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Anpario Plc www.anpario.com/
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Anpario plc is a leader in the manufacturing and marketing of high performance natural feed additives for global agricultural and aquaculture markets with products which improve the health and output of animals, thereby increasing profits for the farmer.

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Anpario reports ‘excellent’ results for 2011; continues to seek acquisitions UPDATE

---Adds broker comment ---

Agricultural additives business Anpario (LON:ANP) is continuing to seek acquisition opportunities to grow the company as it posted "excellent" results for 2011.

The firm, formerly known as Kiotech International, reported a 10 per cent increase in profit before tax and exceptionals to £2.1 million (2010: £1.9mln) for the year to December 31.

It proposes a final dividend of 2.4 pence per share compared to 2 pence in 2010 and had cash of £4.4mln as at year end.

Describing last year's results as "excellent", chairman Richard Rose said the performance was driven by two key factors -  namely, the refocusing of the UK business on higher margin products, and the benefits of the purchase of animal feeds business Optivite in 2009.

The results demonstrate the group’s broad geographic spread, which has enabled it to offset on-going turbulence in both the Middle Eastern and Southern European markets, highlighted Rose.

Operationally, in 2011, the firm said a third production line at its Manton Wood manufacturing facility in Nottinghamshire had more than doubled its production capacity.

Post year-end, Anpario drew attention to its purchase in March of additive products supplier Meriden Animal Health Ltd for up to £4.1 million, which exposes the company to the lucrative Chinese market and is expected to be immediately earnings enhancing.

Bedfordshire-based Meriden’s Orego-Stim range of products, using essential oils, is marketed across 60 countries worldwide, with the majority of sales being outside the United Kingdom.

Importantly, it has a significant presence in China, which accounted for 26 per cent of total group sales in 2011.

Rose told investors the group had made a good start to the current year.

"Despite some significant loss of business due to the on-going turbulence in the Middle East and Europe, we continue to generate opportunities to grow sales of our speciality feed additive range both in the UK and overseas as well as the launch of a number of new products.

"Latin America and Asia Pacific will continue to be targeted as priorities, capitalising on the burgeoning development within both regions.

"Our strong balance sheet and cash flow allow management to continue to seek acquisition opportunities that offer strategic and commercial benefits to the group through the broadening of our product portfolio and geographic spread.

"The acquisition of Meriden brings another strong trading brand to the Anpario Group and increases Anpario's global market share in the feed additive sector," he said.

FinnCap issued a note on Anpario, calling the group “well financed, cash generative, acquisitive and clearly focused on the animal feed supplements market.”

Analyst Duncan Hall has a 140 pence price target on the stock, a 50 per cent upside to the current level of 94 pence.

“Anpario is developing an attractive international franchise in animal feed supplements.  The elimination of antiobiotic growth promoters from the food chain provides an important stimulus for the business,” Hall said.

China represents an important market for the group.  Anpario’s existing office there is approaching break-even and Meriden should increase group sales by around £1.5 million in this region, thus providing critical mass, according to the analyst.

Overseas margins drive group profits and continue to hold up well despite tough trading conditions, and Anpario’s financial strength is likely to remain a feature as the net cash balance grows, he added.

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