ECO Animal Health “solid base for sustainable, profitable growth in the years ahead”

ECO Animal Health Group plc (LON:EAH) has announced its results for the year ended 31 March 2022.



·      Group sales down 22% at £82.2m (2021: £105.6m)

– China and Japan sales declined significantly to £28.4m (2021: £58.9m)

– ROW sales increased by 15% to £53.8m (2021: £46.7m)

·      Gross margin at 43% (2021 restated: 50%)

·      EBITDA decreased to £6.4m (2021 restated: £21.3m) which includes an exchange rate gain of £1m (2021: loss £2.2m)

·      Administrative expenses excluding foreign exchange and exceptional items were constant at £23.4m

·      New product development expenditure 12% higher at £10.2m (2021: £9.1m) reflecting maturing pipeline

·      Loss per share of 1.01p (2021 restated: profit per share of 10.86p)

·      Net cash at the end of the period £14.3m (2021: £19.5m)

·      New £10m Bank RCF facility agreed after the end of the period, which remains undrawn


·      Aivlosin® demand remains robust with increasing market share in key markets

o  Strong growth in USA and Canada from stable domestic demand

o  Strong export driven growth in Latin America

o  Strong growth in South and South East Asia, particularly Thailand

·      Two new Aivlosin Regulatory approvals

o  The first zero day drug withdrawal period anti-microbial for poultry in China

o  New swine respiratory disease marketing authorisation in China

·      Two new poultry vaccine projects progressed to full development in the year

o  Addressing a disease which costs the poultry industry over £600m per annum

o  First marketing approvals expected end of 2023

·      New ESG report provides baseline metrics

·      Appointment of new Chief Executive, David Hallas, on 1 April 2022 and new Non-Executive Director, Tracey James, during the year

David Hallas, CEO of ECO Animal Health Group plc, commented: “I am delighted to have joined ECO in April this year and I have seen so many promising signs within the Company since I have arrived. Whilst the well documented China revenue performance has disappointed due to the extensively depressed pork prices, the underlying growth and continuing gains in other markets is impressive.  We expect that China will remain subdued for another quarter or two but the recent improvement in pork to feed price ratio provides the foundation for a stronger end to the financial year.  I am particularly excited about our new technologies and the innovative products which will add to our expanding portfolio of products in the coming years.  Our approach, our current and future assets and above all our team provide the Company with a solid base for sustainable, profitable growth in the years ahead.”



I am pleased to report that ECO continues to make strong progress on its journey towards building a broader and long term sustainable business.

Sales of our core Aivlosin business delivered strong growth in North America, South East Asia and Latin America.  Sales in Europe were slightly down due to supply chain and post Brexit importation difficulties. China, however, saw a major reduction in sales due to a very rapid and steep down cycle in the overall pig market.  Market cycles are a feature of our market, and looking through these, we believe there are opportunities for continued growth of our core Aivlosin business in the coming years.

The combination of the impact of the China market decline and our continued substantial investment in R&D has resulted in a significant reduction in bottom line performance for the year.  The Board believes that the significant investment in R&D is the most effective use of our cash flow and expects it to lead to a substantial and sustainable increase in shareholder value.

Our substantial investment in R&D has created a broad portfolio of vaccines and biologicals projects that offer competitive advantages over existing solutions in the market.  Some of these projects moved into advanced stages of development during the year and, based on current plans, the first projects are likely to receive regulatory approval before the end of calendar year 2023.  We made an initial presentation of the portfolio and its potential future value at our Capital Markets Day in January 2022.  The Board is excited about the transformative potential of the portfolio to drive a major increase in shareholder value.  Further updates on R&D progress will be provided at the appropriate time in the coming year.

As we committed last year, we have laid out further information on our approach to ESG and will continue to develop and embed our strategy in this important area in the coming year.

We announced in July 2021 that Marc Loomes, the former Chief Executive (“CEO”) of ECO, had informed the Board of his wish to retire by the end of 2022.  Marc joined ECO in 2004 and the contribution his leadership has made to the growth and development of the business cannot be understated.  We sincerely thank him and wish him every success and happiness in the next phase of his life.

We announced in January 2022 the appointment, effective 1 April 2022, of David Hallas as the new CEO of ECO.  David has more than 30 years of experience in the animal health sector and we are delighted to have been able to attract such a high calibre individual to lead ECO through the next phase of its development.

We were delighted to welcome Tracey James to the Board; she has now taken over as Chair of Audit Committee and will build on the foundations put in place by Tony Rawlinson who resigned from the Board as a Non-Executive Director.  After nearly eight years’ service to the Board of ECO, I would like to personally thank him for his support and wisdom and wish him well for the future.  We will in due course seek to add a further Non-Executive Director to the Board.

The Board recognises the value of dividends to shareholders and balancing the need for prudent management of cash resources as well as funding the exciting pipeline of new products.  We have however decided that the best use of the Group’s cash at the current time is in the new product development initiatives and accordingly no dividend will be recommended in respect of the year ended 31 March 2022. 

COVID-19 has remained a challenge during the year.  We are very appreciative and recognise that our people have shown great commitment and flexibility to keep ECO operating and progressing.

Finally, on behalf of the Board, I sincerely thank all our shareholders and stakeholders for the continued support you give to ECO, it is much valued and appreciated as we build out the next exciting phase for ECO.


As anticipated, the first three months of the new financial year has seen Chinese revenue at a subdued level when compared with the record sales of the equivalent prior year period. This quarter coincided with a policy of extended urban lock-down within China in an attempt to control the spread of COVID-19.  This reduced pork consumption, prolonging the period during which major producers were trading at a loss and therefore dampened demand for Aivlosin®.  However, gross margins in China were stronger due to the favourable customer mix and demand for Aivlosin® in this period was at a similar level to that experienced before the ASF outbreak.

Recently the Chinese pork to feed price ratio has increased to greater than 5; this is the first occasion in the last year and is a primary indicator of improved profitability within the ECO customer base and an improved trading environment.  We believe that customers will remain cautious for the remainder of the calendar year; as winter disease outbreaks occur and the normal seasonal demand for pork increases, which is expected to lead to an increase in the demand for Aivlosin® in during fourth quarter.

Outside of China, the first quarter of our financial year ending 31 March 2023 saw strong year-on-year growth.  This growth is particularly strong in our newer markets of South East Asia supported by the trends in USA and Brazil, which we currently expect to continue.

Like many businesses we are monitoring costs closely as the impact of increasing energy costs and general inflationary pressures will be felt by the business throughout this year.  We remain committed to a focused programme of new product development and are excited with the progress we are making.  We continue to focus our R&D activities on initiatives which will provide the greatest shareholder value whilst balancing the cost, return, risk and time to market.

We look forward to the rest of this financial year with cautious optimism and confidence.

Dr Andrew Jones

Non-Executive Chairman



This is my first report as Chief Executive, having succeeded Marc Loomes in April 2022. I am grateful to Marc for his leadership and considerable contributions to the growth and development of ECO.

The Group confronted a series of operational challenges during a year dominated by pork price volatility in China, and the global COVID-19 related disruption of work locations, international travel and supply chains. Despite the significant reduction in revenue from China, business in most other major markets advanced and the Group continued to invest in critical organisation development and strategically important R&D projects.

Operational Review

The difficult trading conditions in China which were primarily caused by low pork prices and subsequent negative profitability for swine producers, significantly impacted the Group’s performance as global revenue declined by 22% to £82.2m. Excluding China and Japan, revenue advanced by 15% to £53.8m reflecting the value of ECO’s global footprint (selling in more than seventy countries) and was an excellent and noteworthy performance.

Sales of Aivlosin®, our patented antimicrobial which is used under veterinary prescription for the treatment of economically important respiratory and gastrointestinal diseases in pigs and poultry, reduced by 17% to £72.9m (2021: £87.5m) due to reduced Chinese sales and accounting for 89% of total revenue.

Sales of the smaller Ecomectin® anti-parasitic range increased by 31% to £5.5m (2021: £4.2m) and represented 7% of the Group’s revenue.

Sales of all other products were £3.7m (2021: £13.8m) and mainly comprised a range of supportive antimicrobial products for pigs in China.

Exposure to Russia and Ukraine is minimal with remaining Russian orders being fulfilled on a payment before collection basis.

Product Approvals

Two Aivlosin® marketing authorisations were obtained from the Ministry of Agriculture and Rural Affairs (“MOA”) of the People’s Republic of China for the use of Aivlosin® Water Soluble Granules. The first approval allows for the treatment of respiratory disease caused by Mycoplasma and other sensitive bacteria, in chickens laying eggs for human consumption and in breeding chickens. Aivlosin® is the first antimicrobial to be licensed by the Chinese MOA for laying birds with a zero day drug withdrawal period for eggs. China is the world’s largest producer of table eggs and accounts for more than a third of the world’s laying birds. The second approval was for swine respiratory disease (“SRD”) adding three important bacterial respiratory pathogens of swine, Haemophilus parasuis, Pasteurella multocida, and Streptococcus suis to the existing Mycoplasma hyopneumoniae registration. Aivlosin® is approved for the treatment of SRD in other markets; it occurs worldwide and causes major economic losses to the pig industry due to mortality, reduction in growth rates and decreased feed efficiency.

Innovation through Research and Development

ECO started a programme of significant investment in vaccine R&D and in building our capability and expertise around four years ago and has seen encouraging progress within the portfolio of projects.

Two poultry vaccine projects progressed to full development during the year. These vaccines protect against respiratory disease estimated to cost the poultry industry over £600m and will enter a vaccine market segment currently worth over £100m. First approvals are expected towards the end of calendar 2023.

The Company’s early-stage research and proof of concept activities are managed through collaborations with leading research institutions and universities with later stage full development work managed by ECO’s experienced project leaders through contract research organisations. This model mitigates the significant costs associated with in-house laboratories and Company owned research facilities.

ECO has a formidable team of scientists and is building a significant product portfolio pipeline with a mix of well-established concepts and novel, highly competitive technologies and approaches with the emphasis on vaccines and other new products to complement our existing antimicrobial business. The pipeline is focused on providing solutions to respiratory and gastrointestinal (gut) diseases of major economic importance in pigs and poultry and is constantly refreshed as new opportunities are identified.

New product development expenditure in the year was £10.2m (2021: £9.1m) ensuring the acceleration of key projects.

A successful Capital Markets Day in early 2022 provided details of the significant commercial value that exists within ECO’s pipeline of over 12 active projects with the first two late-stage development vaccines set to achieve approvals by the end of 2023, and several programmes expected to progress to clinical proof of concept and early development in 2022 and 2023.

Sustainable future and our ESG approach

We have made significant progress over the year on climate goals and on equity, diversity and inclusion. We include for the first time an ESG report. We have collected baseline metrics and will use these to track progress and to develop credible performance targets as part of a measurable climate transition plan.

By providing medicines and vaccines to pig and poultry producers, we improve the lives of both animals and the people who rely on them. The healthy animals that we help to produce assists the world with its sustainability goals of the alleviation of poverty and hunger.

COVID-19 Impact

The COVID-19 related restrictions on free movement have limited access to customers, most notably in China where travel remains severely curtailed, and created considerable supply chain disruption and uncertainty. Despite these constraints, the Company has successfully adopted a hybrid working model and has mitigated most COVID-19 related challenges through innovative ways of working.


Our people have demonstrated superb commitment and flexibility during a particularly challenging period for the business. We remain exceedingly grateful to our colleagues, customers, and suppliers in showing considerable resilience and engagement during a time of rapid and considerable change.

David Hallas

Chief Executive, ECO Animal Health Group

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