Eco Animal Health’s H2 momentum drives a better‑than‑expected FY26
Eco Animal Health Group (AIM: EAH) has closed out its financial year to 31 March 2026 with the wind at its back. Management says the strong first half continued through year end, delivering revenue growth of around 8% year on year and an improvement in gross margins. That puts both revenue and adjusted EBITDA ahead of market expectations.
In plain English: sales were stronger than the market thought they would be, profits did even better, and the company achieved this despite currency and tariff headwinds. The audited numbers will land in early July.
The quick take: what matters and why
- Revenue up c.8% year on year versus FY2025’s £79.6 million – slightly ahead of consensus expectations.
- Gross margins improved thanks to better pricing and lower cost of goods – a key quality signal.
- Adjusted EBITDA expected to be “materially” above last year (£7.3 million) and above the £7.6 million consensus.
- North America and Latin America were standout regions, overcoming currency and tariff challenges.
- Final figures are subject to audit and normal balance sheet provisioning – sensible caution but not a red flag.
Revenue growth: c.8% ahead of consensus
The company guides to an around 8% year-on-year revenue increase versus FY2025’s £79.6 million. Management also flags that this is “slightly ahead” of market expectations, which sat at £83.5 million for FY2026. That’s a clean, demand-led beat – achieved in the face of currency headwinds and tariff issues.
Two regions did the heavy lifting: North America and Latin America. Those are important markets for Eco’s pig and poultry portfolio, and outperformance there can be particularly margin-accretive when pricing holds.
Margins moving the right way
Gross margin – the percentage of sales left after the cost of making the products – improved during the year. The drivers were better product pricing and lower cost of goods. In animal health, small pricing gains can compound meaningfully when volumes are steady, so this is not just a one-off tailwind.
Improving gross margin indicates discipline on both the commercial and supply chain sides. It also gives cushion if input costs or FX wobble later in the year.
Adjusted EBITDA: a material beat without the hype
Adjusted EBITDA – a profit measure before interest, tax, depreciation, and amortisation, adjusted for one-offs – is expected to show a material increase over FY2025’s £7.3 million, and to be materially ahead of the £7.6 million consensus. That’s the result of both higher sales and fatter gross margins.
Importantly, Eco hasn’t put a number on it yet. We just know it’s “materially” higher than both last year and what the market had pencilled in. The audited figure will settle that in early July.
How big is “ahead of expectations”?
The company provides the yardsticks: consensus for FY2026 was £83.5 million of revenue and £7.6 million of adjusted EBITDA. Management now expects both to come in above those levels. Revenue growth is pegged at c.8% year on year, and profitability is flagged as a material beat.
Given they have called out currency headwinds and tariff challenges, the tone here is notably confident. It suggests the core franchise – led by Aivlosin and the broader antibiotics and vaccines range for pigs and poultry – is carrying pricing power and volume resilience.
Regional strength: North America and LatAm doing the heavy lifting
North America and Latin America were called out for particularly strong growth. That matters because:
- These regions are structurally important for swine and poultry production volumes.
- Pricing power can be better defended where product differentiation and brand recognition are strongest.
- Overcoming FX and tariff headwinds here implies underlying demand was robust enough to offset macro drags.
Context: what Eco actually does
Eco Animal Health develops and markets branded veterinary pharmaceuticals globally, with a focus on pigs and poultry. It holds marketing authorisations in over 70 countries and employs more than 200 people worldwide. The lead product, Aivlosin, targets respiratory and intestinal diseases in pigs and poultry – critical conditions for producers to manage efficiently and safely.
The R&D pipeline is described as “maturing”, which hints at future product catalysts, but there are no new pipeline disclosures in this update.
Risks and caveats you should keep in mind
- Audit adjustments: management reminds us the final outcome is subject to the normal audit and balance sheet provisioning processes. That can nudge reported profit up or down, though nothing specific is flagged.
- FX and tariffs: currency headwinds and tariff challenges were present this year and could remain volatile. A stronger pound, for example, can clip translated overseas profits.
- No absolute FY2026 profit figure yet: the company hasn’t disclosed the exact revenue or adjusted EBITDA numbers for FY2026 at this stage.
Why this update is positive for shareholders
Beating on both revenue and profitability, while expanding gross margins, is the combination you want to see in a specialty pharma business. It suggests Eco is executing on pricing, supply chain, and commercial focus in its key regions. Margin improvement also tends to be stickier than one-off revenue surges, which can lift confidence in future cash generation.
The tone is measured – “materially ahead” for EBITDA without overpromising – and the guidance sets up July’s results as a potential confirmation point rather than a discovery process.
What to watch between now and early July
- Final audited figures: precise revenue, gross margin and adjusted EBITDA numbers, plus cash flow and working capital detail.
- Any commentary on pricing sustainability and input costs into FY2027.
- Update on the “maturing” R&D pipeline – timing of any filings, approvals, or launches.
- Regional mix and how FX/tariffs are trending into the new financial year.
Key numbers at a glance
| Metric | Detail from the RNS |
|---|---|
| FY2025 revenue | £79.6 million |
| FY2026 revenue growth | c.8% year on year; slightly ahead of consensus |
| FY2026 revenue consensus | £83.5 million |
| FY2025 adjusted EBITDA | £7.3 million |
| FY2026 adjusted EBITDA outlook | Material increase year on year; materially ahead of consensus |
| FY2026 EBITDA consensus | £7.6 million |
| Gross margin | Improved, driven by pricing and cost of goods |
| Regional performance | Particularly strong in North America and Latin America |
| Audit timeline | Audited full year results expected in early July |
My take: a clean beat and better quality of earnings
This is an encouraging trading update. Eco Animal Health not only grew the top line but did so while lifting gross margins – the hallmark of improved earnings quality. The regional mix looks favourable, and management has negotiated FX and tariff bumps without derailing performance.
We still need the audited numbers to gauge the exact scale of the beat and to see cash conversion, but the direction of travel is clear. For investors, this reads as a constructive setup into July, with scope for upward revisions if the margin gains prove durable. Negatives are mainly exogenous – currencies and tariffs – and the usual audit caveats. On balance, a positive update that should support sentiment.
