Animalcare H1 2025: Double-digit growth, fatter margins, and Randlab firing
Animalcare Group has delivered a strong first half, with the newly acquired Randlab doing exactly what the Board hoped it would. Revenue is up, profits are up, margins are up, and cash generation remains healthy. Guidance is for the full year to land in line with expectations.
Quick jargon buster: AER is actual exchange rates; CER is constant exchange rates (strips out currency moves). “Underlying” numbers exclude one-offs like acquisition and amortisation charges.
Headline numbers investors should know
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Revenue | £43.8m | £36.9m | +18.5% AER (+20.8% CER) |
| Underlying EBITDA | £9.2m | £6.6m | +39.5% |
| Underlying EBITDA margin | 21.1% | 18.0% | +310 bps |
| Underlying PAT (continuing) | £6.7m | £3.5m | Not disclosed |
| Reported PAT | £3.3m | £5.1m | Not disclosed |
| Underlying EPS (continuing) | 9.7p | 5.8p | +67.2% |
| Reported basic EPS | 4.7p | 31.2p | Prior year boosted by disposals |
| Cash conversion | 70.6% | 78.3% | FY25 guide c.80% |
| Net debt (ex leases) | £7.9m | £9.0m (FY24) | Down £1.1m |
| Proforma leverage | c.0.7x | Not disclosed | Low |
| Interim dividend | 2.2p | 2.0p | +10% |
What drove the beat: Randlab and flagship brands
Randlab, acquired on 3 January, was the difference-maker. It contributed £6.4m of equine revenue within the £9.9m Equine & other line, and it came with rich gross margins – 73.0% on an underlying basis – lifting the Group margin to 57.9% from 56.5%.
Organic growth was modest at 1.3% AER (2.4% CER), but key brands did the heavy lifting. Daxocox grew c.39% and Plaqtiv+ c.30%, helped by new tablet strengths for Daxocox and wider reach. Equine also benefited from Danilon, up 8.0%, offsetting weaker equine fluids.
Segment mix: where the growth landed
- Companion Animals: £24.9m, up 1.7% (+2.8% CER). Good growth in Daxocox and Plaqtiv+ offset regulatory impacts on certain antibiotics in Spain.
- Production Animals: £9.0m, up 1.4% (+3.0% CER), normalising after a strong H1 2024.
- Equine & other: £9.9m, up 173.1% (+184.9% CER), including Randlab’s strong like-for-like growth of c.14.0% at CER (c.7.0% at AER).
Margins, cash and balance sheet: quality moving the right way
Underlying EBITDA rose 39.5% to £9.2m with margins up to 21.1%. The mix shift from Randlab’s high-margin portfolio was the main driver. Note that like-for-like gross margin (excluding acquisition effects) dipped to 55.3% from 56.5% due to sales mix and FX translation.
Cash conversion was 70.6%, in line with expectations and pointing to c.80% for FY25. Underlying net cash from operations rose to £6.5m, and free cash before Randlab costs and after leases was £4.3m. Net debt (ex leases) reduced to £7.9m with proforma leverage at roughly 0.7x. Animalcare has substantial headroom, with €52.8m of facilities maturing in 2029 and around £37.4m of RCF headroom at the period end.
EPS, non-underlying items and “underlying” reality
Underlying continuing EPS rose 67.2% to 9.7p, reflecting stronger trading and lower underlying tax (22.3%). Reported EPS was 4.7p, well below last year’s 31.2p, which was flattered by gains on disposals (Identicare and STEM) in 2024.
Non-underlying charges totalled £4.6m pre-tax. The big items were amortisation of acquisition intangibles (£2.9m) and acquisition/integration costs (£1.1m), including a £0.7m one-off fair value unwind on Randlab inventories. There was also £0.5m of restructuring in Germany.
Dividend raised 10% while funding R&D and M&A
The Board declared a 2.2p interim dividend, up 10%, with a clear message: reward shareholders while keeping powder dry for R&D and selective deals. The company is targeting c.5% of revenue into R&D per year, and spend is expected to accelerate in H2.
Pipeline getting busier – and potentially bigger
Animalcare is leaning into innovation to build a higher-growth portfolio over time. The Group now has five “major” projects, each with estimated peak sales potential above £15m and serving markets >c.£100m.
- VHH NGF antibody programme acquired outright for €0.7m post period – now fully controlled and progressed with 272Bio. Focused on expanding the pain franchise.
- Sweet itch (equine): new licence and research collaboration with 272Bio. Initial c.£2.0m preclinical spend over 18–24 months to proof-of-concept.
- E6132: long-acting oral and injectable NSAID candidates entering clinical trials in Q4.
Lifecycle work on Daxocox is paying off too. EU approval for peri-operative use arrived post period, opening broader access, while Japan approval has been secured and the US is being evaluated.
Strategy beyond Europe: Randlab and InVetro widen the footprint
Randlab has integrated well and is already scaling, including expansion into the UAE. The 25% equity stake in InVetro (Australia) adds companion animal exposure in Asia-Pacific with immediate and near-term revenue potential and a localised pipeline.
Risks and watch-outs
- Organic growth was a modest 1.3% at AER – solid given market conditions, but below the headline rate. The step-up is mainly M&A-driven.
- Regulatory headwinds in Spain on antibiotic surveillance hit certain topical products. Discussions with authorities are ongoing.
- FX is a drag: management flags potential currency headwinds if Sterling remains strong.
- Gross margin ex-Randlab softened on mix and FX. Worth tracking in H2.
Why this matters for investors
H1 shows the plan working: acquire scale and margin through targeted deals, keep investing in high-value innovation, and protect balance sheet flexibility. Randlab’s contribution is clear in both growth and profitability, while flagship brands keep compounding.
The dividend increase signals confidence without starving the pipeline. Low leverage, long-dated facilities and healthy cash conversion give Animalcare room to keep doing smart deals and to fund the development bets that could re-rate the portfolio over the medium term.
My take: solid execution with optionality building
This is a strong, high-quality print. The standout positives are margin expansion, low leverage and visible pipeline progress. The main negatives are the softer organic growth rate and FX/headwinds in Spain – manageable but worth monitoring.
With H2 expected to continue in line and multiple catalysts in the pipeline (Daxocox expansion, E6132 trials, sweet itch/NGF progress), Animalcare looks to be setting up for a more innovation-led growth profile while keeping financial discipline. That’s a combination I like.
