Fevara Plc Reports Strong Interim Profits and Strategic Entry into Brazil

Fevara’s H1 FY26: Margin-led progress and a bold move into Brazil

Fevara plc has delivered a tidy first half, holding revenue flat while lifting profits and pushing into the world’s biggest beef market. The story here is operational discipline doing the heavy lifting, with a strategic foray into Brazil setting up a longer runway for growth.

Headline revenue from continuing operations was unchanged at £50.6m, but better pricing, a richer product mix and cost control drove a 22% rise in adjusted operating profit to £7.2m. Low Moisture Block (LMB) volumes – the Group’s core molasses-based feed blocks for grazing livestock – grew 6% year on year, while lower margin minerals were pared back as planned.

Key numbers investors should know

Metric (continuing operations)	H1 FY26	H1 FY25	Change
Revenue	£50.6m	£50.6m	+2% at constant FX
Adjusted operating profit	£7.2m	£5.9m	+22%
Adjusted profit before tax	£7.0m	£5.9m	+19%
Adjusted EPS	11.0p	5.1p	+116%
EBIT margin	14.2%	11.7%	+250 bps
Net cash (unrestricted)	£1.4m	£15.7m	lower as expected
Interim dividend	1.2p	1.2p	unchanged

Note: Adjusted results exclude “adjusting items”, such as acquisition and restructuring costs.

What drove the first-half performance

UK and Europe: LMB-led growth and better mix

Fully owned UK/Europe operations lifted adjusted operating profit 26% to £3.7m. LMB volumes rose 9% as distribution improved, while minerals volume fell 14% by design to exit low margin business. Newly profitable exports to New Zealand and first positive profit from third-party boluses added a useful tailwind.

United States: split weather, steady profit

US fully owned adjusted operating profit nudged up 5% to £2.7m on 4% higher volumes. The picture was mixed: the Southern states benefited from last year’s operational fixes at Oklahoma, with strong momentum and first-half volume up 28%. The Northern states were hit by unusually warm, near snow-free winter conditions, knocking volumes 11% in those regions. Management is leaning on pricing, mix and market share gains to smooth these swings as the cattle cycle shows signs of bottoming.

Joint ventures: tighter execution

Across JVs in the US and Germany, profit contribution to the Group improved 12%. The Tennessee JV is benefitting from a second production line installed in FY24, and the German Crystalyx JV saw better cooperation. Post period end, Fevara exited its Iowa JV due to strategic and operational differences – no material negative impact is expected.

Brazil: platform built, now to scale

Fevara has planted its flag in Brazil, the world’s largest beef market. Two deals anchor the entry:

• Macal acquisition (completed December 2025) for initial £5.0m; Macal generated around £0.7m EBITDA in 2025.
• Cia do Sal acquisition (March 2026) for £4.3m, mainly for a high-spec São Paulo site that will host a new LMB line.

The plan is refreshingly measured: optimise Macal and Cia do Sal, then commission a Brazil-tailored LMB line using £4.0m of capex, expected to start revenue in early 2027. Early trading is in line with expectations.

Margins, cash and capital discipline

This half is all about quality of earnings. Gross profit improved as mix shifted to higher value products, while central costs fell 27% to £0.8m thanks to ongoing simplification (including IT outsourcing). Adjusting items swung to a £1.0m cost, mainly M&A spend, pension buy-in costs and new bank facility fees – one-off by nature but worth noting.

Net unrestricted cash stood at £1.4m at 28 February 2026, down from £15.7m the prior year, exactly as flagged. The main movers were last year’s tender offer, a £4.5m restricted pension escrow, the £5.0m Macal acquisition and £3.8m of dividends. Liquidity looks fine: Fevara has a £20m committed revolving credit facility with HSBC to November 2028 and an additional £10m uncommitted line. The Board is targeting gearing of no more than 1x net debt/EBITDA.

Seasonality matters here: H2 is typically softer. Even so, last twelve months adjusted operating profit of £5.0m is up 35% on FY25 (£3.7m) – a solid sign of momentum.

Strategic partnerships and product pipeline

• Distribution agreement signed post period end for LithoNutri (calcified marine algae) with Oceana Minerals across the UK and Ireland, targeting dairy yield and beef growth rates.
• An insect control product will launch in the US shortly, leveraging established UK/Europe experience and with clear potential for Brazil later.
• Partnerships with Vétalis (boluses) and Seales Winslow (New Zealand LMB distribution) are trading as planned and have moved previously loss-making areas into profit.

Medium-term financial ambitions: why they matter

The Board has put stakes in the ground for the next three to five years: at least £120m revenue, £15m EBITDA, a 10% EBIT margin and 20% ROCE (return on capital employed), with dividend cover of 2x and gearing below 1x. These are ambitions, not formal guidance, but they frame the endgame – scale, better margins and efficient capital use. Given the margin progress, lower central costs and the Brazil entry, they are not outlandish, though execution in Brazil and weather variability in the US remain the key swing factors.

Dividend, outlook and guidance

The interim dividend is held at 1.2p per share, payable on 19 June 2026 to shareholders on the register at close of business on 15 May 2026 (ex-dividend 14 May 2026). Trading since period end has been encouraging, with continued strength in the UK and further margin improvement. The Board is confident of delivering a full-year outcome in line with market expectations for adjusted operating profit of £5.5m.

My take: the good, the watch-outs, and the investment case

Positives

• Profit growth without top-line expansion shows real pricing, mix and cost discipline.
• UK/Europe is motoring, with 9% LMB volume growth and scope for more distribution-led gains.
• US Southern states recovery offsets abnormal Northern weather – operational fixes are showing through.
• Brazil entry creates a credible platform in a structurally attractive, under-penetrated market.
• Central costs down 27% and an EBIT margin up to 14.2% signal a leaner, higher quality business.

Watch-outs

• Cash position fell year on year as expected; discipline around Brazil capex (£4.0m for the LMB line) and working capital will matter.
• US demand remains weather-sensitive; Northern state volumes may continue to be choppy.
• Adjusting items were a cost this half (£1.0m), largely one-off but still a drag on statutory profit.
• H2 is seasonally weaker, so don’t extrapolate H1 margins in a straight line.

Bottom line

This is a clean, margin-led first half that underlines the turnaround momentum. Fevara is building a simpler, higher returning animal nutrition business with genuine global optionality. If management sustains mix upgrades and cost control while executing sensibly in Brazil, those medium-term targets look increasingly attainable. For now, delivery in line with expectations, a maintained dividend, and a sensible balance sheet keep the investment case on track.