ECO Animal Health Group plc (LON:EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health market has provided an update on its operations in China.
The pork price in China has increased from less than RMB12/kg in early October 2021 to over RMB18/kg in early December 2021 before settling between RMB15/kg and RMB16/kg in early January 2022. Whilst the improvement in the pork price has resulted in improved trading conditions for pork producers, the commodity price continues to be volatile and producers remain cautious. Consequently, sales of Aivlosin® during the first three quarters of our financial year are subdued compared to the same period last year. However, revenue generated elsewhere in the Group continues in line with the prior year and, overall, the Board expects to report full year revenue in line with current market expectations. Cash repatriation from China has progressed as planned with both the royalty payment and dividend (totalling £4.6 million) having been received by ECO. Additionally, ECO has used some of its cash in its wholly owned Chinese subsidiary to assist with non-China cashflows and provide greater headroom for the ECO Group.
ECO is also exploring the possibility of increasing its banking facilities to provide greater flexibility to support ECO’s growth plans.
Appointment of Joint Broker and Capital Markets Day
As part of the development of the ECO Group, the Board of Directors has appointed Investec Bank plc (“Investec”) as a joint broker with immediate effect. Singer Capital Markets (“SingerCM”) is retained as Nominated Advisor and joint broker and Peel Hunt LLP continues as joint broker (“Peel Hunt”).
ECO Animal Health plans to hold a Capital Markets Day at 9.00 a.m. on 26 January 2022. It is currently expected that the meeting will be held virtually to comply with current Covid-19 guidelines. Planning is underway and Investec, SingerCM and Peel Hunt will confirm participation arrangements in due course. The meeting will aim to provide insight into the ECO Group’s research and new product development activities.
Marc Loomes, ECO Animal Health CEO said:
“The pork commodity price in China is an important cornerstone to our business and we look forward to a steady recovery in that market. Despite difficult market conditions for the business in China, the Board expects, overall, to be reporting full year revenue in line with market expectations.”
“ECO started a programme of significant R&D investment in vaccines about four years ago and, notwithstanding that the programme is on-going, we have seen meaningful progress. We look forward to sharing some exciting insights and providing further details of the potential commercial value that exists within our new product development pipeline to existing and potential investors, analysts and media at the upcoming Capital Markets Day.”
