The Apiam Animal Health Ltd (ASX: AHX) share price is soaring today following the release of a positive Q1 update.
The animal health company's shares broke its share price record today, up 12% at a high of 70 cents at close of trade. The robust quarterly performance represents a 52-week high share price for Apiam.
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Continued momentum
Apiam reported that momentum has continued on from the strong results achieved in the second-half of FY20.
For the period ending 30 September, the company recorded revenue of $29.6 million, an increase of 14% on Q1 FY20. Gross profit also grew to $16.6 million, up 21.2%.
This was supported by a robust performance in its companion animal and dairy segment, as well as its pig segment. The surge in demand offset a fall in revenue from its feedlot services. Apiam said fewer cattle were on feed compared to the comparative period due to higher feeder cattle prices.
Underlying conditions in the company's regional areas also improved due to the recent rainfall. This led Apiam to focus on its growth strategy which saw new implementations of business initiatives. Launching the ProDairy consultancy program, and Best Mates program delivered organic growth through new customer acquisitions.
Management advised Apiam is generating operating cost efficiencies and leverage, and expects a strong second-half to FY21.
COVID-19 impact
As COVID-19 related lockdowns have restricted movement, Apiam said it has had a bumper six months in its animal business. The contributing reasons were stated as people have further time on their hands and in-turn were seeking companionship.
The favourable conditions allowed the company to launch its Best Mates annual subscription, which grew 64% in its membership base. The program covers unlimited health checks cover for animals among other services.
Apiam managing director, Chris Richards commented on pet ownership. He said:
We're seeing a trend towards pets being more a part of the family and treated as such. This has been a trend we have been observing in regional areas for some time, where traditionally it was more of a trend we saw in the cities. It is now more widespread with regional communities willing to invest more in the health and wellbeing of their companion animals.
In addition to the program, Best Mates has recently launched a TV advertising campaign to promote its services. The advertisement is being shown across regional towns in Victoria and southern New South Wales.
