Animalcare Group PLC on Tuesday said it is confident that 2022 earnings will be in line with market expectations, despite reduced sales in the first half.

For the six months that ended June 30, the York, England-based veterinary drug maker reported a 2.1% decrease in sales to £38.3 million from £39.1 million a year before.

Animalcare expects earnings before interest, tax, depreciation and amortisation for the first half of the year ‘to track in line with revenues’, it said, but cash conversion for the period is expected to be significantly lower as the previous year’s ‘exceptional’ cash conversion unwinds.

Looking ahead to the second half of 2022, the company expects a ‘more even revenue balance’ compared to the same period a year before as demand patterns decrease to normal levels. Animalcare experienced exceptional growth in 2021 as Covid-19 counter measures eased, and the market bounced back. Sales for the period were primarily driven by demand for Companion Animals products.

Total revenue for 2021 was £74.0 million, up 5.0% on 2020 and meaning revenue in the second half of 2021 was £34.9 million.

Despite the macroeconomic conditions, Animalcare says it is confident that full year earnings will be in line with market expectations.

The company’s debt was within its target, at £7.5 million, and it said this will provide the flexibility to invest in opportunities such as partnerships and pipeline projects.

‘We are pleased to have delivered a positive first half against what we knew would be a tough prior year comparison. Strong revenues and improved margins help us maintain trading momentum as we continue to pursue attractive external opportunities,’ said Chief Executive Officer Jenny Winter.

Animalcare will publish its interim results on September 27.

Shares in Animalcare were down 3.7% at 289.00 pence in London on Tuesday afternoon.

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