over the last few years, following the tender offer.
We're just thankful for that support and, you know, some of the insights you guys bring and the support of the company. Hopefully we're delivering, you know, capital growth and income growth for you in the dividend policy and the way the share price and the business is performing. Just thank you for your support as well.
That's-
Marc, do you want to say something?
No, just to echo those comments. Yeah, I really appreciate the support and the backing of everybody and you taking the time to listen to the presentation. Just to extend an invitation that if anyone is ever passing Worksop and would like to come in, then you're more than welcome to use any of the forms of communication. We've got investor relations at Anpario. You know, you can pick up the phone, send us an email, and we're very happy to engage with people and show you around the wonderful facilities that we've got at Manton Wood. Thank you for your time.
Fantastic. Marc, Richard, thank you once again for updating investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Anpario PLC, we would like to thank you for attending today's presentation, and good afternoon to you all.