Anpario (LSE:ANP) — Final Results for the twelve months to 31 December 2025

0:00 Good afternoon, and welcome to the ANPARIO PLC investor presentation. Questions are encouraged and can be submitted via the Q and A tab situated on the right hand side of your screen. Before we begin, I'd like to submit the following poll, which I kindly ask you to submit your responses to. I'd now like to hand over to CEO Richard Edwards. Richard, good afternoon.

0:20 Yes. Thank you, Jack. Welcome everyone to ANPARIO's final results for financial year 2025. Mark is with me, the the chief financial officer, Mark Wilson. And what we'll start with is just run through the numbers and then look at some of the what's happening along the lines in some of the regions that we operate in. And, obviously, particularly with The Middle East, we already have

0:49 some questions on that, but we'll probably answer those as we go through the geographic spread. So, Mark, if you'd like to start with with the numbers, we'll take questions at the end. So just if you can put those through this through the system, then we'll answer, hopefully, all of them at the by the end. Mark, over to you. Okay. Thank you, Richard. Right. Just moving on. Just take you through the quick highlights. I'm sure you've seen these since we've announced the results, but another fantastic year of progress at ANPARIO, including the first full year contribution from BioVet in terms of the key sort of financial metrics. Then we had revenue up 24%, even higher growth in gross profit of 34%, thanks to further improvement in gross margins.

1:35 Adjusted EBITDA up slightly higher than that as well, 38%, taking us to a record 9,600,000. Cash growth again despite having some outflows relation related to final payments for the BioVac acquisition, so good cash generation again. And that diluted adjusted earnings per share of 33% and an increase in the dividend of 11%. So none of that, I'm sure, is is news to you. We'll move through the slides and give you a bit more detail. In terms of the income statement then, as I mentioned already, revenue increasing by 24%, and that includes the full year contribution from BioVet. But underlying that, there was, you know, also strong organic growth. All of the regions performed pretty you know, really well and showed growth apart from the India and Middle East area, which had a fantastic year. Last year really pushed forward thanks to some structural changes going on in that area, and we kind of expected a little bit of consolidation through this year, and and and that has happened to a degree. But, nonetheless, still, if you look at it over the recent years, then still great progress in India and Middle East.

2:41 And, you know, we had particularly good growth this year coming from Asia and The Americas, and there's some great slides later on that we'll that we can talk through to to show that. From a product perspective, then we continue to see a mix a favorable product mix, towards the high margin products such as a REGISTIN, and also products like OPTIMIGA, and as well the BioVet range, which comes in, you know, a high high gross margin, as well, above the the average. As a result of that, then the gross margins have increased back up above the 5050% level to 50.9%, helped helping to boost those growth gross profits even higher by by 34%, as I mentioned previously. In terms of admin expenses, then overall, they're up 24%.

3:27 And on a like for like basis, that was 11%. Also expecting the additional sales and admin costs coming through from from BioVet. On a like for like basis, and a lot of the increase was driven through high employ employment costs, the wage inflation, as well as higher UK national insurance, as well as, you know, it's been there's no way, you know, other than looking at it, it's been a fantastic year with highest single year growth revenue and gross profit and EBITDA growth, and that has led to high bonuses for the year. And as well, we've seen h two, a a number of headcount additions in in sales and technical roles to help further the sales growth in the years to come. Other than that, outside of employment costs, the the general admin kind of cost structure was relatively flat. There's some increases in in areas like travel as well, but, materially, you know, most of most of the growth was through employment.

4:21 Walking through further then, adjusted EBITDA up, as I mentioned previously, 38% with the EBITDA margin returning again up to 20.4%, haven't been 18.3% in the prior year. And I think the 20 above 20% is where we had been a number of years ago, so we could see that return as well. We had a lower tax charge in the year, and that was largely driven by the fact that last year, was some some disallowable expenditure including on on the acquisitions or the yeah. It was well, there was two. There was an abortive one in terms of another deal that we looked at, but then the buyback one, which did did proceed. So there was some disallowable expenses.

5:06 And as well, this year, we've seen, as I've mentioned previously, a further increase in the sales mix towards a Registain, which does benefit from that patent box and the lower corporation tax rate as a result. So leading through to the adjusted EPS up to 33%, our highest ever, you know, highest ever metrics on a on a number of different basis. The the recovery that we have been through has has has you know, we've moved past that. We we got back to a number of metrics like EBITDA last year, and and now we surpassed pretty much every metric we've ever produced, and and and that's good to see and see that difficult period put behind us. And in terms of the dividends, total dividend for the year of 12.5 p, an increase of 11% with a final dividend of 8.9p to be paid in July.

5:55 Moving on in terms of an adjusted EBITDA bridge just to show the drivers increasing the overall profitability. Firstly, the the first bar is excluding BioVet, the 2024 performance of 6,500,000. The second one shows the sales growth that was achieved of 12% and the impact that had in terms of profitability at prior year's margins. And then the third bar, that that gross margin percentage increase, so that that shows just the the benefit of driving those margins up by 4% from from what was achieved in last year. And that gross margin increase offset the the administrative overhead increase that we saw in the year as as Bruce explained it. So taking the excluding BioVet performance up to £8,500,000 adjusted EBITDA, the previous high excluding BioVet was 7,000,000, and so we've surpassed that metric as well.

6:51 We've then got BioVet contributing 900,000 of profit, like, adjusted EBITDA profit for the full year, and that is that surpasses the expectations we had when we bought the business, what, you know, what we've modeled in terms of the the valuation of the business. So it's really pleasing to see. And, yeah, we're driving it's really good to see the integration, which we'll talk about further through the presentation. The last little bit, we as we mentioned last year, we bought the land and buildings that buy that operate on, and so we just isolate that separately. It's not part of the operating forms of the business as as was previously, but it an additional saving that's made from the acquisition of that building, which is a a fantastic site and one that we'll be looking to invest more in and and build upon.

7:42 Moving on further to the slide through the presentation, then in terms of cash flow, good growth again. In terms of the cash flow, strong operating cash flow growth of $9,400,000 There was an outflow in terms of inventories, but we talked about this at the half year. If you saw that presentation, there was some detail that was provided in terms of working days and movements. A lot of the increase that we've seen was driven through that first half of the year. And effectively, it was the case at the end of twenty twenty four, we had low levels of raw material and low levels of finished goods because we just frankly, we sold more than we had expected, and and those stocks were driven lower through the high performance that we had in the second half of last year. So it was a material it was an exceptionally low point, and so we had always anticipated a build back up of inventory in the first half, and and that did come through through the second half, then things would would remain in broadly proportionate to the higher revenues that we've seen. And finished goods, as it mentions there, did did rise by 1,400,000 due to the high volumes and a planned inventory buildup to support some of the future growth that we're seeing in some of the subsidiary entities.

8:57 But overall, capital days are below the levels that we saw in 2023, which if if you remember back to then, I kind of said that I expected that to be kind of the the the baseline moving forward. 2024 was low. They've they've increased a little bit through this year. So, again, similar to what I said at the end of twenty twenty three, I would expect more proportional movements again moving forward. Although, you know, if there's if there's something strategically that we can do in terms of the the inventory base, then we'll look to do that. In terms of the investment activities, then as I sort of highlighted previously, there has been some payments related to the buyback acquisition, some closing adjustments on the final calculation of the closing net cash and also the full achievement of that earn out consideration, and that was paid in q four. So as I sort of said already, they're doing fantastically well and fully and achieved the targets that we set when we acquired the business.

9:56 In terms of capital expenditure, that fell to €700,000 in line with the sort of expectations that we had. It was higher last year due to that purchase of the BioVet London buildings. As previously said, this level of CapEx, if you exclude the buyback purchase, is is slightly higher than the last couple of years. But around this kind of level is where we think we'll to be in the coming years. We've talked about before the plant, for those who have seen it, it's really well invested, highly automated. There's a bit of a project going on at the minute, actually, where the the roofs come off the building, but it's a relatively small smaller level of spending and just some increased optimization. But, generally, the the this site is well invested. Encourage people to come and see it and and contact us if if they'd like to come and see the site.

10:45 And also from an r and d perspective in terms of capital expenditure, then, you know, there's still lots of exciting stuff that we're working on, but, generally, it tends to be evolutionary. And so we don't have a high level of CapEx requirements in the near term. And then lastly, just in terms of the cash flow, the dividends increasing in line with the increasing overall dividend per share. Moving on from the cash flow. I just put this in a little bit just to highlight that kind of recovery that we've been on and and in a number of few different metrics and and kind of the messages that we've where we kind of consistently kind of say where we're trying to achieve in terms of growth, whether it's gross profit or or overall profitability. In the middle section there, you've got a compound annual growth rates for a five year period and then for a ten year period.

11:34 And as we've consistently said, you know, our focus is on delivering consistent high single digit growth, and and that's been demonstrated. You know, when you look at this last five year period, including the difficulties we've had and then going back over a ten year period, you can see the kind of metrics that we've been achieving, and that's kind of what we hope to continue to do moving forward. The gross margins on the left, can see, have now returned back above that 50%, which is a key target for the business. We do wanna drive volume growth and and margin, but, yeah, relatively happy to get it back to 50% level and and look to to drive volumes as well to to increase overall gross profit and and overall profitability.

12:22 And then further, adjusted EBITDA, you know, also growing, whether you look at it on a five year or ten year basis, sort of eight eight to 9% compound annual growth rate. And similarly, dividends have also grown near 10% since since ten years ago. I think we're probably on something like just under twenty years. I can't remember if it's eighteen or nineteen years of consistent year on year dividend growth, and, you know, that's another thing that we're very conscious of continuing to deliver. There's not many companies out there that are able to achieve that. I think that brings my section to the end. Obviously, welcome any questions. We'll look at those at the end of the presentation. I'll hand you back over to Richard. Alright. Thanks, Omar. Well, if if if we just look at a sort of top level view of our segmental revenue and and performance, obviously, you know, we have three going up, one going down.

13:18 In The Americas, obviously, 58 was partly driven by the BioVet acquisition, a full year from BioVet, which is shown on those bars. But, also, I think there's, I think, 21% organic growth in The Americas. Middle East, there was a couple of reasons for that one, which I think we put in the full in in the chairman's statement or the the announcement that that we lost some pellet binder business that I think that was in Saudi Arabia through a customer compared to the previous year.

13:52 Although we are actually thinking we're gonna get some of that back this year, so we're actually working working on that at the moment. There's there's potentially good opportunity to to win that back. And then the other thing was a customer that had payment issues for a while we haven't traded with, but we've worked through with him those payment issues, and that customer has now started to reorder. And Mark has managed to persuade him to pay upfront with that with that. So not sure he's too happy with Mark, but we're very happy to still do business with him. So just delving into Asia, and I'm conscious there are a couple of questions that were pre submitted on Middle East. And when we get to Middle East, we'll we'll answer those.

14:39 Just basically, the the, you know, the big the big success there was The Philippines, which was a big sort of agribusiness, one of their biggest agribusinesses that does a number of different sort of operations out there, including animal feed. It's got its own, I think, its own animal production, and it also sort of had supplies into the backyard sort of consumer market as well with various formulations. We've been speaking to them for quite a while. We had done business with them in in a number of with a numb number of products sort of over the years, but nothing significant. And then it really kicked off last year when they realized that using Aurigastim in their formulation was giving their customers, their pick customers in particular, better performance than the competitor feed, which was ADM.

15:34 So they started to use our use our, I guess, in in more of their formulations, and they started to get more sales growth because they could demonstrate to the customers that they'd lost to ADM that now their feed was gonna give them better animal performance. So that was really us helping a big integrator who has a big agribusiness who supplies animal feed to a lot of smaller farmers that that that they can add value in their chain compared to their competitor. So that's really where The Philippines, we think there's more to come from that this year and certain other animal segments that they're working on. China had a, you know, reasonably good year. And and then the rest of Asia sort of continued its recovery. It's had over the last sort of few years from the dip that we had back then in, I think, 2022, 2023. So some of that was recovering. There's some good work going on a couple of countries over there with with Asia's sort of biggest integrator on a range of products that we've got going in, which includes Aurigastem, also a natural insecticide called Red Light. I might talk about it a little bit later.

16:47 Things like pellet binders and stuff. So if we just slip on to The Americas, really the yeah. Big story here was obviously BioVet. We've now got a a full year's contribution of BioVet and the let me just expand this so I can see a little bit more. So the the the like for like revenue is up 20%, and what we've had is a little bit of a comeback in force sales going into the swine market in North America. Force has been the anti feed Michigan that was really controlling PRRS virus in the feed, but some of the customers have also seen, which they should do, know, gut health improvement and performance in the animal. And what we're finding now is formaldehyde is still legally, you can still use formaldehyde in the feed to cleanse the feed. But what we're finding is it's more consumer driven where some of the family owned farms and producers, pig producers, don't want to use that sort of product because it is classed as carcinogenic.

17:55 You have to keep thirty years of health and safety records for any employee that has been worked on that feed mill or in that production unit that that if you're using formaldehyde. So we're starting to see, certainly, as I say, the family owned businesses and smaller businesses move away from formaldehyde and look at force, and and there's a number of target customers that we are sort of currently working on that could help and even increase that even more. Aurigastim continues to do well certainly in the calf market. And now with BioVet, there is some cross selling with BioVet, either putting it into some of their electrolyte formulations and other formulations or selling it direct to some of their farmers in the dairy industry that they have, you know, a good footprint and a good strength.

18:44 And even into the think when I was last there a few weeks ago, they were talk talking about taking the organic targeting the organic dairy dairy milk industry, and there was a customer, I think, that was looking at it and trialing it there. So it's still quite we feel there's still quite a bit to come out of Americas and certainly with the cross selling opportunities with with BioVet, there's there's, you know, a lot more that we we feel we can get through their sales channel. We've now combined the the management and the sales management team and the back office basically for The US, all the admin and finance functions come under market being moved into the the Wisconsin facility there that we have and and is is being run by their administration and finance team there. And the whole of what we've also done is headed up the whole of America. So that's from Canada all the way down to Chile or Argentina.

19:44 It comes under the responsibility of doctor Nate House, who is the president of of BioVet. And by the end of we think by the end of September, the branding will have transferred over from BioVet over to ANPARIO. And by then as well, a lot of systems integration

20:04 that we're doing will will have really completed by then. So it's quite a lot heading out or doing in The Americas and and particularly in The US in sort of bedding in that acquisition and moving forward. I know there was a particular I think there's a question that's come up about Brazil and this and the performance. So I'll I will just talk a little bit about that. We Brazil is a very competitive market in certain well, where they export a lot of the meat protein. So that would be obviously broiler meat, the chicken. I think 70% of what they produce in chicken is exported. That when you're exporting it, they're getting lower prices of that exported meat because they've also got to include shipping that goes costs and then getting it into those other countries.

20:51 That that has been under pressure. So they so they are very, very cost con price conscious on what price they're paying for feed additives that go in there. And I know that I think the question sort of mentioned about competitors with local production. We do have two key competitors.

21:10 They're in they're in there and do have local production. The the it's not that local having a local facility that beneficial. You know, we still feel we can do some business from The UK with that. The problem is is the import taxes and tariffs into Brazil are quite punitive, and so we have to add it onto their product. And that just makes it a little bit more difficult for us to compete with some of the volume type lower margin meat protein production facilities. So what we are doing, we are we have made making some changes. We are targeting, you know, where there's a homegrown or or there's a home local consumption of of produce. So that would be things like eggs because you can't really transport those eggs around the world as eggs, dairy, beef, some of those sorts of areas. And we also think maybe a little bit of swine.

22:05 So with BioVet, we have just now got the BioVet facility in Wisconsin registered by the Minister of Agriculture in Brazil. So we will start we are starting to look at taking some of those products to certainly target the dairy market and to a certain extent, the beef market. We're also the other area is aqua top culture, and we're doing pretty well

22:29 certainly further in the North Of Brazil around Recife area, I think it is, in tilapia. And that is the tilapia in the aqua market is a lot of that consumption is consumed in Brazil and not exported. So it's those markets that are more favorable. There's more you know, and that's where we'd we have done better. We're gonna try and do more and then target those more rather than the real cutthroat areas. It doesn't mean we can't come necessarily compete.

22:56 There are certain ways that we will be able to compete and get around those import taxes. For example, if we're dealing with a company that can offset those taxes against their exports, then that's one option. So we are looking or we are talking to a number of people on that. But Brazil is a little bit unique in in the way it is. And, of course, a lot of the global feed additive companies all want to be in Brazil. So it just ends up being a little bit more competitive market than

23:26 the many others. Just heading into Europe. I mean, yeah, Europe is again again, we do have a question on Europe and our competitors. Competitors. So I'll try and answer it within this within this section. Europe delivered good sales growth of 10%. It's we are doing pretty well in with our REGO Stim across, you know, across the board really there. We have made some changes with people in the last sort of year, eighteen months, and we have sort of moved certain distributors in some of the sort of Southern Mediterranean countries aside so that we can go and deal more direct because we do have a salesperson that is able to do that. We've also recently signed, I think it's back end of last year, a

24:16 relationship or partnership agreement with a major sort of multinational that is supplying raw material ingredients into the feed mill. So they're our partner for hitting cross those feed mills. I mean, everyone thinks, you know, Europe is one one one country effectively, one trading area, but there's 27 different languages. There's you there's a lot of differences between North And South Germany and and and and even particularly in France. Brittany is more connected to the Welsh than it would be to Paris. So it it there's a lot of nuances within that. We've never had a lot of people on the ground. We've had some distributors who've done well for a few years and then maybe tapered off and not done as well. So what we are doing, we're supporting, and we've done a a partnership agreement just to target the feed mill with certain products.

25:06 And this this partnership company that we're working with, they're they're actually also a supplier to us. They're much bigger than us, and they've got 20 odd different salespeople across Europe in certain countries. So there's a lot of conversations going on with these big feed mills that they already have the relationships with. We are supporting them, and we have one employee that's sort of based out of the The Netherlands that is support that is a feed mill expert and knows how our products work and that that is supporting them to try and start to build the build the

25:37 business across a number of these countries in Europe. So we haven't done this sort of thing before. We sort of relied on on country distributors who didn't necessarily have the links into the feed mill. Feed feed mill, yeah, we've always been strong with the integrator with people producing the animals and probably a little bit weaker on the feed mill side. So this sort of strengthens us in in that area. So we feel that, you know, with the with with this sort of relationship that we can make much more inroads across Europe where it's fragmented, but where where there's opportunities with our products in the feed feed side. It's let me just move on, yeah, to The Middle East. Again, we have had two questions, so I will

26:29 just flip back to some of those questions on there. Obviously, the, you know, The Middle East with the in terms of last year, then the then the biggest issue we had was was really just losing this this pellet binder business that we had. It it is some of that business can be more price sensitive if it's on a tender sort of basis and you get it for a year and then you may lose it because someone comes in a bit cheaper. There was a couple of issues with with the customer, and we lost that. But we have actually sort of reorganized and reset up in that particular country for this pellet binder business, and we think we can get some of that back this year. So that's what the team's sort of working on now. Obviously, within the I I mentioned a little bit about the it was in Egypt actually where we had a customer that's with credit issues and stuff.

27:20 That's now resolved and sorted out. The big standout performer that's in The Middle East thing is obviously India, and that's going well with our partnership

27:29 in terms of certainly, we know now in the aquaculture side. I think we're just recently sending some master cube pellet binder to do some trial work on there. Once that India, UK relate trade relationship is sort of ratified, which I don't think it's fully signed off now, then we were The UK was gonna supply things like, I don't know, lobster, crab, and I think salmon stuff in return for shrimp coming back from India into The UK. So shrimp production cannot they cannot use as a pellet binder urea formaldehyde because it aids carcinogenic. It's effectively wood glue. So they have to use more natural type of products, and that's where MasterCube comes in. So I think we have got trials.

28:15 We sent some MasterCube out there for doing some trial work within those production facilities for shrimp production in India. So we feel there's a lot more to come from India, and there's a lot more areas that we can target with other products and species. And I think we're just starting to sell some of the organic or or get some of the organic acid products produced by our partnership down there. So but let if we just go back to I'll just read out some of these questions. So the first I'll do this question now because we're on The Middle East, but the the first question is to what extent is the Middle East war affecting demand costs, availability of your various product inputs? Does any of this have the potentially to materially potential to materially harm or benefit the company?

29:07 So, look, with it regarding costs and raw materials, I'll Mark, do you want to answer that? Yeah. Yeah. I'm happy to do that, then you can pick up the the demand side. Firstly, I'd be I wanna make it very clear that this is different from the problems that we had through 2022 and 2023. They were linked to some force majeure events that occurred in the market and then also linked to which affected our profitability. There was also high gas prices, which I'll I'll maybe come back to. And then that was affecting our profitability as well as the high level of inflation that was going on at that time. And on the demand side, there's very high wheat prices, which we aren't necessarily seeing at the minute, and I'll let Richard go into probably some more detail on that.

29:54 But in terms of our inputs, the the the biggest spend that we have is Oregon oil. We have a very solid partnership there managed by operations director. We have a three year plan that we have always in place with that. You know, we have a five year agreement and a three year plan, always looking ahead in terms of our demand and their supply, and and then price comes into that as well. So, yeah, we're we're there's a very close relationship, and so we're not necessarily expecting too much in terms of issues on on the oregano oil supply side. Where it comes through to other products, I mean, some of the acids that we buy such as formic and propionic, they are a bit more sensitive to high oil prices.

30:44 They were the areas that we had the force majeure events in the past. Where we had the force majeure events, those products became almost, you know, almost impossible to source and went up three or four times in terms of the overall cost. We are seeing a little bit of an increase, but not yeah. Nothing that's materially detrimental in terms of the overall numbers that we expect to be able to produce this year. And, generally, what we're seeing with these high oil oil prices is there's a rate of change, which is always difficult to manage. But if you if you consider the 2011 to 2014 period, oil prices were above $100 a barrel for, you know, for nearly four years. It's the rate of change that is becoming an issue. And it will it will create a level of inflation throughout the economy, and we are not immune to that.

31:36 There will be areas that things go up, particularly around logistics and and and transport. Fire alarms just fell off in the building. Let me just it's it's been 10 Mark Mark, if you if you just finish on that, then I'll do the rest. Yeah. I'm I'm sure it's a but yeah. No. It's it's it's very different in to to what occurred before. Of course, there's always unknown unknowns, but at this stage, we don't expect something you know, anything like what happened in the past, and we're we're pretty comfortable with the forecast in terms of the market. If they're as costs are coming through, they're higher. We could we're we're passing them on whether it's, you know, freight and logistics across them. You know, they're generally born by the the purchase of the products, and so we can pass those on. You we don't make we don't aim to make profit. Profit.

32:26 We sell on an export basis around the world, so we can pass on those costs. Mark, do you wanna mute your thing and then and then go and find out if the bill is I'm sure I'm sure it's fine. It's because they're because they're doing they're they're installing some new equipment, I'm sure that's what they did. Don't worry investors. I'm sure there's not a fire on-site. Mark, mute mute your thing and go and find out what it is. Yeah. Oh, is this right. Well, Mark's going off and hopefully, there's no fire there. But then, anyway, I'm sure we'll we'll sort it out. I'll I'll just run through. The other just the other question on The Middle East was how will The Middle East situation affect your markets? I mean, look, it's it's very it's sort of very early or difficult to tell, but we don't think we haven't seen a drop off in in demand in The Middle East.

33:13 In fact, you know, there was some big orders and things coming through, you know, last few days from The Middle East, and I was talking about that pellet banter to Saudi Arabia. People are still there ordering. The the issue is how do we get it there or through which routes? You know, for Iraq, used to go straight to Hormuz. We are we are trucking it across Europe and and through Turkey and things. And, actually, quite early on or a few couple of weeks ago, I think it was where we had stuff going into The UAE. The containers were dropped off in India, and then we had to take them from India to Oman and trip them from Oman over to The UAE. So that would have cost a little bit more, but we have a very experienced export logistics team that can get anything anywhere around the world in in most situations.

34:09 So but it's the same for everyone, but that's sort of the impact. So we the the bigger, you know, the the big issues on this are if people if we run if the world runs out of fuel, diesel or whatever, but then the the that's a big issue for everyone. And in The Middle East, in particular, if they can't get corn, soy, or grain, or the animal feed, you know, those raw materials that go into animal feed into the area, then there is a potential it will have to cull chickens, you know, dairy cows, things like that. But it you know, they are finding other routes and other ways to get there. At the end of the day, they've gotta feed the people who live in The Middle East and and they will become hell or high water trying to do that. So but those are you know, there might be some of that that goes on.

35:01 The other sort of impact we would say in Asia, if raw material inputs are going up, that will squeeze some of the margins on the integrators. But we feel that, a, we've got a broad range of products, broad range to teach in in terms of species. We've got we've got buyback compared to when we didn't in 2022, 2023, and we are geographically spread. So people still gotta wait through this period. There is gonna be a bit of disruption, as Mark said, some additional costs in some of the raw materials, but we're passing those on and putting price rises in there. But, obviously, it depends how long this goes on for, but it's gonna be the same for a lot a lot of businesses. The destruction, we're pretty confident that we'll work through that. And as I say, we're not really seeing any demand dropping off in in The Middle East as yet. But it's a day to day thing as obviously the markets keep reflecting by going up and down and and changing things.

35:57 So I think, hopefully, that has answered that question. If not, just drop another question in, lower down and we can come to that at the end. And I think other than that, on The Middle East, we'll just yeah. We can just run through the BioVet bit and and the Outlook, and then I can get on we can get on to the questions. So, look, the BioVet integration, now we're really pleased. It's a great business. It takes, you know, for me, I said sort of four strategic boxes just to remind us was, firstly, it got us into strengthened our dairy, ruminants capability and knowledge. It gave us a sort of second production site and facility in The US, not in The UK because we didn't want another one just in The UK. We didn't need one need one. We just felt from a, you know, a forward planning and risk management point of view having one in in another country or another continent and The Americas.

37:01 The US is is a big agricultural market, so it really has ticked that box. It's a great site with room for expansion. Not that we necessarily need it because there's still you know, we could still at least double or even more in terms of volume through through the Workshop site. It gave us a probiotics. So another product area in the product group, there's still quite a lot of development we can do with combining well, there's a lot of development we can do with combining phytogenics and probiotics. They're very complementary. And it gives gave us a bigger footprint in The US, which is the world's biggest or second biggest agricultural market depending on how how you look at it. So just, you know, the strategic value of that and and its its capability for BioVet and the the product range that we can take around the world. We we feel that, you know, we're we're very still very pleased with that and the cultural fit is good.

37:57 So we have got all The US employees including ANPARIO Inc and and BioVet all employed under the one legal entity. That's all being done. The administrative integration and all the alignment across the region is is underway. We are as I think I mentioned about the BIVET facility being now registered in Brazil as a as a with our Ministry of Agriculture. Registration there's some registrations very close in place like The Middle East. Of course, of all places where it kicks off some of the registration for BioVet would be The Middle East. But also places like Vietnam where there's there's quite big opportunities with their dairy herds to get their products and and get some initial export sales. So that's very imminent, we think, and we're taking the bolus product, what we call a Quadrical brand around the world first from BioVet to get that moving.

38:56 And we are we will be rebranding the whole BioVet to ANPARIO, and we we feel that that should the time stamp for that is it should be complete by the end of September this this year. And we're already transitioning that, so there are elements of ANPARIO's corporate branding coming into their logo and their designs already just to transition that through and get customers familiarized with our with our branding. And the IT that Mark, you know, his team in terms of the ERP and CRM, then that is, you know, expected to all sort of go live by the end the end of the year as well. So so it it's the integration is progressing well. The cross selling opportunities, scalability, those are come starting to come through. They're not massively impacting the the sales in the top top line yet. They're crossing up, but they will be.

39:51 And, you know, the fit the fit is still, you know, very much as as we thought it would be. So just if I I think it's yeah. The outlook, you know, clearly, I think when we did write this, we didn't know what's happening in The Middle East, but, you know, to say, we feel that that is that that is still manageable going forward for this year. The current, yeah, the current year sort of started in line with with a strong competitive q one, so it's sort of similar sales levels last year. We do feel that there's a lot of business development opportunities that are underway and there's a healthy pipeline. So there's quite a bit in Asia with this the big Asian integrator. There's even, you know, opportunities in The Middle East that we see that are big and and and and good, you know, good opportunities that we're working on. And, you know, if those come off, then that that'll be great. But, you know, we we are obviously expecting that some of those may not given where we are. In The US, there's a lot of opportunities we actually are. So there's I think it's catfish catfish aquaculture business in The US that is trialing our guests in products in there and has got, I think, initial good quite good results from that. So there's about I would say there's about 20 business development initiatives going on around the world to suit those local markets and local needs and requirements

41:22 that customers have that we feel, you know, keep us on track delivering for this year. Obviously, you know, we don't I don't think I need to say much more about The Middle East. There will there will be some impacts mainly sort of logistics supply chain, but we're used to managing that. I mean, you know, when you've been in this business for twenty years and you're in 80 countries around the world, each year, there's always some issue going on, whether it's a war, whether it's African swine fever, avian influenza, whatever, uprisings or strikes or things like that. So we've always been able to, you know, work through that disruption and and keep developing and keep the business moving forward. So to us, this is just another thing we have to manage and deal with and and and we'll get through.

42:16 So we as I say, we're confident delivering on these business development initiatives going forward, capitalizing on the Bava acquisition. So, you know, that's not, you know, starting to come through now and and we'll do continue through into the 2026. And also a little bit of innovation. You know, we developed this new product. It didn't actually cost a lot to do this. There are it's not a a completely novel innovative. There are other products in in the in in the market in terms of the the amplified products. It's basically we we what we've got is just a slightly higher specification than the competitors, and that is allowing us to go in and and actually sell against some of the competitors and sell to our customers and market and get that. And so we're very pleased that we have got a confirmed sort of order for this year of a 125 tons, I think it was, which is in The Middle East again. So it's actually going into Middle East. And we'll be starting to produce at once in a few weeks once we've got this particular CapEx that Mark was mentioning in in the production plant installed because this product the this CapEx was justified not not necessarily on amplify, but amplify makes a real quicker return if we got the amplifier yeah. Got some amplify business.

43:43 So we're pretty pleased that we've got that with this this this first big order for this year in Amplify. So it's a new product. So and we think it's got legs in in, obviously, a number of other regions. So we still got, know, we've got a strong financial position with balance sheet. It's an experienced global team. We have that diversity in geographic reach in terms of sales and products and stuff. And that and that's why we think, yeah, we can continue to execute the the strategy. So I think the in the appendix, we'll we may refer to that in some of these questions. So I think we'll start on on the the questions that we've got coming through. I was saying that I can confirm that there was no fire, so you we'll be pleased to know. Alright. Well done, Mark. Although we're although we're well insured, but We're well insured, and we can switch production to and that's exactly why we one of the reasons why we bought BioVet because we could switch production with a little bit of work into into The US.

44:43 And we also have a a tow manufacturer up the road from where Manson Wood is that if there's anything they can they very quickly can fire up. They used to actually produce the Augustine powder for us, so they're they're very familiar with our products. Yeah. Lot I've got from Roger f. In your comments on trading in Europe, you flagged the presence of globally recognized competitors. I was surprised as I would have thought that the same would apply across the world. Should I be surprised? No. Not I mean, the the reason why more of our competitors are in Europe is because Europe, back in the early two thousands or the EU signaled that they wanted to move away from antibiotic growth promoters.

45:28 So a lot of European companies were starting to work on alternatives like organic acids, like phytogenics, and like those sorts of other alternatives to antibiotic growth promoters. The rest of the world and particularly The US was later on. And actually, I don't think they're not banned in The US. It's just consumers have moved or demanded to reduce the amount of antibiotic gross motor. So, you know, if so most of the ones that we were because that was happening over twenty, yeah, twenty five, thirty years ago, this talk, A lot of competitors started out and and then started developing and growing internationally. So we see some of them more around the world than maybe from other countries. Although there are some American ones that we would see internationally, And you would get probably, you do see some from India, but they tend to be sort of more raw material supplying into that sector. So it is it it is generally still quite a lot of European competitors that we would go up to.

46:43 So and the next question is who are your globally recognized competitors? Well, the the the ones in Europe would have been people like Biomin, but they got bought out by DSM. So the Biomin name is no longer there, but the the product still is microfixes, mycotoxin binder. We would come up against people like Delacon, which is an Austrian phytogenics company. They're owned by Cargill, and I think the Delacon name is still out there. PANCOSMA, we used to compete with, and they were bought out by ADM. Now the Pentcos name, I think, is still out there as well. Impactstraco, who are a family owned business, Belgium business, that are very are pretty global because they mainly go through distributors.

47:34 They don't have subsidiaries like we do, except they do have a subsidiary in Brazil because they do other types of products and a lot of feed ingredients. So as Impact Straco, there'd be people like Phyto Biotics that has a phytogenics product, but it's not an sorry. It's not an oregano one. And then other ones that we'd compete with would be Oltec. They are it was really an Irishman that started it, so they have an Irish base, and they're maybe an Irish listed company, but their main operations is in The US and Kentucky. So all tech is very much in The US. And then came in, we would is a family, a big family owned businesses. They also do stuff thinking to human nutrition that is based in Des Moines in Iowa.

48:25 And then there's quite a you know, there's there's a few other sort of smaller ones and and mid sized ones. So as as I say, it's traditionally has been in Europe, but we you know, there are other ones that that are around the world from from different countries. But I think because of the European regulation, then European companies sort of had to move more quickly and got the head start. So it it sort of leads on to a question later on about our innovation and, you know, the the why is why is our r and d spend sort of low, but I'll answer that. I'll link that in. Oh, actually, that's the next question. I know that for the last two years, our and this is Roger f again. Sorry. But you've missed there there is a there is another there's another question in between.

49:12 I'll pick it. Is it the one on Brazil around the local manufacture? Because it's just like we we clarified a little bit in terms of Brazil and the dynamics there. You know, it's not necessarily in the areas that we are currently operating in, the the value, the the kind of products that we we we have, the high kinda high value add feed additives. But if you consider, we we sell to 80 countries around the world. And in all of those eighty eighty countries, we can compete, and that has all been historically based just on production from from Worksop. So local manufacturing and the competition that that brings, yeah, anyone that locally manufactures in the country is going to have a a cost benefit, but we think, you know, central centralized manufacturing in terms of the efficiency savings that brings, the quality, and the consistency of products that we can produce is a massive advantage. And our products have a high value that that can be shipped around the world and be profitable and compete with local manufacturing.

50:21 We do that in 80 countries around the world. Brazil is is more competitive for a number of different reasons, but we can make we can make profits selling in Brazil. It's just a it's just a more competitive market for a number of reasons that that Rich has already highlighted. So it's it's not the case. You know, the the Rich was just talking about competitors. We've had competitors in the past that have regional manufacturing, and you end up getting inconsistency in the products on a global basis because you're using different inputs and and different different production variations. It's it's it's good to have consistency, and it's one of the things we're recognized for is that quality and consistency and efficacy of the product. So, no, I don't think that, you know, I don't think we would have a strategy of looking to locally manufacture anywhere, and I don't think that that's necessarily hampering growth around the world.

51:16 Richard, on the r and d one, I'm I'm happy to answer it initially, and then happy for you to add to it just because it usually comes up from a CapEx perspective. I mean, one of the things I would say is, yes, r and d has been lower. It's been about £250,000 for the last two years. When we kinda went through the difficult period we had and reduced profits, I kinda set highlight this a little bit before. From a tangible CapEx for a second, you know, the the plan is well automated. And at the same time, we looked at did a bit of review and and thought about what, know, our r and d allocation. And the reality is we have a lot of opportunities to grow this business, and there's a lot of innovation still going even at the £250,000. And our product you know, generally, we are doing evolution, not revolution, and we're taking products that are ahead of the time. You know, REXtem celebrated its twenty five year anniversary last year. It's been been around for twenty five years, and it continues to be the number one growth driver. And it is still young in terms of its life cycle. There's way more that a RigStim can do around the world and the growth opportunities that it has. Generally, ANPARIO has been a a business that has come up with solutions for regulatory changes and focused on the future farming practices.

52:34 So there's products that we've had in the in the range for twenty, thirty years that, you know, are increasingly more exciting. You know, Richard talked about force and its opportunity. There's areas in the world like Saudi Arabia that are gonna potentially ban formaldehyde use. So there's a lot of growth with potential within our existing products, but that's not to say that we're not doing r and d. There is, you know, several dozen projects going on at any one point, but one of the things that we're really good at doing is having a global presence of people on the ground that understand what's going on in production systems, some of them from a production background, and they can generally pick up on the challenges that people face and and what they're seeing. And sometimes some of our r and d is coming from that interaction with the customers where we're seeing that product is having a benefit, you know, maybe surprising.

53:23 We can take that, put it through the technical team, prove it in a, you know, in a in a university or trial setting, and then that becomes a feature of their overall product. So, generally, we can be really, really efficient and successful with our products product development. Richard mentioned things like Amplify that's been launched for, you know, very, very little cost, and there's loads of extensions and product enhancements and new variations of products that we've been launching, such as the RigAstent Plus that's been launched this year, that's really exciting. And that's all within that, you know, relatively low level of spend. So I'd I'd say we're highly efficient and effective on a low level of spend, but we are also you know, we have a lot of opportunity with within the the product range as it stands.

54:11 Yeah. Let me just add to that. You you gotta understand the market where we we're focused in is sort of natural feed additives or specialty feed additives. It's governed by in Europe, it's governed by what's known as the EC notified register feed additives, which is eighteen thirty one regulation. So anything that's on that list, we can and there's about four and a half thousand compounds we can use and blend together. There are certain rules about it. And and on that list, some things get knocked off and and and the odd thing gets added. So we but we can only use what's already sort of registered on that without sort of major further regulation like going to the European medical or medicines agency and asking all the FDA.

55:00 And the equivalent in The US, the two equivalents, one's AFCO, which is sort of the feed ingredients board, and then GRAS, g r a s, which is generally recognized as safe. So we end up using what those compounds are, maybe blending them into smart sort of formulations. So it's a a lot of this is not finding a new molecule. If you try to do that, such as an antibiotic or vaccine or whatever, it's tens of millions of pounds to do that. And I think to bring an antibiotic to market now, that's why there aren't any really coming through. But to bring an antibiotic to market through an animal health will cost you €200,000,000 or dollars or sterling or whatever. It's significant and that's why a lot of companies are not doing that.

55:51 So we operate in that market where we can use these compounds and we can blend them in a smart way and then we do trial work. So a lot of the some of the work that we do gets expensed anyway or is with we have staff who are who are already working on this. Any technical staff we have tend to be in product development. They're also out with the sales team, with the customer, and trying to understand what's needed. And, actually, you know, because it's built up this fantastic immune system naturally over the centuries of having to resist high temperatures, low temperatures, insecticides, infection, viruses, parasites. It's built up in the immune system with a series of over a 100 different compounds within its oil that we can use in sort of, you know, a healthy way or an effective way within you know, to help the the animal. So it it so that is why the in terms of the the r and d, it's more evolution.

56:58 It's with compounds that are allowed to be sort of used within the within the animal health industry. And if we went to spend tens of millions, we would not get the return back because of the the animal health and farming. And it's just it wouldn't tolerate that sort of prices that you'd have to charge to try and get that. But there are, you know, there are a lot of companies listed who've who've had quite a bit of venture capital money within our industry who trying to do something very novel, very new. And, a, they've come up against regulatory barriers and, b, they ain't any better than something like or aren't solving anything more than what can can solve and good good animal husbandry.

57:45 So it really isn't the case. That's why, you know, our return on I think our return on invested capital is over 20% because it doesn't require it just doesn't require that in the area that we are. We're not a pharmaceutical company, so we're not doing vaccines. We're not doing antibiotics. There are plenty of big companies out there that are doing that. And our our core skills is basically sort of product marketing is taking a formula a natural formulation and and helping the animal to maintain and improve its gut health so that it's more efficient in terms of getting nutrients out of the feed, but also fending off things like salmonella and e coli and what have you because it's healthier animal, healthy gut.

58:32 So, you know, and that's partly why our strapline is nature's answer because nature has invented a lot of these things. It's done all the r and d over thousands of years. You know? If you go back to you know, someone was trying to invent a pen, wasn't it, in Apollo 11 so they could write in space. They came up with all these sorts of different fantastic things of trying to have a writing implement, and then they just worked out that why don't we just use a pencil? When you're upside down, you can still write in a pencil. So it it doesn't require it quite frankly. What we what we have to be good at is continually refreshing the story and product marketing and prove looking for those niches and proving that our products can give an added value to the customer. And if we can do that globally around the world, we can find out those sort of more profitable niches that that that we can, you know, make money from and continue to grow. So, hopefully, that's answered the question. Think that was the last one, you know, from Roger f.

59:33 So oh, there's another one from Roger f low low down. So I've got SAPP. What are the profit impacting risks to your business in the coming year? Mark, do you wanna do that one? Yeah. Well, I get you know, as Richard said before, if the if if regions, countries, or the world runs out of fuel, then I guess, you know, that that is a significant risk. But I guess all businesses will be in the same boat at that point. But, you know, there's always the unknown unknowns. At this stage, you know, we've we've got if if we sort of walk up the p and l and from an administrative base, yeah, we've got a fairly controlled level of cost and spend and and and, yeah, control control over the and predictability in terms of our cost base from the administrative level.

1:00:24 In terms of inputs, we've talked about that. You know, generally, we're not in we're not seeing the same sort of things that we saw before. There will be inflation, but, you know, we we've got good pricing power to pass that on. But, you know, the the further that this war goes on and the the more acute the impacts and and the rate of change, then then then that will be a risk. There's also Rachel Reeves, Mark. Yeah. Yeah. UK government policy. That was definitely a risk. Ed Millivan Ed Millivan and Rachel Reeves. I see. But to to be honest, on the energy, you know, we do have solar panel in probably, what, four months a year, we get free elect free electricity. Yeah. But it's just, you know, you just we're doing just the country's deindustrializing, isn't it? So what I'll end up doing, we we just don't know. But it's they're not gonna be major impacts. As Mark says, it's it's it's it's more globally if there's some some issue. But I know There's things like tariffs, you know, they've been in place for a while, though, you know, the changes that were made last year. I guess there's always there's always a threat that something like that could come through, you know, we've we've been able to manage, and you can see that in the results. You know, those those tariffs are in place for a large part of the year, and we're very much able to to still continue to grow the business and grow the profitability. So, yeah, look. We are a resilient business.

1:01:45 We've gone through various different crises. There's, you know, Brexit, African swine fever, avian flu. That there's there's always changes when you're operating on this kind of global dynamic. But we've got good teams, good local salespeople, good geographic diversity, good product diversity, and increasing species diversity. So we're as robust as we possibly can be, but, you know, we're we're not immune to to to large geopolitical and macroeconomic issues. Mark, do you want to? Yeah. In terms of the main main raw materials and whether we can hedge sorry. Yeah. William c has a question. I'll just read that out. What are your main raw materials and how straight can you hedge the cost, and what impact is the Iran more likely to have on your input costs and sales of the current situation continues into the summer. In terms of main raw materials, mentioned some of this before, and and the oregano oil that's that goes into that is, you know, the absolute largest spend that we have. It's probably close to 40% of our raw material spend, but we've got a very strong partnership.

1:02:56 And, you know, we we work very closely to plan out for the next three years in terms of our supply and prices and various different things. After that, you get into kind of formic acid, propionic acid. You know, they they're quite high spend, but to a lesser degree than they were maybe in 2023 because, overall, from a sales mix perspective, they're they're a little bit lower than they were at that point. You know, they're a bit higher in terms of overall mix. There's things like silica, and then, you know, there's there's other key active ingredients, but they they they, you know, they fall off in terms of being more material in terms of their full spend profile. And, of course, there's all sorts of minerals and mine materials that we use in the products as well. So that they're the kind of main main cost. It's really difficult to hedge specifically.

1:03:45 You know, the closest thing to a commodity is probably formic acid, but you can't you can't really hedge that. But we have strong relationships. You know, we have different supply options available since the force majeure events that we had before, and we've got good buying power because, you know, we we are still, you know, a very large buyer of those materials. So so that puts us in good stead. We've also you know, on-site, we've got good raw material storage, and we can use that to our advantage to to manage, you know, ebbs and flows in terms of pricing. So it's hard to hedge costs. We do hedge on our foreign exchange in terms of exposure to the dollar, but but nothing really in terms of raw materials. It's very difficult to do so. And then in terms of the the likely sales, I think Richard kind of covered this off earlier.

1:04:37 You know, the the longer this goes on, the the the more, you know, second and third kind of impacts that we we might see. But for the minute, you know, we are continuing as is an expectable to manage. It becoming it's becoming difficult to get product into The Middle East for for a lot of businesses, but not impossible. It just means there's increased costs, different logistics channels, and routes. But, you know, some some change can be opportunity. So, you know, that that in the long term might have some benefits for us as well finding new routes to get into certain markets. Okay. Thanks, Mark. Just pull left. Next one. Do you have a presence in Vietnam? And then fish, question mark. Yeah. We do have a presence in Vietnam.

1:05:22 We have been looking into our targeting shrimp market in particular, but shrimps had had quite a rough time there or in Asia. I think it's been an oversupply and and have been in terms of the pricing. We I'm just trying to recollect because I think we have just been doing a trial or there's been we our product has been compared to others in Vietnam. I think it came out quite well, but our product is priced more highly than some of the others. So I think we were just trying to find out what the cost benefit value was in in terms of that to the customer. But, yeah, we are in Vietnam. I'd like to do more in Vietnam. It's a great country. I think there's great opportunities. It's just hasn't been as easy as maybe we'd initially thought it was to get some traction there. But I think there there is there was something coming off there recently that I've heard and I have to check on that. But, yeah, it's it is on our radar screen to to do that. And, obviously, agriculture is quite a big, yeah, big part in in in Vietnam.

1:06:29 Next question again from Roger. Does the fact that swine prices in China so low impact your business? No. Not necessarily. I mean, it let me tell you what's going on in China. China is very different. What China has achieved is basically, I think it's now 30 piglets per sow. So because of African swine fever, they the government basically wanted to make sure that this was stamped out as quick as possible, and it's gone on for a number of years now. So they weren't so they give licenses to farmers to to grow pigs, basically, to produce pork. And they let the smaller farmers and the ones with less investment and less capability were not given licenses.

1:07:18 So they basically got rid of what were probably inefficient non bio secure farms and which promoted the bigger producers and the bigger farms. And those bigger producers were more efficient, more effective, more innovative, and have managed to achieve, you know, really going from maybe 22, 23 piglets per sow up to 30. So you need so you got less farms, and so they're probably that's why the price has gone down. There's been an oversupply. But into some of the bigger producers because they're more efficient and they've got more piglets per sow, they're more yeah. The the they still got the profitability. So they will still use our products. We do what happens is one interesting thing that Andrew, our sales director, just come back from China a few weeks ago.

1:08:09 We have a product called Opto Optomega algae. And in the in the womb of the sow, because you've got you've now got a lot of competition for, you know, obviously, nutrients and blood and things like that from the placenta of the animal of the sow to the piglets. So you're getting you they were getting, you know, a number of dead births and and and and piglets that weren't surviving. What we think with our products, and there's some trial work going on, is with Otsomega, it helps the supply of blood through the placenta in the sow. So we actually think it can bring some benefit. We got some of our products that will bring our benefits in terms of what's omega algae into helping sustain and promote more piglets per sow.

1:09:03 So, you know, just when you think that, yeah, maybe the low prices close the door on us, another one opens because there's a a actual niche sort of health opportunity with some of our with another product that that we have. So so we feel yeah. You know, with China, low impact, know, the low low cost of the pork meat is but they're more efficient and more professionalized farms that are going on there. So we and there's still other opportunities we can do in agriculture and and and dairy that I think the team's looking on there. So hopefully, that answers that that one. But you've always yeah. You gotta be mindful. Things can change, and particularly in China can change quite fast, but we feel there's still good opportunities out there.

1:09:53 Next question from Mason s. Are you hoping to complete another acquisition this year? Well, if we were, we couldn't really say just just like that off. Think, You know, we're we're talking to yeah. We're we're continually talking to companies, and we're looking at them. You know, we're not imminent on on on anything. And and if we were, as I say, I couldn't couldn't really say. You know, one thing at the moment is that we are valued lower than than what the private market is indicating for these types of businesses. So we're the cheapest acquisition out there effectively is is is what I'd be saying. But as I say, we have a list of companies we'd like to we'd like to acquire. A lot of them can be family owned, so the pipeline isn't abundant with good opportunities because a lot of family owned businesses or owner managed aren't gonna aren't gonna sell. It's gonna get handed down through to the kids and things. So it is finding the right decent business is finding, you know, another buyer that is like a needle in a haystack and looking for them. But we're continually looking.

1:11:02 We we review stuff that comes up for sale. But, certainly, if if something came up for sale and goes through an auction, it would be going at a higher multiple than what we're valued on on at the moment. So hopefully, that answers that question. Richard, I'm happy to take the next one. It's kinda kinda in some ways connected. Yeah. Martin b asking, given that you have a large cash pile, the outlook sounds good and the valuation is low despite record performance. Would you consider doing another tender offer? I mean, again, similar to the acquisition question that, you know, we wouldn't be able to say anything price sensitive. But if we're just talking about the capital allocation policy, then, yeah, yes, we have a a large cash pile that does help us be robust and and make strategic decisions when we need to.

1:11:52 Generally, in terms of capital expenditures, been talking about, you know, we don't have a high requirement for for tangible CapEx or from an r and d perspective. So and and that's not gonna you know, that's not expected to change in the next couple of years. Acquisitions are the absolute prior priority for that cash. What I would say is, you know, those for those who've been invested for us for a while in 2022, we looked at doing an acquisition of a company in The UK. We actually outbid we bid 43,000,000. The the company AB Foods bought it bought the business for $441,000,000. And that was because at that point, you know, raising money was very difficult, and, you know, we would have had to get get debt and an equity raise. So it it would have been difficult at that point.

1:12:41 So having a high level of cash does open up the the size of deals that we can do without having to go into the market and raise equity. We're very confident if we needed to raise equity that there's a lot of people that would back us and and and we'd be able to to do that. But nonetheless, in terms of speed and deliverability from from any vendor side, then then it's certainly helpful to have a large cash pile. So, you know, the buyback deal, Richard was looking at for seven years. Richard maintains and and the business, you know, we're we're constantly looking and evaluating a number of businesses, and and those conversations can span multiple years. So that is the the priority. After that, you know, the the fact is we have a number of people that invest in us for I IHT relief, and so we are conscious about having too high a cash pile. I think there's kind of an unwritten rule that if you have more than 25% of your revenue as cash, then, you know, that that that that can call into question a little bit whether that's accept an accepted asset. That's why we're very clear on that that that cash is there to fund acquisitions. But if we can't find a suitable acquisition and our cash pile continues to grow, then we will look to return it to shareholders as we did with the tender offer in two thousand twenty twenty three.

1:13:54 We did a £9,000,000, you know, share repurchase through that tender offer vehicle. And if we did a buyback, it was in 2020, and we we launched one last year. And so, yeah, that it's kind of it's not that we would like to be doing other things and and getting acquisitions, but, absolutely, we'll return cash to investors as that as that cash bar continues to grow. Yeah. Roger asked just a comment more than a question. I know that several of the competitors you mentioned have been taken over by the Austrian company by Cargill. I remember that I left my first AGM ten years ago. Convinced that you'll be taken over. Do you have any comments?

1:14:41 Yeah. The I mean, it's, you know, obviously, if someone came with with the right firm offer then then and we felt that it should be put to shareholders, then we'd we'd put it we we'd obviously put it to shareholders. Yeah. I know that there has been so people may be looking at us. I think being listed and being in The UK, listed companies, it's more difficult for companies. There's a lot of regulation to go through. Certainly, private companies and cargo sort of really is from their own private companies. Putting their head above the power publicly is is not what some of them want to do. The cost of taking someone private on, I think, on AIM or on on the London market is not cheap. So you gotta pay for all those investment bankers.

1:15:29 But, yeah, as I say, you know, we we're a listed we're a listed company, and if someone approached with the with the right offer then then it'd be down to, you know, it'd be put forward to shareholders if if we felt fairly valued and it was a good offer. Other other than that, we're then, yeah, we're we're looking for those those opportunities to acquire people, private companies that we can bring in and and continue to try and build the business. So, hopefully, that sort of answered my view. I mean, that was purely sort of my my my view on where where we are. Next question. Think, Sam, why where is the Oregano oil source from? Many different countries. Well, is it from many different countries? I don't wanna say specifically where it's from. It's mainly from one country, the bulk of it. We basically have with our partner there, with our our processor there, we have control of, you know, the whole supply chain in conjunction with with with partner. They obviously process the oil steam, extract it, blend it to our specification.

1:16:39 They manage any any of the farms. Some they they produce some of the oregano plant themselves, but they also use contract farmers. So it's spread across, you know, a lot of different areas. They can actually sort of buy in from other countries certain oil and then process it to our specification in in certain circumstances. But, generally, the the bulk of all of the oil is coming from, you know, sort of sort of one country in Europe. But we I'm I'm quite happy with that. It's in a very good area, and it gives us an advantage because of the way the climatic conditions are within that within that country. So our oregano plant is a very resilient plant.

1:17:26 So, you know, it can be grown in a number of areas. It's just the way that we grow and then the area that we grow gives us better yield and sort of a better specification, which we feel then differentiates us, gives us the consistency in the market and better animal performance. And that's through our marketing product marketing story. Just Paul left just a comment says thank you. Encouraging a competent business. Thank you, Paul. And then Simon, why Mark, you do you wanna do that now? Yeah. I can. So, Simon, listen. And this is the last question. Can you pass on higher transport costs, e g, having to go overland in The Middle East to customers? Yes. Absolutely. You know, we we don't lock in prices, and we price we price on the next works basis. So freight and transport additional costs are being borne by the customers and added on. Generally, our products are you know, they are high value and low volume.

1:18:28 Where you've got a high a lower value, high volume kind of lower density product, then it's harder to carry the additional transport costs into the product. But, you in particular, products like Optomega, you know, a container a container of worth a lot of money. So even the high additional transport costs are getting getting in proportionally to the overall cost, then the impact is smaller than some lower lower value commodities that might be traded around the world. So, yes, we do pass those on to customers. We did when the when the war initially broke out, then there were additional charges for for for products that were on the way. And we took the commercial decision to to bear those costs for the customers, and I think that probably cost us about $30,000.

1:19:23 There's a couple of products that we have to go through some different routes, including, you know, India and back to Oman and then to UAE. So that the win cut some additional costs, but but, you know, taking that on for the customers went down well. And, you know, orders continue to come in from The Middle East and continue to find routes through, and those those costs are being borne by by the customers. It's not just The Middle East. You know, it's places like Australia, other areas where we're seeing high transport costs and stuff as well. But generally around around the business, then, yeah, transport costs are not borne by us. They're passed on to the customer. Right. That That's it. That's it. That's the last question. So, look, just thank everyone for taking the time to listen to us and come come on to the thing. Thank you for your questions.

1:20:10 Again, we we like to answer all the questions. I think we've done that. I hope we've done that satisfactorily. And, yeah, I look forward to seeing you next time next time we do that. And as as Mark says, you know, if any of you are sort of passing the a one or workshop, then then, you know, we can we can show people around. And if you got any questions, then we're happy if you email us as well. We'll we'll we'll we'll we'll always try to answer them. So once again, thanks very much, and look forward to doing this next time. That's great. Thank you both once again. Ladies and gentlemen, could ask that you don't close the session just yet as you'll now be automatically redirected to a page to give your feedback, which helps the company better understand your views and expectations.

1:20:56 On behalf of the management team, we'd like to thank you for attending today's presentation. I wish you a good afternoon.