Animalcare Group plc

("Animalcare", the "Company" or the "Group")

Full Year Results for the year ended 31 December 2021

29 March 2022. Animalcare Group plc (AIM: ANCR), the international animal health business, announces its audited full year results for the year ended 31 December 2021.

Financial Highlights

·    Revenues grew 5.0% to £74.0m (8.0% up at CER) on strong Companion Animals demand and contribution from new products

·    Improved gross margins drove double-digit increase in underlying* EBITDA to £13.5m as profitability benefited from continuing focus on top selling brands (2020: £12.1m)

·    Statutory profit before tax, incorporating non-underlying items of £0.9m (2020: £0.2m), with reported basic loss per share of 0.1 pence (2020: 0.4 pence profit per share)

·    Continued strong underlying* cash conversion of 108.8% (2020: 102.9%) reduced net debt to £5.3m at year end, further strengthening Group's capacity to support investment in growth strategy

·    Proposed final dividend of 2.4 pence per share (2020: 2.0 pence per share)

Strategic and Operational Highlights

·    Daxocox approved in EU and UK and launched successfully across all markets, generating £1.2m in second half sales

·    Further optimisation of portfolio yields 8.3% increase in revenues generated by top 40 selling brands

·    Sandra Single joins Senior Executive Team in newly created Strategic Product and Portfolio Director role

·    Continuing investment in people focuses on Group-wide sales and marketing excellence and leadership development

·    Pipeline strengthened through post-period end early-stage licencing and collaboration agreement with Orthros Medical for innovative VHH antibodies therapy

*Underlying measures are before the effect of non-underlying items which excludes fair value adjustments on acquired inventory, amortisation of acquired intangibles and acquisition and integration costs. A reconciliation to statutory measures is provided in the Chief Financial Officer's Review.

Commenting on the full year results, Chief Executive Officer, Jenny Winter said: "Positive trading performance and improved margins combined to further strengthen our financial platform as we continue to invest in the future success of the Group.

"Growth in revenues over the year was driven by attractive fundamentals and increased demand in our Companion Animals markets. Profitability, meanwhile, benefited from our ongoing focus on the top selling brands supported by contributions from newly launched products. Continuing strong cash conversion drove a further marked reduction in net debt putting us comfortably below our net debt to underlying EBITDA leverage target range thereby increasing our deal-making flexibility.

"Operationally, we made good progress against our strategic priorities. Daxocox, our novel COX-2 inhibitor for osteoarthritis-related pain in dogs, received marketing approval in the EU and the UK in April 2021 and launched successfully in the second half. In a post-period event we made important advances on the business development front through an early-stage licencing and collaboration agreement with Orthros Medical, initially to develop new arthritis treatments that exploit the innovative potential of VHH antibodies.

"We recognise that investing in our people is as important as investing in our pipeline and other areas of our business. It's exciting, therefore, to see the roll-out of consistent Group-wide leadership development and sales and marketing frameworks to ensure we maintain and build competitiveness in our fast-evolving, dynamic markets.

"Early sales performance in 2022 is in line with management expectations and we are confident that we can continue to grow revenues while facing marked inflationary and foreign exchange headwinds. It's a credit to the commitment, agility and skill of the Animalcare team that the Group is in a strong position as we set our sights on delivering another successful year."

Analyst webcast

A briefing for analysts will be held at 10:30 BST on Tuesday 29 March 2022 via Zoom webcast. Analysts wishing to join should use the following link to register and receive access details.

https://stifel.zoom.us/webinar/register/WN_LQ129OkwTsmm3fYVAmeQzg

A copy of the analyst presentation will be made available on the Group website shortly after the webcast.

About Animalcare

Animalcare Group plc is a UK AIM-listed international veterinary sales and marketing organisation. Animalcare operates in seven countries and exports to approximately 40 countries in Europe and worldwide. The Group is focused on bringing new and innovative products to market through its own development pipeline, partnerships and via acquisition.

For more information about Animalcare, please visit www.animalcaregroup.com or contact:

Chairman's statement

I am delighted to report that 2021 was a year of delivery for Animalcare. Positive trading performance on the back of resurgent demand further strengthened our financial platform as we continued to make significant progress against our strategic priorities.

After a particularly challenging 2020, in which the Animalcare team demonstrated resilience and agility in the face of the COVID-19 pandemic, we delivered a healthy level of growth across the year.

At £74.0m, total revenues were 5.0% ahead of the prior year, an increase of 8.0% at constant exchange rates. The principal driver of growth was the recovery in the Companion Animals market with demand boosted by positive fundamentals such as increased pet ownership and the relative relaxation of pandemic controls on the operation of veterinary practices. Our Companion Animals segment, which also benefited from newly introduced products, grew by 14.6% over the period.

Underlying EBITDA, a key measure of profit, increased at a double-digit percentage rate to £13.5m as margins benefited from a favourable product mix, even accounting for an increase in SG&A-related investment in our people. The ongoing management of our product portfolio is also having a positive impact; efforts to retire smaller "tail" products continue, concentrating management attention on bigger selling brands with higher returns and higher potential. After underlying adjustments totalling £8.6m (2020: £7.8m) the profit before tax on a reported basis was £0.9m (2020: £0.2m).

Cash generation was again a feature of our performance with a particularly strong cash conversion rate of 108.8% helping to reduce net debt to £5.3m by year end. This represents a 60% improvement for the year (2020: £13.6m), placing us well below our target leverage range and further equipping us with the financial muscle to invest in pipeline and commercial growth opportunities.

The Group's positive trading performance, robust financial position and confident outlook have supported the Board's decision to propose a final dividend of 2.4 pence per share (2020: 2.0 pence per share).

Organisationally, the move to a regional management structure at the beginning of the year has had a positive impact, enabling a more focused Senior Executive Team to concentrate decision-making on performance and growth opportunities. Investment in our people remains a priority so the roll out of a new leadership development programme that will provide a consistent approach is an important step for the Group.

This has been a significant year for our internal pipeline with the launch of Daxocox, our novel COX-2 inhibitor for the treatment of osteoarthritis-related pain in dogs. We received marketing approval in the EU and the UK in April and commenced launch activities across our markets in the second half of the year. We're still at an early stage with Daxocox but are encouraged by progress to date and remain confident that this product can have a growing, positive impact on animals and their owners for years to come. Life cycle management projects are under way to extend the potential of Daxocox into new indications and new territories.

Consistent with our strategy, we continue to focus on external business development opportunities: from pipeline partnerships with long-term potential to commercial deals that deliver earnings growth in the nearer term. STEM Animal Health Inc., the joint venture we established with Kane Biotech in September 2020, is soon to reach our markets with the launch of the first Plaqtiv+ range of dental treatment products that exploit the benefits of anti-biofilm technology to combat oral infections. Additionally, in a post period event, we reached a research and development partnership with Netherlands-based Orthros Medical to explore the promising therapeutic potential of novel antibodies in a veterinary setting. This collaboration and R&D agreement gives us access to innovative VHH antibody technology thereby substantially strengthening our early-stage pipeline, a key building block of our long-term growth strategy.

Animalcare has always strived to be a good corporate citizen wherever we operate. Historically, we have viewed this through a local lens. But as we grow, so do the expectations of a widening set of stakeholders. In our annual report we lay out the steps we will take to create a meaningful, achievable and measurable Group-wide plan that ensures we operate sustainably across our markets in a co-ordinated manner.

Looking to the future, we believe the attractive fundamentals that helped fuel demand during 2021 will continue to support growth in 2022; sales in the early part of the year provide grounds for optimism on that score while we navigate and manage headwinds, notably in the form of inflation and foreign exchange. Overall, however, the long-term positives of the animal health market and the strong position of the Group continue to give us confidence to invest in value-creating growth opportunities.

I'd like to take this opportunity to welcome Dr Douglas Hutchens to the Board of Animalcare Group plc whose appointment as Non-Executive Director was announced on 10 February 2022. Douglas's expertise in veterinary medicine and R&D combined with his extensive network will prove invaluable as we pursue our long-term growth strategy.

On behalf of the Board, I'd also like to recognise our employees for delivering such a positive performance in 2021 and thank our shareholders for their continuing support.

Jan Boone

Non-Executive Chairman

Chief Executive Officer's Review

2021 was a year to celebrate for Animalcare. The continuing evolution of our product portfolio, which saw significant contributions from new products such as Daxocox, helped deliver positive results in a growing and dynamic animal health market. This performance further strengthened the Group's financial position, equipping us with the firepower to invest in opportunities that are consistent with our growth strategy.

Organisationally, we continued to build the scalable and sustainable business platform required to support delivery of our long-term ambitions.

Strong finances

Pleasingly, we delivered positive results against all our key financial parameters.

Revenues for the year were £74.0m, an increase of 5.0% on the prior year, or 8.0% at constant exchange rates. Group sales performance largely mirrored the strong uptick in demand seen across the Companion Animals market which was propelled by attractive fundamentals such as increased pet ownership and a loosening of COVID-related restrictions on veterinary practices during the year. The rapid recovery in trading conditions was visible in exceptionally strong Q1 revenues compared to the same period in 2020. We expect to see a more normal pattern of sales for the opening months of 2022.

Benefiting from a favourable product mix, our gross margin of 53.3% was ahead of the prior year (2020: 51.9%). This contributed to underlying EBITDA of £13.5m (2020: £12.1m) which grew ahead of revenue even allowing for the absorption of increased SG&A costs chiefly related to investment in our people and sales and marketing excellence. After underlying adjustments totalling £8.6m (2020: £7.8m) the profit before tax on a reported basis was £0.9m (2020: £0.2m).

The Group's very strong cash conversion rate of 108.8% helped drive net debt lower to £5.3m as of 31 December 2021, a remarkable 60% reduction over the 12 months.

This was a significant achievement and an important milestone. After several years of concerted effort to improve our balance sheet, we are now comfortably below our stated target leverage range of 1 to 2 times underlying EBITDA. This increases our investment capacity and flexibility in the continued pursuit of pipeline and business development opportunities that support our long-term growth strategy.

Key leadership

In 2021 we made important strides to further align our capabilities and structure with our growth strategy.

At the beginning of the year, we adopted a regional model overseen by a slimmed down Senior Executive Team (SET). Built around the South Region (Spain, Portugal and Italy) and North Region (UK, Germany, Belgium and Netherlands), the new structure has increased management focus on performance and growth opportunities while streamlining decision-making.

To help embed this approach we have deployed a number of our key people to regional or Group roles. That has the effect of improving operational efficiency and consistency as we continue to build a scalable organisation that can adapt and flex as we grow. We are also investing in company-wide skills development, most notably in the area of sales & marketing excellence. It's vital that we continue to forge capability in this space as we introduce innovative new products in increasingly competitive and dynamic veterinary markets that have seen changes in ways of working, often accelerated by the pandemic.

More broadly, we are implementing a company-wide initiative to develop the cadre of leaders that will steer Animalcare to a successful future. Built around the proven principles of "high challenge, high support", this programme will help us to nurture the strong talent that exists at all levels across the Group.

Our annual Gallup employee survey is a valuable management tool that helps us pinpoint opportunities to maintain and build levels of engagement across the business. Following on from an exceptionally positive survey result in 2020, we saw a slight (4%) decrease in the overall engagement measure for 2021. Naturally, we would like to see that score improve year on year. But we also recognise that this rating keeps us well ahead of Gallup's European average benchmark of companies.

Through the survey, employees told us that they felt more of a "One Team" spirit, noticed an improvement in communication and cross-country collaboration and appreciated increased training and development opportunities.

They have also helped us set priorities for 2022 including better understanding of our strategic pillars in a changing marketplace, improved internal communication process and associated use of digital tools and the roll-out of our leadership programme.

Strategic Product and Portfolio Director

We're delighted to welcome Sandra Single to the Animalcare team who has joined us as Strategic Product and Portfolio Director and as a member of the Group's Senior Executive Team. In the newly created role Sandra is accountable for the alignment of internally and externally sourced products to drive future growth. She leads the Technical, R&D, Quality, Regulatory and Project Management teams and works alongside the Group's specialist Business Development resource on potential deals. Sandra brings a wealth of research, development, portfolio management and licensing experience to the Group.

Growth portfolio

Maintaining a high quality and competitive portfolio is key to our future success. It serves as both a solid foundation and an engine of growth. In 2021, we continued with our efforts to rationalise the number of smaller "tail" products, thereby concentrating management and sales & marketing attention on bigger selling, higher margin products. Collectively, our top 40 selling brands accounted for approximately 75% of total revenue, an increase of 8.3% compared with the prior year.

In 2021 we were delighted to see Daxocox enter that top 40 category. Our novel treatment for osteoarthritis-related pain in dogs was introduced in the second half and generated £1.2m in sales. Though we are launching into a vigorous marketplace, increasingly characterised by large corporate veterinary groups, we remain confident Daxocox will be our biggest selling product within the next five to ten years.

We continue to see the greatest growth potential in the Companion Animals and Equine segments of our business, particularly over the longer term. Consequently, that's where we direct most of our investment. However, our Production Animals business continues to enjoy positive fundamentals and generate attractive returns. Indeed, while the revenues derived from this product category declined by 13.9% versus 2020, adjusting for the previously mentioned discontinuation of a legacy distribution agreement in Belgium at the beginning of 2021, our retained Production Animals business grew sales and margins over the year.

Business development

Seeking out pipeline and business development opportunities through partnerships or acquisitions is a central element of our growth strategy. It's never an easy task, but there are attractive opportunities. Indeed, I don't recall many occasions during the year when we were not involved in talks over one or more promising agreements.

Animalcare's strong balance sheet, backed by an experienced business development team, equips us with the financial resources and skills to convert these opportunities into reality. It's particularly satisfying, therefore, to have struck an early-stage research and development agreement with Netherlands-based Orthros Medical. Announced on 24 March 2022, the licensing and collaboration deal seeks to unlock the exciting therapeutic potential of VHH antibodies, initially for the treatment of canine osteoarthritis. This agreement represents a key building block in our long-term growth strategy in an area of therapeutic focus and significant market growth.

In addition, the first products from STEM Animal Health Inc. - our joint venture with Kane Biotech signed in September 2020 - are soon to hit the market following completion of manufacturing transfer and the start of listing negotiations with key customers. We have also extended our commercial reach through a distribution agreement with Virbac to market and sell Daxocox in most European countries outside Animalcare's direct territories.

Innovative pipeline

Daxocox received marketing authorisation for EU countries and the UK in April 2021. Launch activities kicked off at the end of the first half of the financial year and are under way across all our markets. R&D life cycle management programmes for Daxocox have been initiated to target new indications, new formulations and geographic expansion. For the STEM joint venture, coactive+ biofilm and Dispersin B pipeline projects have been initiated, with a particular focus on otitis.

Our early-stage agreement with Orthros Medical provides an important new dimension to our growing pipeline as we pursue the potential for novel VHH antibody technology that we believe will become an increasing feature of veterinary treatment.

To support delivery of pipeline opportunities, total R&D investment reached £1.3m. We expect this to increase in 2022 as we invest in our VHH antibodies partnership with Orthros Medical and other future growth opportunities.

Summary and outlook

We entered 2021 at pace with exceptional revenue and profit growth rates in the first quarter driven by a post-pandemic recovery in Companion Animals demand. While we saw a return to more normal trading levels across the rest of the year, we delivered a very positive overall performance and a further significant improvement in the Group's financial position, enabling us to continue investing in our long-term growth strategy.

Early sales activity in 2022 is in line with management expectations, although compared to 2021 we anticipate a more even balance between the first and second halves as the grip of COVID-19 loosens over time. Across the full year we expect our revenue and growth momentum to continue while we navigate inflationary and foreign exchange headwinds. Whatever conditions we encounter, I know that we can continue to call on the commitment, agility, focus and professionalism of the Animalcare team on our journey to become a leading company in our chosen markets.

I'd like to thank each of our employees for their hard work and dedication. It's hugely appreciated by all members of the senior management team.

Jenny Winter

Chief Executive Officer

Chief Financial Officer's Review

Underlying and Statutory Results

To provide comparability across reporting periods, the Group presents its results on both an underlying and statutory (IFRS) basis. The Directors believe that presenting our financial results on an underlying basis, which excludes non-underlying items, offers a clearer picture of business performance. IFRS results include these items to provide the statutory results. All figures are reported at actual exchange rates (AER) unless otherwise stated. Commentary will include references to constant exchange rates (CER) to identify the impact of foreign exchange movements. A reconciliation between underlying and statutory results is provided at the end of this financial review.

Overview of Underlying financial results

We are pleased to report a positive trading performance with revenue growth and improved gross margins leading to a double-digit increase in underlying EBITDA. The Group delivered very strong cash conversion which drove a significant reduction in net debt during the year, further strengthening our capacity to invest in our long-term growth strategy.

Revenues grew to £74.0m (2020: £70.5m), up 5.0% on the prior year (8.0% at CER). As anticipated, revenue growth was weighted towards the first half as a result of exceptional veterinary demand in Q1 and markets returning to more normal levels over the course of the financial year.

Revenue by product category is shown in the table below:

Companion Animals revenue, which represented approximately 69% of Group turnover, is the key driver of our overall revenue growth, increasing by 14.5% to £51.3m. This growth can be attributed to strong in-year market dynamics across Europe, in particular during the first half of the year,  newly introduced products, which contributed £2.2m (2020: £1.9m) and continued focus on driving value from our key (top 40) brands. Daxocox, our novel COX-2 inhibitor pain treatment for dogs, added £1.2m to revenue, predominantly during the second half. 

In contrast, Production Animals revenue declined by 13.9% versus the prior year to £17.0m. This is primarily driven by the discontinuation of a legacy distribution contract of several antibiotics and other lower margin products within the Group's Belgium subsidiary. Production Animals remains an important part of our South Region business, accounting for approximately 40% of regional revenues. Within this region, Production Animals sales increased by 3.0% compared to 2020. 

As expected, Equine and other sales decreased by 4.1% to £5.7m primarily due to prior year stock build within our international partner channel in advance of the manufacturing transfer of Danilon, which was completed during the year.

During 2021, we maintained our emphasis on optimising our portfolio to reduce fragmentation and drive commercial focus towards our larger selling, higher margin, brands. As a result, we entered 2022 with a portfolio that is close to our target of approximately 150 brands. Revenues from the top 40 brands grew by 8.3%, predominantly driven by new product launches during 2021 and 2020, while improving our gross margins.

The strong revenue growth and higher margin product mix drove a significant improvement in our operating profitability with underlying EBITDA at £13.5m (2020: £12.1m), an increase of 11.3% versus prior year. SG&A costs increased during the year to £26.0m (2020: £24.5m) principally driven by investments in sales and marketing activities and our people. As a result, SG&A expenses as a percentage of revenue increased to 35.1% (2020: 34.7%).

The underlying effective tax rate of 24.4% (2020: 20.1%) has increased versus prior year primarily reflecting the geographic mix of profits and the one-off impact of the substantively enacted increase in corporate tax rates in the UK (from 19% to 25% effective 1 April 2023) on deferred tax balances. We continue to optimise research and development tax credits.

Reflecting the points noted above, underlying basic EPS increased by 13.2% to 12.0 pence (2020: 10.6 pence). 

Overview of reported financial results

Reported Group loss after tax for the year (after accounting for the non-underlying items shown in the table and discussed below) was £0.1m (2020: £0.2m profit), with reported loss per share at 0.1 pence (2020: 0.4 pence earnings per share).

Non-underlying items totalling £8.6m (2020: £7.8m) relating to profit before tax have been incurred in the year, as set out in note 4. These principally comprise:

1.     Amortisation and impairment of acquisition-related intangibles of £8.3m (2020: £5.9m). This charge primarily comprises amortisation in relation to the reverse acquisition of Ecuphar NV and previous acquisitions made by Ecuphar NV. The increase versus 2020 primarily reflects the non-cash impairment of four projects that formed part of the acquired development pipeline, the principal drivers for which are:

●     the recall and suspension of all products containing ranitidine for human use by European and US authorities. Consequently, Animalcare has ceased development of ranitidine for animal use; and

●     technical and manufacturing issues that have significantly impacted the timing of supply and expected commercial returns of an equine product. 

2.    Expenses relating to acquisition, business development, integration, restructuring and other costs of £0.8m (2020: £1.5m) including the carve out and partnership of Identicare Ltd, our microchipping and database services business, with effect from 1 January 2022, reorganisation and restructuring of our Belgium and UK logistic operations and relocation of our Spanish office;

3.    £0.5m income in respect of product divestments as we continue to focus on our core higher margin brands. 

Dividends

An interim dividend of 2.0 pence per share was paid in November 2021.

The Board is proposing a final dividend of 2.4 pence per share (2020: 2.0 pence per share) in line with pre-COVID levels. Subject to shareholder approval at the Annual General Meeting to be held on 7 June 2022, the final dividend will be paid on 8 July 2022 to shareholders whose names are on the Register of Members at close of business on 10 June 2022. The ordinary shares will become ex-dividend on 9 June 2022.

The Board continues to closely monitor the dividend policy, recognising the Group's need for investment to drive future growth and dividend flow to deliver overall value to our shareholders.

Cash flow and net debt

We have made significant progress during 2021 in reducing our debt and increasing our financial capacity for M&A and pipeline opportunities that support our long-term growth. The main driver for this was our very strong cash conversion performance as set out in the table below:

Net cash flow generated by our operations increased to £14.0m (2020: £11.1m). Net working capital reduced by £2.2m primarily due to lower than expected receivables as a result of phasing of trading towards year end. Inventories reduced by £1.4m driven by delayed supply, a large proportion of which came into stock during Q1. The reduction in net working capital was in part offset by a £1.8m increase in cash taxes mainly due to a combination of geographic mix of profits, phasing of payments, settlement of prior year taxes and reduced cash receipts in respect of R&D tax credits.

As we expect trading and inventory patterns to be more balanced over the current financial year ending 31 December 2022, we anticipate cash conversion to be lower in 2022, but remain on average over 2021 and 2022  within the target 90-100% range.

Net debt reduced by £8.3m over the full year and stood at £5.3m on 31 December 2021. This significant improvement was largely driven by the very strong cash conversion noted above.  Exchange rate variations benefited the net debt position by £1.1m.

Net capital expenditure of £2.7m (2020: £1.5m) largely comprises investment in our product development pipeline of £1.3m, the most significant components of which relate to Daxocox and milestone licence payments to STEM Animal Health inc, together with £1.0m of expenditure relating to continuing investment in our IT infrastructure, including new regulatory and quality management systems and website and platform development relating to Identicare Ltd.

The net debt to underlying EBITDA leverage ratio was approximately 0.4 times (FY20: 1.1 times) comfortably below the Group's stated target range of 1-2 times underlying EBITDA.

Borrowing facilities

During the first half of the year, we completed an exercise with our four syndicate banks to extend our existing banking facilities from 31 March 2022 to 31 March 2025.

The Group's financing arrangements consist of a committed revolving credit facility of €41.5m and a €10m acquisition line, which cannot be utilised to fund our operations. The investment loan facility was repaid in full at the time of renewal.

The facilities remain subject to the following covenants which are in operation at all times:

•    Net debt to underlying EBITDA ratio of 3.5 times;

•    Underlying EBITDA to interest ratio of minimum 4 times; and

•    Solvency (total assets less goodwill/total equity less goodwill) greater than 25%.

As at 31 December 2021 and throughout the financial year, all covenant requirements were met with significant headroom across all three measures.

At 31 December 2021, total facilities were £43.3m, of which £3.6m, net of cash balances, was utilised, leaving headroom of £39.7m.

Going concern

The Directors have prepared cashflow forecasts for a period of at least 12 months from the date of signing of these financial statements (the going concern assessment period). These forecasts indicate that the Group will have sufficient funds to meet its obligations as they fall due, taking into account the potential impact of "severe but plausible" downside scenarios to factor in a range of downside revenue estimates, including further unexpected COVID disruptions, and higher than expected inflation across our cost base, with corresponding mitigating actions. 

The output from these scenarios shows the Group has adequate levels of liquidity from its committed facilities and complies with all its banking covenants throughout the going concern assessment period. Accordingly, the Directors continue to adopt the going concern basis of preparation. 

Summary and outlook

We delivered a strong set of results driven by growing demand in our Companion Animals segment, underpinned by strong market fundamentals which have moderated as we progressed through the financial year. Demand levels in the early part of 2022 are encouraging and in line with expectations that revenue and profit delivery will be more balanced over the current financial year compared to 2021. 

Our very strong underlying cash conversion led to a significant reduction in net debt and the net debt to underlying EBITDA leverage ratio. We hence enter 2022 with increased capacity and flexibility to pursue business and product development opportunities. Our licensing and collaboration agreement with Orthros Medical, announced on 24 March 2022, is the first step towards increasing investment in our product development pipeline.

Chris Brewster

Chief Financial Officer

29 March 2022

Consolidated income statement

Year ended 31 December 2021

In order to aid understanding of underlying business performance, the Directors have presented underlying results before the effect of exceptional and other items. These exceptional and other items are analysed in detail in note 4 to these financial statements.

Consolidated statement of comprehensive income

Year ended 31 December 2021

Consolidated statement of financial position

Year ended 31 December 2021

Consolidated statement of changes in equity

Year ended 31 December 2021

Reverse acquisition reserve

Reverse acquisition reserve represents the reserve that has been created upon the reverse acquisition of Animalcare Group plc.

Other reserve

Other reserve mainly relates to currency translation differences. These exchange differences arise on the translation of subsidiaries with a functional currency other than Sterling.