Anpario (LSE:ANP) — Final Results for the year ended 31 December 2024

0:01 Good morning, and welcome to the ANPARIO PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time by the q and 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 it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And then I'd like to hand you over to Richard Edwards, CEO. Good morning, sir.

0:31 Yes. Thank you, Lily. Good morning, everyone, and welcome to ANPARIO's presentation. First, apologies. It's it was delayed from a number of weeks ago because we had a a delayed announcement by a few days. We'll start off Mark will Mark Wilson, our our group finance director, will will start off with going through those results, and then I will just talk a little bit about the geography and how we performed in in in certain regions around around the world. And then there's there's a bit on BioVet, our plans for it and what and what BioVet's all about. So once again, thanks very much for attending. And if you have any questions, obviously, put them through the platform, and we'll probably answer most of them at the end after we've done after we've run through the slides.

1:20 Mark, over to you. Okay. Yep. As Richard said, thanks everyone for joining, and I'll I'll I'll walk through the results and talk to any questions that you've got at the end. So I'm sure you've all seen the the main highlights. So revenue up 23%, up to 38,200,000, and that that's, yeah, 23% increase with the gross profit growing faster, up 28% due to increased gross margins in the period, up to $17,900,000 gross profit for the year. Adjusted EBITDA was up 57%,

1:53 back to $7,000,000 which was the peak we achieved in 2021. And then diluted adjusted earnings per share up even higher as a result of the tender offer, that that we, we did through July 2023. Cash, even even after the outflow of cash from ViVet, then cash was still relatively strong at $10,500,000 and we continue to increase the dividends now onto our sixteenth or seventeenth year of continued growth in the dividend. Just going through it in a bit more detail, in terms of that revenue, then we saw, as as I said, 23% with with growth in all of the operating segments that we report in across Asia, The Americas, Middle East, and and Europe, and all of those areas showing growth. Some of it was the recovery from the difficult few years that we've had and and other areas, in particular, the The Middle East, with strong strong organic growth in the periods, and and Rich can talk through that in a bit later in the slides.

2:48 Similarly, in terms of product classes, then we saw growth across all all of the major product classes in which we operate. There was, again, a mixed story in the sense that some of it was a recovery from the difficult period that we've had, and, basically, the pellet binders, toxin binders, and acid base eubotics, but then we also saw continued growth across other products such as the Regasim. As well, we saw the increased volumes, as you'd expect, and more stable raw material prices. So that enabled the a continued recovery in the gross margins up to 46.9 percent for the period compared to 45% last year. In terms of admin expenses, then overall, they were up 14% or 1,600,000, but that does include a number of different things which are sort of more exceptional. So firstly, there's 1,200,000 of of incentive provisions about bonuses for the sales staff and and staff and management in light of the the strong performance in the period.

3:40 There's also buyback overheads for the q four period as well as 600,000 of acquisition related costs. In terms of those acquisition costs, then we did actually look at two different acquisition opportunities last year, but we pulled out one following due diligence. And obviously, of course, we went ahead with the buyback deal. Adjusted EBITDA, as I said, went it was up 57%. There was a high sorry, high well, higher tax charge in the period. There's a lower level of R and D spend, so as we signaled in the past that we expected, and a number of sort of nondeductible expenses such as acquisition related amounts. And as I said, the EPS up the highest ever, thanks to that the tender offer that we did in July 23 and by increasing dividend, as I've already mentioned.

4:29 Just moving on, just breaking that down in terms of the bridge of the adjusted EBITDA. Then we've got the $4,500,000 EBITDA that we performed from last year. This first green column, the increase of 2,300,000 that's related to the increase in sales at last year's margins. So that added 2,300,000 to the adjusted EBITDA. We then had the increased improvement in margin, which added a further 500,000. We're still we talked about in recent years, those a redundancy and restructuring exercise that we're going through in light of the difficult period for the agri market in general, and the tail end of that has led to a further naught 300,000 in saving on in terms of people costs. And then across the basket of other admin costs, again, there's kind of the efficiency savings and drive that we've been going through. Then there was a, you know, saving a further naught 200,000 boost in adjusted EBITDA.

5:17 We've then got the incentives. So that's the, you know, the bonuses for the sales staff and and staff and management in in light of the strong performance. The incentives are generally driven around growth, you know, whether it's from the sales team in terms of sales or, you know, the rest of the staff in terms of EBITDA profit. Then the focus is on, you know, all of those targets reset back to zero, and we need to provide growth in order to, you know, to to to be able to fund those those bonuses for future periods. So but the like for like performances and, you know, that cost part would largely be removed. Then we get to $6,600,000 as the like for like EBITDA performance. So not quite getting back to that 2021 performance, but the addition of BioVet, which we'll talk more about shortly, then that added $0 for that Q4 period and got us back up to that $7,000,000 EBITDA.

6:08 Just breaking down a little bit the performance of Pfizer and then the like for like, then we can see the overall movements for the group in that shaded left column. And then if if we talk through five that first, then they added 2,200,000 of revenue in sterling for for that q four period. Their their gross margins are similar and slightly higher to ours, including all the production costs absorbed and and distribution costs absorbed into that. So their gross margins were 55%, and that's, you know, fairly, very typical for them. And then going through the rest then in terms of operating profit and EBITDA and profit before tax, then they contribute 9,400,000 in sterling. They're having a really strong period through that through q four. And, that's something we can talk about, Richard, to, you know, what what's been going on in in relation to the buyback performance.

6:56 We then got the central column, which has a number of act acquisition related costs including, you know, the the the legal and consultancy, DD related costs around the transaction, as well as a few other things, such as we bought the building, which Viibet operate in. They were previously renting from some common stockholders, but not exactly the same. So we acquired that building, but we we're measuring that separately, with the normal performance of Viibet, especially given the the earn out and contingent consideration arrangement, which, again, we can we can talk to. So if you pull out the the buyback business performance, some of the acquisition related items, then we see the like for like performance. And even out with the acquisition of Pfizer, then we saw very strong growth, revenue of 5,000,000. It's the strongest growth in in any single year. Gross profit's up 2,800,000, and as you can see, operating profit of 100% and EBITDA of 47% or 2,100,000.

7:52 Moving on, just to talk about the gross profit. So, yeah, through the through this period where we've seen a decline in gross margins and there's been a number of ways we've we've talked about this, we're generally, at the minute, seeing a more stable raw material price environment. And year on year 2024 compared to 2023, and we saw a full year a full year benefit from reduced costs. At the same time, due to increased volumes and the kind of highly automated, but also, you know, fairly fixed costs of production that we've got, then we saw a reduction in the the production cost per ton, which led to some efficiency savings and improved margins. So overall, our average cost for the basket of products that we sell reduced by 1,500,000.

8:38 So we've got the the 14,000,000 of gross profit from last year. The overall cost came down on a like for like basis across the sales mix by 1,500,000. In terms of the selling prices, average selling prices actually declined. Now this is due to a number of reasons, including the fact that we saw a recovery in some of the the maybe low priced products such as the the the binders and things. But at the same time, you know, we're also a particular place about The Middle East. A lot of the the new business that we won in a year was quite large, high volume customers. And as you'd normally expect, you know, they they get, you know, a discount for for purchasing high volume. So overall, average price reduced. So those two, the average cost reduced boosted profits by 500,000, and the average prices reduced, offsetting that by 1,400,000.

9:31 But what we did see was a huge increase in the quantity of of products that we're selling, and that is up to that 3,700,000 increase in in that third third column. And then if you apply the sales mix change into that as well, then you get a slight offset of 1,000,000. If you look at the across all of our product classes, then pretty much all of the product classes that we saw were more profitable on a gross pounds per ton gross profit pounds per ton basis. It was just that overall, when you look at that sales mix, the the average gross profit pounds per ton reduced. So across all the products, you know, there's been sales growth, improvements in profitability, and we've just seen a recovery in some of those other other products as as we were hoping to see. If we move on to talk about cash flow, obviously, strong operating cash flow from through increased levels of profitability.

10:20 In terms of working capital, there was a slight decrease in inventory, and this released $100,000 in the period. It related slightly to the strong trading and and going through the raw materials quicker than we necessarily expected, but also slightly lower levels of of finished goods stock in some of the subsidiaries around the world. Similarly linked to the highest sales level, then we saw an increase in the trade and the receivables of 1,900,000. And then there's been a 2,500,000 increase in the trade and other payables. That that was largely related to the prior period has been relatively low. But then at the same time, we've got the buyback contingent consideration amount included in that 2,500,000, so that's about 800,000. And then we've got the accruals for the bonus the incentive provisions of of 1,200,000. So that that largely accounts for the the delta there.

11:10 Moving through the cash flow bridge, then we've got the tax paid, which is just, you know, a function of the the the tax charge. In terms of CapEx CapEx, then as we've been said before and anything that has come on the site visit that we arranged last year, and we've got well invested plants here. And in terms of so, you know, it's highly automated. We've finished the program of automation that we originally envisaged. There isn't there's always things that we we can do and improve in production, but there's not, you know, there's not a big requirement for further capital expenditure in the site and and plenty of room for growth, for volume growth. And in terms of intangibles and from an r and d perspective, we continue to do a number of r and d work, you know, the levels we were at before, which is a million pound plus a year, they've they've reduced. There's a number of products that we've launched onto the market,

11:57 and there continues to be, you know, you know, twenty, thirty trials that we're working on, but they tend to be of a lower level scale and proving proving new applications for the existing products because we, you know, we have a a very strong product range, and and there's lots of growth that those those products can continue to drive. Moving forward, there will be work on on looking at combination products with the such as with the five probiotics and the Regastim, but I wouldn't expect a huge increase in in the level of capital expenditure either on a tangible or intangible basis moving forward. We've then got dividends paid at $1,400,000 And then the two further blocks, we've got the £2,500,000 which was the initial cash outlay for the buyback deal. And there's a slide later I can talk through the numbers specifically on that.

12:42 And then as I said, we bought the land and buildings, and that was a further outflow of 1,800,000. So year on year, then a slight naught 100,000 fall in in overall cash, but still a very strong level of 10,500,000, you know, to to look at further deals as as we were looking last year and to, you know, to to to look to further investments in organic growth that we can we can produce. Just taking a bit of a reflection because, obviously, it has been kind of a difficult few years in the agri market. I think we've held up particularly well, still remaining profitable and cash generative through that period when there's a lot of businesses that we've been looking at that that haven't necessarily been in the same position. So we we've really shown our resilience through this period. But if we look on this this left hand chart, then the bars show the adjusted EBITDA performance and then the the sort of dark purple is the adjusted earnings per share. And you can see I was getting back to that 7,000,000 adjusted EBITDA that we talked about and then in terms of the adjusted EPS because of the tender offer and the reduction in the number of shares and achieving the highest ever level of diluted adjusted earnings per share.

13:53 And then on the right hand side, similar from a dividend perspective, and we've got the dividend per share in blue and in the purple, then the payout ratio. So as we discussed, through this period, we continue to increase the dividend because we believe in the long term growth and, you know, prospects and and the fact that the recovery would come and would carry on. And so we continue to increase the dividends, but the payout ratio increased. We've now backed down to kind of 40 around 45% level payout ratio, and we'll look to continue to to try and grow you know, drive dividend growth as well as capital growth as well. And then just coming through, if you look at the middle, you can see the the compound annual growth rates over a sort of five year period and a ten year period in terms of adjusted EBITDA, so this is just adjusted earnings per share and the total dividend. If you look at it from a, you know, five year perspective, then obviously, the adjusted EBITDA has been on a bit of a recovery. But if you look at a ten year period, then the kind of the metrics that Richard Richard and I often talk to is, you know, seeking consistent high single digit level growth, and and that's what's coming through in the numbers. And we'll look to you know, now that we've seen this recovery come through with the addition of BIVET, then then, you know, that's that's the market for us moving forward on a continued basis.

15:06 That's the end of my section in terms of the numbers. More than welcome to ask questions, and I will look to answer them at the end. So I'll pass over to Richard. Okay. Thanks, Mark. Just I just moving to sort of segmental revenue, and it's it's not often that we get four four of our segments or four the four main segments with sales growth across all of them. Normally, you know, sometimes we get three with one declining or half and half. So and that's really what helps, you know, drive drive the whole business forward. But within that, there are obviously some ups and downs in in certain countries within those territories. But just broadly, what we saw is is definitely a a good strong recovery coming through from Asia and Middle East where over the past number of years, we've refocused really on high margin type products as well and and moved away from sort of tender offer business, which tends to be sort of price driven.

16:11 So our our team over there have really gone more for the higher value add. But, also, The Middle East is benefiting from going to sort of get improving their food security after COVID. They had an issue with a lot of foreign workers within the country. They couldn't afford to feed them. They didn't have enough food to feed them during the COVID crisis. So that frightened them, and they are investing massively in being able to ensure food security. So those are just some of some of the reasons where where some of those segments have done done well. Just going into a little bit of detail

16:46 on Asia Pacific, as I say, just general improved conditions and particularly margins for producers following those difficult years. And really, that was just it was a reflection of the perfect storm in sort of 2022 and 2023 in Asia, which hit us, but we've had some good recovery across many yeah. Most of the countries over there apart from, I think, small declines in Bangladesh and Japan for various reasons. We after a long time working with a a a big integration distributor in The Philippines, we finally started to see stronger demand for some of our products and particularly for, you know, our our our our that is starting to come through even more so now. And we had good sales of things like MasterCube and RedLight that is a natural insecticide.

17:37 So and and Malaysia, again, delivered a strong performance compared to the previous sort of few years. China was steady, flat sales,

17:47 still doing reasonably well given that China, you you know, in terms of its consumption, yes, or meat protein consumption and and and the malaise in in the economy there, we feel we had pretty good, yeah, pretty good performance. The pig market has improved to a certain extent, and it's sort of stabilized now. But generally, meat protein consumption remains weak, and China can actually satisfy that sort of local local demand. But I think we're the the Asia's still continuing to make progress, and and we expect 2025 to continue in the in the same way. The The Americas were really the the our our problem sort of child or a couple of countries there.

18:33 Just firstly, though, obviously, BioVet had 2,200,000 of sales in the final quarter. So that really sort of turned turned around helped turn around that region benefiting from that because excluding that, The Americas would have showed a 10% decline in revenue and really driven by quite a significant drop in our US US business where we lost some forced business in the pork producer area. Yeah. Yeah. Yeah. US pork producers, pig farmers have been under pressure because of some of the tariffs that are being put up in China, and haven't been exporting as much. And, really, I think through most of last year, most pig farmers will break even at best. We are seeing that coming back this year.

19:19 Actually, there's a few customer wins, and we are hopeful that some of that business or hopefully most of that business we can claw back within this year. And and we are just sort of waiting to see a number of particular other customers who who are hopeful of going back onto force the force product. Avian influenza has also has benefited actually with high egg prices. So the producers that we've been supplying, providing they haven't been hit by even influenza, have been doing very well. And that's generally we we generally supply the organic so free range to the market in in The US, but that that did benefit us but couldn't offset, as I say, the the the loss of force and a few other customers.

20:04 Just in South America, Brazil was a was a key disappointment. It is very tough in Brazil. There's been an oversupply. Certainly, I think of eggs in in the early part of that or most of last year, I think that's changed and improved. There's a quite a lot of low value market competition we have to contend with in Brazil. And we are a slight disadvantage because if we're importing into Brazil, there's quite a number of different taxes. There's a minimum profit margin or minimum profit that we actually have to make on our on our products within Brazil, and that's really to stop dumping product dumping in into the country. So we so we we we've always decided that we would not have a production plant there.

20:50 We don't need one there. We'd prefer to have low fixed costs there, be fleet of foot, and be able to sort of react to sort of local local changes. But the market is pretty difficult in the poultry side for they they have an excess of poultry meat production. They're exporting that, and the prices that producers are getting are very low for that. So at the moment, Brazil is just a difficult market. I'm told by a number of analysts, it's a difficult market for most industries. But we don't have big asset or big capital investment there, and there are a number of initiatives that we're looking at to try and sort of pull that around and work that around. And just so so Venezuela and Colombia showed some strong growth. So it's it's patchy in The Americas. We do feel some of this will come back certainly in The USA.

21:36 Brazil, we think, will still remain tough for most of this year. Just moving on to Europe. That was good. There's some good sales growth there with, you know, sales up 15%, volumes up 6%. We've had the countries that have been doing well, Israel, Switzerland, Austria. One of our competitors certainly in in Europe, Biomin, was bought a number of years ago by DSM. They seem to they've been bought into a bigger company and they seem to have lost their way. And our Austrian distributor distributed some of the Biomins products, but is now starting to sort of switch to some of our products. So we we there's some good opportunities to take market share from a a competitors as I say that has been sort of swallowed up by big organization and really got got lost in in there. There's a number of, I mean, challenges in Spain. Spain's, again, a difficult market. It's the largest swine market. It's the I think it's just about the lowest cost producer

22:38 in in in across Europe. And so it does get pretty competitive in that market. But, again, there's there's a number of opportunities we feel we we can look at. And this year, Europe is doing well. We are working with a big European organization to sell some of our a range of our products in a in a number of different countries across Europe, France, where in the past in the recent sort of decade, we've we've not really done much. It's been difficult for us to sell into France, but we feel this this company has got better links. And and as I say, the the beginning of this year, Europe the Europe region started off really well. As I said at the beginning this section, the MEA outstanding sales performance with sales up 78%.

23:32 That now accounts, I think, probably for the highest group, this this region in terms of 18% of group sales. That's as I say, it's been sort of continuing trend, but it really accelerated recently because of this policy well, policies across a number of Middle Eastern countries to be self sufficient on food security. We also Egypt, we also have go started to go direct there, and that has helped sort of drive those numbers a bit more. And you'll see Egypt was up by point eight up point 8,000,000. So good demand for MasterCube and Origo Stim, and there's a we think there's a good opportunity with the BioVet products, which I'll talk about a little bit later. Our Indian partnerships continue to deliver, and I think it's had a real good start to this year as well.

24:23 With that recent India India trade deal that has been signed at top level, it's a high level sort of signature. So a lot of the detail is still to be worked out, and it will be certainly probably a year or a number of years before we start to see some of the benefits. But we do think there's a lot of future potential in India for us. We've got a good partnership there. And, actually, I think we've got four people out there at the moment this week, which is a little bit worrying given some some of the developments, but they are focusing on looking at the dairy the the dairy sector and what in in the more northern part of the country. And then we got another couple of people down in the South focusing on aquaculture, I think, and poultry. So India, you know, is probably set to become the biggest or second biggest economy.

25:14 At some point, we feel we got a really good position there and and the opportunity. So we we we probably feel India is our number one opportunity to a certain extent, and that's why we're we are putting a lot of resort sales resource or investing a lot of sales resource to support the part our partnership and the custom the end customers in that country.

25:33 So just to look a little bit on BioVet and the outlook, I'll hand back to Mark just to go through the financials on the acquisition for a slide, and then I'll come back in after Mark's gone through these numbers. Thank you, Richard. So, yeah, just to walk through some of the numbers. I mean, this is all in the the business combination note, but I just wanted to draw it out and see if to explain it and then see if anyone has any questions to go through at the end. So the upfront upfront cash consideration was 5,000,000 with an additional 200,000 that was paid in January following the the completion accounts adjustment.

26:09 And then but through the deal, we acquired cash of 2,400,000. Pfizer, as Richard will come on to talk to, is very similar similar culturally in terms of the way it operates and and some of its mentality and approach to the market. So they they had a high level of cash that they carried within the business anyway. But at the same time, unfortunately, the the founder, Bill Zener,

26:34 who gave Rich and gave some background on, He passed through through the as we go through this process, and there was some key man insurance which paid up the business. I think there's some residual cash left in the business from that. So we acquired acquired the business of 5,000,000, but it it had 2,400,000 of cash. So that meant that the total cash outflow on acquisition was 2,500,000. There is a contingent consideration element as well, which is 1,000,000 or naught 800,000, and that's based on twelve months EBITDA performance post acquisition and that not being less than $800,000. You can see on the on the bottom left the the the various different other assets that make up the net assets that are required within the business. And and if we include if we include the continued consideration now, as I said, then, you know, the total consideration was 5,800,000, and then then assets acquired described in that section.

27:31 If we if we think about that performance, that target performance when we're looking at the deal, so through March and April last year and and and initial conversations with with them, people buy that, then, you know, they were going through a strong level of performance and and but they also believed in in further growth and but at the same time through the second half of the year, there was a number of different things in the market that changed, including influenza affecting some dairy cows dairy cow herds across The US, and some of BioVet's products are particularly strong in in recovering those those animals through that period. So whereas influenza is usually negative, yeah, because they're quite strong on layers and and broilers where, you know, the the usual approach would be to call the bird birds.

28:19 Then in terms of the the dairy market, then usually people try and, you know, nurse nurse those cows back to full health following the avian influenza challenge. And BioVet got some fantastic products in order to do that, particularly through the sort of summer months when there's a high level of heat stress. So as we sort of entered towards the the, you know, the final final stretch of the the the deal, then they hit this really strong performance, particularly in places like California. And so their level of performance for q four was exceptional, their strongest ever trading period. They achieved sales of 2,200,000. And as as I highlighted before then, the adjusted EBITDA was 9,400,000 sterling for that three month period. So the full year target for EBITDA in dollars was 800,000, but they did not put 4,000,000 sterling in in just that three month period. So they're performing really strong, doing really well as a business, and, you know, it's highly likely, you know, almost guaranteed that that contingent consideration element will be paid and, you know, following this strong period that we've been going through.

29:21 But that means we, you know, we can

29:23 potentially look at paying that earlier and working with them to to start some of the integration of the business and and and things earlier, and and Richard can can talk to that on the next few slides. Yeah. Thanks so much. So just I mean, we we put out when we did the deal, we actually said, you know, strategic reasons why we did it, and I'll just sort of recap on those. Firstly, that, you know, they they have a strong presence and expertise and capability in in the ruminant and in particular dairy. We do have some dairy knowledge and expertise, but maybe not as much as BioVet, but BioVet really is a 100% focused, you know, really on on there. So they also have probiotic product range, which was a gap for us.

30:10 If we try to develop and produce a probiotic, we just wouldn't we could come up with a probiotic, but we wouldn't be known for that. Customers would say, well, you know, you're the guys with or the

30:21 organic acid people with with force. We wouldn't have that backstory in that pedigree, and that is important. You know, this is an industry where, you you know, you you need to be product specialists. So you need to be like a heart surgeon or an oncologist or a gynecologist, not just a general practitioner. So they they brought that probiotic expertise and we and and that is, you know, compatible essentially with with our our phytogenics range.

30:48 The the other side was giving us a bigger presence in the in The US, which is the first or second biggest agri market in the world and will remain, you know, up there with with with China and and now and they're probably at some point coming through in Brazil. So and and that was the third sort of reason. And then the fourth was to give us better you know, as a risk management, an alternative in terms of a production facility that wasn't in The UK or wasn't necessarily in Europe, but it was on a different continent and and can supply potentially down all the way down to, you know, Argentina and Brazil if if if required, but depending on on the logistics. So it gives us that resilience. It's in in terms of production facilities and gives us options.

31:35 But if you look at, you know, on the more culturally side of the thing, know, why is it highly complementary?

31:41 BioVet is an, you know, is an innovative and technically led business with strong capabilities, particularly microbiology and the gut microbiome because of the probiotics. Probiotics is all about sort of microbiology and gut microbiome. That's not to say that ANPARIO isn't or wasn't because actually a number of our products were were developed by microbiology many many years ago by microbiologists number of years ago. And we've always been conscious that the gut microbiome in animal health is extremely important. But we've probably moved to being more product marketing led. We've taken our technology, done a lot of brand building, things like Origo StimForce, MasterCube, trying to get brand equity into those those products names and and build power brands. And with our extensive sort of sales and and distribution network, it allows us to then open up those channels to for for some of these products to be pushed down into the relevant markets.

32:40 So that's, you know, taking what you know, bio vets technical product equity and pushing it being more marketing led with it and building those power brands is what ANPARIO brings to the brings to that party. So as I mentioned before, the probiotics, they enhance gut health, phytogenics to lessen the impact of disease and help the gut be more robust and a better environment for the probiotics to work in. And if I could explain just give an analogy of of how we feel this way. If you've got a block of apartments and you're the landlord and you want to rent it out and you want to rent it to nice people to come into these apartments who will look after and be kind and be good people, then what you do is you rip out the old carpet, you paint it with some nice paint, put some nice furniture, put some decent windows in, light and airy, make it a nice environment to attract, you know, good people into those apartments. What Phytogenics does and what Auriga Stim does is basically does the ripping out the carpet, painting it, cleaning it, cleaning it up. That basically in the gut, it helps to make the gut integrity better. So it closes the gaps. It stops leaky gut, things like makes the gut environment a better place. It kills off, you know, bad bacteria, things like salmonella and things. It's antimicrobial.

34:07 And it it prepares the ground for when the you put the probiotics in, and the probiotics can then proliferate and grow and give give, you know, things like lactobacillus and and and improve and enhance the gut health. So we think there's a complementary well, we know there's a complementary effect between these two types of technologies, and we know that some of our customers and for example, our Indian partner takes origostim. They also take a probiotic actually from ARM and HAMMER, and they they administer those or they sell those sort of in combination to customers. Customers use them half and half combination. So what we've done is brought these two technologies together. I don't think there's not another company in our sector that has the deep pedigree and understanding of phytogenics and probiotics.

34:56 You will get some companies that say we've got an essential oil and we've developed a probiotic as well. But they've but they've not done it with by bringing in, as I say, like a heart surgeon and an oncologist to work together or whatever. We've brought the pedigree in the background of BioVet alongside ANPARIO's pedigree in BioVet, and that's what we've done over the years is acquire, you know, that strong background in particular product technologies and try to apply them and put them together. And we've already done some testing on that, so we've proven AUGUSTEM is at certain levels is compatible with BIOVET's probiotics. So there's a whole potential raft of product development, either combining the products or going to customers and say, put our guest stim in for this period of time and then start to administer, you know, the probiotic and things like that. So there's a lot of work to be done there, but there's a lot of product development opportunities before without having to go and start paying for pure research in universities or institutions.

35:58 But what BioVet also do, they manufacture smaller packaging type products that go on to pharma, administered by the pharma or the vet on farm, and that will give sort of ANPARIO the access to that on farm market for ANPARIO's products, so particularly in in The US and that understanding. So really, BioVet was sort of ahead of its time, yeah, ahead of its time with some of its technology, which was very similar to, you know, ANPARIO. If you look at Aurigastim, it's it's twenty five years over twenty five years now since it was first launched, and it's still growing. And BioVet, we feel, has just not necessarily have the global opportunity or the opportunity to take the products more globally, had a bigger audience or a bigger bigger market to go out because they've really just concentrated on certain regions in The US.

36:47 So the the the product the projects that we're currently working on in integration products, so the first and the foremost is to try and take some of their key product brands and you see them there. I know there's a question on this. Hopefully, this answers it into selected market. So generated DFM. DFM means direct fed microbial to Americans, but to Europeans, basically, it's probiotics. So there's a generator DFM product, and we we're keeping those brand names of generator. If you see QuadraCal, that's calcium boluses that are administered through the throats of the of the cow of the animal, and then have a various different speed of releases in terms of the calcium. So QuadraCal will be a brand that we take internationally, and it and that really supports cows with milk fever just after giving birth where they've got a deficiency in calcium.

37:43 Goldlight, that will be a brand that we take as an electrolyte, and we've already started to test by apply by putting combining our Oregostim into their electrolyte product. And they've been doing some testing work on that, and I think they've got a product that's that's quite close to look they'll closely launch that combination product in in The US. And then ruminator was a capsule in a capsule, and we and and I'll talk a little bit about that later. So there's four sort of product areas we'll brands we're taking. It's Generator, QuadraCal, Gold Light, ruminator. We wanna build, you know, we wanna build those brands into stronger global brands like we've done with our REGO Stim into power brands. As we go international, we will it will be branded as ANPARIO internationally, so the ANPARIO company name, but we're retaining their product names.

38:36 Then the other areas that I just sort of mentioned about cross selling ANPARIO's product through the BioVet sales channel, we're starting off with some of the Oregostim range and our AMPRO mycotoxin binder range in The US. And I was there a few weeks ago with for a few days with their sales team going through these products, and they're and they seem very excited and keen to have, you know, broader range that they can sell to to customers that they're already seeing and through distributors and resellers that they're currently working with. There's a mark and his team sort of heading up just a gradual integration of their systems, financial reporting, things like back office of our US business into into the Barnabelle BioVet office. That's it's not a heavy integration because their systems are good. They had very good systems and and and there's some some there's some quite simple approaches that we can do with that.

39:26 And then we will, I think, what so Mark sort of mentioned, depending on when we draw a line under the earnout, it it's due to sort of finish, I think, the end of, yeah, September. Then we will combine the management structure following the earnout in The US to begin with, and we've already started to have some of those conversations with the key people about what what that's going to look like. And then Shane, some of you may have met Shane if you've been up to the our production plan, our ops director. Shane and and our quality manager over a few weeks ago running through their production and processes and quality control. And that's really just at the moment, there's no big integration with with with any of the production side or whatever. That's just a collaboration and learning and their their production people are coming out to see what we're doing in Manson Wood, I think, in June.

40:20 So just so you see those products. You'll see them on the the website, as I said. The ruminator product, the generator, QuadraCal. There's you you know, these are mainly focused on ruminant products, dairy calf, beef, and small rum some they do have some equine products as well, but it's it's small volumes, small sales volumes that they they do with those. And the majority of the sales are in, yeah, California, Wisconsin, and sort of Northeast, sort of New York state, and around there where where the main dairy dairy regions are. So just take we we those those are how they look like, but to say the branding on them when we go international will show ANPARIO rather than BioVet, and that's how we'll sort of start off and see how that works.

41:12 So just a little bit about some of that technology. They the capsule in a capsule is a unique solution where if you see the the blue and the white tablet there, like a paracetamol tablet, that has the microbes inside. That has a probiotic in. On the outside is yeast, vitamin, minerals. If those were combined and packaged and left on the shelf, you'd see that the microbes, the bacteria would would deteriorate. The survival of those microbes would be much less. And that's what they've when they've tested against some competitor products, they do combine them into boluses or just into foil bags. That's the black line that you see where it drops down off significantly in terms of the the survival of these microbes and then and then basically tells them nothing, I think, after about forty days.

42:07 The red line is capsule in a capsule. And all, yeah, microbial survival of microbe, they they all drop off at some point, but this product will be designed that it's got a the the 50% level. It's got enough of those of the bacteria and the bugs to still have an effect on the animal. So this is really about transport packaging. And, you know, the the this this technology was developed more than twenty years ago. People have still not followed it. And this product, I think, grew about 70% certainly in in last year because it was being used to get the the dairy cows through that period of where they were catching avian influenza and try to nurse them back through back to production and productivity.

42:54 If you what's quite nice about, you know, having this this this position now in the dairy side is in in the past with ANPARIO, if avian influenza got into a flock of birds, the birds would just be culled because it's cheaper to cull them, wipe them out, and try and eliminate the disease. You can't cull you don't kill cows. You they're too expensive. There's an even bigger job of disposing them, and so you have to try and nurse them back. So there's a little bit of counter cyclicality here when there's an issue with having influenza. I'd like to say that I obviously realized that a number of years ago when I started speaking to these guys, but this really came through sort of in in in the last year. But what we see there is, as I say, this technology that means that our products and it's a little bit like the consistency level of of Origo Stem. We have the most consistent oregano oil on the market, which means consistent performance in the animals. This sort of thing, retaining that integrity of the microbial stability is important. And I actually came across a product, especially in Ireland, that combines essential oils, like fenugreek it was, with a probiotic.

44:05 And someone I know who tested that product said that basically the microbes were all dead. They weren't there. They've been obviously impacted. So they were selling a product that farmers or vets thought was had had good microbial stability, whereas in fact, it didn't have any because of this exact problem. So that's a a unique selling point that we feel will go down well internationally as well in in certain countries where we can ship to. Just a little bit on on these are the just a number of photographs that I I mean, again, I think that some of these probably would be on their website. But we bought the we purchased the freehold. It's located about half an hour's drive West of Madison in Wisconsin.

44:55 It's a big site. It's three and a half acre site. That's that's probably The US acres as well. And we basically can expand into that. We can put more you know, we there there's probably a better warehousing and and racking that we can put to even potentially take we we we currently use a number of different third party warehouses and and one that will be not far from here, we can potentially could do some consolidation on on that at some point. But, really, there is some of this different type of production, we can produce origustine liquid and powder there fairly quickly if we needed to. We don't need to do that at this point, but at some point, we can. And you see the current building's 25,000 square foot, and there's the ability to add an additional 45,000 square foot. So it's a really good site, I think, for $2,300,000.

45:48 Very good sort of value and investment for us for the future. And, you know, this gives us, I don't know, ten or twenty twenty years of capacity when you combine that with the capacity we still got in Wurzon and Manson Wood. So I think that is just really for the BioVet side. Just trying to summarize now on the outlook. It's been a strong start to the year with an increasing sort of gross margin run rate as volumes have continued to sort of come through the production plan. We are we will, you know, obviously, year additionally benefit from a full year of BioVet numbers in the thing because because we just had the last quarter, quarter four last year.

46:34 We are mindful of global trade conditions and probably when we wrote these bullet points was back at the in early or late March, so that has made some difference. But there's always something going on around the world, and we we yeah. Sometimes we get impacted with it. But if we get impacted in one area, what you tend to find is there's a a benefiting factor in another area. So and that's why we have that real diverse spread of geographic geographies, and now we're more species diverse and more product diverse. But avian influenza still may present some additional challenges. At the moment, we're not seeing anything major or big. And, you know, we don't feel that the tariffs are going to be major thing once these things are smoothed out.

47:19 And I know there's a question on tariffs, and we'll come to that specifically because we I think we do. I'll just have some numbers for The US. So look. These but the you know, as I said, these challenges in in reinforce why we do the deals like BioVet to get and open up some of our subsidiaries is to get more geographic diversity and species diversity because we can offset, you know, bad areas, weak areas with stronger areas. But, you know, overall, the demand for our products is expected to continue and, you know, to increase. You know, we benefit gut health naturally, so things like antibiotics are going to be need to be used less and less. And also, you know, harmful chemicals like, as I say, formaldehyde, zinc oxide, those sorts of things. We you know, all our products help improve production efficiency, and that's what we to demonstrate to the farmer.

48:13 And as I say, we we are, know, replacing less desirable practices. We have a we have a strong cash position, and, you know, we will continue to sort of seek complementary acquisition opportunities, whether it's strengthening our sales channels, bringing in another sort of product technology that is proven that has sales, or even consolidate yeah. Consolidating out some of our competitors where we can maybe bring in synergies by combining the production in in either one of our production plants. And that's another point about BioVet. Having that platform and production facility there gives us makes it easier and gives another, you know, bigger opportunity to maybe start to look at certain acquisitions within The US that makes sense where we can consolidate into the Barnabelle site and and more volume we get through there, then it justifies putting more automation into into the Barnabelle site to really drive those benefits.

49:14 And I'd just like to thank you for listening. And if we go back to the questions, Mark, do you that yeah. That's the end of the presentation. Yeah. Yeah. That's the that's the presentation. But we're can see a number of questions that have come through. I think a lot of them are for me, Richard. So I'm I'm happy to pick them up, and then I'll I'll I'll talk to you where five. So if we first take the the question from Peter m, how sustainable is the improved gross margin of 46.9% given the the mix shift towards lower priced products? In terms of the the mix shift towards lower priced products, it's really returned to to more to a more similar mix to what we've had in the past. So I don't necessarily see that as too detrimental to our to our ability to improve the margins. Obviously, it will have an impact, but, generally, the margins are improving.

50:09 And one of the things to say about that is, particularly the acid base UBAR six, which is quite a high volume area, then they, those products had an acute increase in their raw material pricing through some force majeure events on on things like formic acid and proprionic acid. So the margin on some of those products has improved at the same time. They are low priced, but they are, you know, they are still differentiated. They still create good margins. What we do internally is we're we're focused on trying to generate 50% margin. And that's if if we take buy that separately for a second, that's, you know, the the ANPARIO business, as as it has been on a on a like for like basis. We've then got buy that, which is, you know, producing a a relatively consistent 55% gross margin level. And so that will improve the overall group margin anyway.

50:57 As Richard said, as we're coming through this this first few months of the year, then we've seen an increase in the gross margin. Generally, having a a more stable pricing environment enables us to, you know, to be more short in terms of the margin. Sales mix is usually one of the largest drivers. We still got the opportunity to to improve margins through increased increased efficiency through the factory. If we get more volume, then we'll get, you know, we'll get the gearing and and the operational efficiency coming through from that. So there's there's more to add from that, and there's there's more more generally you know, we have continued to to look to put price increases through in the in this this first half of the year. So I think, you know, we we we are you know, as we've gone through this year, we've seen an improved gross margin, and, you know, we would expect, to be able to deliver a margin higher than that 46.9%, targeting a 50% margin on that like for like, buy that producing a 55%.

51:49 And I think that, you know, the only thing to that is, yeah, there's a question on foreign exchange. We've got some short term, you know, short to medium term mitigation hedging in place, which I can come on the thoughts on that question. So there is a bit of a headwind there, but at the same time, you know, we we see ourselves as as a, you know, a business that could produce higher margins. You know, the products are high value ads and and should be able to generate those kind of returns, and and that is the focus for us as a business. Had we not increased those margins, then, you know, you know, a lot the performance of the business would be nowhere near the recovery that we've achieved through this period. Moving on, so another question from Peter M. Can you elaborate on how recent price reductions might impact margins going forward? So again, as I've just been saying in terms of margins going forward, would be expecting and targeting and have been seeing improved margins.

52:38 And in terms of the the price the pricing of the products, then it's not necessarily that we've given price discounts to customers. It's more that some of the organic growth has gone to higher volume. So as you would expect, you know, a customer buying a high volume of products would get a lower price. And so when I was talking through that slide about overall price reductions, they're not taking across the whole range of products. And then even within that, you know, that there are, you know, areas of growth that we've seen big big customers getting slightly slightly better prices. But as again, as I said on that slide, the actual gross profit that we've been producing across all the product classes has increased, through this period in in spite of the fact that and and, yeah, we've got to talk about the question about the the the production shift and say, this site can produce, you know, more than double. It can, you know, go two and a half, three times the volume that it can produce, that it's producing currently. So we are keen, to make sure we're driving top line growth but at a high margin.

53:39 And, yeah, if we can get back to that 50%, great. But if we can if we can hold it as close to that and and drive volume growth and and and drive the overall profitability of the business, then then we'll look to do that as well. I think, Mark, just on that point as well, it's also gotta be mindful that higher value products, for example, you know, we sell some products at maybe a thousand pounds per ton. And there, we would be saying, well, you know, we need a 50% margin. That's five, you know, 500 gross profit. But we could be selling a product that's 10,000 pounds a ton. And if you start to say, you know, we need 50% margin on some of those products, it may get too prohibitive. It so, you know, we'd be making 10 times the profit. But so you may do it. So it may be that we we have to make a margin of 30%, but our gross profit pounds per ton is still very is still significant. So we look at those two metrics when we're pricing and when we're looking. We're you you know, I mean, the ideal is a high value add product with as high margin as you can get, but you you don't always get that opportunity. But we we manage those two metrics, that margin percent percentage and the gross profit pounds per tonne.

54:50 Sorry, Mark. Do want to No problem. Okay. So moving on to the question from Paul S. The board has not made any significant share purchases for some while. Does that reflect the view that you think the shares are fully valued? So the board have picked up shares over this last twelve month period. Richard and Karen have exercised their options, their EMI options. And similarly, through this post the announcement, then item awards that that that Yeah. No. I think I it cost me it cost me about a 120,000, I think. Was it December or something? We Yeah. I mean, overall, if you look at it, then the board of the board of added 0.6% of of the share capital, you know, in the last you Richard and Karen, that was in December, myself in April.

55:38 So we are highly aligned. You know, we've not sold any of those shares. We've acquired them because we believe in the long term, you long term growth. A lot of a lot of companies you might see when PLC awards, that's the other option awards. You know, at the very least, quite often, directors will sell to cover the tax the tax burden, but, you know, myself, Karen and Richard have not been doing that, and we and we're certainly not been selling any shares. I've been acquiring shares consistently every year, granted, you know, maybe at a lower level. But the board I think the board owned near enough 3% in in held shares, and then, you know, that we've got the JSOP scheme, which does align us very closely on driving and delivering shareholder value. So so there have been there have been purchases and and and increased commitments from from the board.

56:24 And, you know, we're as I said, we're very aligned and and looking to to to the benefit of all, you know, shareholders, stakeholders driving the value of the business forward. And and we don't feel that the shares are fully valued, just to answer that that question. No. And if we thought they were fully valued, then, you know, we probably wouldn't we're you know, we can't can't give advice. But, you know, if we thought that they were fully valued, then we would perhaps look to sell some of those shares through through those various exercises. And the last Mark, to make a point, though, the last time we were did 7,000,000 EBITDA, the share price was over 7 or £7. And we and we but we this time around, we've got 18% less shares in issue as well because we did that tender offer. So that's why we feel there's the value is not fully there.

57:11 Yeah. I mean, generally, yeah, terms of the market then, you know, we're hearing some hearing some hopeful signs that there's gonna be more inflows into UK UK markets, and and that will help as well just generally across all, you know, all shares on on The UK market, you know, and being more appropriately valued. There we go. Don't wanna speculate too much on the wider market. And, Angie, I don't this question, Richard, for you. Yeah. But, question, which of Bivet's products are priorities for global rollout? Well, hopefully, I've answered that. It was those four. It was, you know, obviously, the probiotic, the capsule in a capsule, the electrolytes, and the calcium boluses. If we if we were to pick one that we think has got some real good opportunity and that we've already got feedback from places like Vietnam, Middle East, I think India actually as well, fairly recently, is the calcium boluses. There's a there's quite a a good story behind that.

58:06 So all of those to varying degrees will be pushed into targeted regions. Actually, the boluses as well, I think, in Brazil when Andrew was there a few weeks ago, there's an opportunity. So so, yeah, those are the ones that we're gonna focus on. Okay. So I'll I'll pick up Roger s question. So I know that in 2024, you moved to a two shift working. Are you still on two shift working? And is it practical to go to three shift working? Is there generally adequate availability of labor? So, I mean, yeah, we we did we've ran three shifts in the past, firstly. So, absolutely, we can go to three shifts. Through the reduction of volumes over the last couple of years, then we actually ended up consolidating onto single shifts for about a year.

58:53 And, you know, due to the higher volume requirements, then then that expanded to two. When I say two shift working, I think, yeah, we've got five production lines. And so when we're working one shift, we were operating all five, all five lines at the same time. When we moved back up to a two shift working, it wasn't that we went to two shifts working the five production lines all the time. It's, it's, not quite not quite like that. So we've got, we're we're not quite having doubled, the production hours on across the lines by going to that two shifts. So there's still room to grow within that two shift working by operating more of the lines. And as I said, we can go to three shift work. And I think if if you include weekends and stuff, then you can you can get more hours out of it still. So there's still lots of capacity to grow, to grow the business.

59:38 Because the the factory is quite highly automated for those that have seen it, then it does reduce the manual labor requirements. And if we do, you know, if we did require additional labor, then then, generally, you know, it is available in the local area. Yeah. We've we're quite close to where the the headquarters of Wilkinson's used to be. So, you know, it's it's been generally an improved situation following following that that closure to to to get labor. But, generally, you know, if we need if we need to grow the business, it's a it's a function of increasing man hours, which is available just, you know, operating the the the automated production lines, for more hours in a day. And then as well, I would encourage anyone that would like to come to get in contact with us and see how efficient we can be as an operation.

1:00:31 Moving on to the next question. So Roger f, do you envisage any important marking market batting of PMCs this year, Richard? Yeah. That basically, actually, formaldehyde. So it's it's basically wood glue, which is a pellet back can be used as a pellet binder in in aquaculture. We're not specifically aware of of of any any countries, but what what what tends to happen is and and this should India the India trade deal is a cracking example. I think the deal is we'll be selling sort of shellfish and salmon to India, and they will be selling shrimp back into The UK market. Now but if they gotta sell into Europe and The UK market, then they can't use PMCs. So one of our big opportunities we think in India, and that's why the guys are out there now in into into the aquaculture market, is our pellet binder master cube. So it's really where the shrimp has been devoured or eaten that that the regulation is sort of biting.

1:01:32 But the you know, we do see that things like, you know, urea formaldehyde will gradually, hopefully, reduce in in other regions. But, know, I think that's some some part like Honduras supply shrimp into some of The UK, Europe, and and I think The US have banned PMCs as well. So so it it I I can't specifically say, you know, how quick or how fast that will will go or if there are other areas, but the trend is in the right direction for that product for sure. Mark, there's another one from Roger. So Roger's next question then. What is the criteria for entering the JSOP and by is it by, like, the service and job grade? So the JSOP's been in operation since around two thousand two thousand eleven.

1:02:21 And through that through that time period, it's mostly been for the executive board, but it's also been utilized for members of the executive management team. So executive management team includes, you know, the the production director there of the sorry. The production director, which is Shane Shane Bailey, which some of you may have met. Sarah Osborne, who's the, you know, sort of group marketing technical director, and then Andrew, who's the group commercial director, as well as, you know, Richard, myself, and and Karen. So those individuals, you know, the the JSOPS scheme is there to, you know, to retain good quality management and to align people to, you know, shareholder value creation. And if you look across those people, then, you know, I've been here fifteen years. Richard's at nearly twenty years.

1:03:10 Karen's similar to me, so around fifteen, sixteen years. And and and Sarah and Shane, longer than that, and and I'm just similarly around ten years. So, you know, it's very effective in terms of retention and and, you know, motivating those people to stay on board and and be aligned with with growing this business and and backing and putting in the hard effort and and retaining those individuals. So it's typically reserved for those those individuals. Are you planning just a bit of a question about Jeff. Are you planning to open up further subsidiaries overseas this year? We've not opened one for a couple of years. I think we are we are in all of the large markets that we want to. I wouldn't rule out opening up more, but it's certainly not not the intention at this moment. You know, we we've gone through a a period over the last sort of ten years of of establishing subsidiaries where we want to be operating directly in, and and they are the, you know, the large key agricultural markets.

1:04:08 And then outside of that, then, you know, we've kind of gone through the distributors. And the distributors we're working with, they are you know, we now call them partner distributors where we're we're working with them and driving the end, you know, the end customer sale and having that relationship as well. So it's not to say that we wouldn't rule it out, no. There's no no further plans to do that. We've we're we've got the operational footprint that we want. The plan now is to more go deeper into those specific territories and open up further growth. Okay. So moving on to another question from Roger s. So I compared some having a mental block on this. I note that in the full year results and the cash flow, there was an inflow from the issuance of shares of 1,000,000 and an outflow of 656,000 to the JSOP.

1:04:53 In interim, the proceeds of issuance of shares was 656, and the outflows to the JSOP was the same amount of 656. And why why the difference in those figures in h two? Well, issuance of shares includes the the the amounts that Richard and Karen purchased. So they have EMI options, and they exercise their option to purchase those. So the difference between the 1,000,656 includes that, and there was another individual within the business that exercised, some options within them that they held that were close to expiring. So so the 656 was the inflow and outflow to the JASO, it's kind of a back to back situation, and and the rest was the option awards, including those to Karen and Richards that that that they acquired and, obviously, the the the proceeds flowed into the business.

1:05:42 SAPP, how will the lower US dollar impact your business? So in terms of dollar, then if you could buy that for a second, which I'll talk to, then we've got a we've always typically had around 40% of our revenue in dollars. And to be honest, in terms of purchasing or administrative costs, then then there's not, you know, there's not a whole lot to offset that that dollar inflow. So we are exposed on on US dollars. Generally, we've got excess dollars and a shortage of euros. And then, you know, there's a number of the current currencies around the subsidiaries, which which have an impact as well. So an increase in the cable rate, you know, GDP, US dollars will have a negative impact on the revenue, and therefore, you know, flowing through the the p and l. But we, you know, we're very conscious of this as business, and we have hedge, you know, financial instruments, foreign exchange hedges in place to to mitigate that. And we tend to go out two to three years with with those hedging. So so that should enable us to offset the impact on the short to medium term.

1:06:48 You can't really mitigate longer term trends, but what we can do as a business, and this is why we have that hedging hedging over end of the years, is as as rates increase and move against those, then as we look to implement future price rises, then we can we've got a couple of years to to manage that dollar that dollar price and ink it up a little bit more to offset the impact of of of exchange rate changes. Moving on another question. So from SAPP, how will US tariff impact your business? Hopefully, US UK trade deal will help. Well, we'll see what happens at 03:00. Hopefully, that'll be good news. We the tariff situation is also quite dynamic. What we can be sure of, you know, is the more shorter term and direct impact. So if you look at it last either last year, so 2024 or for the average of the last five years, then the increase in the tariffs between the between UK and US would have reduced profit before tax by 190,000.

1:07:53 But that's before you include the corporation tax change. So we the if we did nothing else, then corporation tax in The US would be lower. And think the net the net impact is about a 140,000 sterling for profit after taxes of those tariffs. There are things that we can do to mitigate them. I mean, hopefully, yeah, we'll we'll hear some positive news. We've we've slowed down, you know, because we generally hold high levels of stocks in in the subsidiaries. Anyway, we have been sending stuff to The US since the tariffs have been announced, but but a lower level than we would have necessarily normally done. There are other options that we've got. Richard talked to the fact that the buyback production site can produce a rigosyn, and that's around half of what we sell within The US market. So that can help, you know, reduce the the tariff impact there.

1:08:40 And that, you know, there there are generally other things that we can we can look at doing to to kind of mitigate as much as possible those those tariff impact. But but the best thing for everybody would be for a trade deal to go in place. It's in terms of tariffs more generally, then clearly, there are some indirect and longer term impacts, you know, things like container availability, which I'm sure, will start to have an impact. And it's harder to quantify some of those. But, know, as as a business, we don't we don't envisage the tariffs situation in The U. S. Will have a material negative effect on us. Bill Hage, how do you arrive at the price of BioBet? Was it the result of an auction? Are there any comparative benchmarks to reassure shareholders that you have not overpaid?

1:09:28 I think, firstly, there was a competitive process. So there was us and another bidder. But as Richard said, he's been speaking to the business since 2017. I think, you know, there's a lot of cultural fit between the businesses. I don't think, you know, the founder, who unfortunately died through the process, you know, was was did see that, you know, we would be a good fit. And as well, for us, you know, it would make make it the home of The US operations. So, know, they did they did align with that and and see that there was opportunities for for BioVet to grow within the Empire Group on a on a global basis as well. So so, know, it's a a long process that we've which has been going through and discussing it with them. In terms of the right price, then as you'd expect, you know, we we, you know, do modeling in terms of discounted cash flow and and various different things. That was done at a point, you know, March, April last year. You know, BioVet generally been growing and improving performance for a number of years. They believe that they were just on the cusp of of achieving high growth, and so that's why we put the contingent consideration element in.

1:10:33 But if you even look at that, you know, as I said, the target for them to produce the target on which we sort of ran the modeling and the discounted cash flow and and obviously checked that there was shareholder value creation possible was done before that boost that they've seen through this 8,000,000 influenza challenge and and the increased demand for their product. But if you look at it, had 800,000 sterling target, and they achieved 400,000 sorry. $800,000 target for EBITDA for twelve month period, and and they've produced not point 4,000,000 in in just three months. So they're performing exceptionally well, and, you know, we'd we'd I think, Mark, just just on the benchmarking, yeah, there aren't many deals in this sector happening at the moment. People are sat on their hands.

1:11:19 But, you know, a number of years ago, the multiples were higher than what we're what we're what we paid for BioVac. So we we we certainly don't think we've overpaid. We think we've got a fair, good deal. Came with the property as well. Oh, yeah. We were able to buy the property as well. So, yeah, to get to get that position, we feel it was a a good deal. We wouldn't you know, we the the a lot a lot of reasons why we haven't done many deals over the last number of years is because there've been some there have been some very high valuations in in this in this sector. It's calmed down a bit now, but now everyone sat on their hands probably waiting for those valuations to come back. But as I said, I can, yeah, reassure you, we think we've got it for, you know, a good fair price.

1:12:07 That Yeah. A bit from Bill h again. In terms of the long term, say, five to ten years, do do you see The Americas overtaking Asia to become the biggest market from ANPARIO's products? Probably, if you'd asked me that a year ago, I might have said yes. But with India, from I was out in India in August. From what we see in India, India is you know, we feel India's wants to be Brazil, and it's got the resources and capability to be in Brazil in terms of producing significant amount of meat protein such as chicken in particular, and then being a big exporter and a big industry for them and shrimp exporters have already explained. Actually, I think that the biggest dairy I think they have the biggest dairy herd in the world. It's just that most most of these herds are two cows in someone's backyard that we're actually supplying.

1:13:03 So they haven't so they haven't started to industrialize to the to the level that obviously Brazil and and the The US have. But it could equally be with what we're doing in The US with BioVet and getting into that and certain things in Mexico and and and Latin America. We we're doing that that could take over Asia. But our Asia region covers China, Us yeah. And Australasia as well and Papua New Guinea. So it's quite a big area that's covering it. So but it it it's it's it's difficult to say. I think, as I say, in India is the the the will will surprise people, I think, going going forward. So but I'm not bothered so long as they all grow as quickly as possible.

1:13:51 Peter, d Then the the Yeah. I'll I'll tell you this one. So what level of savings do you anticipate following integration of private back office systems? Would you describe it as a minor or or significant? It's definitely in in the minor category. As Rich has kind of already said, there's no immediate rush to do anything. They've got a a very good systems and controls in place, and we're gonna be looking to, as you expect, move them onto our systems, but really look to have that, that office in Barnabas in in Wisconsin as the the home of The US operations. And so, yeah, there will be minor savings as we, you know, pay less. You know, we don't have two different operating systems, two different ERP systems, two different CRM systems, etcetera, but they're definitely in a minor category and and and, you know, they're they've got good systems and controls in place. So it's a case of doing that, at the right moment and in the right way. There's no rush either for savings or to improve their their their operating environment.

1:14:52 And then the last one. I'll I'll do this, Mark, and and you can chip in. Just from Roger f, when asked why you have so few institutional investors, what answer do you give? I think there's a couple of reasons. One is some of the institutions sold out on the tender offer at £2.25, which is smart of them. And we did actually have one institution say, we're selling out at the tender offer because we think there'll be an overhang and then your share price will be cheaper. He's still not back on on the, you know, on the shareholder register. But the the other reason is we haven't had to raise any money since 2009. And a lot of the funds we do speak to funds and some of the, you know, some of the well known small cap, micro cap funds. They would like to get in. They would like to buy in. But if they try to buy off the market, there's not the liquidity.

1:15:48 They can't get ahold of the stock and no and and there's not big volumes that are selling at at, you know, around the £4 mark. So it's difficult for some of those institute you know, we we we've had countless meetings where they would like to get a shell, but it's very hard for them to get in. They've gotta buy start buying small amounts. And some of these small cap funds have got 800,000,000 or 1,000,000,000 in funds and, you know, they would minimum they want is sort of 1% of that fund which could be 8,000,000. So it's very different. We haven't had to raise money. A lot of them we see in case we did need to raise money and they sort of wait until we do that. But we we hope that, you know, some of them can start buying in smaller chunks and maybe build up from that. But that that that is the AIM liquidity issue.

1:16:36 As I say, we did probably have four institutions, I think, that met at least four that sold out in the tender offer that for various reasons. Some of that had redemptions in their funds and had to sell. Others were because our market cap was too low. We were down at below 50,000,000, and that to be honest, the minimum for these institutions now is probably 200,000,000, and that's a problem on on the AIM market. But, you know, if someone buys in at 50,000,000 and we go to 200,000,000, that's four times the money. It's potentially more chance of doing that than the 200,000,000, maybe going to 800,000,000. But, you you know, we keep seeing them because, you know, if we needed to raise money to do a a more sizable acquisition, then then we would need their support. And there may be an institution that needs to sell and they can then pick up the the the shares. But I think at this price, the problem is is there's there aren't many sellers willing to sell at the in in in big amounts at this level.

1:17:42 And I think I think that's it. That that's the last of the questions. So thanks Richard. For taking your time. Richard, if I may just Yeah. Jump back in there. Thank you for taking the time to address all these questions you can with investors. And, of course, the company can review all questions submitted today. We'll publish those responses on the investor meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Richard, can I please just ask you for a few closing comments? Yeah. Look. Firstly, thank you for your time and and listening to us. We have gone through, you know, a couple of difficult years, but we we still made a profit. This company is very resilient because we've built it geographically. We've built it species to be diverse and and now and and also product diverse.

1:18:28 There's some good opportunities coming up in the global agri market. As I said, India, we see as one and and Asia continuing to do so. And with BioVet, we've got, you know, a lot of opportunity to take their products more internationally and develop combination products with our phytogenics technology and and and BioVet's probiotic technology. So, you know, we're well invested. We've got a richness of of of product opportunities. You do get ups and downs because, you know, we are working in war zones in well, in India being being a case important. But we are we're still supplying, I think, into Syria and Yemen and and Iraq. So, you you you know and and then you've got, obviously, Trump and the tariffs.

1:19:14 But we've always been able to sort of compensate for the downs in one area with a positive. So I think, know, we're a good, diverse business, resilient, and a and a and a and a good growth business for the long term. And, those are investors who have seen a has seen a decent return and and and appreciate the dividend. And those of you who aren't, take us take a closer look at us and and invest. But thank you for your time. Rich and Mark, thank you for updating investors today. But please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that our management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of the management team of ANPARIO PLC, we'd like to thank you for attending today's presentation, and good morning to you all.