Apiam Animal Health Limited Appendix 4E
Apiam Animal Health Limited
ASX: AHX
APPENDIX 4E
PRELIMINARY FINAL REPORT
COMPANY DETAILS
Name of entity:
Apiam Animal Health Limited
ACN:
604 961 024
Reporting period:
For the year ended 30 June 2023
Previous period:
For the year ended 30 June 2022
Apiam Animal Health Limited Appendix 4E
2
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Statutory Results Summary
CHANGES FROM PERIOD ENDED 30 JUNE
2023 2022
%
$m
$m
Revenue from ordinary activities
up
22
To
192.1
from
157.2
Net profit attributable to members
down
51
To
2.3
from
Profit from ordinary activities after tax attributable to
members
down
51
To
2.3 From
4.6
4.6
Underlying EBITA (Incl. non-controlling interests)
up
12
to
12.8
From
11.5
Underlying EBITA (Earnings Before Interest, Tax and Amortisation) is considered by Management to be
a useful indicator of business profitability and excludes one-off corporate costs as well as integration and
acquisition expenses. Further commentary on the annual results can be found in the ‘Operating and
Financial Review’ section within the Directors’ report of the attached Annual Financial Report.
Dividends
2023 Interim Dividend
2023 Final Dividend
Amount per
security
cents
Franked
amount per
security
Cents
0.0 cents
0.0 cents
0.0 cents
0.0 cents
Apiam Animal Health Limited Appendix 4E
3
Net Tangible Asset per Security
Net Tangible assets per share
Return to shareholders
2023
($0.26)
2022
($0.11)
Dividends of $697,330 were paid during the period; no share buy backs were conducted during the year.
Basis of Preparation
This report is based on the consolidated financial statements which have been audited by Grant Thornton
Audit Pty Ltd. The audit report is included within the Company’s Annual Report which accompanies this
Appendix 4E.
Entities over which control has been gained or lost during the period:
Refer to Note 33 and 34 of the attached Financial Statements for details of entities over which control has
been gained. There were no entities over which control was lost.
Associates and Joint Venture Entities
The Company has no associate companies and 3 joint venture entities.
Other information required by Listing Rule 4.3A
Other information requiring disclosure to comply with Listing Rule 4.3A is contained in the 30 June 2023
Annual Report (which includes the Directors’ Report) which accompanies this Appendix 4E.
Accounting Standards
This Report has been compiled using Australian Accounting Standards and International Financial
Reporting Standards.
2023
Apiam Animal Health
Enriching the lives of Animals, People and Communities
ANNUAL REPORT
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
Contents
Chairman’s Message
Managing Director’s Message
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report
Additional Information
1
2
4
7
21
32
34
35
36
37
38
76
77
81
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
2
Chairman’s Message
Dear Shareholder,
On behalf of the Board of Directors I am pleased to present the Apiam Animal Health Ltd Annual
Report for the year ended 30 June 2023 (FY23). In a year marked by both challenges and
opportunities, Apiam has continued on its growth journey to build a business with a broader
revenue base, enlarged scale and greater financial resilience.
Apiam’s accelerated acquisition program embarked on over the past three years has seen the
Company significantly increase the revenues and earnings it generates from the dairy & mixed
animal veterinary segment. This segment provides a resilient revenue stream and significant
opportunities for growth as populations, and animal numbers continue to increase in regional hubs
and peri-urban locations. These are the areas Apiam, as a Company, has identified as key market
opportunities.
Over the year, we completed a further seven acquisitions in various geographic regions,
increasing our exposure to dairy, companion animals and the equine veterinary industry, all
segments that remain largely fragmented and with attractive growth profiles.
While Apiam reported solid revenue growth for FY23, our earnings growth did not meet our
targets, in part due to the Company impacts from broader economic challenges such as inflation,
the wage environment for skilled workers and interest rate rises.
In June 2023, we finalised a restructuring and redundancy program that will have immediate cost
benefits in FY24. We expect this program to result in employee expense savings of $2.6 million
in the year ahead and improved earnings margins across our business.
Apiam’s Management team will also be continuing to work with several clinics to further improve
their earnings margins in-line with our Group targets and will be particularly focussed in the areas
of optimisation of staff rostering, cost management and adoption of service programs to generate
further revenue opportunities.
In the year ahead, we will continue to build a resilient business that captures the growing revenues
available in the veterinary industry and that is leveraged to increased animal numbers in strategic
regional locations. The acquisition pipeline remains strong, with phasing to reflect optimisation of
capital resources and cash flow.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
3
We have identified that there is opportunity to achieve further cost savings and synergies from
our network of clinics, and we have embarked on a strategy to improve returns and deliver a more
profitable business. We thank shareholders for their patience and support during this process.
As a Board and Management team we are committed to improving Apiam’s performance in FY24.
Finally, I acknowledge the contribution of our employees over the past 12 months, and their efforts
to deliver best-practice and high-quality animal care for our clients and their animals.
Yours sincerely,
Professor Andrew Vizard
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
4
Managing Director’s Message
Dear Shareholder,
It has been another busy year for Apiam as we have continued on our regional expansion strategy
in the 12-months to 30 June 2023 (FY23). Over the past year we have completed the acquisition
of seven veterinary businesses and continued to work on the integration of the accelerated
number of acquisitions we have completed over the past three years.
Despite the broader macro-economic challengers, our revenues remained solid increasing 22.6%
over the year to $192.8 million1. This was driven by the resilience of our dairy & mixed animal
veterinary segment, which now accounts for 77% of our Group revenues and has been the focus
of our acquisition program. This segment delivered 4.9% organic like-for-like revenue in FY23
versus the prior corresponding period (pcp).
While our intensive animal veterinary segments (pigs and beef feedlot) remain integral to Apiam’s
regional and rural model, they continue to face cyclical industry pressures. Revenues from our
beef feedlot segment fell in FY23 due to lower feeder steer inductions in H1, however pleasingly
this was partly offset by revenue growth in the pig segment particularly in the second half of FY23
as the impacts of the Japanese Encephalitis outbreak in 2022 abated.
Overall, our earnings performance in FY23 was below what the company is capable of, coming
in below the rate of our revenue growth. Underlying EBITA (before one-off expenses)2 increased
11.6% to $12.8 million, impacted by growth in wage expense. Inflationary pressures, the
recruitment of higher skill-set vets in the first half of FY23 and the increased staff associated with
business support functions during our accelerated acquisition phase all contributed to this growth.
We also restructured several clinics to improve future performance, which resulted in short-term
revenue and EBITA impacts which pleasingly started to resolve late in the reporting period.
Further steps we are taking to address cost efficiencies with respect to wages are set out in the
section below.
Reported net profit after tax (NPAT) fell to $2.3 million in FY23 (FY22: $4.6 million) due to the
impact of a one-off non-cash provision ($1.7 million post-tax basis) relating to the write-down of
1 Excludes one-off revenue adjustment for deferred revenue relating to prior years +$920K and reversal of earn-out no longer payable $(190K)
2 Underlying EBITA is a non-IFRS measure and is earnings before interest, tax, amortisation and one-off expenses
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
5
sanitiser and surface protectant products. Rising interest rates as well as higher borrowings to
fund strategic acquisitions has also increased Apiam’s finance cost in FY23 to $3.8 million (FY22:
$1.6 million).
Cost saving initiatives to improve earnings margins
During the second half of FY23 Apiam Management strongly focused on leveraging synergies
from its existing clinics, working to improve efficiencies and ensure appropriate skillsets within
each clinic. In a small number of clinics, the restructure required has resulted in short term
revenue and EBITA reduction, which is expected to recover in FY24. With an increased focus on
leveraging the organic revenue growth to achieve higher earnings, the Company has reduced the
rate of its acquisition program.
In June 2023, Apiam completed a cost-saving redundancy & restructuring program to improve
workflows and eliminate some redundant roles both within the Company’s centralised business
support functions, as well as at various clinic locations.
This program is expected to result in a reduction to Apiam’s wage expenses of approximately
$2.6 million p.a. from July 2023 onwards. Redundancy costs incurred as part of this process were
approximately $0.3 million and will be treated as non-recurring costs in Apiam’s FY23 accounts.
Apiam’s business support network costs have already been scaled back, declining 1.9% in H2
FY23 (vs H1 FY23), particularly as the rate and the scale of the acquisition program slowed in
this period and we expect this trend to continue into FY24.
Additional earnings leverage is also expected in the year ahead as Management continue to
identify additional areas where greater service program adoption can be executed and clinic-level
employment costs can be more efficiently and effectively incurred.
Regional veterinary workforce growth
As with all healthcare providers, workforce retention and quality is at the core of our business
performance. Over FY23 we have made great strides in attracting veterinarians to the regions
and have led the industry with some innovative employment focussed programs to attract and
retain talent.
In FY23 we introduced the “Your Vet Career, Your Way” program, which focusses on employee
driven flexibility around career pathways, flexible workplace practices and locations to meet
lifestyle preferences. We continued our Vetriage program which has reduced after-hours calls to
veterinarians by >70%, with non-critical care being handled by our virtual team of experienced
veterinary nurses. We also introduced a student debt (HECS) reduction program which has seen
very high interest since its launch in May. Despite the program closing in October 2023, we have
already offered several places to high quality applicants.
Overall, we believe our innovative employee-focussed offerings have resulted in Apiam having a
much greater share of our veterinarian workforce in full-time employment (66%), versus the
industry average of 50%, as reported at the recent Australian Veterinary Association conference.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
6
We believe that this is being achieved as a result of approximately 80% of our veterinarians opting
into our flexible workplace programs including compressed 4-day weeks or 9-day fortnights.
Looking ahead in FY24
We remain confident in the resilient nature of our non-discretionary business, supported by the
essential nature of the animal healthcare services we provide. The strengths and benefits of our
business model, particularly our expansion over the past three years into the resilient dairy &
mixed animal segment will places us well to continue to deliver strong revenue outcomes in the
year ahead.
From an earnings perspective, we still have much work to do and we are working with clinics on
an individual basis to drive revenue growth, better extract cost savings and enhance efficient and
effective workflow practices to meet our individual clinic earnings margin targets. This will be the
key focus of our strategy in FY24.
We expect our operating earnings margins to improve in FY24 as these measures take effect.
Additionally, we will continue to identify acquisition growth opportunities taking into account our
free cash flows as well as the synergy realisation potential for the Group.
Apiam has strong fundamentals and I thank you for your continued support as we continue to
strive towards delivering our shareholders improved financial results.
Yours sincerely,
Dr Chris Richards
Managing Director
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
7
Directors’ Report
The Directors present their report on the consolidated entity consisting of Apiam Animal Health
Limited (Apiam) and the entities it controlled at the end of, or during, the year ended 30 June
2023.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the
date of this report are as follows.
Professor Andrew Vizard
Non-Executive Chairman
Dr Christopher Richards
Managing Director
Mr Richard John Dennis
Non-Executive Director
Dr Jan Tennent
Non-Executive Director
Evonne Maree Collier
Non-Executive Director (appointed 1 October 2022)
The following person resigned as a director during the financial year
Mr Michael van Blommestein
Non-Executive Director (retired 24 November 2022)
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
8
INFORMATION ON DIRECTORS
Professor Andrew Vizard
Dr Christopher Richards
Independent Non-Executive Chairman
Managing Director
BVSc(Hons), MVPM, FAICD
BSc, BVSc, MAICD
Professor Vizard is a Principal Fellow at the
Faculty of Veterinary and Agricultural
Sciences, University of Melbourne and
previously Associate Professor of Veterinary
Epidemiology and Director of The Mackinnon
Project, a recognised leader in sheep and beef
veterinary consultancy.
held
directorships
An experienced company director, he has
previously
in ASX
companies, statutory bodies and research
including Animal Health
organisations
Australia,
for
body
coordinating Australia’s animal health system;
Primesafe, the statutory authority responsible
for regulating the production of safe meat in
Victoria; and the Australian Wool Corporation.
responsible
the
Dr Chris Richards is the Managing Director of
Apiam Animal Health Limited, as well as the
Australian subsidiary entities and joint venture
companies, which provide veterinary services to
Australian regional and rural communities.
Chris is responsible for the strategic direction of
the development,
Apiam, which has seen
growth, acquisition and integration of production
and companion animal veterinary clinics,
veterinary wholesale, logistics, laboratory and
genetics services businesses since 1998 into
the Apiam of today.
Chris is also a Director of registered charity, Fur
Life Foundation Ltd, which raises funds to
support people in rural, regional, and remote
communities.
He is currently Chair of the Vizard Foundation
and Executive Secretary for the Hermon Slade
Foundation and the Australia & Pacific Science
Foundation.
Interests in Shares and Options
Interests in Shares and Options
286,109 shares
38,651,577 shares
560,164 performance rights
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
9
Mr Richard John Dennis
Non-Executive Director
Independent Non-Executive Director
BComm, LLB
Dr Jan Tennent
Non-Executive Director
Independent Non-Executive Director
PhD, BSc (Hons), GCertMgt, GAICD, FTSE
FASM,
Rick held a number of senior roles for over 35
years with Ernst & Young (EY) and was the
Managing Partner of EYs Queensland practice
on two occasions from 2001-2007 and from
2014-15. Rick also held several executive
management roles at EY, including Deputy
COO and CFO for the Asia-Pacific practice
where he was responsible for overseeing the
financial and operational integration of EYs
Australian and Asian member firms.
Rick
is a member of Australian Super’s
Queensland Advisory Board, a member of the
Advisory Boards of EWM Group and HLB
Chessboard, and an external member of the
Audit & Risk Committee of Racing Queensland.
Rick is non-executive Chair of AF Legal Group
Limited, Motorcycle Holdings Limited, Energy
Resources of Australia Limited, and a non-
executive director of Cettire Limited and Step
One Clothing Limited.
Jan is a Fellow of the Australian Academy of
Technology and Engineering and the Australian
Society for Microbiology and, a Principal Fellow
at The University of Melbourne.
She is an internationally recognised researcher
with specialist knowledge of antimicrobial
resistance mechanisms and the discovery and
commercialisation of vaccines. Jan has held
senior roles at CSIRO, the CRC for Vaccine
Technology, CSL, and Pfizer Animal Health
(now Zoetis) where she was the Director of
Business Development and Global Alliances in
the APAC region.
Her most recent executive role was as CEO of
Biomedical Research Victoria (2012-2019). Jan
is also a non-executive director of Agriculture
Victoria Services Pty Ltd, Phytogene Pty Ltd,
AusBiotech Limited (to 3 Nov 2022) and eviDent
Foundation Limited.
Interests in Shares and Options
Interests in Shares and Options
12,064 shares
72,073 shares
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
10
Evonne Maree Collier
Mr Michael van Blommestein
Non-Executive Director (appointed 1 October
2022)
BA, MBus, GradCertAppFin, GAICD
Independent Non-Executive Director (retired 24
Nov 2022)
GAICD
Michael was a Vice President and Country
Manager of Australia and New Zealand for
Zoetis and managed the spin-off of Zoetis from
Pfizer Australia.
Michael is an experienced director in the animal
health sector. He presided over Animal
Medicines Australia, the peak industry body for
five years and was a member of the board for
nearly a decade. Michael played an integral role
in leading and overseeing the transition of
Animal Health Alliance into Animal Medicines
Australia and has also served on the board of
Animal Health Association Japan.
Ms Collier has served as a Chair and Non-
Executive Director on various boards since
2011 and currently serves as a Non-Executive
Director and Chair of the Remuneration and
Nominations Committee for 4DMedical Limited
as well as a number of private and publicly
unlisted companies.
She currently serves as Non-Executive Director
of global SaaS analytics company, Sage
Automation (Chair of the Digital Products
board), digital dental and aesthetic dental clinic
aggregator, Curae Health
(Chair), global
eCommerce business, Australian Fitness
(Chair) and Motorama Group
Supplies
Automotive Holdings (Chair of the Marketing
and Digital Committee).
Ms Collier was also previously Non-Executive
Director of ASX-listed 1300Smiles Limited and
Think Childcare Limited prior to its acquisition in
2021.
Ms Collier holds a Master of Business
(Marketing, Strategy and Innovation), Bachelor
of Arts, Graduate Certificate of Applied Finance,
and is a Graduate Member of the Australian
Institute of Company Directors.
Interests in Shares and Options
Interests in Shares and Options
Interests in Shares and
Options
111,861 111,268 shares
Nil
111,268 shares
Company Secretary
Eryl Baron
Company Secretary
AGIA
Eryl has 20 years’ experience working in the corporate sector as a Company Secretary in a
number of industries. She is the appointed Company Secretary to a portfolio of ASX- listed
companies across a range of industries.
Eryl is an Associate member of the Governance Institute of Australia. She is experienced in
company secretarial and governance management of listed and unlisted companies.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
11
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board committee held
during the year and the number of meetings attended by each Director or their alternate were as
follows:
Directors
Board Meetings
Audit & Risk Management
Committee
Remuneration &
Nomination Committee
Andrew Vizard
Chris Richards
Michael van
Blommestein
Richard Dennis
Jan Tennent
Evonne Collier
A
12
12
3
12
12
10
B
11
12
2
12
12
8
A
4
-
-
4
4
3
B
4
-
-
4
4
3
A
3
-
1
-
3
3
B
2
-
1
-
3
2
Column A denotes the number of meetings the Director was entitled to attend and column B
denotes the number of meetings the Director attended.
COMMITTEE MEMBERSHIP
As at the date of this report, the Company has an Audit & Risk Management Committee and a
Remuneration & Nomination Committee of the Board of Directors
Members of the Audit & Risk Management Committee during the period were:
Richard Dennis (Chair)
Andrew Vizard
Jan Tennent
Evonne Collier (appointed to the Board on 1 October 2022)
Members of the Remuneration & Nomination Committee during the period were:
Jan Tennent (Chair)
Andrew Vizard
Evonne Collier (appointed to the Board on 1 October 2022)
Michael van Blommestein (Chair) (resigned from the Board on 24 November 2022)
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
12
PRINCIPAL ACTIVITIES
The Group operates in the segment of provision of veterinary products and services to production,
companion and equine animals. Apiam services animals throughout their life cycle, including the
provision of:
-
-
-
-
-
-
-
-
-
-
-
-
systems to assist in herd health programs;
production advice;
consulting services and products to assist in the prevention of animal diseases;
technologies to manage compliance with legislative requirements on pharmaceutical use;
advice and services in respect of animal welfare compliance;
retail animal health product sales;
on-farm delivery of products via its own logistics capability;
third party auditing services of industry quality assurance programs;
technology development for animal health management;
ancillary services such as sales and/or delivery of genetics and associated products;
on-farm and on-line training programs for clients; and
veterinary services for companion animals
REVIEW OF OPERATIONS
Apiam’s revenue for the 12 months to 30 June 2023 (FY23) remained resilient and continued to
reflect the non-discretionary nature of the Company’s veterinary operations.
Revenue grew 22.6% in FY23 to $192.8 million3 (FY22: $157.2 million) driven by the
Company’s dairy & mixed animal segment which accounted for 77% of total revenue. This
segment delivered like-for-like (LFL) revenue growth of 4.9% in FY23 vs the prior corresponding
period (pcp).
The Company’s beef feedlot and pig segment continued to operate in a challenging industry
environment, with segment LFL revenue falling (4.1)% in FY23. While revenue generated in the
feedlot segment was below the previous year due to lower feeder steer inductions and improved
health outcomes, pleasingly the pig segment delivered 5.0% revenue growth in H2 FY23 (vs
pcp) off the back of industry expansion and recovery in pig numbers from the Japanese
encephalitis impacts of 2022.
Apiam’s underlying EBITA (before one-off expenses)4 grew 11.6% in FY23 with the rate of
growth impacted by higher wage costs which increased 8.7% on a LFL basis in the dairy &
mixed animal segment. Increased growth in wages over the period occurred due to recruitment
of higher skill-set veterinarians in H1 FY23, the broader inflationary environment as well as the
3 Excludes one-off revenue adjustment for deferred revenue relating to prior years +$920K and reversal of earn-out no longer payable $(190K)
4 Underlying EBITA is a non-IFRS measure and is earnings before interest, tax, amortisation and one-off expenses
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
13
full year impact of the acquisitions program and the associated business support required,
particularly following the accelerated rate of acquisitions over FY21-FY22. Apiam’s business
support network costs declined 1.9% in H2 FY23 (vs H1 FY23) as the rate and the scale of the
acquisition program slowed in this period.
Rising interest rates over the past 12 months, as well as increased borrowings to fund strategic
acquisitions, has increased Apiam’s finance costs in FY23 to $3.8 million, up from $1.6 million in
FY22. This has had a negative impact on the Company’s Underlying Net Profit After Tax and
Amortisation (NPATA) performance in FY23.
Additionally, Apiam’s reported NPAT has been impacted by a one-off provision for inventory,
which is reflected as a $1.7 million non-cash expense (post-tax basis). This has reduced
reported NPAT to $2.3 million (FY22: $4.6 million).
In June 2023, Apiam completed a cost-saving redundancy & restructuring program to reduce
the amount of non-veterinarian staff both within the Company’s centralised business support
functions, as well as at various clinic locations.
This program is expected to result in a reduction to Apiam’s wage expenses of approximately
$2.6 million p.a. from July 2023 (FY24) onwards. Redundancy & restructuring costs incurred
were $0.3 million and are treated as one-off expenses for the purposes of the tables presented
in this Directors Report.
Management continue to work with dairy and mixed animal clinics around optimisation of staff
rostering and achievement of greater operating cost efficiencies to further reduce costs and
improve their financial contribution to the Group.
The following tables are presented to assist in the interpretation of the underlying performance
of Apiam during FY23. This information is additional and presented using non-IFRS information
and terminology.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
14
Apiam FY23 Financial Results Summary – Underlying Basis
P&L underlying
Total Revenue 1
Cost of goods sold 2
Gross Profit 3
Operating expenses
Underlying EBITDA 4
Underlying EBITA 4
Underlying NPATA 4, 5
Amortisation post tax
One-off expenses post tax
One-off revenue adj post tax
One-off write-down adj post tax
NPAT attributable to members
Gross Margin (%)
Underlying EBITDA margin (%)
Underlying EBITA margin (%)
FY23
FY22
Variance
%
192.8
(67.5)
125.3
157.2
(59.8)
97.4
35.6
22.6%
(7.7)
12.9%
27.9
28.6%
(104.3)
(79.2)
(25.2)
31.8%
21.0
12.8
6.4
(1.5)
(0.5)
(0.5)
(1.7)
2.3
18.3
11.5
7.1
(1.1)
(1.4)
2.7
14.8%
1.3
11.6%
(0.7)
(9.6)%
(0.5)
31.4%
0.9
(61.6)%
4.6
(2.4)
(50.9)%
65.0%
10.9%
6.7%
62.0%
11.6%
7.3%
Notes
1
Excludes one-off revenue adjustment for deferred revenue relating to prior years +$920K and reversal of earn-out
no longer payable $(190K)
2
Excludes inventory write-down expense of $2.4 million relating to sanitiser and surface protectant products.
3 Gross profit is a non-IFRS measure and only considers the cost of inventory associated with product revenue. It
does not consider any cost of services associated with service revenue.
4 Underlying earnings are non-IFRS measures and exclude one-off acquisition, integration & restructuring costs (tax
effected where applicable at NPAT level)
Before amortisation (tax effected)
5
Apiam FY23 Financial Results Summary – Reported Basis
P&L stat
Total revenue
Cost of goods sold
Gross profit 1
Operating expenses
EBITDA
Depreciation ROU assets
Depreciation & amortisation
EBIT
Interest
Tax
Other (including minorities)
NPAT attributable to members
FY23
FY22
192.1
(69.9)
122.2
(105.1)
157.2
(59.8)
97.4
(81.1)
Variance
34.9
(10.1)
24.8
(24.0)
16.3
0.8
17.1
(4.1)
(6.1)
6.9
(3.8)
(1.0)
0.2
2.3
(3.3)
(5.0)
7.9
(1.6)
(1.9)
0.2
4.6
%
22.2%
16.9%
25.4%
29.5%
4.9%
24.0%
21.3%
(13.4)%
140.4%
(0.8)
(1.1)
(1.1)
(2.2)
0.9
(48.5)%
(0.0)
(16.8)%
(2.4)
(50.9)%
1 Gross profit is a non-IFRS measure and only considers the cost of inventory associated with product revenue. It
does not consider any cost of services associated with service revenue.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
15
Acquisitions & cost-saving restructuring program
Apiam continued its acquisition program in FY23 completing the acquisitions listed below during
the period:
Business acquired
State
Veterinary
speciality
Acquisition date
The Vet Practice
VIC
Mixed animals
1 Jul 2022
Victorian Equine Group
VIC
Equine specialist
1 Jul 2022
Harradine & Associates
(2 clinics)
WA
Mixed animals &
equine
1 Nov 2022
Hunter Equine
NSW
Equine specialist
8 Dec 2022
Singleton Veterinary Hospital
NSW
Mixed animals
1 Feb 2023
Merimbula, Pambula & Eden
Vet Clinics
Townsend Veterinary Clinic
(Albury)
NSW
Mixed animals
1 Feb 2023
NSW
Mixed animals
1 April 2023
Boyne Tannum Vet Surgery
QLD
Mixed animals
5 July 2023
(FY24)
In addition, Apiam opened three new greenfield clinics during the financial year, with two of
these clinics opened during Q4 FY23 in the regional hubs of Yarrawonga (VIC) and Caboolture
(QLD). Both of these clinics have been performing strongly since commencement of trading
and have been targeted to meet the needs of a growing pet care market in these regional
growth corridors. Apiam introduced a revised greenfields model in FY22, to reduce the cost
burden of new greenfields clinics while in scale-up, and this continues to generate strong
outcomes.
As previously communicated, Apiam’s focus in H2 FY23 was to deliver further integration
benefits and growth synergies from its acquisition program in order to maximise free cash flow
generation. In-line with this, Apiam has been focusing on improving efficiencies and resourcing
appropriate skillsets within each clinic to be able to deliver improved performance. In a small
number of clinics the restructure required has resulted in short term revenue reduction, which is
expected to recover in FY24. With an increased focus on the existing clinic performance, the
Company has reduced the rate of its acquisition program.
A redundancy and restructuring program to reduce non-veterinary positions and achieve greater
savings was completed in June 2023. Savings from this program are already being realised and
are expected to be approximately $2.6 million in FY24 (annualised basis).
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
16
Apiam Management are continuing to work with a number of clinics where further integration
benefits can be realised, in order to reduce costs and increase earnings and cash flow
generation.
Balance sheet & cash flow
Apiam’s balance sheet as at 30 June 2023 remains solid, with key movements over the past 12
months reflecting the impact of the acquisition program. A $2.4 million write-down to inventory
was incurred during FY23 and reflects provisioning for the value of sanitiser and surface
protectant products.
Net debt as at 30 June 2023 increased to $68.7 million, up from $41.0 million as at 30 June
2022. This increase related to the $32.5 million of cash consideration required for acquisitions
over FY23. The Company’s operating leverage ratio as at the end of FY23 was 3.0x against a
covenant of 3.5x. Apiam has recently extended the current terms of its banking facilities with its
long standing financier, National Australia Bank until January 2026.
Apiam’s operating cash flow in FY23 increased 15.7% as a result of earnings growth and strong
working capital management. Operating cash conversion to underlying EBITDA (pre-AASB 16
adjustments) remained strong at 129.2%, up from 116.8% in FY22.
Financing cash flows during FY23 reflect the draw-down of Apiam’s finance facility to fund the
Company’s acquisition program.
Statutory cashflows $m
FY23
FY22
Net cash provided by operating activities
Acquisition of subsidiary, net of cash
Payments for property, plant and equipment
Payments for Intangible assets
Other
Net cash used in investing activities
Net changes in financing
Dividends paid to shareholders
Repayment of lease liabilities
Proceeds from share issues
Other
Net cash inflow from financing activities
Net change in cash and cash equivalents
17.4
(32.5)
(7.9)
(0.3)
0.2
(40.6)
28.9
(0.7)
(4.8)
0.0
0.0
23.5
0.3
15.0
(28.2)
(4.2)
(0.1)
0.0
(32.5)
4.8
(2.4)
(3.5)
19.2
0.0
18.1
0.7
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
17
Outlook & strategy for FY24
Apiam continues to focus on building a resilient business, that is leveraged to growing animal
numbers in targeted regional locations.
In FY24, the Company will also be particularly focussed on reducing costs, maximising free
cash flows and delivering value to shareholders.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
18
DIVIDENDS
No interim dividend was paid in the 2023 financial year. On 28 August 2023 the Apiam Board of
Directors declared that there will be no final dividend.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors there were no significant changes in the state of affairs of the
consolidated entity during the financial period, except as otherwise noted in this Report.
SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL
YEAR
The Group acquired seven veterinary businesses during FY23 and entered into agreements for
the acquisition of one further veterinary business post reporting date. Further details of these
acquisitions are disclosed in Note 39 of the Financial Statements.
Apart from these events, there are no other matters or circumstances that have arisen since the
end of the year that have significantly affected or may significantly affect either:
•
•
•
the entity’s operations in future financial years
the results of those operations in future financial years; or
the entity’s state of affairs in future financial years.
LIKELY DEVELOPMENTS, BUSINESS STRATEGIES AND PROSPECTS
The Company’s strategy is to build on the solid foundation it has established as an integrated
animal health business servicing the rural production and companion animal sectors, and ensure
we can meet the needs of a market which is experiencing strong growth.
The Company expects to continue to invest through acquisition, new greenfield sites, partnerships
and further recruitment of leading expertise to ensure we have the capacity and capability required
to prosper in the expanding global animal health industry.
KEY RISKS AND BUSINESS CHALLENGES
Apiam Animal Health operates, in part, in the Production Animal industry and in particular the pig,
feedlot cattle and dairy cattle sectors. Any downturn or disruption in these sectors, particularly if
it results in substantial reductions in livestock numbers or production volume, will adversely impact
the Company.
Any recurring or prolonged disruption to the supply of the key products that Apiam Animal Health
sells, particularly vaccines, may have an adverse effect on the financial performance of the
Company.
No single client or buying group accounts for more than 10% of Apiam Animal Health’s FY23
revenue. However, if there is consolidation within Apiam Animal Health’s client base, this may
lead to a concentration of the Company’s client exposure risk and may adversely affect the
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
19
margins that the Company is able to generate on the sale of its products and services to these
client groups.
Apiam Animal Health’s business model depends substantially on its senior management team
and key personnel to oversee the day-to-day operations and strategic management of the
Company. There is a risk that operating and financial performance of the Company would be
adversely affected by the loss of one or more key persons.
ENVIRONMENTAL REGULATION
The Group is not subject to any particular or significant environmental regulation under laws of
the Commonwealth or of a State or Territory. The Managing Director reports to the Board on any
environmental and regulatory issues at each Directors meeting, if required. There are no matters
that the Board considers need to be reported in this report.
GREENHOUSE GAS AND ENERGY DATA REPORTING REQUIREMENTS
The Group is not subject to the reporting requirements of either the Energy Efficiency
Opportunities Act 2006 or the National Greenhouse and Energy Reporting Act 2007.
UNISSUED SHARES UNDER OPTION
There were no unissued ordinary shares of Apiam under option at the date of this report.
SHARES ISSUED DURING OR SINCE THE END OF THE YEAR AS A RESULT
OF EXERCISE OF OPTIONS
During the financial year, the Company did not issue ordinary shares as a result of the exercise
of options.
DEEDS OF ACCESS, INDEMNITY AND INSURANCE FOR DIRECTORS AND
OFFICERS
Access
The Company has entered into deeds of access, indemnity and insurance with each Director
which contain rights of access to certain books and records of the Company.
Indemnification
Under the constitution of the Company, the Company is required to indemnify all Directors and
officers, past and present, against all liabilities allowed under law. Under the deed of access,
indemnity and insurance, the Company indemnifies parties against all liabilities to another person
that may arise from their position as an officer of the Company or its subsidiaries to the extent
permitted by law. The deed stipulates that the Company will meet the full amount of any such
liabilities, including reasonable legal costs and expenses.
The company has agreed to indemnify its auditors, Grant Thornton Audit Pty Ltd, to the extent
permitted by law, against any claim by a third party arising from the Company’s breach of its
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
20
agreement. The indemnity requires the Company to meet the full amount of any such liabilities
including a reasonable amount of legal costs.
Insurance
Under the constitution of the Company, the Company may arrange and maintain directors’ and
officers’ insurance for its Directors to the extent permitted by law and under the deed of access,
indemnity and insurance, the Company must maintain insurance cover for each Director for the
duration of the access period.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
21
Remuneration Report (Audited)
REMUNERATION REPORT (AUDITED)
This remuneration report outlines the director and executive remuneration arrangements of the
Company and the Group in accordance with the requirements of the Corporations Act 2001 and
its Regulations. For the purposes of this report, key management personnel (KMP) of the Group
are defined as those persons having authority and responsibility for planning, directing, and
controlling major activities of the Company and the Group, directly or indirectly, including any
director (whether executive or otherwise) of the parent.
For the purposes of this report, the term “executive” encompasses the senior executives and
general managers of the Group.
Details of Key Management Personnel
(I) DIRECTORS
Andrew Vizard
Chairman (Independent Non-executive)
Chris Richards
Managing Director (Executive)
Michael van Blommestein (resigned 24 November 2022)
Director (Independent Non-executive)
Richard Dennis
Director (Independent Non-executive)
Jan Tennent
Director (Independent Non-executive)
Evonne Collier (appointed 1 October 2022)
Director (Independent Non-executive)
(II) EXECUTIVES
Matthew White
Chief Financial Officer
Brian Scutt
Chief Operating Officer
Renee Waters (New KMP)
Chief People Officer
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
22
The Remuneration Report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration;
Details of remuneration;
Service agreements;
Share-based remuneration;
Bonuses included in remuneration;
Non-executive director remuneration; and
Other information.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
23
a
Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and
frameworks are:
•
•
•
to align rewards to business outcomes that deliver value to shareholders;
to drive a high performance culture by setting challenging objectives and rewarding high
performing individuals; and
to ensure remuneration is competitive in the relevant employment marketplace to
support the attraction, motivation and retention of executive talent.
The Group has structured a remuneration framework that is market competitive and
complementary to the reward strategy of the Group.
The Remuneration and Nomination Committee (the Committee) operates in accordance with its
charter as approved by the Board and is responsible for reviewing and recommending
compensation arrangements for the Directors and the Executive Team. The Committee has met
three times in the FY23 reporting period.
The remuneration structure that has been adopted by the Group consists of the following
components:
fixed remuneration being annual salary;
long term incentives; and
•
•
• short term incentives, being bonuses.
The Committee assesses the appropriateness of the nature and amount of remuneration on a
periodic basis by reference to recent employment market conditions with the overall objective of
ensuring maximum stakeholder benefit from the retention of a high quality Board and Executive
Team. The company’s key financial metrics are as follows:
Item
FY23
FY22
FY20
FY19
FY18
EPS (cents)
1.30c
3.42c
4.18c
3.63c
3.01c
Dividends
paid (cents
per share)
Net profit
before tax
($’000)
Share price
($)
0.4c
2.4c
2.4c
1.6c
1.6c
$3,166
$6,470
$6,971
$5,956
$4,569
$0.51
$0.69
$0.96
$0.46
$0.52
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
24
b
Details of remuneration
Details of the nature and amount of each element of the remuneration of each Key Management Personnel (KMP) of Apiam are shown in the table
below:
Short term employee benefits
Salary
and fees (i)
$
Cash Bonus
$
Accrued
annual leave
$
Non-monetary
benefits
$
Post-employment
benefits
Superannuation
$
Long-term
benefits
(Accrued long
service leave)
$
Share-based
Payment
Performance
Rights (ii)
$
-
-
-
-
-
-
-
-
67,316
3,757
15,602
19,783
Directors
Andrew Vizard
Chairman Independent
Richard Dennis
Independent
Chris Richards
Managing Director
Michael van Blommestein
Independent
Jan Tennent
Independent
Evonne Collier
Independent
Employees
Matthew White
Chief Financial Officer
Brian Scutt
Chief Operating Officer
Renee Waters
Chief People Officer
2023 Total
2022 Total
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
140,000
120,000
80,000
70,000
431,915
367,929
26,146
54,545
70,000
60,000
47,511
-
291,649
276,267
244,215
237,626
219,143
-
1,550,579
-
-
-
-
-
63,332
-
-
-
-
-
-
-
33,250
27,849
-
-
-
-
-
-
-
-
-
3,514
18,129
6,711
1,504
-
61,460
28,597
-
(10,874)
1,186,367
124,431
-
-
-
-
-
-
-
-
-
-
-
-
15,602
19,783
Total
$
140,000
120,000
80,000
70,000
595,673
504,931
28,891
60,000
70,000
60,000
52,500
-
347,512
389,967
268,911
310,423
258,437
-
Performance
based
percentage of
remuneration
%
0%
0%
0%
0%
3%
16%
0%
0%
0%
0%
0%
0%
4%
15%
4%
14%
4%
0%
3%
12%
47,283
1,841,924
55,637
1,515,321
-
-
-
-
25,292
23,568
2,745
5,455
-
-
4,989
-
25,292
23,568
24,927
22,801
23,987
-
107,232
75,392
-
-
-
-
-
-
-
-
40,073
10,469
15,475
16,093
-
-
-
-
-
-
12,307
24,769
9,575
14,775
9,926
-
-
-
-
-
-
-
14,750
13,984
1,068
661
3,877
-
59,768
25,114
(i)
(ii)
Salary and fees include salaries and allowances.
Share based payment performance rights are long term incentive performance plans which will lapse if they are not vested within three years of grant date. For rights issued in FY21 the
performance rights will vest annually over three years upon the Company achieving a minimum of 12% share price growth per year and continued employment. For rights issued in FY23 the
rights will vest at the end of the three year performance period upon the Company achieving a minimum Total Shareholder Return of 45% and continued employment. The amount recognised
for the Managing Director, Chief Financial Officer, Chief Operating Officer and Chief People Officer is the proportion expensed in that year based on the Monte Carlo valuation model.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
25
The relative proportions of remuneration that are linked to performance and those that are fixed
are as follows:
Name
Executive Directors
Chris Richards
Other Key Management Personnel
Matthew White
Brian Scutt
Renee Waters
Fixed remuneration
At risk – LTI
97%
96%
96%
96%
3%
4%
4%
4%
Service agreements
c
Remuneration and other terms of employment for the Executive Director and other key
management personnel are formalised in a Service Agreement. The major provisions of the
agreements relating to remuneration are set out below:
Base salary
$435,083
$293,550
$245,867
$220,626
Term of agreement
No fixed term
No fixed term
No fixed term
No fixed term
Notice period
Twelve (12) months
Six (6) months
Three (3) months
Three (3) months
Name
Chris Richards
Matthew White
Brian Scutt
Renee Waters
Bonus provisions
Chris Richards:
Matthew White:
Brian Scutt:
Renee Waters:
Nil
Nil
Nil
Nil
Long Term Incentive Plan
d
Remuneration of key management personnel includes performance rights which are offered as
part of long term incentive plans. The long term incentive plans run for periods of three years. The
rights granted in FY20 and FY21 vest in 3 tranches, subject to continued employment and upon
meeting the share price growth requirements at each respective vesting date.
The annual share price growth requirement is set out below for each financial year during the
performance period.
Share Price Growth
% of Performance Rights that may vest
Less than 12%
Above 12% but less than 31%
Nil – Tranche lapses and Performance
Rights cancelled
Between 50% and 100%, as determined on a
pro-rata, straight line basis
At or above 31%
100% allocation of Tranche
Share Price Growth shall be measured by comparing the Baseline Share Price against the
Closing Share Price in each year of the Performance Period. The baseline share price will be
calculated by assessing the volume weighted average price (VWAP) of shares for the 30 calendar
days following the lodgement of the annual report in the prior financial year. The closing share
price shall be calculated by assessing the VWAP of shares for the 30 calendar days following the
lodgement of the annual report for the current financial year of the performance period.
TSR shall be measured by comparing the Baseline Share
Price against the Closing Share Price during the Performance
Period. The calculation used will be the Closing Share Price,
minus the Baseline Share Price, plus Dividends received,
divided by the Baseline Share Price.
The Baseline Share Price is $0.9572 (calculated by
assessing the volume weighted average price (VWAP) of
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
26
For the rights granted in FY22 and FY23 the performance measures are assessed at the end of
the three year period and are based on the Total Shareholder Return (TSR) of the company and
subject to continued employment.
The TSR requirement is set out below for the three year performance period.
TSR shall be measured by comparing the Baseline Share Price against the Closing Share Price
during the Performance Period. The calculation used will be the Closing Share Price, minus the
Baseline Share Price, plus Dividends received, divided by the Baseline Share Price.
The Baseline Share Price was $0.9572 for FY22 and $0.7643 for FY23 (calculated by assessing
the volume weighted average price (VWAP) of Apiam shares for the 20 trading days following the
lodgement of the annual report for the previous financial year).
The Closing Share Price shall be calculated by assessing the VWAP of Apiam shares for the 20
trading days following the lodgement of the annual report at the end of the relevant Performance
Period.
Performance will be assessed as follows:
Absolute TSR
Below 45%
45-95%
95%
Percentage of Performance Rights to vest
Nil
Straight line between 50% and 100%
100%
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
27
Performance Rights Granted:
The following performance rights are allocated equally over a three-year period. The performance rights for each financial year during the performance period
will vest subject to meeting the share price growth rate and the employee remaining in continuous employment through to the annual vesting date of 31 October.
Each tranche of performance rights which have not vested will expire if the applicable performance measures are not met during the performance period.
Name
Grant
Perform-
FY2020
Fair Value
Fair Value
FY2021
Fair Value
Fair Value
FY2022
Fair Value
Fair Value
FY2023
Fair Value
Fair Value
Expiry
Date
ance
Tranche
per Right
Tranche
per Right
Tranche
per Right
Tranche
per right
date to
Rights
granted
exercise
vested
shares
Chris Richards
28/11/19
248,144
82,714
$16,411
$0.1984
82,715
$22,338
$0.2701
82,715
$23,873
$0.2886
Matthew White
19/03/20
106,326
35,442
$ 4,021
$0.1135
35,442
$ 8,831
$0.2492
35,442
$ 9,099
$0.2567
-
-
-
-
-
-
31 Oct 23
31 Oct 23
Matthew White
06/04/21
67,303
Brian Scutt
23/10/20
97,510
-
-
-
-
-
-
22,434
$14,700
$0.6553
22,434
$ 8,410
$0.3749
22,435
$ 8,305
$0.3702
31 Oct 24
32,503
$15,193
$0.4674
32,503
$10,359
$0.3187
32,504
$10,612
$0.3265
31 Oct 24
The following performance rights were issued in FY22 and FY23. The performance measures are assessed at the end of the three-year period and are based
on the Total Shareholder Return (TSR) of the company and subject to continued employment. The Performance Rights which have not vested will expire if the
applicable Performance Measures are not met during the Performance Period.
Name
Grant
Perform-
FY2024
Fair Value
Fair Value
FY2025
Fair Value
Fair Value
Expiry date
Date
ance
Tranche
per Right
Tranche
per Right
to exercise
Rights
granted
vested
shares
Chris Richards
25/11/21
192,821
192,821
$23,106
$0.1198
-
-
-
31 Oct 25
Chris Richards
24/11/22
284,628
-
-
-
284,628
$27,233
$0.0957
31 Oct 26
Matthew White
09/12/21
99,248
99,248
$11,110
$0.1119
-
-
-
31 Oct 25
Matthew White
08/12/22
128,026
-
-
-
128,026
$10,450
$0.0816
31 Oct 26
Brian Scutt
09/12/21
83,126
83,126
$ 9,304
$0.1119
-
-
-
31 Oct 25
Brian Scutt
06/12/22
107,230
Renee Waters
06/12/22
96,221
-
-
-
-
-
-
107,230
$8,502
$0.0793
31 Oct 26
96,221
$7,628
$0.0793
31 Oct 26
The company has chosen share price growth as the performance measure as it believes the fundamental driver for executive remuneration should be long term
financial performance that generates value for Apiam shareholders.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
28
Non-Executive Director remuneration
e
Clause 13.1(a) of the Company’s Constitution (Constitution) provides the limit for the aggregated
remuneration of non-executive directors which is currently set at $750,000. The Directors of the
Company are entitled to apportion and distribute this aggregate Non-Executive Directors’
remuneration as they determine.
The Non-Executive Directors of the Company received the following fees (which total $360,000):
• Chairman (One): $140,000 per annum;
• Directors (Three): $70,000 per annum, each; and
• Chair of the Audit and Risk Management Committee $10,000 (in addition to the directors
fees), such amounts being inclusive of any superannuation payments.
The ASX Listing Rules and Constitution allows the Company to increase the aggregate amount
of remuneration payable to Non-Executive Directors of the Company pursuant to Shareholder
approval at a general meeting.
f
Other information
Options held by key management personnel
There were no options to acquire shares in the Company held during the 2023 reporting period
by key management personnel of the Group, including their related parties.
Shares held by key management personnel:
The number of ordinary shares held in the Company at 30 June 2023 held by each of the
Groups key management personnel, including their related parties, is set out below.
Personnel
Balance at
1/07/2022
Granted as
remuneration
Received
on
exercise
Chris Richards
38,850,000
Andrew Vizard
Richard Dennis
Michael van
Blommestein
Jan Tennent
Evonne Collier
Matthew White
Brian Scutt
Renee Waters
Total
284,591
12,000
111,268
71,691
-
145,421
1,503,593
-
40,978,564
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,882
43,882
Other
changes
Held as at
30/06/2023
(198,423)
38,651,577
1,518
64
-
382
-
596
286,109
12,064
111,268
72,073
-
146,017
264,560
1,768,153
-
43,882
68,697
41,091,143
None of the shares included in the table above are held nominally by key management personnel
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
29
Performance rights held by key management personnel:
The number of performance rights held at 30 June 2023 by each of the Group’s key
management personnel, including their related parties, is set out below.
Balance
at
1/07/2022
358,251
237,435
148,133
182,613
Granted
as
remunerat
ion
284,628
128,026
107,230
Vested &
Exercised
-
-
-
96,221
(43,882)
Forfeited/
lapsed
during
year
(82,715)
(57,876)
(32,503)
(43,883)
Personnel
Chris Richards
Matthew White
Brian Scutt
Renee Waters
Held as at
30/06/2023
Vested &
not
exercised
Vested in
FY23
560,164
307,585
222,860
191,069
82,715
57,876
-
-
-
-
-
-
-
Total
926,432
616,105
(43,882)
(216,977)
1,281,678
140,591
Loans to key management personnel
The Group did not enter into any loans with key management personnel during the 2023 year.
The number of key management personnel included in the Group aggregate at year end is Nil.
The Group does not have an allowance account for receivables relating to outstanding loans and
has not recognised any expense for impaired receivables during reporting period.
Other transactions with key management personnel
The Group rents a head office and warehouse facility at Piper Lane, Bendigo East, Victoria. The
premises are owned by an entity associated with Chris Richards. Rental payments in FY23
amounted to $378,303 (2022: $360,193).
The Group rents a veterinary clinic and warehouse facility at Rubicon Street, Smithton, Tasmania.
The premises are owned by an entity associated with Chris Richards. Rent payments made
amounted to $135,941 (2022: $133,752).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris
Richards. Lease payments made amounted to $119,186 (2022: $113,481).
End of audited Remuneration Report.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
30
Environmental legislation
Apiam operations are not subject to any particular or significant environmental regulation under a
law of the Commonwealth or of a State or Territory in Australia.
Indemnities given to, and insurance premiums paid for, auditors and officers.
Insurance of officers
During the year, Apiam paid a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all Directors. The liabilities insured are legal costs that
may be incurred in defending civil or criminal proceedings that may be brought against the officers
in their capacity as officers of the Group, and any other payments arising from liabilities incurred
by the officers in connection with such proceedings, other than where such liabilities arise out of
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else to cause detriment
to the Group.
Details of the amount of the premium paid in respect of insurance policies are not disclosed as
such disclosure is prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent
permitted by law, indemnified or agreed to indemnify any current or former officer of the Group
against a liability incurred as such by an officer.
Non-audit services
During the year, the Company’s auditors performed certain other services in addition to their
statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in
accordance with written advice provided by resolution of the Audit and Risk Management
Committee, is satisfied that the provision of those non-audit services during the year is compatible
with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
•
•
all non-audit services were subject to the corporate governance procedures adopted by the
Company and have been reviewed by the Audit and Risk Management Committee to ensure
they do not impact upon the impartiality and objectivity of the auditor; and
the non-audit services do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they
did not involve reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as an advocate for the Company or jointly
sharing risks and rewards.
Details of the amounts paid to the auditors of the Company and its related practices for audit and
non-audit services provided during the year are set out in Note 30 to the financial statements.
A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations
Act 2001 is included on page 32 of this financial report and forms part of this Directors’ Report.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
31
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company, or to intervene in any proceedings to which the
Company is a party, for the purpose of taking responsibility on behalf of the Company for all or
part of those proceedings.
Rounding of amounts
Apiam is a type of Company referred to in ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the
financial report have been rounded to the nearest $1,000 (where rounding is applicable), or in
certain cases, to the nearest dollar under the option permitted in the Instrument.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
28 August 2023
32
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
Melbourne VIC 3008
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Auditor’s Independence Declaration
To the Directors of Apiam Animal Health Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Apiam Animal Health Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and
belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
A C Pitts
Partner – Audit & Assurance
Melbourne, 28 August 2023
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
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Legislation.
#10101452v1w
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
33
Apiam Animal Health Limited
Financial Statements
For the year ended 30 June 2023
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
34
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Revenue
Other income
Expenses
Changes in inventory
Cost of materials
Employee benefit expenses
Depreciation and amortisation expense
Other operating expenses
Share of profit from equity accounted investments
Finance costs
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit from continuing operations
Profit for the year
Profit attributable to:
Owners of Apiam Animal Health Limited
Non-controlling interests
Note
7
2023
$’000
191,757
318
(2,309)
(67,568)
(82,844)
(10,227)
(22,240)
53
(3,774)
3,166
(995)
2,171
2,171
2,277
(106)
29
8
8
9
26
2022
$’000
157,057
167
1,740
(62,501)
(61,960)
(8,359)
(18,195)
91
(1,570)
6,470
(1,931)
4,539
4,539
4,639
(100)
Total comprehensive income/ (loss) for the period
2,171
4,539
Earnings per share for profit attributable to the ordinary
equity holders of the company:
Note
Cents
Cents
Basic earnings per share
Diluted earnings per share
27
27
1.30
1.28
3.42
3.36
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2023
35
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 30 June 2023
Note
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Other current liabilities
Current tax liabilities
Borrowings
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Employee benefit obligations
Deferred tax liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent
Share capital
Corporate re-organisation reserve
Non-controlling interest acquisition reserve
Share based payment reserve
Foreign currency translation reserve
Retained earnings
Non-controlling interest
Total equity
10
11
12
13
15
14
18
19
16
23
20
21
22
21
16
22
18
24
25
25
25
25
26
2023
$’000
3,172
13,958
15,472
2,130
34,732
163,614
43,812
274
3,605
211,305
246,037
12,435
4,984
1,346
889
2,934
10,677
33,265
66,066
24,043
543
3,718
505
94,875
128,140
117,897
134,840
(26,692)
(6,615)
993
6
15,336
117,868
28
117,896
2022
$’000
2,845
13,623
17,781
1,628
35,877
126,932
31,640
271
4,458
163,301
199,178
10,968
3,558
498
1,859
2,914
8,991
28,788
39,165
17,753
657
3,626
505
61,706
90,494
108,684
127,249
(26,692)
(6,615)
871
(19)
13,756
108,550
134
108,684
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
36
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Note
Balance at 1 July 2021
24
Issue of new share capital
Share placement
24
Transaction costs on issue of new share capital, net of tax 24
24
Issue of shares to vendors of business acquired
24
Employee share plan, transfer on exercise of rights
Employee share plan, share based payments
24
Foreign currency translation adjustment
Purchase of non-controlling interest
Dividends paid
Transactions with owners
Profit / (Loss) for the period
Total comprehensive income for the period
Balance at 30 June 2022
24
Issue of new share capital
Share placement
24
Transaction costs on issue of new share capital, net of tax 24
24
Issue of shares to vendors of business acquired
24
Employee share plan, transfer on exercise of rights
Employee share plan, share based payments
24
Foreign currency translation adjustment
Purchase of non-controlling interest
Dividends paid
Transactions with owners
Profit / (Loss) for the period
Total comprehensive income for the period
Balance at 30 June 2023
Share
capital
Corporate
re-
organisation
reserve
$’000
101,010
919
20,247
(748)
5,333
488
-
-
-
-
26,239
-
-
127,249
42
-
-
7,119
430
-
-
-
-
7,591
-
-
134,840
$’000
(26,692)
-
-
-
-
-
-
-
-
-
-
-
-
(26,692)
-
-
-
-
-
-
-
-
-
-
-
-
(26,692)
Non-
controlling
interest
acquisition
reserve
$’000
(6,615)
-
-
-
-
-
-
-
-
-
-
-
-
(6,615)
-
-
-
-
-
-
-
-
-
-
-
-
(6,615)
Share
based
payment
reserve
Foreign
Currency
Translation
Reserve
Retained
earnings
Total
attributable to
owners of
parent
Non-
controlling
interest
$’000
$’000
$’000
595
-
-
-
-
(488)
764
-
-
-
276
-
-
871
-
-
-
-
(430)
552
-
-
-
122
-
-
993
(79)
-
-
-
-
-
-
60
-
-
60
-
-
(19)
-
-
-
-
-
-
25
-
-
25
-
-
6
11,596
-
-
-
-
-
-
-
795
(3,274)
(2,479)
4,639
4,639
13,756
-
-
-
-
-
-
-
-
(697)
(697)
2,277
2,277
15,336
$’000
79,815
919
20,247
(748)
5,333
-
764
60
795
(3,274)
24,096
4,639
4,639
108,550
42
-
-
7,119
-
552
25
-
(697)
7,041
2,277
2,277
117,868
$’000
1,002
27
-
-
-
-
-
-
(795)
-
(768)
(100)
(100)
134
-
-
-
-
-
-
-
-
-
-
(106)
(106)
28
Total
equity
$’000
80,817
946
20,247
(748)
5,333
-
764
60
-
(3,274)
23,328
4,539
4,539
108,684
42
-
-
7,119
-
552
25
-
(697)
7,041
2,171
2,171
117,896
The above statement should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2023
Note
28
15
33
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest paid
Transaction costs paid relating to acquisition of subsidiary
Income taxes paid
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Proceeds from disposals of property, plant & equipment
Proceeds from disposals of intangible assets
Dividends received
Acquisition of subsidiaries, net of cash acquired
Net cash (outflow)/inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Lease payments
Proceeds from issue of share capital
Capital contribution of non-controlling interest
Transaction costs paid on issue of share capital
Dividends paid to company shareholders
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
10
2023
$'000
214,619
(189,993)
24,626
(3,774)
(416)
(3,031)
17,405
(7,855)
(350)
128
-
50
(32,543)
(40,570)
39,049
(10,111)
(4,773)
-
-
-
(673)
23,492
327
2,845
3,172
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
37
2022
$'000
174,352
(153,820)
20,532
(1,570)
(1,802)
(2,122)
15,038
(4,322)
(542)
167
422
40
(28,248)
(32,483)
31,497
(26,696)
(3,511)
20,247
28
(1,069)
(2,356)
18,140
695
2,150
2,845
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
38
Notes to the Consolidated Financial Statements
1
Nature of operations
Apiam Animal Health Limited and subsidiaries’ (‘the Group’) principal activities include the provision of veterinary products
and services to production animals, companion animals and equine. The Group is vertically integrated with strategic
sourcing of products, custom manufacture of vaccines, in-house laboratory services and on farm delivery with its own
logistics service.
There have been no significant changes in the nature of these activities during the year.
2
General information and statement of compliance
The consolidated general purpose financial statements of the Group have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of
the Australian Accounting Standards Board (AASB). Compliance with Australian Accounting Standards results in full
compliance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB). Apiam Animal Health Limited is a for-profit entity for the purpose of preparing the financial statements.
Apiam Animal Health Limited is the Group’s Ultimate Parent Company. Apiam Animal Health Limited is a Public Company
incorporated and domiciled in Australia. The address of its registered office and principal place of business is 27-33 Piper
Lane, East Bendigo, Victoria 3550.
The consolidated financial statements for the year ended 30 June 2023 were approved and authorised for issue by the
Board of Directors on 28 August 2023.
3
Changes in accounting policies
New Accounting Standards and Interpretations adopted during the year
The amended accounting standards and interpretations issued by the Australian Accounting Standards Board during the
year that were mandatory were adopted. None of these amendments or interpretations materially affected any of the
amounts recognised or disclosures in the current or prior year.
Accounting Standards issued but not yet effective and not been adopted
early by the Group
At the date of authorisation of these financial statements, several new, but not effective Standards and amendments to
existing Standards, and Interpretations have been published by the AASB. None of these Standards or amendments to
existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the
effective date of the pronouncement.
4 Restatement of prior period intangibles provisionally accounted
Apiam has restated the financial statements of three of the veterinary businesses it acquired in the financial year ended 30
June 2022. The acquisitions were provisionally accounted for in that period. Subsequent to the acquisition, it was noted
that there were customer relationships and trademarks within these businesses and that a portion of goodwill recognised
upon acquisition must be reclassified as intangible assets. The customer relationships recognised as intangible assets
are amortised over the useful life of the asset. This resulted in a restatement of each of the affected financial statement
line items for prior periods as follows:
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
39
30 June 2022
Statement of financial position (extract)
Previous
amount $'000
Adjustment
$'000
Restated amount
$'000
Goodwill
113,580
(286)
113,294
Trademarks and trade names
Customer relationships
Deferred tax assets
Other current liabilities
Employee benefit obligations (current)
Employee benefit obligations (non-current)
Deferred tax liabilities
2,491
9,243
4,426
(500)
(8,972)
(657)
(3,510)
63
323
32
2
(19)
1
(116)
2,554
9,566
4,458
(498)
(8,991)
(657)
(3,626)
5 Summary of accounting policies
Overall considerations
The consolidated financial statements have been prepared using the significant accounting policies and measurement
bases summarised below.
Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2023.
The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary
and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30
June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and
losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on
consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted
by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from
the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets
that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners
of the parent and the non-controlling interests based on their respective ownership interests.
Business combination
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their acquisition-date fair values.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
40
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of:
(a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree, and (c)
acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable
net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a
bargain purchase) is recognised in profit or loss immediately.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at acquisition date. The measurement period ends on
either the earlier of (i) 12 months from the date of acquisition or (ii) when the acquirer receives all the information possible
to determine fair value.
Business combinations under common control are accounted for in the accounts prospectively from the date the group
obtains the ownership interest.
Assets and liabilities are recognised upon consolidation at their existing carrying amount in the financial statements of the
Acquiree. Any difference between the fair value of the consideration paid and the book value / carrying amount at which the
assets and liabilities are recorded is recognised directly in the Corporate re-organisation reserve in equity.
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian Dollars ($AUD), which is also the functional currency of
the Parent Company.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange
rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from
the settlement of such transactions and from the re-measurement of monetary items at year end exchange rates are
recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange
rates at the date of the transaction), except for non-monetary items measured at fair value which are translated using the
exchange rates at the date when fair value was determined.
Segment reporting
Apiam identifies its operating segments based on the species to which the Group provide veterinary services and supply
animal health products. The Group’s three (3) operating segments are:
• Dairy and Mixed;
• Feedlots;
• Pigs;
The segments are aggregated for reporting purposes on the basis that each segment has sales consisting predominantly
of S4 products, over the counter products and service revenue and that these products and services exhibit similar economic
characteristics across each business.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
41
Revenue
Revenue arises mainly from the sale of veterinary products and services.
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied
When the Group enters into transactions involving its products and services, the total transaction price for a contract is
allocated amongst the various performance obligations. Revenue is recognised either at a point in time or over time, when
the Group satisfies performance obligations by transferring the promised goods or services to its customers.
Sale of veterinary products and services
Revenue from the sale of veterinary products is recognised when the Group transfers control of the goods to the customer
and/or as contractual performance obligations are satisfied. Revenue from the sale of veterinary services is recognised as
the services are provided.
Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividends, other than
those from investments in associates, are recognised at the time the right to receive payment is established.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during
the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs
are expensed in the period in which they are incurred and reported in finance costs Note 8.
Intangible assets
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and
separately recognised. See Note 5.3 for information on how goodwill is initially determined. Goodwill is carried at cost less
accumulated impairment losses. Refer to Note 5.12 for a description of impairment testing procedures.
Customer Relationships
Customer Relationships represents the future economic benefits arising from existing customers within a business
combination that have been individually identified and separately recognised. Customer relationships are amortised over
the anticipated life of the relationship and have been determined to range between five and ten years.
Trademarks & Trade Names
Trademarks & Trade Names represents the future economic benefits arising from within a business combination that have
been identified and separately recognised. Trademarks & Trade Names are carried at cost less accumulated impairment
losses. The useful life is reviewed at each reporting date and each has been determined to have an indefinite useful life.
Capitalised development costs
Capitalised development costs represent costs that are directly attributable to the development of the Group’s IT
infrastructure and intellectual property. Capitalised development costs are measured at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over its expected useful life of
between two and five years.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
42
Property, plant and equipment
Leasehold improvements, plant and equipment, motor vehicles and assets under construction
Leasehold improvements, plant and equipment, motor vehicles and assets under construction are initially recognised at
acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and
condition necessary for it to be capable of operating in the manner intended by the Group’s management. Plant and
equipment and motor vehicles also include property held under finance lease (see Note 5.11). Leasehold improvements,
plant and equipment and motor vehicles are subsequently measured using the cost model, cost less subsequent
depreciation and impairment losses.
Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of buildings, IT
equipment and other equipment. The following useful lives are applied:
•
Leasehold improvements: 10 - 33%
Plant & equipment: 10 – 33%
•
• Motor vehicles: 20 - 25%
In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over
the term of the lease, if shorter.
Assets under construction commence depreciation once the asset is put into service.
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the
disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other
expenses.
Leased assets
For any new contracts entered into, the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a
contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange
for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are
whether:
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group
•
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout
the period of use, considering its rights within the defined scope of the contract
•
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether
it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The
right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct
costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any
lease payments made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use
asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the
present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is
readily available or the Group’s incremental borrowing rate.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
43
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is
remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss
if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense
in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease
liabilities have been recognised as current and non-current.
Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash
inflows (cash-generating units (CGUs). As a result, some assets are tested individually for impairment and some are tested
at the CGU level. Goodwill is allocated to those CGUs or a group of CGUs that are expected to benefit from synergies of
the related business combination and represent the lowest level within the Group at which management monitors goodwill.
CGUs or a Group of CGUs to which goodwill or indefinite life intangible assets has been allocated are tested for impairment
annually or more frequently if events or changes in circumstances indicate that they might be impaired. All other assets are
tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised for the amount by which the assets, CGUs or a group of CGUs carrying amount exceeds
its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use,
management estimates expected future cash flows from each CGU or group of CGUs and determines a suitable interest
rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly
linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and
asset enhancements. Discount factors are determined individually for each CGU or group of CGUs and reflect
management’s assessment of respective risk profiles, such as market and asset-specific risk factors.
Impairment losses for CGUs or group of CGUs reduce first the carrying amount of any goodwill allocated to that CGU or
group of CGUs. Any remaining impairment loss is charged pro rata to the other assets in the CGU or group of CGUs. With
the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist. An impairment charge is reversed if the CGUs or group of CGUs recoverable amount
exceeds its carrying amount.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
44
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs
(where applicable). Financial assets other than those designated and effective as hedging instruments are classified into
the following categories:
•
•
•
amortised cost
fair value through profit and loss (FVTPL)
fair value through other comprehensive income (FVOCI)
The classification is determined by both:
•
•
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as
FVTPL):
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash
flows
•
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest
on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall
into this category of financial instruments.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are
categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual
cash flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments
fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting
requirements apply.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial
assets in this category are determined by reference to active market transactions or using a valuation technique where no
active market exists.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
45
Impairment of financial assets
AASB 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected
credit loss (ECL) model’. Instruments within the scope of the requirements included loans and other debt-type financial
assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB
15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through
profit or loss.
The Group considers a broader range of information when assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the
future cash flows of the instrument. In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit
risk (‘Stage 1’) and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is
not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised
for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the
expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and
records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows,
considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its
historical experience, external indicators and forward-looking information to calculate the expected credit losses using a
provision matrix. The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk
characteristics they have been grouped based on the days past due. Refer to Note 35.3 for a detailed analysis of how the
impairment requirements of AASB 9 are applied.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or loss.
Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial
liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised
in profit or loss. All derivative financial instruments that are not designated and effective as hedging instruments are
accounted for at FVTPL.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs are assigned on the basis of weighted average
cost. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling
expenses.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
46
Income taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office
(ATO) and other fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date.
Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current
tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of
assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on
the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or
accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is
not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will
not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable
income, based on the Group’s forecast of future operating results which is adjusted for significant non-taxable income and
expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in
full.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and
liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except
where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) or directly
in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
The Group is not tax consolidated.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes
in value.
Equity, reserves and dividend payments
Share capital
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing
of shares are deducted from share capital, net of any related income tax benefits.
Corporate re-organisation reserve
The Corporate re-organisation reserve represents the difference between the fair value of the consideration paid and the
fair value of assets and liabilities acquired in a business combination whereby the business acquired was under common
control at the date of acquisition.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
47
Non-controlling interest acquisition reserve
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate
reserve within equity attributable to owners.
Non-controlling interest
Represents the portion of the net assets of subsidiary’s that are not 100% owned by the Group.
Retained earnings
Retained earnings include all current and prior period retained profits. Dividend distributions payable to equity shareholders
are included in other liabilities when the dividends have been approved in a general meeting prior to the reporting date. All
transactions with owners of the parent are recorded separately within equity.
Share based payments reserve
Recognises share-based payments accrued in employee incentive share plan.
Foreign currency translation reserve
Exchange differences relating to the translation of the Group’s controlled entities from their functional currencies into
Australian dollars are brought to account directly to the foreign currency translation reserve.
Employee benefits
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within
twelve (12) months after the end of the period in which the employees render the related service. Examples of such benefits
include wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee benefits are
measured at the undiscounted amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The Group’s liabilities for annual leave and long service leave are included in other long term benefits as they are not
expected to be settled wholly within twelve (12) months after the end of the period in which the employees render the related
service. They are measured at the present value of the expected future payments to be made to employees. The expected
future payments incorporate anticipated future wage and salary levels, experience of employee departures and periods of
service, and are discounted at rates determined by reference to market yields at the end of the reporting period on high
quality corporate bonds that have maturity dates that approximate the timing of the estimated future cash outflows. Any re-
measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the
periods in which the changes occur.
The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does
not have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective of
when the actual settlement is expected to take place.
Post-employment benefit plans
The Group provides post-employment benefits through various defined contribution plans.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
48
Share-based employee remuneration
The Group operates equity-settled share-based remuneration plans for its employees. None of the Group’s plans feature
any options for a cash settlement.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.
Where employees are rewarded using share-based payments, the fair values of employees’ services are determined
indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and
excludes the impact of non-market vesting conditions (for example profitability and sales growth targets). The share-based
payment expense is recorded proportionately over the vesting period.
Provisions, contingent liabilities and contingent assets
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the Group has a
present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will
be required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and
implemented, or management has at least announced the plan’s main features to those affected by it. Provisions are not
recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where
there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations. Provisions are discounted to their present values, where the time value of money is
material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations
are disclosed as contingent liabilities unless the outflow of resources is remote in which case no liability is recognised.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the
asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown
inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and
financing activities, which are disclosed as operating cash flows.
Rounding of amounts
The Parent Entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instruments 2016/191 and accordingly, amounts in the financial statements and directors’ report have been rounded off to
the nearest $1,000, or in certain cases, the nearest dollar.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
49
Significant management judgement in applying accounting policies
When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions
about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgement
The following are significant management judgements in applying the accounting policies of the Group that have the most
significant effect on the financial statements.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Group’s
future taxable income against which the deferred tax assets can be utilised.
Identification of CGUs and allocation of goodwill to CGUs or Groups of CGUs
CGUs are identified by determining the smallest identifiable group of assets that generate largely independent cash
inflows from other assets or groups of assets. Identifying those largely independent cash inflows requires significant
judgement in assessing the Group’s sources of revenue and how assets are utilised in generating those revenues.
Goodwill is required to be allocated to the CGUs or groups of CGUs that are expected to benefit from the synergies of the
combination. Significant judgement is required to assess which CGUs or groups of CGUs benefit from the synergies and
thus determine how the goodwill is allocated.
Estimation uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Impairment
Management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows
and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results
and the determination of a suitable discount rate (see Note 5.12).
Useful lives of property, plant and equipment and definite life intangible assets
Management reviews its estimate of the useful lives of property, plant and equipment and definite life intangible assets at
each reporting date, based on the expected utility of the assets. Uncertainties in these estimates may relate to technical
obsolescence or some other event.
Customer relationships
Management estimates core customer revenue, customer attrition rates and revenue growth rates when valuing customer
relationship intangible assets.
Identification of the core customer share of revenue requires management to estimate the percentage of recurring
revenue that can be attributed to the customer relationship as opposed to other factors such as convenience of the
location of the clinic. Estimation uncertainty exists in regard to the core revenue resulting from the calculated percentage
of recurring customers.
Management estimates the attrition rate for customers through assessment of the historical attrition rates of the acquired
customers. The estimates of attrition rates are uncertain to the extent that they may not reflect the historical attrition rates.
Management estimates the forecast revenue growth rate for acquired businesses by assessing historical performance of
the acquired business and there is uncertainty that the future growth rates of the customer base do not reflect the
estimate.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
50
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of a business combination
(see Note 5.3). Particularly, the fair value of contingent consideration is dependent on the outcome of many variables that
affect future profitability.
Leases – determination of the appropriate discount rate to measure lease liabilities
The Group enters into leases with third-party landlords and as a consequence the rate implicit in the relevant lease is not
readily determinable. Therefore, the Group uses its incremental borrowing rate as the discount rate for determining its
lease liabilities at the lease commencement date. The incremental borrowing rate is the rate of interest that the Group
would have to pay to borrow over similar terms which requires estimations when no observable rates are available.
Leases - Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group’s operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain
to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
51
6
Segment reporting
Identification of reportable operating segments
Management identifies operating segments based on the species to which the Group provide veterinary services and supply
animal health products. The Group’s three (3) operating segments are:
• Dairy and Mixed;
• Feedlots;
• Pigs;
Each of these operating segments is managed separately as each species group requires specific veterinary expertise
resources and marketing approach. These operating segments are monitored and strategic decisions are made on the basis
of adjusted segment operating results.
The segments are aggregated for reporting purposes on the basis that each segment has sales consisting predominantly
of S4 products (prescription based pharmaceuticals), over the counter products and veterinary service revenue and that
these products and services exhibit similar economic characteristics across each segment. Corporate overheads that
cannot be allocated to a specific segment are disclosed separately.
The revenues and profit generated by the Group’s operating segments are summarised as follows:
Segment information
Revenue from external customers
Segment operating costs
Segment adjusted operating profit before tax
Total reporting segment operating profit
Other income
Corporate overheads
Acquisition and integration costs
Restructure costs
Finance costs
Share of profit from equity accounted
investments
Net profit before tax
Income tax
Net profit after tax
7
Revenue
Sales revenue
Goods transferred at a point in time
Services transferred over time
Total revenue
2023
$'000
2022
$'000
191,757
(182,493)
9,264
157,057
(145,527)
11,530
9,264
318
(1,964)
(416)
(315)
(3,774)
53
3,166
(995)
2,171
2023
$'000
98,815
92,942
191,757
11,530
167
(1,807)
(1,802)
(139)
(1,570)
91
6,470
(1,931)
4,539
2022
$'000
90,411
66,646
157,057
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
8
Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leased buildings(i)
Leasehold improvements
Plant and equipment
Motor vehicles
Amortisation of intangibles
Total depreciation and amortisation
Right of use assets
(i)
Finance costs
Interest expense on borrowings
Interest expense on lease liabilities
Share-based payments expense
Rental expense
52
2022
$’000
3,323
446
2,133
882
1,575
8,359
1,168
402
1,570
765
130
2023
$’000
4,129
606
2,366
1,074
2,052
10,227
3,180
594
3,774
568
613
9
Income tax expense
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective
tax rate of the Group at 30% (2022: 30%) and the reported tax expense in profit or loss are as follows:
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2022 - 30%)
Adjustments for non-deductible expenses:
Sundry items
Income tax expense
Income tax expense
Adjustment for current tax in prior periods
Total current tax expense
Tax expense comprises
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Tax expense/(benefit)
Note 18 provides information on deferred tax assets and liabilities.
2023
$’000
3,166
950
9
959
959
36
995
1,620
(625)
995
2022
$’000
6,470
1,941
(7)
1,934
1,934
(3)
1,931
2,717
(786)
1,931
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
53
10 Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents
11 Trade and other receivables
Trade receivables, gross
Less: allowance for expected credit losses
Other receivables
Rebates receivable
2023
$'000
3,172
3,172
2022
$'000
2,845
2,845
2023
$'000
13,352
(642)
65
1,183
13,958
2022
$'000
12,951
(503)
58
1,117
13,623
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair
value. An allowance for expected credit losses has been recognised using a provision matrix based on historical credit loss
rates. Refer to Note 35.3 Credit risk analysis.
Balance at 1 July
Acquired through business combinations
Impairment loss
Balance 30 June
12
Inventories
Stock on hand, at cost
Less provision for obsolescence
Stock in transit, at cost
13 Other current assets
Prepayments
Security deposits
2023
$'000
503
113
26
642
2023
$'000
17,921
(2,607)
158
15,472
2023
$'000
1,700
430
2,130
2022
$'000
327
169
7
503
2022
$'000
17,691
(142)
232
17,781
2022
$'000
1,313
315
1,628
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
54
14
Property, plant and equipment
Details of the Group’s property, plant and equipment and their carrying amount are as follows:
Leased
Buildings
(i)
Leasehold
improve-
ments
Plant and
equipment
Motor
vehicles
(ii)
Assets
under
construction
Total
$’000
$’000
$’000
$’000
$’000
$’000
26,773
(7,645)
19,128
3,527
(988)
2,539
16,665
7,510
279
54,754
(9,340)
(5,141)
-
(23,114)
7,325
2,369
279
31,640
19,128
5,245
2,539
2,643
7,325
3,352
2,369
2,123
279
31,640
(195)
13,168
5,159
557
847
616
(4,129)
(606)
(2,366)
(1,074)
-
-
7,179
(8,175)
25,403
5,133
9,158
4,034
84
43,812
36,110
6,635
19,957
10,044
84
72,830
(10,707)
(1,502)
(10,799)
(6,010)
-
(29,018)
25,403
5,133
9,158
4,034
84
43,812
At 30 June 2022
At cost
Accumulated depreciation
Net book value
Year ended 30 June 2023
Opening net book value
Additions
Additions through business
combinations
Depreciation charge
Closing net book value
At 30 June 2023
Cost
Accumulated depreciation
Net book amount
i) Right of use Assets
ii)
Includes leased and owned motor vehicles
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
15 Intangible assets
At 30 June 2022
Cost
Accumulated amortization and impairment
Carrying amount at 30 June 2022
At July 1 2022
Opening net book value
Additions
Additions through business combinations
Amortisation
Closing net book value
At 30 June 2023
Cost
Accumulated amortization and impairment
Net book value
55
Total
$'000
130,761
(3,829)
126,932
126,932
350
38,384
(2,052)
163,614
Customer
Relation-
ships (i)
$’000
Trademarks
& Trade
Names (i)
$’000
Capitalised
develop-
ment costs
$'000
Goodwill
(i)
$'000
113,294
-
113,294
113,294
-
32,017
-
145,311
11,919
(2,353)
9,566
9,566
-
5,739
(1,642)
13,663
2,993
(1,476)
1,517
1,517
350
-
(410)
1,457
2,555
-
2,555
2,555
-
628
-
3,183
3,183
-
3,183
145,311
-
145,311
17,658
(3,995)
13,663
3,313
(1,856)
1,457
169,465
(5,851)
163,614
i) Opening balances have changed due to a restatement of a prior period. Refer to Note 4.
Impairment testing
Goodwill is allocated to the CGU or group of CGUs that are expected to benefit from the synergies of the business
combination. Each CGU or group of CGUs to which goodwill is allocated represents the lowest level within the entity at
which goodwill is monitored for internal management purposes and does not exceed an operating segment before
aggregation, being the Dairy and mixed, Feedlot and Pigs segments.
The recoverable amounts of the CGUs and groups of CGUs were determined based on value-in-use calculations, covering
a detailed one year forecast with annual growth rates applied over a five year term, followed by an extrapolation of expected
cash flows for the units’ remaining useful lives using the terminal growth rates determined by management. The present
value of the expected cash flows of each CGU or group of CGUs is determined by applying the following key assumptions:
Annual sales growth Pig CGU %
Annual Sales growth Feedlot CGU %
Annual Sales growth Dairy & mixed CGUs %
Annual operating expenses growth rate %
Long-term growth rate %
Post-tax discount rate %
2023
3.00%
2022
3.00%
0.00% to 5.00% 5.00% to 7.50%
5.00%
2.00%
2.50%
10.00%
5.00%
2.00%
2.50%
10.79%
2023
$’000
2022
$’000
Goodwill allocation across CGUs or groups of CGUs
145,311
113,294
The Directors and management have considered and assessed reasonably possible changes for key assumptions and have
not identified any instances that could cause the carrying amount for any of the CGUs to exceed its recoverable amount.
Growth rates
The annual sales growth rate as per the table in 15.1, annual operating expense growth rate of 2% and the long-term
growth rate of 2.50% reflect the average growth rates for the industry.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
56
Discount rates
The post-tax discount rate of 10.79% reflects appropriate adjustments relating to market risk and other risk factors. The
discount rate is applied to each CGU or Group of CGU’s because they share common risks.
Cash flow assumptions
Management’s key assumptions include stable profit margins, based on experience in this market. The Group’s
management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect
stable profit margins achieved immediately before the budget period. Efficiency improvements have been taken into account
and prices and wages reflect publicly available forecasts of inflation for the industry.
Apart from the considerations described in determining the value-in-use of the CGUs and groups of CGUs described above,
management is not currently aware of any other probable changes that would necessitate changes in its key estimates.
The following is a summary of the CGUs or Groups of CGUs to which goodwill is allocated.
Feedlot
Dairy and mixed
Balance 1 July 2022
Acquisitions
30 June 2023
$’000
13,330
-
13,330
$’000
91,287
32,017
Pig
$’000
Total
$’000
8,677
113,294
-
32,017
123,304
8,677
145,311
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
57
16
Leasing
Lease liabilities are presented in the statement of financial position as follows:
Lease liabilities (current)
Lease liabilities (non-current)
2023
$’000
2022
$’000
4,984
3,558
24,043
17,753
29,027
21,311
The Group has leases for its warehouses, clinics, offices, motor vehicles and equipment. With the exception of short-term
leases and leases of low-value assets, each lease is reflected in the balance sheet as a right-of-use asset and a lease
liability.
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 30 June 2023 were
as follows:
Minimum lease
payments due
Within
one year
One to
two years
$’000
$’000
Two to
three
years
$’000
Three
to four
years
$’000
Four to
five
years
$’000
After
five
years
$’000
Total
$’000
30 June 2023
Lease payments
Finance charges
5,684
(700)
5,585
(565)
5,052
4,938
(430)
(303)
3,405
(185)
6,817
(271)
31,481
(2,454)
Net present values
4,984
5,020
4,622
4,635
3,220
6,546
29,027
Lease payments not recognised as a liability
The group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months
or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In
addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as
incurred.
The expense relating to payments not included in the measurement of the lease liability is as follows:
Short term leases
Leases of low value assets
17 Commitments
2023
$’000
525
88
613
2022
$’000
64
65
129
2023
$’000
2022
$’000
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Property, plant and equipment
1,198
-
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
58
18 Deferred tax assets and liabilities
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
The balance of deferred tax assets and liabilities comprises temporary differences
attributable to:
Current assets
Trade and other receivables
Inventory
Non-current assets
Property, plant & equipment
Intangible assets
Current liabilities
Trade and other payables
Provisions
Other
Unused tax losses
Listing and acquisition costs
Equity raising costs
Deferred tax assets
Deferred tax liabilities
2023
$'000
2022
$'000
198
994
161
237
(3,977)
(5,047)
(2,216)
(3,626)
24
3,421
3,411
635
228
(113)
-
2,999
2,393
572
312
832
3,605
(3,718)
4,458
(3,626)
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial
position.
Tax losses
$'000
Provis-
ions
$'000
Trade
receiv-
ables
$'000
Listing &
acquis-
ition costs
$'000
Equity
raising
costs
$'000
Invento
ry
$'000
Trade
and other
payables
$’000
Property,
plant &
equipment
$’000
Intangible
assets
$’000
At 1 July 2021
1,440
2,267
110
111
72
109
(Charged)/credited:
to P&L
at 30 June 2022
(Charged)/credited:
to P&L
At 30 June 2023
•
•
•
953
2,393
732
2,999
1,018
3,411
422
3,421
51
161
37
198
461
572
63
635
240
312
(84)
228
128
237
757
994
(622)
(2,020)
Total
$'000
1,467
(1,594)
(2,216)
(1,606)
(3,626)
(635)
832
-
-
-
24
24
(1,761)
(3,977)
(1,421)
(5,047)
(945)
(113)
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
19 Trade and other payables
Trade payables
Sundry payables and accrued expenses
59
2022
$'000
5,737
5,231
2023
$'000
6,317
6,118
12,435
10,968
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
20 Current tax liabilities
Current tax payable
21 Borrowings
Current:
Bank loans (a)
less capitalized costs
Total current borrowings
Non-current
bank loans (a)
Total non-current borrowings
Refer to Note 36 for information on financial instruments.
Secured liabilities and assets pledged as security
The total secured liabilities (current and non-current) are as follows:
Bank loans
Less capitalised borrowing costs
Assets pledged as security
2023
$'000
889
2023
$'000
2,956
(22)
2,934
2022
$'000
1,859
2022
$'000
2,932
(18)
2,914
66,066
66,066
39,165
39,165
2023
$’000
69,022
(22)
69,000
2022
$’000
42,097
(18)
42,079
(a) Bank loans are secured by first ranking general security agreements in relation to the current and future assets
of Apiam and each wholly-owned subsidiary.
Banking covenants
The financial covenants that must be complied with applicable to bank facilities are:
• Maximum gearing ratio, defined as the ratio of Net Debt divided by Net Debt plus Equity, is to be no greater than 45%
as of the 30th June each financial year, with
o Net Debt meaning the amount owing (excluding AASB16 leases) less cash and cash equivalent: and
o
Equity meaning total assets minus total liabilities.
• Maximum operating leverage ratio, defined as the ratio of Net Debt divided by EBITDA, is to be no greater than 3.5x
as of the 30th June each financial year, with
o
EBITDA meaning earnings before interest, tax, depreciation and amortisation, excluding any one-off
acquisition and integration/system expenses
The Group complied with all bank covenants during the period.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank - term loan facilities
Bank - master asset finance agreement for equipment finance
Bank - overdraft facility
Bank - credit card facility
Used at reporting date
Bank - term loan facilities
Bank - master asset finance agreement for equipment finance
Unused at reporting date
Bank - term loan facilities
Bank - master asset finance agreement for equipment finance
Bank - overdraft facility
Bank - credit card facility
22 Employee benefit obligations
Leave obligations current
Leave obligations non-current
Employee benefits
60
2022
$'000
83,700
4,500
1,000
300
89,500
42,097
1,803
43,900
41,603
2,697
1,000
300
45,600
2022
$'000
8,991
657
9,648
2023
$'000
100,000
4,500
500
500
105,500
69,022
2,875
71,897
30,978
1,625
500
500
33,603
2023
$'000
10,677
543
11,220
The provision for employee benefits relates to the group’s liability for long service leave and annual leave.
Amounts not expected to be settled within the next 12 months
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service
leave where employees have completed the required period of service and also those where employees are entitled to pro-
rata payments in certain circumstances. The entire amount of the provision of $10,677 (2022: $8,972) is presented as
current, since the group does not have an unconditional right to defer settlement for any of these obligations. However,
based upon experience, the group does not expect all employees to take the full amount of accrued leave or require payment
within the next twelve months.
23 Other current liabilities
Contingent consideration for acquisitions
Net payable to vendors on acquisition
Contract liability
Make good provision
.
2023
$'000
-
-
1,219
127
1,346
2022
$'000
190
142
19
147
498
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
61
24 Equity
24.1 Share capital
The share capital of Apiam consists only of fully paid ordinary shares; the shares do not have a par value. All shares are
equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of
Apiam.
Shares issued and fully paid
· beginning of the period
· shares issued as consideration for business
acquisitions
· shares issued on achievement of earnout for
prior year acquisition
· issued under dividend reinvestment plan
· share placement
· transaction costs on issue of new share capital
· employee shares issued
Shares issued and fully paid
Total shares authorised at the end of the period
2023
Shares
2022
Shares
2023
$'000
2022
$’000
166,388,823
129,896,893
127,249
101,010
11,021,249
5,976,370
7,119
5,333
-
-
-
-
33,475
-
-
516,076
177,959,623
177,959,623
1,021,307
28,924,553
-
569,700
166,388,823
166,388,823
25
-
-
447
134,840
134,840
919
20,247
(748)
488
127,249
127,249
Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders’
meeting of Apiam.
25 Reserves
Details of reserves are as follows:
Balance at 1 July 2021
Employee share plan incentive
Foreign currency translation
Balance at 30 June 2022
Employee share plan incentive
Foreign currency translation
Balance at 30 June 2023
26 Non-controlling interests
Issued capital
Current year earnings
Retained profits carried forward
Total non-controlling interests
Corporate
reorganisation
reserve
$’000
(26,692)
-
-
(26,692)
-
-
(26,692)
Non-
controlling
interest
acquisition
reserve
$’000
(6,615)
-
-
(6,615)
-
-
(6,615)
Share
based
payment
reserve
Foreign
Currency
Translation
reserve
$’000
595
276
-
871
122
-
993
$’000
(79)
-
60
(19)
-
25
6
Total
$’000
(32,791)
276
60
(32,455)
122
25
(32,308)
2023
$’000
140
(106)
(6)
28
2022
$’000
141
(100)
93
134
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
62
27 Earnings per share and dividends
Earnings per share
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the Parent
Company as the numerator.
Profit attributable to Owners of Apiam Animal Health
Limited
2023
$'000
2,277
2,277
2022
$'000
4,639
4,639
The weighted average number of shares for the purposes of calculating basic and diluted earnings per share are as follows:
weighted average number of shares used in basic earnings per share
weighted average number of performance rights
weighted average number of shares used in diluted earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
Dividends
During the year, the following dividends were declared and paid.
fully franked final dividend (1.2 cents a share)
fully franked interim dividend (1.2 cents a share)
fully franked final dividend (0.4 cents a share)
Franking credits
The amount of the franking credits available for
subsequent:
Balance at the end of the reporting period
Franking debits that will arise from the payment of
dividends recognised as a liability at the end of the
reporting period
franking credits that will arise from the payment of the
amount of provision for income tax
2023
Number
175,031,496
2,730,416
2022
Number
135,811,154
2,330,783
177,761,912
138,141,937
1.30
1.28
3.42
3.36
2023
$'000
-
-
697
697
2022
$'000
1,616
1,658
-
3,274
2023
$'000
2022
$'000
12,528
11,179
(305)
(856)
889
13,112
1,859
12,182
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
63
28 Reconciliation of cash flows from operating activities
a) Reconciliation of cash flows from operating activities
(a) Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit for the period
Adjustments for:
· depreciation and amortisation expense
· doubtful debt expense
· obsolete stock provision
· amortisation of borrowing costs
· profit on sale of fixed assets
· share benefits expense
· share of profit in equity accounted investments
·
Net changes in working capital:
· decrease/(increase) in trade and other receivables
· decrease/(increase) in inventories
· decrease/(increase) in other assets
· decrease/(increase) in deferred tax asset
· increase/(decrease) in trade and other payables
· increase/(decrease) in income tax payable
· increase/(decrease) in deferred tax liability
· increase/(decrease) in employee benefit obligations
· increase/(decrease) in other liabilities
· increase/(decrease) in other current liabilities
· increase/(decrease) in foreign currency translation reserve
Net cash received in operating activities
29 Employee remuneration
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Employee benefits – expense
Wages and salaries expense
Bonus expense
Share-based payment expense
Superannuation expense
Employee benefits expense
2023
$’000
2,171
10,227
233
2,464
6
(318)
570
(53)
2,028
1,166
(387)
853
(246)
(1,411)
(1,478)
522
-
1,033
25
17,405
2023
$’000
75,567
159
568
6,550
82,844
2022
$’000
4,539
8,359
97
100
22
(167)
764
(91)
1,347
(668)
(16)
(171)
295
273
(293)
562
89
(64)
61
15,038
2022
$’000
56,325
196
765
4,674
61,960
Share-based employee remuneration
As at 30 June 2023, the Group maintained two share-based payment schemes for employee remuneration, the Future
Leaders Long Term Incentive Plan and the Senior Executive Long Term Incentive Plan. Performance rights under these
Plans will vest if certain conditions are met. Participants have to achieve performance targets and have to be employed
until the end of the agreed vesting period. Upon vesting, each participant will be issued with ordinary shares as defined in
the Incentive Plan. The fair value of rights offered for the Future Leaders Long Term Incentive Plan is based on the share
price at grant date. The fair value of rights offered for the Senior Executive Long Term Incentive Plan is determined using
the Monte Carlo valuation model that takes into account factors specific to the performance conditions, such as the grant
date, share price at grant date, vesting period, risk free rate, volatility and dividend yield. The performance rights will be
issued at nil exercise price upon vesting.
The number of performance rights held by employees of the Group at 30 June 2023 is set out below:
Type
Performance rights
Balance at
1/07/2022
2,529,301
Granted
1,163,563
Vested and
Exercised
(391,376)
Forfeited
(322,063)
Held as at
30/06/2023
2,979,425
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
64
30 Auditor remuneration
Audit services – Grant Thornton Audit Pty Ltd
Remuneration for audit or review of financial statements
Other services – Grant Thornton
•
taxation services
• due diligence services
Total other services remuneration
Total auditor’s remuneration
2023
$
2022
$
352,839
235,394
2,120
122,669
124,789
477,628
13,400
118,900
132,300
367,694
31 Related party transactions
The Group’s related parties include key management, post-employment benefit plans for the Group’s employees and others
as described below.
Transactions with key management personnel
Key management of the Group are the executive members of Apiam’s Board of Directors and members of the Executive
Team. Key management personnel remuneration includes the following expenses:
Short-term employee benefits:
• salaries including bonuses and non-monetary benefits
• accrued annual leave entitlements
• non-monetary benefits
Total short-term employee benefits
Long- term employee benefits:
• Accrued long service leave entitlements
Share based payments expense
Total long-term employee benefits
Post-employment benefits:
• superannuation
Total post-employment benefits
Total remuneration
2023
$
2022
$
1,550,579
1,310,798
61,460
15,602
28,597
19,783
1,627,641
1,359,178
59,768
47,283
107,051
107,232
107,232
25,114
55,637
80,751
75,392
75,392
1,841,924
1,515,321
Other transactions with key management personnel
The Group rents premises at Piper Lane, Bendigo East, Victoria. The premises are owned by an entity associated with Chris
Richards. Rental payments made amounted to $378,303 (2022: $360,193).
The Group rents premises at Rubicon Street, Smithton, Tasmania. The premises are owned by an entity associated with
Chris Richards. Rent payments made amounted to $135,941 (2022: $133,752).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris Richards. Lease payments
made amounted to $119,186 (2022: $113,481).
32 Contingent liabilities
In the Directors’ view, there are no contingent assets or liabilities that will have a material effect on the Group.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
65
33 Business combination
The Group applies the acquisition method in accounting for business combinations.
During the reporting period the Group acquired 100% of the business assets of the veterinary clinics listed below. The
number of fully paid shares issued and fair value per share is included.
Veterinary Business
Acquisition Date
No. of Shares
Fair value per
Victorian Equine Group (VEG)
Victorian Equine Group (VEG)
Harradine & Associates (HAV)
1 July 2022
1 July 2022
1 November 2022
Merimbula, Pambula & Eden Vet Clinics (MPEVC)
1 February 2023
Townsend Veterinary Clinic (TVC)
1 April 2023
issued
3,827,019
215,952
683,851
1,079,461
n/a
share
$0.65
$0.73
$0.72
$0.62
n/a
During the reporting period the Group acquired 100% of the issued share capital and voting rights of the entities listed below.
The number of fully paid shares issued and fair value per share is included.
Entity
Acquisition Date
No. of Shares
Fair value
The Vet Practice (TVP)
Hunter Equine Centre (HEC)
Singleton Veterinary Hospital (SIVH)
1 July 2022
8 December 2022
1 February 2023
issued
per share
1,697,573
623,501
2,893,892
$0.65
$0.665
$0.62
The following detailed table highlights the fair value of the identifiable assets acquired and liabilities assumed as at the date
of acquisition for each of the business combinations undertaken in the period.
The acquisition of these veterinary businesses expands Apiam’s presence in equine, dairy and mixed clinics in regional
Victoria, New South Wales and Western Australia.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
Fair value of consideration transferred
Amounts settled in cash
Amount settled by issue of shares at fair value
Payable to vendors
Total fair value of consideration transferred
Recognised amounts of identifiable net assets
Cash and equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Trademarks and trade names
Customer relationships
Property, plant & equipment
Deferred tax assets
Total non-current assets
Trade and other payables
Other current liabilities
Current tax liabilities
Employee benefit obligations
Lease liabilities
Total current liabilities
Lease liabilities
Employee benefit obligations
Deferred tax liabilities
Total non-current liabilities
Identifiable net assets
Goodwill on acquisition
Net cash outflow on acquisition
VEG
$’000
7,287
2,645
-
TVP
$’000
7,006
1,103
-
HAVB
$’000
2,184
492
-
66
HEC
$’000
6,304
415
-
SIVH
$’000
MPEVC
$’000
5,739
1,794
-
2,899
669
-
TVCA
$’000
1,350
-
-
Total
$’000
32,769
7,118
-
9,932
8,109
2,676
6,719
7,533
3,568
1,350
39,887
-
314
245
-
559
237
1,029
1,597
-
2,863
110
-
-
86
127
323
1,244
6
352
1,602
1,497
8,435
7,287
112
35
180
26
353
-
906
1,367
-
2,273
400
-
200
311
116
1,027
619
23
171
813
786
7,323
6,894
-
308
169
-
477
27
247
953
-
1,227
-
-
-
67
142
209
589
9
54
652
843
1,833
2,184
89
1,719
165
36
2,009
180
1,378
1,937
-
3,495
900
-
178
132
131
1,341
1,369
-
414
1,783
2,380
4,339
6,215
25
189
175
52
441
184
1,531
708
-
2,423
296
-
63
189
92
640
399
8
453
860
1,364
6,169
5,714
-
22
301
1
324
-
525
186
-
711
1
-
-
168
62
231
64
10
102
176
-
1
86
-
87
-
123
430
-
553
-
-
-
41
203
244
-
-
24
24
628
2,940
2,899
372
978
1,350
226
2,588
1,321
115
4,250
628
5,739
7,178
-
13,545
1,707
-
441
994
873
4,015
4,284
56
1,570
5,910
7,870
32,017
32,543
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
67
Consideration transferred
Acquisition related costs amounting to $416,412 are not included as part of the consideration transferred and have been
recognised as an expense in the consolidated statement of profit of loss, as acquisition expenses. Acquisition related
costs were made up of state government transfer duties, due diligence audit fees, legal, accounting and other
miscellaneous expenses.
Identifiable net assets
The accounting for all business combinations has been finalised as at 30 June 2023.
The fair value of the trade and other receivables acquired as part of the business combinations amounted to $2,588,000
with a gross contractual amount of $2,701,000. As at the acquisition date, the Group’s best estimate of the contractual
cash flows not expected to be collected amounted to $113,000.
There were no contingent liabilities assumed from the acquisitions and no separate transactions.
Goodwill
The goodwill that arose on the combinations can be attributed to the synergies expected to be derived from the
combination including implementation of the Groups programs, software systems, support networks, supply and
employment contracts. Goodwill has been provisionally allocated to CGUs at 30 June 2023 and is attributable to the Dairy
& mixed segment. The goodwill that arose from this business combination is not expected to be deductible for tax
purposes.
34 Interests in subsidiaries
Composition of the Group
Set out below details of the subsidiaries held directly by the Group:
Name of the Subsidiary
Chris Richards & Associates Pty Ltd
Country Vet Wholesaling Pty Ltd
Apiam Logistics Services Pty Ltd
Apiam Management Pty Ltd
Southern Cross Feedlot Services Pty Ltd
Westvet Wholesale Pty Ltd
Portec Veterinary Services Pty Ltd
Pork Storks Australia Pty Ltd
McAuliffe Moore & Perry Pty Ltd
Warrnambool Veterinary Clinic Pty Ltd
Scottsdale Veterinary Services Pty Ltd
Smithton Veterinary Service Pty Ltd
AAH Clinics NSW & QLD Pty Ltd
AAH - Bell Vet Services Pty Ltd
CVH Gippsland Pty Ltd
CVH Southern Riverina Pty Ltd
AAH Veterinary Services Pty Ltd
CVH iVet Pty Ltd (deregistered 30/10/2022)
Tasvet Wholesale Pty Ltd
Quirindi Feedlot Services Pty Ltd
Quirindi Veterinary Clinic Pty Ltd
Quipolly Equine Centre Pty Ltd
AAH Veterinary Clinics Pty Ltd
Gympie & District Veterinary Services Pty Ltd
Apiam Solutions LLC
Fur Life Foundation Ltd
Country of
incorporation
and principal
place of
business
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
USA
Australia
Principal activity
Veterinary services
Wholesale supply
Transport
Payroll
Veterinary services
Wholesale supply
Veterinary services
Genetics
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Dormant
Dormant
Veterinary services
Veterinary services
Veterinary services
Veterinary Services
Veterinary Services
Distribution
Charity
Group proportion of
ownership interests
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
51%
100%
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
51%
100%
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
South Yarra Pharma Pty Ltd
Animal Consulting Enterprises Pty Ltd
The Trustee for Grampians Animal Health
Unit Trust
CrosVet Pty Ltd
Agnes Banks Equine Clinic Pty Limited
North Hill Veterinary Clinic Pty Ltd
The Vet Practice Pty Ltd
Hunter Equine Centre Pty Ltd
Singleton Veterinary Hospital Pty Limited
Australia
Australia
Veterinary Services
Manufacturing
Australia
Veterinary Services
Australia
Australia
Australia
Australia
Australia
Australia
Veterinary Services
Veterinary Services
Veterinary Services
Veterinary Services
Veterinary Services
Veterinary Services
100%
100%
100%
100%
100%
100%
100%
100%
100%
Losing control over a subsidiary during the reporting period
There was no loss of control over a subsidiary during the reporting period.
Interests in unconsolidated structured entities
The Group has no interests in unconsolidated structured entities.
35
Financial instrument risk
Risk management objectives and policies
68
100%
100%
100%
100%
100%
100%
0%
0%
0%
The Group is exposed to various risks in relation to financial instruments. The main types of risks are market risk, credit
risk and liquidity risk.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and
focuses on actively securing the Group’s short to medium-term cash flows by minimising the exposure to financial markets.
Long-term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options.
The most significant financial risks to which the Group is exposed are described below.
Market risk analysis
The Group is exposed to market risk through its use of financial instruments and specifically to interest rate risk, which result
from both its operating and investing activities.
Interest rate sensitivity
The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. At 30 June 2023, the Group
is exposed to changes in market interest rates through bank borrowings at variable interest rates.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 1%
(2022: +/- 1%). These changes are considered to be reasonably possible based on observation of current market conditions.
The calculations are based on a change in the average market interest rate for each period, and the financial instruments
held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.
30-Jun-23
30-Jun-22
Profit for the year
Equity
$’000
+1%
555
399
$’000
-1%
(555)
(399)
$’000
+1%
555
399
$’000
-1%
(555)
(399)
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
69
Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to credit risk
from financial assets including cash and cash equivalents held at banks, trade and other receivables. The Group’s maximum
exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised
below:
Classes of financial assets:
Cash and cash equivalents
Trade and other receivables
2023
$’000
3,172
13,958
17,130
2022
$’000
2,845
13,623
16,468
The credit risk is managed on a group basis based on the Group’s credit risk management policies and procedures.
The credit risk in respect of cash balances held with banks and deposits with banks are managed via only banking with
major reputable financial institutions.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group
and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings
and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with
creditworthy counterparties.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single
counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number of
customers in various industries and geographical areas. Based on historical information about customer default rates
management consider the credit quality of trade receivables that are not past due or impaired to be good.
Trade receivables are written off (ie. derecognised) when there is no reasonable expectation of recovery.
The Group’s management considers that all of the above financial assets that are not impaired or past due for each of the
30 June reporting dates under review are of good credit quality.
At 30 June, the Group has made an allowance for expected credit losses (see Note 11) based on past due amounts and
prior trading history. The amounts at 30 June analysed by the length of time past due, are:
Past due under 30 days
Past due 30 days to under 60 days
Past due 60 days and over
Total
2023
$’000
1,889
584
1,437
3,910
2022
$’000
2,035
646
1,070
3,751
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
70
Liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs by
monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows
due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual
maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as
well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period
are identified monthly. Net cash requirements are compared to available borrowing facilities in order to determine headroom
or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The Group’s objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day periods at
a minimum. This objective was met for the reporting periods. Funding for long-term liquidity needs is additionally secured
by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its
cash resources and trade receivables. The Group’s existing cash resources and trade receivables significantly exceed the
current cash outflow requirements. Cash flows from trade and other receivables are all contractually due within one (1)
month.
As at 30 June 2023, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
30 June 2023
Bank borrowings
Trade and other payables
Total
Within 6
months
$’000
6 - 12
months 1 - 4 years
$’000
$’000
2,934
12,435
15,369
-
-
-
66,066
-
66,066
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
30 June 2022
Bank borrowings
Trade and other payables
Total
Within 6
months
$’000
6 - 12
months
$’000
1 - 4 years
$’000
2,914
10,968
13,882
-
-
-
39,165
-
39,165
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the
liabilities at the reporting date.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
71
36
Fair value measurement
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three
(3) levels of a fair value hierarchy. The three (3) levels are defined based on the observability of significant inputs to the
measurement, as follows:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
•
Level 3: unobservable inputs for the asset or liability
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a
recurring basis at 30 June 2023 and 30 June 2022:
30 June 2023
Contingent consideration
Total liabilities
Net fair value
30 June 2022
Contingent consideration
Total liabilities
Net fair value
Level 1
$'000
-
-
-
Level 1
$'000
-
-
-
Level 2
$'000
-
-
-
Level 2
$'000
-
-
-
Level 3
$'000
-
-
-
Level 3
$'000
190
190
190
Total
$'000
-
-
-
Total
$'000
190
190
190
Measurement of fair value of financial instruments
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair
values, in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based
on the characteristics of each instrument, with the overall objective of maximising the use of market-based information. The
finance team reports directly to the Chief Financial Officer (CFO) and to the Audit and Risk Management Committee.
Valuation processes and fair value changes are discussed among the Audit Committee and the valuation team at least
every year, in line with the Group’s reporting dates.
The valuation techniques used for instruments categorised in Level 3 are described below:
Contingent consideration (Level 3)
The fair value of contingent consideration related to the acquisition of business combinations is considered to be face value
as the payments become due within the next six (6) months.
The following table provides information about the sensitivity of the fair value measurement to changes in the most significant
inputs:
Significant unobservable input
Estimate of the input
Sensitivity of the fair value measurement to input
Probability of meeting target
95%
-
Level 3 Fair value measurements
The reconciliation of the carrying amounts of financial instruments classified
within Level 3 is as follows:
Contingent consideration
Balance at 1 July
Contingent consideration for acquisitions / (released to profit and loss)
Balance at 30 June
2023
$’000
190
(190)
-
2022
$’000
-
190
190
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
72
37 Capital management policies and procedures
The Group’s capital management objectives are:
•
•
to ensure the Group’s ability to continue as a going concern, and
to provide an adequate return to shareholders;
by pricing products and services commensurately with the level of risk.
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on
the face of the statement of financial position. The Group’s goal in capital management is to maintain a gearing ratio below
45% (ratio of net debt to net debt and equity). This is in line with the Group’s covenants resulting from the banking facilities
it has taken out from December 2015.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure while
avoiding excessive leverage. This takes into account the subordination levels of the Group’s various classes of debt. The
Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the
risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
The amounts managed as capital by the Group for the reporting periods under review are summarised as follows:
Total equity
Cash and cash equivalents
Capital
Total equity
Borrowings
Overall financing
Capital-to-overall financing ratio
2023
$'000
117,896
3,172
121,068
117,896
69,000
186,896
65%
2022
$'000
108,684
2,845
111,529
108,684
42,079
150,763
74%
The Group has honoured its covenant obligations, including maintaining capital ratios, since the banking loans were taken
out in December 2015.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
73
38 Parent entity information
Information relating to Apiam Animal Health Limited (‘the Parent Entity’):
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Share based payment reserve
Retained earnings / (Accumulated losses)
Total equity
Statement of profit or loss and other comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
The Parent Entity has entered into a deed of cross guarantee. Refer Note 40 for details.
The Parent Entity had no contingent liabilities at 30 June 2023 (2022: $nil).
39 Post-reporting date events
2023
$’000
2022
$’000
2,628
199,167
6,977
75,251
119,567
134,519
993
(17,616)
117,896
2,287
153,941
5,097
45,257
108,684
126,928
871
(19,115)
108,684
2,682
53
2,735
4,348
91
4,439
On 1 July 2023 the Group acquired the business assets of Boyne Tannum Vet Surgery, a provider of veterinary services in
the Gladstone region of Queensland. The consideration consisted of an initial cash payment of $2,432,315. The prima facie
value of net assets acquired is $140,641 and the prima facie goodwill is $2,492,133. The prima facie balance sheet is not
yet fair valued and is subject to change. The goodwill that arose on the combination can be attributed to the synergies
expected to be derived from the combination including implementation of the Groups programs, software systems, support
networks, supply and employment contracts. Separately identifiable intangible assets (customer relationships) are expected
and have not yet been fair valued.
The acquisition of this veterinary business expands Apiam’s presence in regional Queensland. At this time the acquisition
have not been finalised and the goodwill cannot be quantified.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
74
40 Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the
others:
Chris Richards & Associates Pty Ltd
Country Vet Wholesaling Pty Ltd
Apiam Logistics Services Pty Ltd
Apiam Management Pty Ltd
Southern Cross Feedlot Services Pty Ltd
Westvet Wholesale Pty Ltd
Pork Storks Australia Pty Ltd
McAuliffe Moore & Perry Pty Ltd
Warrnambool Veterinary Clinic Pty Ltd
Scottsdale Veterinary Services Pty Ltd
Smithton Veterinary Service Pty Ltd
AAH Clinics NSW & QLD Pty Ltd
AAH - Bell Vet Services Pty Ltd
CVH Gippsland Pty Ltd
CVH Southern Riverina Pty Ltd
CVH Border Pty Ltd
Tasvet Wholesale Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved of the requirement to prepare financial statements
and a directors’ report under Legislative Instrument 2016/785 issued by the Australian Securities and Investments
Commission. No entities were added or removed during the financial year.
Set out below is a consolidated statement of profit or loss and other comprehensive income of the parties to the Deed.
Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2023
Continuing operations
Revenue
Other income
Expenses
Changes in inventory
Cost of materials
Employee benefit expenses
Depreciation of property, plant and equipment
Other operating expenses
Finance costs
Share of profit from equity accounted investments
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit from continuing operations
Profit for the year
2023
$'000
2022
$'000
132,220
112,416
322
139
(2,549)
(43,602)
(59,945)
(7,038)
(12,836)
(3,519)
53
1,594
(42,635)
(48,018)
(6,256)
(11,898)
(1,476)
91
3,106
3,957
(1,030)
2,076
(1,180)
2,777
2,076
2,777
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
Set out below is a consolidated statement of financial position of the parties to the Deed.
Statement of Financial Position
as at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Amounts payable to vendors for business acquisitions
Current tax liabilities
Borrowings
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent
- share capital
- corporate reorganization reserve
- share based payment reserve
- non-controlling interest acquisition reserve
- retained earnings
Total Equity
75
2022
$’000
2,328
11,351
13,415
1,629
28,723
123,731
24,674
268
3,261
151,934
2023
$’000
2,716
13,571
10,866
1,820
28,973
161,716
28,786
270
2,355
193,127
222,100
180,657
10,597
1,321
862
2,934
3,870
7,750
27,334
66,066
17,219
388
1,661
85,334
112,668
9,262
485
1,675
2,914
3,530
6,800
24,666
39,165
14,041
390
1,832
55,428
80,094
109,432
100,563
133,174
993
(26,692)
(6,587)
8,544
109,432
125,584
(26,692)
871
(6,481)
7,281
100,563
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
76
Directors’ Declaration
1
In the opinion of the Directors of Apiam Animal Health Limited:
a The consolidated financial statements and notes of Apiam Animal Health Limited are in
accordance with the Corporations Act 2001, including
i Giving a true and fair view of its financial position as at 30 June 2023 and of its performance
for the financial year ended on that date; and
ii Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b There are reasonable grounds to believe that Apiam Animal Health Limited will be able to
pay its debts as and when they become due and payable.
c There are reasonable grounds to believe that the members of the extended closed group
identified in Note 40 will be able to meet any obligations or liabilities to which they are, or
may become, subject by virtue of the deed of cross guarantee described in Note 40.
2 The Directors have been given the declarations required by Section 295A of the
Corporations Act 2001 from the Managing Director and Chief Financial Officer for the
financial year ended 30 June 2023.
3 Note 2 confirms that the consolidated financial statements also comply with International
Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
28 August 2023
77
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
Melbourne VIC 3008
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
Independent Auditor's Report
To the Members of Apiam Animal Health Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Apiam Animal Health Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a
b
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
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78
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Intangible assets – Note 15
At 30 June 2023 the carrying value of goodwill, customer
Our procedures included, amongst others:
relationships and trademarks is $145.3M, $13.7M and $3.2M
respectively, and is allocated to two separate cash generating
units ("CGU") and one group of cash-generating units ("CGU
group").
In accordance with AASB 136 Impairment of Assets, the
Group is required to assess at the end of each reporting
period whether there are any indicators of impairment.
• Reviewing management's determination of the CGU's and
CGU group;
• Reviewing management's allocation of goodwill resulting
from acquisitions amongst the CGU's/CGU group;
• Reviewing managements impairment models for
compliance with AASB 136;
Goodwill must be tested for impairment annually, irrespective
• Verifying the mathematical accuracy of the underlying
of any indication of impairment.
This is a key audit matter due to the high level of management
judgment and estimation required to determine the
recoverable value of the CGU's and CGU group.
Business Combination – Note 33
During the year ended 30 June 2023, the Group acquired
100% of the business assets of four veterinary clinics. In
addition, the Group acquired 100% of the issued share capital
of three companies.
Acquisitions are required to be recognised under AASB 3
Business Combinations. Separately identifiable intangible
assets are to be separated from the value of goodwill and
recognised as an identifiable intangible asset.
This area is a key audit matter due to the high level of
management judgement and estimation required to determine
the fair value of net assets acquired and the fair value of
identifiable intangible assets.
value in use calculations and evaluating the methodology
used for appropriateness;
• Evaluating cash flow projections by assessing actual
results compared to historical forecasts;
• Reviewing key judgements and assumptions and
performing sensitivity analysis on the inputs in the value in
use model;
• Utilising an auditor's expert to assess the reasonableness
of key inputs and assumptions used in the model; and
• Evaluating the disclosures in the financial statements for
appropriateness and consistency with accounting
standards.
Our procedures included, amongst others:
• Assessing whether transactions have been appropriately
accounted for under AASB 3;
• Reviewing management's calculation for the acquisition,
including tracing inputs to supporting documentation and
assessing whether any goodwill arising as a result of the
acquisition has been appropriately recognised within the
financial statements;
• Considering if separately identifiable intangible assets
exist, such as customer relationships, which are to be
separated from goodwill and recognised;
• Obtaining and reviewing the identification and valuation of
intangible assets completed by management's expert;
• Assessing the work performed by managements expert
including evaluating competence, capabilities, and
objectivity of the expert;
• Reviewing material balances from the completion accounts
for each acquisition, including selecting samples and
tracing to source documentation to verify the fair value of
balances on the acquisition date; and
Grant Thornton Audit Pty Ltd
79
• Evaluating the disclosures in the financial statements for
appropriateness and consistency with accounting
standards.
Information other than the financial report and auditor's report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023, but does not include the financial report and our
auditor's report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Group are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor's report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 21 to 29 of the Directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Apiam Animal Health Limited, for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
Grant Thornton Audit Pty Ltd
80
Responsibilities
The Directors of the Group are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
A C Pitts
Partner – Audit & Assurance
Melbourne, 28 August 2023
Grant Thornton Audit Pty Ltd
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
81
ASX Additional Information
Additional Securities Exchange Information
In accordance with ASX Listing Rule 4.10, the Company provides the following information to
shareholders not elsewhere disclosed in this Annual Report. The information provided is current as
at 24 July 2023 (Reporting Date).
Corporate Governance Statement
The Company’s Directors and management are committed to conducting the Group’s business in
an ethical manner and in accordance with the highest standards of corporate governance. The
Company has adopted and substantially complies with the ASX Corporate Governance Principles
and Recommendations (Fourth Edition) (Recommendations) to the extent appropriate to the size
and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that
were in operation throughout the financial year for the Company, identifies any Recommendations
that have not been followed, and provides reasons for not following such Recommendations
(Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3, the Corporate Governance Statement will be
available for review on Apiam’s website (http://www.apiam.com.au/corporate-governance/) and will be
lodged together with an Appendix 4G with ASX at the same time that this Annual Report is lodged
with ASX. The Appendix 4G will particularise each Recommendation that needs to be reported
against by Apiam and will provide shareholders with information as to where relevant governance
disclosures can be found.
The Company’s corporate governance policies and charters are all available on Apiam’s website
(http://www.apiam.com.au/corporate-governance/).
Substantial holders
As at the Reporting Date, the names of the substantial holders of the Company and the number
of equity securities in which those substantial holders and their associates have a relevant
interest, as disclosed in substantial holding notices given to the Company, are as follows:
Holder of Equity Securities
Class of
Equity
Securities
Number of
Equity
Securities held
% of total
issued
securities
CJOEA FAMILY COMPANY PTY LTD
Ordinary Shares
38,850,000
22.27%
PETSTOCK INVESTMENTS PTY LTD
Ordinary Shares
21,240,500
12.3%
REGAL FUNDS MANAGEMENT PTY
LIMITED AND ITS ASSOCIATES
Ordinary Shares
17,844,177
9.9%
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
82
Number of holders
As at the Reporting Date, the number of holders in each class of equity securities:
Class of Equity Securities
Fully paid ordinary shares quoted on ASX
Fully paid ordinary shares restricted until 31 July 2023 and quoted on ASX
Fully paid ordinary shares restricted until 4 September 2023 and quoted on ASX
Fully paid ordinary shares restricted until 1 November 2023 and quoted on ASX
Fully paid ordinary shares restricted until 4 December 2023 and quoted on ASX
Fully paid ordinary shares restricted until 11 December 2023 and quoted on ASX
Fully paid ordinary shares restricted until 1 February 2024 and quoted on ASX
Fully paid ordinary shares restricted until 1 June 2024 and quoted on ASX
Fully paid ordinary shares restricted until 1 July 2024 and quoted on ASX
Fully paid ordinary shares restricted until 1 November 2024 and quoted on ASX
Fully paid ordinary shares restricted until 9 December 2024 and quoted on ASX
Fully paid ordinary shares restricted until 3 February 2025 and quoted on ASX
Total restricted ordinary shares
Total Ordinary Shares on issue
Performance Rights
Voting rights of equity securities
Number of
holders
168,974,266
839,247
441,825
341,927
1,124,449
311,751
1,986,677
582,660
2,762,294
341,924
311,750
1,986,676
11,031,180
180,005,446
2,693,991
The only class of equity securities on issue in the Company which carries voting rights is ordinary
shares.
As at the Reporting Date, there were 1,830 holders of a total of 180,005,446 ordinary shares of the
Company.
At a general meeting of the Company, every holder of ordinary shares present in person or by
proxy, attorney or representative has one vote on a show of hands and on a poll, one vote for each
ordinary share held. On a poll, every member (or his or her proxy, attorney or representative) is
entitled to vote for each fully paid share held and in respect of each partly paid share, is entitled to
a fraction of a vote equivalent to the proportion which the amount paid up (not credited) on that
partly paid share bears to the total amounts paid and payable (excluding amounts credited) on that
share. Amounts paid in advance of a call are ignored when calculating the proportion.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
83
Distribution of holders of equity securities
The distribution of holders of equity securities on issue in the Company as at the Reporting Date
is as follows:
Distribution of ordinary shareholders
Holdings Ranges
Holders
Total Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 999,999,999
343
562
271
515
139
208,222
1,388,001
2,067,138
15,570,594
160,771,491
Totals
1,830
180,005,446
Distribution of performance rights holders
Holdings Ranges
Holders
Total Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 999,999,999
Totals
0
0
1
15
9
25
0
0
7,686
781,681
1,904,624
2,693,991
%
0.12
0.77
1.15
8.65
89.31
100.00
%
0.00
0.00
0.29
29.02
70.70
100.00
Less than marketable parcels of ordinary shares (UMP Shares)
The number of holders of less than a marketable parcel of ordinary shares based on the closing
market price at the Reporting Date ($0.525) is as follows:
Total Shares
180,005,446
UMP Shares
UMP Holders
% of issued
shares held by
UMP holders
128,433
263
7.1%
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
84
Twenty largest shareholders
The Company only has one class of quoted securities, being ordinary shares. The names of the
20 largest holders of ordinary shares, and the number of ordinary shares and percentage of
capital held by each holder is as follows:
Holder Name
Balance as at
Reporting Date
%
CJOEA FAMILY COMPANY PTY LTD
35,758,709
19.87%
PETSTOCK INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
SCOLEXIA COMMODITY PTY LTD
21,240,500
11.80%
12,817,128
7.12%
7,122,807
3.96%
5,654,958
3.14%
3,079,729
1.71%
2,755,777
1.53%
CERTANE CT PTY LTD
2,018,793
1.12%
COBASH PTY LIMITED
1,872,006
1.04%
MR ROGER CHARLES CARMODY & MRS MARIS MOORE
CARMODY
MR BRIAN SCUTT
JINLAND PTY LTD
BUTTONWOOD NOMINEES PTY LTD
OREM HOLDINGS PTY LTD
1,742,791
0.97%
1,728,879
0.96%
1,708,211
0.95%
1,640,817
0.91%
1,620,724
0.90%
WARBONT NOMINEES PTY LTD
1,575,944
0.88%
HAMILTON ANIMAL HEALTH PTY LTD
FERGUS MACBETH HAY
MATTHEW GEORGE MULLEN
FOUR POST INVESTMENTS PTY LTD
BNP PARIBAS NOMS PTY LTD
Total Securities of Top 20 Holdings
Total of Securities
1,564,270
0.87%
1,446,946
0.80%
1,446,946
0.80%
1,386,700
0.77%
1,386,561
0.77%
109,569,196
60.87%
180,005,446 100.00%
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2023
85
Company Secretary
The Company’s secretary is Eryl Baron.
Registered Office
The address and telephone number of the Company’s registered office is:
27- 33 Piper Lane
East Bendigo VIC 3550
Telephone: +61 (0)3 5445 5999
Share Registry
The address and telephone number of the Company’s share registry, Boardroom Pty Limited,
are:
Street Address:
Boardroom Pty Limited
Level 8, 210 George Street
Sydney New South Wales 2000
Telephone: (02) 9290 9600
Stock Exchange Listing
The Company’s ordinary shares are quoted on the Australian Securities Exchange (ASX issuer
code: AHX).
Escrow
11,031,180 Ordinary Shares ae subject to Voluntary Escrow. The number of securities and end
dates of escrow period are shown above.
Unquoted equity securities
The number of each class of unquoted equity securities on issue, and the number of their holders,
are as follows:
Class of restricted
securities
Number of unquoted Equity
Securities
Number of holders
Performance Rights
2,693,991
25
Other Information
The Company is not currently conducting an on-market buy-back.
There are no issues of securities approved for the purposes of item 7 of section 611 of the
Corporations Act which have not yet been completed.
No securities were purchased on-market during the reporting period under or for the purposes of
an employee incentive scheme or to satisfy the entitlements of the holders of options or other rights
to acquire securities granted under an employee incentive scheme.
CORPORATE
DIRECTORY
DIRECTORS
Professor Andrew Vizard
Dr Christopher Richards
Mr Richard Dennis
Dr Jan Tennent
Evonne Collier
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Eryl Baron
REGISTERED OFFICE
27-33 Piper Lane
East Bendigo VIC 3550
T 03 5445 5999
F 03 5445 5914
E investorrelations@apiam.com.au
AUDITORS
Grant Thornton Australia
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
BANKERS
National Australia Bank
395 Bourke Street
Melbourne VIC 3000
SHARE REGISTRY
Boardroom Pty Ltd
Level 8, 210 George Street
Sydney NSW 2000
T (02) 9290 9600
STOCK EXCHANGE
LISTING
Australian Securities Exchange
Level 4, North Tower, Rialto
525 Collins Street
Melbourne VIC 3000
ASX CODE
AHX
WEBSITE
apiam.com.au
ANNUAL REPORT 2023
A P I A M . C O M . A U