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 2024
Previous period:
For the year ended 30 June 2023
Apiam Animal Health Limited Appendix 4E
2
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Statutory Results Summary
CHANGES FROM PERIOD ENDED 30 JUNE
2024 2023
%
$m
$m
Revenue from ordinary activities
up
7
To
204.8
from
192.1
Net profit attributable to members
up
117
To
4.9
from
2.3
Profit from ordinary activities after tax attributable to
members
up
117
To
4.9
From
2.3
Underlying EBITA (Incl. non-controlling interests)
up
23
to
15.8 From
12.8
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
Amount per
security
cents
Franked
amount per
security
Cents
2024 Interim Dividend
1.0 cents
1.0 cents
2024 Final Dividend
1.0 cents
1.0 cents
Record date for determining entitlements to the dividend
29 August 2024
Date dividend payable
30 September 2024
Dividend reinvestment plan
The Company initiated a Dividend Reinvestment Plan (DRP) on the 25 August 2017 which provides
shareholders with the opportunity to utilise all or part of their dividend to purchase shares in the Company.
Shareholders electing to participate in the FY24 final dividend DRP must nominate to do so by 30 August
2024.
Shareholders who elect to participate in the DRP for the FY24 final dividend will be issued shares at a
DRP issue price which will be the average of the daily market price of Apiam’s shares over the period of
Apiam Animal Health Limited Appendix 4E
3
five trading days between 6 September 2024 and 12 September 2024 (‘Pricing Period’). The timetable in
respect of the 2024 final dividend and DRP is as follows:
Event / Action
Date
Record Date
29 August 2024
Election Date: Last date for shareholders to make an election to participate in
the DRP
5.00 pm (Melbourne time) on
30 August 2024
Pricing Period Commencement Date
6 September 2024
Last Day of Pricing Period
12 September 2024
Announcement of DRP issue price
13 September 2024
Dividend Payment Date / Issue of DRP shares
30 September 2024
Details of the DRP can be downloaded from www.apiam.com.au. In order to participate in the DRP for
the 2024 final dividend, shareholders should ensure that their DRP Election Form is received, or an
online election is made, by no later than 5.00 pm (Melbourne time) on 30 August 2024. An online
election can be made by visiting www.boardroomlimited.com.au.
Apiam Animal Health Limited Appendix 4E
4
Net Tangible Asset per Security
2024
2023
Net Tangible assets per share
($0.25)
($0.26)
Return to shareholders
Dividends of $1,800,002 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 32 and 33 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 2024
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.
ANNUAL REPORT
2024
Apiam Animal Health
Enriching the lives of Animals, People and Communities
Apiam Animal Health Limited
1
Financial statements for the year ended 30 June 2024
Contents
Chairman’s Message
2
Managing Director’s Message
4
Directors’ Report
7
Remuneration Report
19
Auditor’s Independence Declaration
30
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
32
Consolidated Statement of Financial Position
33
Statement of Changes in Equity
34
Consolidated Statement of Cash Flows
35
Notes to the Consolidated Financial Statements
36
Consolidated Entity Disclosure Statement
73
Directors’ Declaration
75
Independent Audit Report
76
Additional Information
79
Apiam Animal Health Limited
2
Financial statements for the year ended 30 June 2024
Chairman’s Message
Dear shareholders,
On behalf of the Board of Directors I am pleased to present the Apiam Animal Health Ltd (“Apiam”)
Annual Report for the year ended 30 June 2024 (“FY24”).
This year our team has worked hard to implement the strategy we outlined to you earlier in FY24.
At our Annual General Meeting in November 2023, I shared several strategic priorities that the
Apiam Board of Directors had set for the Company following our disappointing earnings
performance in FY23. Our focus was on pursuing organic growth initiatives, improving clinic
performance and better extracting synergies from recent acquisitions.
We established these priorities to deliver improved earnings, maximise our free cash flows and
to reduce Company debt. We also outlined our goal to recommence paying dividends to
shareholders.
I am pleased to confirm that through making these strategic changes in our business over the
course of the year, we are well on the way to delivering these outcomes for shareholders. In FY24,
Apiam reported:
•
Earnings and margin growth with underlying EBITA increasing 23.2% and underlying NPAT
(before amortisation) increasing 12.3%
•
Improvement in operating cash flows of 8.5%
•
Reduced net debt of $66.8 million (30 June 2024) down from $71.1 million (31 December
2023)
•
Re-introduction of the Company dividend with an interim FY24 dividend of 1.0 cents per
share and final FY24 dividend of 1.0 cents per share
Several factors have driven Apiam’s improved earnings performance in FY24. In our Clinical Vet
Services segment (formerly named the Dairy & Mixed Animal segment) the shift to a new vet-
supported clinic management model has been important. This transition not only enhanced
margins and organic growth but also reduced costs across various non-veterinary functions.
Additionally, our Intensive Animal Vet Services business – comprising the Beef Feedlot & Pigs
Apiam Animal Health Limited
3
Financial statements for the year ended 30 June 2024
segments – benefited from a focus on high value, technology driven veterinary and production
consultancy services, which significantly boosted their profitability.
Despite these results, there is still work to be done. We see further opportunities for synergy and
efficiency improvements in FY25. Management continues to work closely with four clinics that
have undergone a full restructure to improve the financial performance of their operations, and
these clinics are also expected to contribute to improved profitability in the year ahead.
Apiam’s Clinical Vet Services segment now represents 78% of Apiam’s revenues and importantly
provides a robust and resilient revenue base for the Group. Veterinary services to dogs & cats
make up the largest component of this segment’s revenues in FY24 and our Best Mates
subscription veterinary program leverages this client base. In FY24 we achieved over 30% growth
in Best Mates member numbers and this program is a strong source of organic growth for our
Company.
Our other business area, Intensive Animal Veterinary Services, contributed 22% of Apiam’s
revenues in FY24. These segments service large commercial piggery & feedlot operators and
have a different set of business drivers from Clinical Vet Services. Veterinary consulting to clients
in this segment occurs on a much larger scale and is principally driven by Apiam’s use of
innovative technologies, such as data benchmarking, diagnostics and vaccines.
Unique products and services such as bespoke vaccines designed for an operator’s specific herd,
and disease surveillance and predictive analytics for large numbers of animals using proprietary
technology are all examples of how Apiam are providing differentiated services to their
commercial customers. Importantly, it is these types of products and services that are achieving
better animal health, production and profitability outcomes for our clients.
Looking ahead, I believe the tangible financial benefits delivered by our strategic program in FY24
has positioned Apiam strongly for continued financial improvement in FY25. With robust organic
growth opportunities and a sustainable structurally lower cost base, we are well-positioned to
achieve further profitability gains. I would like to thank our shareholders for their patience as we
continue to advance through this process.
To close, I would like to thank my fellow Board members for their support this year as well as
acknowledge our Apiam team members for their hard work in delivering best-practice and high-
quality animal care. It is these efforts that have contributed to the improved results we have
delivered this financial year.
Your sincerely,
Andrew Vizard
Apiam Animal Health Limited
4
Financial Statements for the year ended 30 June 2024
Managing Director’s Message
Dear fellow shareholders,
This year we delivered improved financial results through a strategic plan that focussed on
extracting synergies, achieving more effective outcomes from our existing business portfolio
and pursuing organic growth opportunities.
Financial review
Our veterinary business – comprised of Clinical Vet Services and Intensive Animal Vet Services
– delivered resilient revenue performance despite broader economic and cost-of-living issues
over the period. In FY24, Apiam’s revenues increased 6.2% to $204.8 million, supported by a
strong organic growth contribution from the Beef Feedlot segment as well as acquisitions made
early in the period.
Our earnings performance in FY24 improved as the benefits of our cost-saving and focus on
delivering effective outcomes began to be realised. In addition, gross margin expansion was
achieved as the Company has pursued a strategy to focus on the provision of higher value-add
products & services.
In FY24, Apiam’s underlying EBITA1 increased strongly by 23.2% to $15.8 million as synergies
were extracted across Apiam’s business support network and Clinical Vet Services segment.
Redundancy and restructuring programs were executed in June 2023 and December 2023, with
further annualised benefits to be realised in FY25. The implementation of a vet-supported clinic
management model has also led to margin expansion and sustainable cost savings (discussed
further below).
Overall, Group operating expenses on a like-for-like basis declined 2.5% despite the inflationary
environment over the financial year.
Underlying NPATA2 grew 12.3% in FY24, despite being impacted by higher finance costs ($5.5
million in FY24 vs $3.8 million in FY23). Reported NPAT grew 116.5% to $4.9 million (FY23:
1 Underlying EBITA is a non-IFRS measure and is earnings before interest, tax, amortisation and one-off expenses
2 Underlying NPATA is a non-IFRS measure and is net profit after tax but before amortisation and one-off expenses
Apiam Animal Health Limited
5
Financial Statements for the year ended 30 June 2024
$2.3 million) with this growth trend reflective of the impact of $2.4 million of inventory write-down
expense incurred in FY23.
Following two companion animal veterinary acquisitions early in FY24, Apiam also sought to
maximise cash flows and reduce net debt. Net debt as at 30 June 2024 was $66.8 million down
from $71.1 million as at 31 December 2023.
Diversified business model – segment performance
Apiam’s Clinical Vet Services segment provides veterinary services to companion animals,
equine and other mixed animals via its network of 66 clinics Australia-wide. In FY24, this
segment reported 7.4% revenue growth. On a like-for-like basis Apiam’s Clinical Vet Services
segment revenue was (1.6)% vs FY23 excluding four clinics that were restructured over FY24.
This lower like-for-like growth trend is in-line with Management expectations as it relates to the
large number of COVID-pets now in a healthy young stage of adult life.
From an organic growth perspective, our Best Mates subscription-based veterinary program for
companion animals continues to perform strongly as it represents an attractive offering for our
customer base. In FY24 member numbers increased 32.4% on the prior year. In addition, our
four greenfield clinics that we have opened since FY23 are ramping-up according to plan and
are expected to make a growing contribution to revenue and earnings in the coming year.
Apiam slowed the pace of its acquisition program in FY24, in-line with our revised strategic
priorities. The total cash consideration for acquisitions completed in FY24 was $6.3 million,
down from $32.5 million in FY23. Acquisitions made since 1 July 2022 have performed strongly
under Apiam’s ownership, delivering mid single-digit revenue growth in the period.
The Company’s Intensive Animal Vet Services – comprised of the Beef Feedlot and Pigs
segments delivered 2.3% revenue growth in FY24, a turn-around from prior years due to
improved underlying industry conditions, particularly in the beef feedlot segment. Apiam’s focus
on higher value-add products and services, supported by our investment in technology,
diagnostics and vaccines has also led to strong profit improvements. Gross profit across these
segments increased 10.1% in FY24.
Sustainable operating structure and earnings margins
As part of Apiam’s FY24 strategy to optimise the performance of its veterinary clinics and
leverage cost savings, Apiam transitioned to a new vet-supported clinic management model.
This model has been designed to foster agile and timely decision making and has involved
streamlining standards-of-care and workflow practices within clinics. We have been encouraged
by the improved margins we are already seeing across much of our portfolio as a result of this
management model.
This approach has also allowed for a reduction in our centralised Business Support Network
and we believe this is now resourced at a more sustainable level to support the Group moving
forward.
Apiam Animal Health Limited
6
Financial Statements for the year ended 30 June 2024
Outlook for FY25
Looking ahead to FY25, we expect demand for veterinary services in regional and rural
locations to remain resilient. We have a business model diversified across various industry
sectors, servicing companion animal pet and livestock owners all the way through to large
commercial pig and beef feedlot operators.
Many of the strategic changes we made in FY24 will have a greater annualised impact in FY25
and we expect this to further improve our earnings position. While we continue to monitor the
market for attractive strategic acquisitions, we will also appropriately balance debt management
against all investment decisions subject to return on capital thresholds.
Yours sincerely,
Dr Chris Richards
Managing Director
Apiam Animal Health Limited
7
Financial Statements for the year ended 30 June 2024
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
2024.
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
Apiam Animal Health Limited
8
Financial Statements for the year ended 30 June 2024
INFORMATION ON DIRECTORS
Professor Andrew Vizard
Independent Non-Executive Chairman
BVSc(Hons), MVPM, FAICD
Dr Christopher Richards
Managing Director
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.
An experienced company director, he has
previously
held
directorships
in
ASX
companies, statutory bodies and research
organisations
including
Animal
Health
Australia,
the
body
responsible
for
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.
He is currently Chair of the Vizard Foundation
and Executive Secretary for the Hermon Slade
Foundation and the Australia & Pacific Science
Foundation.
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
Apiam, which has seen the development,
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.
Interests in Shares and Options
346,184 shares
Interests in Shares and Options
42,400,000 shares
477,449 performance rights
Apiam Animal Health Limited
9
Financial Statements for the year ended 30 June 2024
Mr Richard John Dennis
Independent Non-Executive Director
BComm, LLB
Dr Jan Tennent OAM
Independent Non-Executive Director
PhD, BSc (Hons), GCertMgt, GAICD, FTSE
FASM
Rick held several 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 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. He is also an external
member of the Audit & Risk Committee of
Racing Qld.
Jan is a Fellow of the Australian Academy of
Technology and Engineering and the Australian
Society for Microbiology, a Principal Fellow at
The University of Melbourne and was awarded
the Medal of the Order of Australia (OAM) in the
Australia Day 2024 Honours list for service to
research science, and to business.
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 eviDent
Foundation Limited.
Jan was a non-executive director of Agriculture
Victoria Services Pty Ltd (to 30 Oct 2023) and
Phytogene Pty Ltd (to 30 Oct 2023).
Interests in Shares and Options
12,425 shares
Interests in Shares and Options
125,732 shares
Apiam Animal Health Limited
10
Financial Statements for the year ended 30 June 2024
Evonne Maree Collier
Non-Executive Director
BA, MBus, GradCertAppFin, GAICD
Ms Collier has served as a Chair and Non-
Executive Director on various boards since
2011 and currently serves as Non-Executive
Director of global SaaS analytics company,
Sage Automation (Chair of the Digital Products
board) and digital dental and aesthetic dental
clinic aggregator, Curae Health (Board Chair).
Ms Collier was also previously Non-Executive
Director of ASX-listed 4D Medical (4DX),
1300Smiles Limited (ONT) and Think Childcare
Limited (TNK).
Ms Collier’s executive career was with blue-
chip,
multinational
companies
in
C-suite
Strategy, Sales/Marketing and R&D/Innovation
positions, specialising in business turnarounds
and digital and eCommerce products, channels
and transformation.
Ms Collier holds a Bachelor of Arts, Master of
Business, Master of Digital Marketing and
Graduate Certificate of Applied Finance, and is
a Graduate Member of the Australian Institute
of Company Directors.
Interests in Shares and Options
Nil
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
11
Financial Statements for the year ended 30 June 2024
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
A
B
A
B
A
B
Andrew Vizard
11
11
5
5
6
6
Chris Richards
11
11
n/a
n/a
n/a
n/a
Richard Dennis
11
11
5
5
n/a
n/a
Jan Tennent
11
11
5
5
6
6
Evonne Collier
11
11
5
5
6
6
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
Members of the Remuneration & Nomination Committee during the period were:
Jan Tennent (Chair)
Andrew Vizard
Evonne Collier
Apiam Animal Health Limited
12
Financial Statements for the year ended 30 June 2024
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 executed on its strategic plan to deliver resilient revenue growth and improved
profitability for shareholders in the twelve months to 30 June 2024 (FY24).
The Company’s business model is diversified across Clinical Vet Services3 (companion animal,
equine and farm services clients) and Intensive Animal Vet Services (commercial pig and beef
feedlot operators). This model has ensured that, despite challenging conditions in many parts of
the broader economy, Apiam’s business has remained robust and delivered growth in the
period.
Importantly, Apiam’s focus in FY24 to extract further efficiencies and synergies from the
accelerated acquisition program the Company undertook between FY21 - FY23 has resulted in
improved earnings margins and cost savings.
Financial review
Revenue in FY24 grew 6.2% to $204.8 million (FY23: $192.8 million4) supported by a strong
revenue performance in Apiam’s beef feedlot business as well as acquisitions executed in the
first half of FY24 (H1 FY24).
Gross profit increased 9.6% to $137.3 million in FY24 (FY23: $125.3 million4), with the
Company’s gross margins increasing to 67.0% in FY24 from 65.0%4 over this time. The focus
on the provision of higher value products and consulting services across all segments of the
Group drove this result.
Operating earnings also grew strongly in FY24 with underlying EBITA5 increasing to $15.8
million, an increase of 23.2%4 on the prior comparable period. Underlying EBITA margins
3 Previously named the Dairy & Mixed Animal segment
4 FY23 financials presented for the purposes of growth analysis throughout the Review of Operations exclude one-off revenue
adjustment for deferred revenue relating to prior years and reversal of earn-out no longer payable (Revenue net effect +$730,000)
as well as inventory write-down expense (Cost of goods sold net effect +$2.4 million)
5 Underlying EBITA is a non-IFRS measure and is earnings before interest, tax, amortisation and one-off expenses
Apiam Animal Health Limited
13
Financial Statements for the year ended 30 June 2024
increased to 7.7% (FY23: 6.7%) as cost synergies and efficiencies were extracted across
Apiam’s business support network and Clinical Vet Services segment.
Underlying NPATA grew 12.3%4 in FY24, after accounting for the impact of higher finance costs
over the period ($5.5 million in FY24 vs $3.8 million in FY23). Reported NPAT grew 116.5% to
$4.9 million (FY23: $2.3 million) with this growth trend reflective of the impact of $2.4 million of
inventory write-down expense incurred in FY23 associated with sanitiser and surface protectant
products.
The following tables are presented to assist in the interpretation of the underlying performance
of Apiam in FY24. This information is additional and presented using non-IFRS information and
terminology.
Apiam FY24 Financial Results Summary – Underlying Basis
P&L underlying
FY24
FY23
Variance
%
Total Revenue 1
204.8
192.8
12.0
6.2%
Cost of goods sold 2
(67.5)
(67.5)
(0.0)
0.0%
Gross Profit 3
137.3
125.3
12.0
9.6%
Operating expenses
(111.7)
(104.3)
(7.4)
7.1%
Underlying EBITDA 4
25.6
21.0
4.6
22.0%
Underlying EBITA 4
15.8
12.8
2.9
23.2%
Underlying NPATA 4,5
7.2
6.4
0.8
12.3%
Amortisation post tax
(1.5)
(1.5)
(0.1)
5.7%
One-off expenses post tax
(0.8)
(0.5)
(0.2)
44.6%
One-off revenue & write-down adj post tax
(2.2)
NPAT attributable to members
4.9
2.3
2.7
116.5%
Underlying EBITDA4 (pre AASB 16)
20.3
16.6
3.7
22.3%
Gross Margin (%)
67.0%
65.0%
Underlying EBITDA margin (%)
12.5%
10.9%
Underlying EBITA margin (%)
7.7%
6.7%
Earnings per share (cents)
2.76
1.30
1.5
112.3%
Notes:
1
FY23 excludes one-off revenue adjustment for deferred revenue relating to prior years and reversal
of earn-out no longer payable (net effect +$730,000)
2
FY23 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 costs
(Other Operating Expenses FY24: $428K vs FY23: $442K) & restructuring costs (Employee Benefit
Expenses $666K vs FY23: $315K). These costs have been tax effected where applicable at NPAT
level
5
Before amortisation (tax effected)
Apiam Animal Health Limited
14
Financial Statements for the year ended 30 June 2024
Apiam FY24 Financial Results Summary – Reported Basis
P&L stat
FY24
FY23
Variance
%
Total revenue
204.8
192.1
12.8
6.6%
Cost of goods sold
(67.5)
(69.9)
2.4
(3.4)%
Gross profit 1
137.3
122.2
15.1
12.4%
Operating expenses
(112.8)
(105.1)
(7.7)
7.4%
EBITDA
24.5
17.1
7.4
43.2%
Depreciation ROU assets
(5.0)
(4.1)
(0.9)
21.4%
Depreciation & amortisation
(7.0)
(6.1)
(0.9)
14.1%
EBIT
12.5
6.9
5.6
82.0%
Interest
(5.5)
(3.8)
(1.7)
46.3%
Tax
(2.2)
(1.0)
(1.2)
116.5%
Other (including minorities)
0.1
0.2
(0.1)
(54.2)%
NPAT attributable to members
4.9
2.3
2.7
116.5%
Notes:
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
Segment performance
Clinical Vet Services segment (formerly Dairy & Mixed Animal segment)
This segment is made up of a network of 66 veterinary clinics and operates under a business-
to-consumer (B2C) model.
Reported revenue growth for the Clinical Vet Services segment was 7.4% in FY24 and on a like-
for-like6 basis was (1.6)% vs pcp (with like-for-life results excluding four clinics which have been
restructured over FY24).
While this like-for-like growth was below prior period trends, this impact is in-line with Company
expectations following COVID-related peaks in new pet ownership, and the fact that veterinary
input across the life stages of COVID pets hits the lowest part of the life-stage cycle at 2-3
years.
The Company continues to deliver growth in many important areas with 32.4% reported growth
in its Best Mates annual subscription members over FY24.
This segment accounted for 78% of the Company’s revenues in FY24.
Beef Feedlot & Pigs segments
Apiam’s Beef Feedlot & Pigs segments service commercial feedlot & piggeries around Australia
via a business-to-business (B2B) model.
Apiam’s technology and data analytics offering are a key driver of the veterinary consulting,
product & services offering provided to commercial clients.
In FY24, revenues in these segments grew 2.3% vs pcp as industry conditions improved after a
challenging few years. The beef feedlot segment in particular has experienced strong revenue
growth since Q2 FY24.
6 Like-for-like refers to ex-acquisition performance and adjusted to exclude acquisitions that have not contributed a full 12-months of trading
in FY24 or FY23.
Apiam Animal Health Limited
15
Financial Statements for the year ended 30 June 2024
Apiam’s Beef Feedlot & Pigs segments made a strong profit contribution to the Group in FY24
as the Company’s increasing use of data-lead veterinary & production consultancy services
have driven improved margins.
These segments accounted for 22% of the Company’s revenues in FY24.
Business initiatives - cost-saving programs
As part of Apiam’s FY24 strategy to optimise the performance of its veterinary clinics and
leverage cost savings, Apiam transitioned to a new vet-supported clinic management model.
This model has been designed to foster increasingly agile and timely clinic decision making and
has helped to improve Apiam’s margins and profit growth performance in FY24.
The move to a vet-supported clinic management model led to a redundancy and restructuring
program to reduce non-veterinary positions. This process was undertaken in June 2023 and
December 2023. Savings from this program have been realised in the Company’s Business
Support Network and within the Clinical Vet Services segment with further annualised benefits
to be realised in FY25.
Significant restructuring has been required in four veterinary clinics and this has resulted in a
short-term reduction to revenue and negatively impacted Clinical Vet Services profits in FY24.
Changes to the leadership and senior veterinary teams in these clinics are now complete and
the clinics are focussed on streamlining operations and ensuring sufficient capacity to meet
historical revenue demands in their local markets.
Overall, Apiam’s operating expenses on a like-for-like basis fell 2.5% in FY24 vs pcp, a strong
result in the current inflationary environment.
Acquisitions
Apiam slowed the pace of its acquisition program in FY24, with two acquisitions completed –
Boyne Tannum Vet Surgery and Macleay Valley Veterinary Services – both settled in the first
quarter of FY24. The total cash consideration for acquisitions completed in FY24 was $6.3
million, down from $32.5 million in FY23.
Acquisitions made since 1 July 2022 have performed strongly under Apiam’s ownership,
delivering mid single-digit revenue growth in FY24.
Balance sheet & cash flow
Apiam have generated strong cash flows in FY24 which have been applied to debt
management, resumption of the interim FY24 dividend and organic growth initiatives.
Net debt as at 30 June 2024 was $66.8 million, down from $71.1 million as at 31 December
20237. The Company’s operating leverage ratio has reduced from 2.9x to 2.6x over this period
in-line with the reduction in net debt and growth in earnings. The Company’s operating leverage
covenant requirement remains at 3.5x EBITDA8.
Apiam’s cash flow generation remains strong with operating cash flow conversion to underlying
EBITDA (before AASB 16 lease adjustments) of 118.1% in FY24, above Managements long-
term target of 100%. This was supported by strong control of working capital and general costs.
7 Net debt as at 30 June 2024 includes $4.3 million of equipment bank finance (reported under lease liability) (vs $3.4 million as at 31
December 2023)
8 Underlying EBITDA
Apiam Animal Health Limited
16
Financial Statements for the year ended 30 June 2024
Dividend
Apiam’s Board of Directors reinstated its dividend program in February 2024 in light of the
Company’s strong cash flow generation and the slower pace of the acquisition program.
The Board has declared a final dividend of 1 cent per share. The record date for the final
dividend is 29 August 2024. Apiam’s dividend reinvestment policy will be in place in respect of
the final dividend.
Outlook
The outlook for veterinary services in rural and regional Australia remains resilient.
Exposure to a diversified customer base through Apiam’s Clinical Vet Services and Intensive
Animal Vet services model delivers many opportunities for growth. In the year ahead, the
Company plans to leverage its investment in new product technologies to drive growth across
its commercial pig & beef feedlot customer base.
Further efficiencies and synergies are expected to be extracted from the Company’s clinic
portfolio in FY25. The ramp-up of greenfield clinics as well as the four clinic locations where
significant business restructuring has been undertaken, will add further growth opportunities in
the year ahead.
In FY25, Apiam plans to apply surplus cash flows to a combination of debt management and
growth initiatives. The Company continues to monitor the market for strategic acquisitions,
subject to return on capital thresholds.
DIVIDENDS
An interim dividend of $1,800,002 at 1 cent per share was paid in April 2024. On 23 August 2024
the Apiam Board of Directors declared that there will a final dividend of $1,814,391 at 1 cent per
share.
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.
Statutory cashflows $m
FY24
FY23
Net cash provided by operating activities
18.9
17.4
Acquisition of subsidiary, net of cash
(6.3)
(32.5)
Payments for property, plant and equipment
(4.8)
(7.9)
Payments for Intangible assets
(0.1)
(0.3)
Other
0.2
0.2
Net cash used in investing activities
(10.9)
(40.6)
Net changes in financing
(2.0)
28.9
Dividends paid to shareholders
(1.3)
(0.7)
Repayment of lease liabilities
(6.0)
(4.8)
Proceeds from share issue
0.0
0.0
Other
0.0
0.0
Net cash inflow from financing activities
(9.4)
23.5
Net change in cash and cash equivalents
(1.4)
0.3
Apiam Animal Health Limited
17
Financial Statements for the year ended 30 June 2024
SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL
YEAR
The Apiam Board of Directors declared the Company’s final dividend of 1 cent per share fully
franked on 23 August 2024. The final dividend of $1,814,391 will be paid on 30 September 2024.
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 FY24
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
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.
Apiam Animal Health Limited
18
Financial Statements for the year ended 30 June 2024
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
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
19
Financial Statements for the year ended 30 June 2024
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 of the
Group.
At the Annual General Meeting of Shareholders on 23 November 2023, greater than 25% of
Shareholders voted against the adoption of the FY2023 Remuneration Report. No shareholder
feedback was received at the meeting in relation to the Remuneration Report. The board have
sought feedback from shareholders who voted against the adoption of the Remuneration report
and no issues have been raised in relation to the Remuneration Report.
In addition to fixed remuneration, the Company offers performance rights as part of its long term
incentive plan for key management personnel which is based on Total Shareholder Return (TSR)
with a 3 year target of threshold at 45% growth and maximum at 95% growth. Short term
incentives are also offered to key management personnel that are based on key metrics aligned
with Apiam’s strategy. The Remuneration & Nomination Committee and the Board have
continued to review the approach taken to the Company’s overall remuneration and its
appropriateness to the Company’s circumstances and market conditions.
Details of Key Management Personnel
(I) DIRECTORS
Andrew Vizard
Chairman (Independent Non-executive)
Chris Richards
Managing Director (Executive)
Richard Dennis
Director (Independent Non-executive)
Jan Tennent
Director (Independent Non-executive)
Evonne Collier
Director (Independent Non-executive)
Apiam Animal Health Limited
20
Financial Statements for the year ended 30 June 2024
(II) EXECUTIVES
Matthew White
Chief Financial Officer
Brian Scutt (resigned 30/11/2023)
Chief Operating Officer
Renee Waters
Chief People Officer
Duncan Runciman (commenced as KMP on 01/02/2024)
Chief Veterinary Officer
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;
Short term incentive plan;
Long term incentive plan;
Non-executive director remuneration; and
Other information.
Apiam Animal Health Limited
21
Financial Statements for the year ended 30 June 2024
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
six times in the FY24 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
FY24
FY23
FY22
FY21
FY20
EPS (cents)
2.76c
1.30c
3.42c
4.18c
3.63c
Dividends
paid (cents
per share)
1.0c
0.4c
2.4c
2.4c
1.6c
Net profit
before tax
($’000)
$7,062
$3,166
$6,470
$6,971
$5,956
Share price
($)
$0.345
$0.51
$0.69
$0.96
$0.46
Apiam Animal Health Limited
22
Financial Statements for the year ended 30 June 2024
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:
Year
Short term employee benefits
Post-
employment
benefits
Long-term
benefits
Share-based
Payment
Total
Performance
based
percentage of
remuneration
Salary
and fees (i)
Cash
Bonus
Accrued
annual
leave
Non-monetary
benefits
Superannuation
Termination
benefits
(Accrued
long
services
leave)
Performance
Rights (ii)
Directors
$
$
$
$
$
$
$
$
$
%
Andrew Vizard
Chairman Independent
2024
140,000
-
-
-
-
-
-
-
140,000
0%
2023
140,000
-
-
-
-
-
-
-
140,000
0%
Richard Dennis
Independent
2024
80,000
-
-
-
-
-
-
-
80,000
0%
2023
80,000
-
-
-
-
-
-
-
80,000
0%
Chris Richards
Managing Director
2024
450,311
66,139
49,112
10,245
29,391
-
26,339
17,259
648,796
13%
2023
431,915
-
67,316
15,602
25,292
-
40,073
15,475
595,673
3%
Michael van Blommestein
2024
-
-
-
-
-
-
-
-
-
0%
Independent
2023
26,146
-
-
-
2,745
-
-
-
28,891
0%
Jan Tennent
Independent
2024
70,000
-
-
-
-
-
-
-
70,000
0%
2023
70,000
-
-
-
-
-
-
-
70,000
0%
Evonne Collier
Independent
2024
63,063
-
-
-
6,937
-
-
-
70,000
0%
2023
47,511
-
-
-
4,989
-
-
-
52,500
0%
Employees
Matthew White
Chief Financial Officer
2024
303,824
29,750
(3,738)
-
28,743
-
14,569
9,700
382,848
10%
2023
291,649
-
3,514
-
25,292
-
14,750
12,307
347,512
4%
Brian Scutt
Chief Operating Officer
2024
136,135
-
(28,776)
4,317
13,699
63,618
(2,058)
11,055
197,990
6%
2023
244,215
-
(10,874)
-
24,927
-
1,068
9,575
268,911
4%
Renee Waters
Chief People Officer
2024
262,486
24,871
10,008
-
27,718
-
14,623
7,480
347,186
9%
2023
219,143
-
1,504
-
23,987
-
3,877
9,926
258,437
4%
Duncan Runciman
Chief Veterinary Officer
2024
269,201
47,271
44,866
8,081
27,033
-
24,365
1,034
421,851
11%
2023
-
-
-
-
-
-
-
-
-
0%
2024 Total
2024
1,775,020
168,031
71,472
22,643
133,521
63,618
77,838
46,528
2,358,671
9%
2023 Total
2023
1,550,579
-
61,460
15,602
107,232
-
59,768
47,283
1,841,924
3%
(i) Salary and fees include salaries and allowances.
(ii) 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 FY22, FY23 and FY24 the rights will vest
at the end of the three year performance period with the quantity of rights vesting depending on the Total Shareholder Return Growth achieved (45% Threshold and 95% Target) and continued employment. The amount
recognised for the Managing Director, Chief Financial Officer, Chief People Officer and Chief Veterinary Officer is the proportion expensed in that year based on the Monte Carlo valuation model.
Apiam Animal Health Limited
23
Financial Statements for the year ended 30 June 2024
The relative proportions of remuneration that are linked to performance and those that are fixed
are as follows:
Name
Fixed remuneration
At risk
Executive Directors
Chris Richards
87%
13%
Other Key Management Personnel
Matthew White
90%
10%
Brian Scutt
94%
6%
Renee Waters
91%
9%
Duncan Runciman
89%
11%
c
Service agreements
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:
Name
Base salary
Term of agreement
Notice period
Chris Richards
$450,310
No fixed term
Twelve (12) months
Matthew White
$303,824
No fixed term
Six (6) months
Brian Scutt
$254,472
No fixed term
Three (3) months
Renee Waters
$254,000
No fixed term
Three (3) months
Duncan Runciman
$254,000
No fixed term
Three (3) months
d
Short Term Incentive Plan
The amount at risk and performance criteria of the short term incentive (STI) plan is determined
annually by the Apiam Board. For the FY24 reporting period the STI amount at risk was 50% of
base salary for the Executive Director and 33.33% of base salary for the Chief Financial Officer,
Chief People Officer and Chief Veterinary Officer.
e
Long Term Incentive Plan
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
(Performance Period). The value of the long term incentive performance rights granted to the
Executive Director and KMP under the Company’s employee incentive plan is set by the Board,
and the vesting of the rights is based on achieving agreed key performance indicators. The grant
of rights to the Executive Director is also subject to shareholder approval.
During the FY24 reporting period the Apiam Board approved the issue of performance rights to
the Chief Financial Officer, Chief People Officer and Chief Veterinary Officer equal to 33.33% of
their respective base salary for the Performance Period ending 30 June 2026.
The performance measures are assessed at the end of each Performance Period and are based
on the Total Shareholder Return (TSR) of the company and subject to continued employment.
TSR shall be measured by comparing the Baseline Share Price against the Closing Share Price
at the completion of 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 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
reporting period that occurs immediately prior to the commencement of the Performance Period.
The Baseline Share Price is $0.9572 for the Performance Period ending FY24, $0.7643 for the
Performance Period ending FY25 and $0.3852 for the Performance Period ending FY26.
Apiam Animal Health Limited
24
Financial Statements for the year ended 30 June 2024
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.
Example FY24 (Performance Period ending FY26):
•
The TSR is measured as:
o
The closing share price (VWAP for 20 trading days following lodgement of the
FY26 Annual Report) minus
o
The Baseline share price (VWAP for 20 trading days following lodgement of the
FY23 Annual Report) plus
o
Dividends received
o
All divided by Baseline share price (VWAP for 20 trading days following
lodgement of the FY23 Annual Report).
•
The performance rights will vest only after three years’ service and performance is
delivered.
•
Vesting of all performance rights is subject to Board discretion. Threshold TSR at which
performance rights commence and the TSR at which 100% rights vest for the three-
year period commencing 1 July 2023 is shown in the table below.
The Performance Rights will vest as follows:
Absolute TSR
Below 45%
Nil
45-95%
Straight line between 50% and 100%
95%
100%
Apiam Animal Health Limited
25
Financial Statements for the year ended 30 June 2024
Performance Rights Granted:
The following performance rights were issued in FY22, FY23 and FY24. 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
Date
Perform-
ance
Rights
granted
FY2024
Tranche
Fair Value
Fair Value
per Right
FY2025
Tranche
Fair Value
Fair Value
per Right
FY2026
Tranche
Fair Value
Fair Value
per Right
Expiry date
to exercise
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
Matthew White
28/03/24
262,915
-
-
-
-
-
-
262,915
$12,777
$0.0486
31 Oct 27
Brian Scutt
09/12/21
83,126
83,126
$ 9,304
$0.1119
-
-
-
-
-
-
31 Oct 25
Brian Scutt
06/12/22
107,230
-
-
-
107,230
$8,502
$0.0793
-
-
-
31 Oct 26
Renee Waters
06/12/22
96,221
-
-
-
96,221
$7,628
$0.0793
-
-
-
31 Oct 26
Renee Waters
28/03/24
219,799
-
-
-
-
-
-
219,799
$10,682
$0.0486
31 Oct 27
Duncan Runciman
28/03/24
219,799
-
-
-
-
-
-
219,799
$10,682
$0.0486
31 Oct 27
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
26
Financial Statements for the year ended 30 June 2024
f
Non-Executive Director remuneration
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.
g
Other information
Options held by key management personnel
There were no options to acquire shares in the Company held during the 2024 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 2024 held by each of the
Group’s key management personnel, including their related parties, is set out below.
Personnel
Balance at
1/07/2023
Granted as
remuneration
Received
on
exercise
Other
changes
Held as at
30/06/2024
Chris Richards
38,651,577
-
82,715
3,665,708
42,400,000
Andrew Vizard
286,109
-
-
60,075
346,184
Richard Dennis
12,064
-
-
361
12,425
Jan Tennent
72,073
-
-
53,659
125,732
Evonne Collier
-
-
-
-
-
Matthew White
146,017
- 57,876
257,823
461,716
Brian Scutt
1,768,153
-
-
999,943
2,768,096
Renee Waters
43,882
-
-
125,000
168,882
Duncan Runciman
1,101,173
-
-
-
1,101,173
Total
42,081,048
-
140,591
5,162,569
47,384,208
None of the shares included in the table above are held nominally by key management personnel
Apiam Animal Health Limited
27
Financial Statements for the year ended 30 June 2024
Performance rights held by key management personnel:
The number of performance rights held at 30 June 2024 by each of the Group’s key
management personnel, including their related parties, is set out below.
Personnel
Balance
at
1/07/2023
Granted
as
remunerat
ion
Vested &
Exercised
Forfeited/
lapsed
during
year
Held as at
30/06/2024
Vested &
not
exercised
Vested in
FY24
Chris Richards
560,164
-
(82,715)
-
477,449
-
-
Matthew White
307,585
262,915
(57,876)
(22,435)
490,189
-
-
Brian Scutt
222,860
-
-
(222,860)
-
-
-
Renee Waters
191,069
219,799
-
(20,255)
390,613
-
-
Duncan Runciman
-
219,799
-
-
219,799
-
-
Total
1,281,678
702,513
(140,591)
(265,550)
1,578,050
-
-
Loans to key management personnel
The Group did not enter into any loans with key management personnel during the 2024 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 FY24
amounted to $403,051 (2023: $378,303).
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 in
FY24 amounted to $147,708 (2023: $135,941).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris
Richards. Lease payments made in FY24 amounted to $126,983 (2023: $119,186).
The Group leases an equine clinic facility at Beet Road, Maffra, Victoria. The premises are owned
by an entity associated with Duncan Runciman. Rent payments made in FY24 amounted to
$34,405 (2023: $32,712).
End of audited Remuneration Report.
Apiam Animal Health Limited
28
Financial Statements for the year ended 30 June 2024
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 29 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 30 of this financial report and forms part of this Directors’ Report.
Apiam Animal Health Limited
29
Financial Statements for the year ended 30 June 2024
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
23 August 2024
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
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.
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 2024, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b 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, 23 August 2024
30
Apiam Animal Health Limited
31
Financial Statements for the year ended 30 June 2024
Apiam Animal Health Limited
Financial Statements
For the year ended 30 June 2024
Apiam Animal Health Limited
32
Financial Statements for the year ended 30 June 2024
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
2023
$’000
$’000
Revenue
6
204,656
191,757
Other income
174
318
Expenses
Changes in inventory
(328)
(2,309)
Cost of materials
(67,164)
(67,568)
Employee benefit expenses
28
(90,665)
(82,844)
Depreciation and amortisation expense
7
(11,974)
(10,227)
Other operating expenses
(22,164)
(22,240)
Share of profit from equity accounted investments
50
53
Finance costs
7
(5,523)
(3,774)
Profit/(loss) before income tax
7,062
3,166
Income tax (expense)/benefit
8
(2,154)
(995)
Profit from continuing operations
4,908
2,171
Profit for the year
4,908
2,171
Profit attributable to:
Owners of Apiam Animal Health Limited
4,931
2,277
Non-controlling interests
25
(23)
(106)
Total comprehensive income/ (loss) for the period
4,908
2,171
Earnings per share for profit attributable to the ordinary
equity holders of the company:
Note
Cents
Cents
Basic earnings per share
26
2.76
1.30
Diluted earnings per share
26
2.71
1.28
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
33
Financial Statements for the year ended 30 June 2024
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
2024
2023
As at 30 June 2024
Note
$’000
$’000
Current assets
Cash and cash equivalents
9
1,757
3,172
Trade and other receivables
10
13,369
13,958
Inventories
11
15,144
15,472
Other current assets
12
2,240
2,130
Total current assets
32,510
34,732
Non-current assets
Intangible assets
14
167,599
163,614
Property, plant and equipment
13
51,023
43,812
Investments
273
273
Deferred tax assets
17
4,372
3,605
Total non-current assets
223,267
211,304
Total assets
255,777
246,036
Current liabilities
Trade and other payables
18
12,910
12,435
Lease liabilities
15
5,913
4,984
Other current liabilities
22
2,183
1,346
Current tax liabilities
19
1,333
889
Borrowings
20
-
2,934
Employee benefit obligations
21
11,400
10,677
Total current liabilities
33,739
33,265
Non-current liabilities
Borrowings
20
64,265
66,066
Lease liabilities
15
31,601
24,043
Employee benefit obligations
21
611
543
Deferred tax liabilities
17
3,027
3,718
Other liabilities
505
505
Total non-current liabilities
100,009
94,875
Total liabilities
133,748
128,140
Net assets
122,029
117,896
Equity
Equity attributable to owners of the parent
Share capital
23
135,769
134,840
Corporate re-organisation reserve
24
(26,692)
(26,692)
Non-controlling interest acquisition reserve
24
(6,615)
(6,615)
Share based payment reserve
24
1,093
993
Foreign currency translation reserve
24
2
6
Retained earnings
18,467
15,336
122,024
117,868
Non-controlling interest
25
5
28
Total equity
122,029
117,896
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
34
Financial statements for the year ended 30 June 2024
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Share
capital
Corporate
re-
organisation
reserve
Non-
controlling
interest
acquisition
reserve
Share
based
payment
reserve
Foreign
Currency
Translation
Reserve
Retained
earnings
Total
attributable to
owners of
parent
Non-
controlling
interest
Total
equity
Note
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2022
127,249
(26,692)
(6,615)
871
(19)
13,756
108,550
134
108,684
Issue of new share capital
23
42
-
-
-
-
-
42
-
42
Issue of shares to vendors of business acquired
23
7,119
-
-
-
-
-
7,119
-
7,119
Employee share plan, transfer on exercise of rights
23
430
-
-
(430)
-
-
-
-
-
Employee share plan, share based payments
-
-
-
552
-
-
552
-
552
Foreign currency translation adjustment
-
-
-
-
25
-
25
-
25
Dividends paid
-
-
-
-
-
(697)
(697)
-
(697)
Transactions with owners
7,591
-
-
122
25
(697)
7,041
-
7,041
Profit / (Loss) for the period
-
-
-
-
-
2,277
2,277
(106)
2,171
Total comprehensive income for the period
-
-
-
-
-
2,277
2,277
(106)
2,171
Balance at 30 June 2023
134,840
(26,692)
(6,615)
993
6
15,336
117,868
28
117,896
Issue of new share capital
23
478
-
-
-
-
-
478
-
478
Employee share plan, transfer on exercise of rights
23
451
-
-
(451)
-
-
-
-
-
Employee share plan, share based payments
-
-
-
551
-
-
551
-
551
Foreign currency translation adjustment
-
-
-
-
(4)
-
(4)
-
(4)
Dividends paid
-
-
-
-
-
(1,800)
(1,800)
-
(1,800)
Transactions with owners
929
-
-
100
(4)
(1,800)
(775)
-
(775)
Profit / (Loss) for the period
-
-
-
-
-
4,931
4,931
(23)
4,908
Total comprehensive income for the period
-
-
-
-
-
4,931
4,931
(23)
4,908
Balance at 30 June 2024
135,769
(26,692)
(6,615)
1,093
2
18,467
122,024
5
122,029
The above statement should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
35
Financial statements for the year ended 30 June 2024
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
2024
2023
Note
$'000
$'000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
226,454
214,619
Payments to suppliers and employees (inclusive of GST)
(198,370)
(189,993)
28,084
24,626
Interest paid
(5,523)
(3,774)
Transaction costs paid relating to acquisition of subsidiary
(190)
(416)
Income taxes paid
(3,493)
(3,031)
Net cash (outflow)/inflow from operating activities
27
18,878
17,405
Cash flows from investing activities
Payments for property, plant and equipment
(4,778)
(7,855)
Payments for intangible assets
14
(90)
(350)
Proceeds from disposals of property, plant & equipment
174
128
Dividends received
50
50
Acquisition of subsidiaries, net of cash acquired
32
(6,263)
(32,543)
Net cash (outflow)/inflow from investing activities
(10,907)
(40,570)
Cash flows from financing activities
Proceeds from borrowings
27,690
39,049
Repayment of borrowings
(29,730)
(10,111)
Lease payments
(6,024)
(4,773)
Dividends paid to company shareholders
(1,322)
(673)
Net cash (outflow)/inflow from financing activities
(9,386)
23,492
Net (decrease)/increase in cash and cash equivalents
(1,415)
327
Cash and cash equivalents at the beginning of the year
3,172
2,845
Cash and cash equivalents at end of the year
9
1,757
3,172
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
36
Financial statements for the year ended 30 June 2024
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 2024 were approved and authorised for issue by the
Board of Directors on 23 August 2024.
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.
Apiam Animal Health Limited
37
Financial statements for the year ended 30 June 2024
4
Summary of accounting policies
Overall considerations
The consolidated financial statements have been prepared using the material 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 2024.
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.
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 were historically accounted for in the accounts prospectively from the date
the group obtained the ownership interest.
Apiam Animal Health Limited
38
Financial statements for the year ended 30 June 2024
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 was 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:
• Clinical Vet Services (formerly 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.
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
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.
Apiam Animal Health Limited
39
Financial statements for the year ended 30 June 2024
Sale of veterinary services
Revenue from the sale of veterinary services is recognised over time as the services are provided based on either a fixed
price or an hourly rate.
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 7.
Intangible assets
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and
separately recognised. See Note 4.3 for information on how goodwill is initially determined. Goodwill is carried at cost less
accumulated impairment losses. Refer to Note 4.12 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.
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 4.11). 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: 3-15 years
•
Plant & equipment: 2-10 years
•
Motor vehicles: 4-5 years
Apiam Animal Health Limited
40
Financial statements for the year ended 30 June 2024
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
Assets under construction commence depreciation once the asset is put into service.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
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.
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.
Apiam Animal Health Limited
41
Financial statements for the year ended 30 June 2024
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
42
Financial statements for the year ended 30 June 2024
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
43
Financial statements for the year ended 30 June 2024
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 34.3 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
44
Financial statements for the year ended 30 June 2024
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
45
Financial statements for the year ended 30 June 2024
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
46
Financial statements for the year ended 30 June 2024
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
47
Financial statements for the year ended 30 June 2024
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 4.12).
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
48
Financial statements for the year ended 30 June 2024
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of a business combination
(see Note 4.3). 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
49
Financial statements for the year ended 30 June 2024
5
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:
• Clinical Vet Services (formerly 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:
2024
2023
Segment information
$'000
$'000
Revenue from external customers
204,656
191,757
Segment operating costs
(189,492)
(182,493)
Segment adjusted operating profit before tax
15,164
9,264
Total reporting segment operating profit
15,164
9,264
Other income
174
318
Corporate overheads
(1,946)
(1,964)
Acquisition and integration costs
(190)
(416)
Restructure costs
(667)
(315)
Finance costs
(5,523)
(3,774)
Share of profit from equity accounted investments
50
53
Net profit before tax
7,062
3,166
Income tax
(2,154)
(995)
Net profit after tax
4,908
2,171
6
Revenue
2024
2023
$'000
$'000
Sales revenue
Goods transferred at a point in time
101,732
98,815
Services transferred over time
102,924
92,942
Total revenue
204,656
191,757
Apiam Animal Health Limited
50
Financial statements for the year ended 30 June 2024
7
Expenses
Profit before income tax includes the following specific expenses:
2024
2023
$’000
$’000
Depreciation
Leased buildings(i)
4,999
4,129
Leasehold improvements
783
606
Plant and equipment
2,593
2,366
Motor vehicles
1,395
1,074
Amortisation of intangibles
2,204
2,052
Total depreciation and amortisation
11,974
10,227
Right of use assets
(i)
Finance costs
Interest expense on borrowings
4,486
3,180
Interest expense on lease liabilities
1,037
594
5,523
3,774
Share-based payments expense
550
568
Rental expense
562
613
8
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% (2023: 30%) and the reported tax expense in profit or loss are as follows:
2024
2023
$’000
$’000
Profit from continuing operations before income tax expense
7,063
3,166
Tax at the Australian tax rate of 30% (2023 - 30%)
2,119
950
Adjustments for non-deductible expenses:
Sundry items
7
9
Income tax expense
2,126
959
Income tax expense
2,126
959
Adjustment for current tax in prior periods
28
36
Total current tax expense
2,154
995
Tax expense comprises
Current tax expense/(benefit)
3,612
1,620
Deferred tax expense/(benefit)
(1,458)
(625)
Tax expense/(benefit)
2,154
995
Note 17 provides information on deferred tax assets and liabilities.
Apiam Animal Health Limited
51
Financial statements for the year ended 30 June 2024
9
Cash and cash equivalents
2024
2023
$'000
$'000
Cash at bank and in hand
1,757
3,172
Cash and cash equivalents
1,757
3,172
10
Trade and other receivables
2024
2023
$'000
$'000
Trade receivables, gross
13,142
13,352
Less: allowance for expected credit losses
(666)
(642)
Other receivables
2
65
Rebates receivable
891
1,183
13,369
13,958
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 34.3 Credit risk analysis.
2024
2023
$'000
$'000
Balance at 1 July
642
503
Acquired through business combinations
7
113
Impairment loss
17
26
Balance 30 June
666
642
11
Inventories
2024
2023
$'000
$'000
Stock on hand, at cost
16,299
17,921
Less provision for obsolescence
(1,545)
(2,607)
Stock in transit, at cost
390
158
15,144
15,472
12
Other current assets
2024
2023
$'000
$'000
Prepayments
1,837
1,700
Security deposits
403
430
2,240
2,130
Apiam Animal Health Limited
52
Financial statements for the year ended 30 June 2024
13
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
At 30 June 2023
At cost
36,110
6,635
19,957
10,044
84
72,830
Accumulated depreciation
(10,707)
(1,502)
(10,799)
(6,010)
-
(29,018)
Net book value
25,403
5,133
9,158
4,034
84
43,812
Year ended 30 June 2024
Opening net book value
25,403
5,133
9,158
4,034
84
43,812
Additions
11,018
981
1,832
1,982
(17)
15,796
Additions through business
combinations
860
0
145
181
-
1,186
Depreciation charge
(4,999)
(784)
(2,593)
(1,395)
-
(9,771)
Closing net book value
32,282
5,330
8,542
4,802
67
51,023
At 30 June 2024
Cost
47,835
7,591
18,249
11,670
67
85,412
Accumulated depreciation
(15,553)
(2,261)
(9,707)
(6,868)
-
(34,389)
Net book amount
32,282
5,330
8,542
4,802
67
51,023
i)
Right of use Assets
ii)
Includes leased and owned motor vehicles
Apiam Animal Health Limited
53
Financial statements for the year ended 30 June 2024
14 Intangible assets
Goodwill
(i)
Customer
Relation-
ships (i)
Trademarks
& Trade
Names (i)
Capitalised
develop-
ment costs
Total
$'000
$’000
$’000
$'000
$'000
At 30 June 2023
Cost
145,311
17,658
3,183
3,313
169,465
Accumulated amortization and impairment
-
(3,995)
-
(1,856)
(5,851)
Carrying amount at 30 June 2023
145,311
13,663
3,183
1,457
163,614
At July 1 2023
Opening net book value
145,311
13,663
3,183
1,457
163,614
Additions
-
-
-
90
90
Additions through business combinations
4,813
1,285
-
-
6,098
Amortisation
-
(1,803)
-
(400)
(2,203)
Closing net book value
150,124
13,145
3,183
1,147
167,599
At 30 June 2024
Cost
150,124
18,944
3,183
1,789
174,040
Accumulated amortization and impairment
-
(5,799)
-
(642)
(6,441)
Net book value
150,124
13,145
3,183
1,147
167,599
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 Clinical Vet Services (formerly Dairy & 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:
2024
2023
Annual sales growth Pig CGU %
3.00%
3.00%
Annual Sales growth Feedlot CGU %
3.00% to 4.50% 0.00% to 5.00%
Annual Sales growth Clinical Vet Services CGUs %
5.00%
5.00%
Annual operating expenses growth rate %
2.00 to 3.00%
2.00%
Long-term growth rate %
2.50%
2.50%
Post-tax discount rate %
11.20%
10.79%
2024
2023
$’000
$’000
Goodwill allocation across CGUs or groups of CGUs
150,124
145,311
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 14.1, annual operating expense growth rate of 2% to 3% and the long-
term growth rate of 2.5% reflect the average growth rates for the industry.
Apiam Animal Health Limited
54
Financial statements for the year ended 30 June 2024
Discount rates
The post-tax discount rate of 11.20% 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
$’000
Clinical Vet
Services
$’000
Pig
$’000
Total
$’000
Balance 1 July 2023
13,330
123,304
8,677
145,311
Acquisitions
-
4,813
-
4,813
30 June 2024
13,330
128,117
8,677
150,124
Apiam Animal Health Limited
55
Financial statements for the year ended 30 June 2024
15
Lease liabilities
Lease liabilities are presented in the statement of financial position as follows:
2024
2023
$’000
$’000
Lease liabilities (current)
5,913
4,984
Lease liabilities (non-current)
31,601
24,043
37,514
29,027
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 2024 were
as follows:
Minimum lease
payments due
Within
one year
One to
two years
Two to
three
years
Three
to four
years
Four to
five
years
After
five
years
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
30 June 2024
Lease payments
7,231
6,700
6,564
6,206
4,712
11,479
42,892
Finance charges
(1,318)
(1,107)
(903)
(683)
(505)
(862)
(5,378)
Net present values
5,913
5,593
5,661
5,523
4,207
10,617
37,514
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:
2024
2023
$’000
$’000
Short term leases
489
525
Leases of low value assets
73
88
562
613
16 Commitments
2024
2023
$’000
$’000
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Property, plant and equipment
222
1,198
Apiam Animal Health Limited
56
Financial statements for the year ended 30 June 2024
17
Deferred tax assets and liabilities
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
2024
2023
$'000
$'000
The balance of deferred tax assets and liabilities comprises temporary differences
attributable to:
Current assets
Trade and other receivables
205
198
Inventory
680
994
Non-current assets
Property, plant & equipment
(3,034)
(3,977)
Intangible assets
(4,894)
(5,047)
Current liabilities
Trade and other payables
-
24
Provisions
3,905
3,421
Other
Unused tax losses
3,669
3,411
Listing and acquisition costs
669
635
Equity raising costs
145
228
1,345
(113)
Deferred tax assets
4,372
3,605
Deferred tax liabilities
(3,027)
(3,718)
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial
position.
Tax losses
Provis-
ions
Trade
receiv-
ables
Listing &
acquis-
ition costs
Equity
raising
costs
Invento
ry
Trade
and other
payables
Property,
plant &
equipment
Intangible
assets
Total
$'000
$'000
$'000
$'000
$'000
$'000
$’000
$’000
$’000
$'000
At 1 July 2022
2,393
2,999
161
572
312
237
-
(2,216)
(3,626)
832
(Charged)/credited:
to P&L
1,018
422
37
63
(84)
757
24
(1,761)
(1,421)
(945)
at 30 June 2023
3,411
3,421
198
635
228
994
24
(3,977)
(5,047)
(113)
(Charged)/credited:
to P&L
258
484
7
34
(83)
(314)
(24)
943
153
1,458
At 30 June 2024
3,669
3,905
205
669
145
680
-
(3,034)
(4,894)
1,345
Apiam Animal Health Limited
57
Financial statements for the year ended 30 June 2024
18 Trade and other payables
2024
2023
$'000
$'000
Trade payables
6,078
6,317
Sundry payables and accrued expenses
6,832
6,118
12,910
12,435
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
19 Current tax liabilities
2024
2023
$'000
$'000
Current tax payable
1,333
889
20 Borrowings
2024
2023
$'000
$'000
Current:
Bank loans (a)
-
2,956
less capitalized costs
-
(22)
Total current borrowings
-
2,934
Non-current
bank loans (a)
64,280
66,066
less capitalized costs
(15)
-
Total non-current borrowings
64,265
66,066
Refer to Note 34 for information on financial instruments.
Secured liabilities and assets pledged as security
The total secured liabilities (current and non-current) are as follows:
2024
2023
$’000
$’000
Bank loans
64,280
69,022
Less capitalised borrowing costs
(15)
(22)
64,265
69,000
Assets pledged as security
(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
58
Financial statements for the year ended 30 June 2024
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
2024
2023
$'000
$'000
Total facilities
Bank - term loan facilities
100,000
100,000
Bank - master asset finance agreement for equipment finance
4,500
4,500
Bank - overdraft facility
500
500
Bank - credit card facility
500
500
Bank – guarantee facility
690
-
106,190
105,500
Used at reporting date
Bank - term loan facilities
64,280
69,022
Bank - master asset finance agreement for equipment finance
4,295
2,875
Bank – guarantee facility
229
-
68,804
71,897
Unused at reporting date
Bank - term loan facilities
35,720
30,978
Bank - master asset finance agreement for equipment finance
205
1,625
Bank - overdraft facility
500
500
Bank - credit card facility
500
500
Bank – guarantee facility
461
-
37,386
33,603
21 Employee benefit obligations
2024
2023
$'000
$'000
Leave obligations current
11,400
10,677
Leave obligations non-current
611
543
12,011
11,220
Employee benefits
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 $11,400 (2023: $10,677) 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.
22 Other current liabilities
2024
2023
$'000
$'000
Contract liability
1,767
1,219
Make good provision
416
127
2,183
1,346
.
Apiam Animal Health Limited
59
Financial statements for the year ended 30 June 2024
23 Equity
23.1 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.
2024
2023
2024
2023
Shares
Shares
$'000
$’000
Shares issued and fully paid
· beginning of the period
177,959,623
166,388,823
134,840
127,249
· shares issued as consideration for business
acquisitions
-
11,021,249
-
7,119
· issued under dividend reinvestment plan
1,433,667
33,475
478
25
· employee shares issued
518,411
516,076
451
447
Shares issued and fully paid
179,911,701
177,959,623
135,769
134,840
Total shares authorised at the end of the period
179,911,701
177,959,623
135,769
134,840
Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders’
meeting of Apiam.
24 Reserves
Details of reserves are as follows:
Corporate
reorganisation
reserve
Non-
controlling
interest
acquisition
reserve
Share
based
payment
reserve
Foreign
Currency
Translation
reserve
Total
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2022
(26,692)
(6,615)
871
(19)
(32,455)
Employee share plan incentive
-
-
122
-
122
Foreign currency translation
-
-
-
25
25
Balance at 30 June 2023
(26,692)
(6,615)
993
6
(32,308)
Employee share plan incentive
-
-
100
-
100
Foreign currency translation
-
-
-
(4)
(4)
Balance at 30 June 2024
(26,692)
(6,615)
1,093
2
(32,212)
25 Non-controlling interests
2024
2023
$’000
$’000
Issued capital
140
140
Current year earnings
(23)
(106)
Retained profits carried forward
(112)
(6)
Total non-controlling interests
5
28
Apiam Animal Health Limited
60
Financial statements for the year ended 30 June 2024
26 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.
2024
2023
$'000
$'000
Profit attributable to Owners of Apiam Animal Health
Limited
4,931
2,277
4,931
2,277
The weighted average number of shares for the purposes of calculating basic and diluted earnings per share are as follows:
2024
2023
Number
Number
weighted average number of shares used in basic earnings per share
178,512,336
175,031,496
weighted average number of performance rights
3,476,858
2,730,416
weighted average number of shares used in diluted earnings per share
181,989,193
177,761,912
Basic earnings per share (cents)
2.76
1.30
Diluted earnings per share (cents)
2.71
1.28
Dividends
During the year, the following dividends were declared and paid.
2024
2023
$'000
$'000
fully franked final dividend (0.4 cents a share)
-
697
fully franked interim dividend (1.0 cents a share)
1,800
-
1,800
697
Franking credits
2024
2023
The amount of the franking credits available for subsequent
periods:
$'000
$'000
Balance at the end of the reporting period
15,908
12,528
Franking debits that will arise from the payment of
dividends recognised as a liability at the end of the
reporting period
(771)
(305)
franking credits that will arise from the payment of the
amount of provision for income tax
1,333
889
16,470
13,112
Apiam Animal Health Limited
61
Financial statements for the year ended 30 June 2024
27
Reconciliation of cash flows from operating activities
(a) Reconciliation of cash flows from operating activities
2024
2023
Cash flows from operating activities
$’000
$’000
Profit for the period
4,908
2,171
Adjustments for:
·
depreciation and amortisation expense
11,974
10,227
·
doubtful debt expense
272
233
·
obsolete stock provision
(1,061)
2,464
·
amortisation of borrowing costs
7
6
·
profit on sale of fixed assets
(174)
(318)
·
share benefits expense
551
570
·
share of profit in equity accounted investments
(50)
(53)
·
Net changes in working capital:
·
decrease/(increase) in trade and other receivables
441
2,028
·
decrease/(increase) in inventories
1,549
1,166
·
decrease/(increase) in other assets
(99)
(387)
·
decrease/(increase) in deferred tax asset
(767)
853
·
increase/(decrease) in trade and other payables
468
(246)
·
increase/(decrease) in income tax payable
444
(1,411)
·
increase/(decrease) in deferred tax liability
(1,016)
(1,478)
·
increase/(decrease) in employee benefit obligations
599
522
·
increase/(decrease) in other current liabilities
836
1,033
·
increase/(decrease) in foreign currency translation reserve
(4)
25
Net cash received in operating activities
18,878
17,405
28
Employee remuneration
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Employee benefits – expense
2024
2023
$’000
$’000
Wages and salaries expense
81,814
75,567
Bonus expense
459
159
Share-based payment expense
550
568
Superannuation expense
7,842
6,550
Employee benefits expense
90,665
82,844
Share-based employee remuneration
As at 30 June 2024, 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 2024 is set out below:
Type
Balance at
1/07/2023
Granted
Vested and
Exercised
Forfeited
Held as at
30/06/2024
Performance rights
2,739,687
2,883,892
(537,077)
(612,529)
4,473,973
Apiam Animal Health Limited
62
Financial statements for the year ended 30 June 2024
29
Auditor remuneration
2024
2023
$
$
Audit services – Grant Thornton Audit Pty Ltd
Remuneration for audit or review of financial statements
290,345
352,839
Other services – Grant Thornton
•
taxation services
-
2,120
•
due diligence services
-
122,669
Total other services remuneration
-
124,789
Total auditor’s remuneration
290,345
477,628
30
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:
2024
2023
$
$
Short-term employee benefits:
salaries including bonuses and non-monetary benefits
1,943,051
1,550,579
accrued annual leave entitlements
71,472
61,460
non-monetary benefits
22,643
15,602
Total short-term employee benefits
2,037,166
1,627,641
Long- term employee benefits:
Accrued long service leave entitlements
77,838
59,768
Share based payments expense
46,528
47,283
Total long-term employee benefits
124,366
107,051
Post-employment benefits:
superannuation
133,521
107,232
Total post-employment benefits
133,521
107,232
Termination benefits
63,618
-
Total remuneration
2,358,671
1,841,924
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 $403,051 (2023: $378,303).
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 $147,708 (2023: $135,941).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris Richards. Lease payments
made amounted to $126,983 (2023: $119,186).
The Group leases an equine clinic facility at Beet Road, Maffra, Victoria. The premises are owned by an entity associated
with Duncan Runciman. Rent payments made in FY24 amounted to $34,405 (2023: $32,712).
Apiam Animal Health Limited
63
Financial statements for the year ended 30 June 2024
31
Contingent liabilities
In the Directors’ view, there are no contingent assets or liabilities that will have a material effect on the Group.
32
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 Boyne Tannum Vet Surgery (BTVS) and
acquired 100% of the issued share capital and voting rights of Macleay Valley Veterinary Services (MVVS). The
acquisition of these veterinary businesses expands Apiam’s presence in clinical vet services in regional New South Wales
and Queensland.
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.
BTVS
MVVS
Total
$’000
$’000
$’000
Fair value of consideration transferred
Amounts settled in cash
2,661
3,603
6,264
Total fair value of consideration transferred
2,661
3,603
6,264
Recognised amounts of identifiable net assets
Cash and equivalents
-
1
1
Trade and other receivables
16
107
123
Inventories
68
92
160
Other assets
-
11
11
Total current assets
84
211
295
Customer relationships
574
711
1,285
Property, plant & equipment
302
884
1,186
Total non-current assets
876
1,595
2,471
Employee benefit obligations
39
129
168
Lease liabilities
-
122
122
Total current liabilities
39
251
290
Lease liabilities
174
502
676
Employee benefit obligations
8
16
24
Deferred tax liabilities
157
168
325
Total non-current liabilities
339
686
1,025
Identifiable net assets
582
869
1,451
Goodwill on acquisition
2,079
2,734
4,813
Net cash outflow on acquisition
2,661
3,602
6,263
Apiam Animal Health Limited
64
Financial statements for the year ended 30 June 2024
Consideration transferred
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 amounting to $189,736 are not included as part of the consideration transferred and have been
recognised as an expense in the consolidated statement of profit of loss. Acquisition related costs were made up of
state government transfer duties, legal, accounting and other miscellaneous expenses.
Identifiable net assets
The accounting for all business combinations has been finalised as at 30 June 2024.
The fair value of the trade and other receivables acquired as part of the business combinations amounted to $123,000
with a gross contractual amount of $130,000. As at the acquisition date, the Group’s best estimate of the contractual cash
flows not expected to be collected amounted to $7,000.
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 2024 and is attributable to the
Clinical Vet Services (formerly Dairy & Mixed) segment. The goodwill that arose from this business combination is not
expected to be deductible for tax purposes.
33 Interests in subsidiaries
Composition of the Group
Set out below details of the subsidiaries held directly by the Group:
Name of the Subsidiary
Country of
incorporation
and principal
place of
business
Principal activity
Group proportion of
ownership interests
2024
2023
Chris Richards & Associates Pty Ltd
Australia
Veterinary services
100%
100%
Country Vet Wholesaling Pty Ltd
Australia
Wholesale supply
100%
100%
Apiam Logistics Services Pty Ltd
Australia
Transport
100%
100%
Apiam Management Pty Ltd
Australia
Payroll
100%
100%
Southern Cross Feedlot Services Pty Ltd
Australia
Veterinary services
100%
100%
Westvet Wholesale Pty Ltd
Australia
Wholesale supply
100%
100%
Portec Veterinary Services Pty Ltd
Australia
Veterinary services
100%
100%
Pork Storks Australia Pty Ltd
Australia
Genetics
100%
100%
McAuliffe Moore & Perry Pty Ltd
Australia
Veterinary services
100%
100%
Warrnambool Veterinary Clinic Pty Ltd
Australia
Veterinary services
100%
100%
Scottsdale Veterinary Services Pty Ltd
Australia
Veterinary services
100%
100%
Smithton Veterinary Service Pty Ltd
Australia
Veterinary services
100%
100%
AAH Clinics NSW & QLD Pty Ltd
Australia
Veterinary services
100%
100%
AAH - Bell Vet Services Pty Ltd
Australia
Veterinary services
100%
100%
CVH Gippsland Pty Ltd
Australia
Veterinary services
100%
100%
CVH Southern Riverina Pty Ltd
Australia
Veterinary services
100%
100%
AAH Veterinary Services Pty Ltd
Australia
Veterinary services
100%
100%
Tasvet Wholesale Pty Ltd
Australia
Dormant
100%
100%
Quirindi Feedlot Services Pty Ltd
Australia
Veterinary services
100%
100%
Quirindi Veterinary Clinic Pty Ltd
Australia
Veterinary services
100%
100%
Quipolly Equine Centre Pty Ltd
Australia
Veterinary services
100%
100%
Apiam Animal Health Limited
65
Financial statements for the year ended 30 June 2024
AAH Veterinary Clinics Pty Ltd
Australia
Veterinary Services
80%
80%
Gympie & District Veterinary Services Pty Ltd
Australia
Veterinary Services
100%
100%
Apiam Solutions LLC
USA
Distribution
51%
51%
Fur Life Foundation Ltd
Australia
Charity
100%
100%
South Yarra Pharma Pty Ltd
Australia
Veterinary Services
100%
100%
Animal Consulting Enterprises Pty Ltd
Australia
Manufacturing
100%
100%
The Trustee for Grampians Animal Health
Unit Trust
Australia
Veterinary Services
100%
100%
CrosVet Pty Ltd
Australia
Veterinary Services
100%
100%
Agnes Banks Equine Clinic Pty Limited
Australia
Veterinary Services
100%
100%
North Hill Veterinary Clinic Pty Ltd
Australia
Veterinary Services
100%
100%
The Vet Practice Pty Ltd
Australia
Veterinary Services
100%
100%
Hunter Equine Centre Pty Ltd
Australia
Veterinary Services
100%
100%
Singleton Veterinary Hospital Pty Limited
Australia
Veterinary Services
100%
100%
Macleay Valley Veterinary Services Pty Ltd
Australia
Veterinary Services
100%
0%
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.
34
Financial instrument risk
Risk management objectives and policies
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 2024, 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%
(2023: +/- 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.
Apiam Animal Health Limited
66
Financial statements for the year ended 30 June 2024
Profit for the year
Equity
$’000
$’000
$’000
$’000
+1%
-1%
+1%
-1%
30-Jun-24
666
(666)
666
(666)
30-Jun-23
555
(555)
555
(555)
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:
2024
2023
$’000
$’000
Classes of financial assets:
Cash and cash equivalents
1,757
3,172
Trade and other receivables
13,369
13,958
15,126
17,130
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 10) based on past due amounts and
prior trading history. The amounts at 30 June analysed by the length of time past due, are:
2024
2023
$’000
$’000
Past due under 30 days
2,449
1,889
Past due 30 days to under 60 days
578
584
Past due 60 days and over
1,299
1,437
Total
4,326
3,910
Apiam Animal Health Limited
67
Financial statements for the year ended 30 June 2024
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 2024, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
Within 6
months
6 - 12
months
1 - 4 years
$’000
$’000
$’000
30 June 2024
Bank borrowings
-
-
64,265
Trade and other payables
12,910
-
-
Total
12,910
-
64,265
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
Within 6
months
6 - 12
months
1 - 4 years
$’000
$’000
$’000
30 June 2023
Bank borrowings
2,934
-
66,066
Trade and other payables
12,435
-
-
Total
15,369
-
66,066
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
68
Financial statements for the year ended 30 June 2024
35
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
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
2024
2023
$’000
$’000
Balance at 1 July
-
190
Contingent consideration for acquisitions / (released to profit and loss)
-
(190)
Balance at 30 June
-
-
36
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) which is in line with the covenants of its banking facilities.
Apiam Animal Health Limited
69
Financial statements for the year ended 30 June 2024
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:
2024
2023
$'000
$'000
Total equity
122,029
117,896
Cash and cash equivalents
1,757
3,172
Capital
123,786
121,068
Total equity
122,029
117,896
Borrowings
64,265
69,000
Overall financing
186,294
186,896
Capital-to-overall financing ratio
66%
65%
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
70
Financial statements for the year ended 30 June 2024
37
Parent entity information
Information relating to Apiam Animal Health Limited (‘the Parent Entity’):
2024
2023
$’000
$’000
Statement of financial position
Current assets
1,733
2,628
Total assets
196,787
197,496
Current liabilities
4,512
6,977
Total liabilities
71,979
75,251
Net assets
122,029
117,896
Issued capital
135,448
134,519
Share based payment reserve
1,093
993
Retained earnings / (Accumulated losses)
(14,512)
(17,616)
Total equity
122,029
117,896
Statement of profit or loss and other comprehensive income
Profit for the year
2,434
2,682
Other comprehensive income
50
53
Total comprehensive income
2,484
2,735
The Parent Entity has entered into a deed of cross guarantee. Refer Note 39 for details.
The Parent Entity had no contingent liabilities at 30 June 2024 (2023: $nil).
38
Post-reporting date events
The Apiam Board of Directors have declared the Company’s final dividend of 1 cent per share fully franked on 23 August
2024. The final dividend of $1,814,391 will be paid on 30 September 2024.
Apiam Animal Health Limited
71
Financial statements for the year ended 30 June 2024
39
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
2024
2023
$'000
$'000
Continuing operations
Revenue
137,811
132,220
Other income
156
322
Expenses
Changes in inventory
538
(2,549)
Cost of materials
(43,018)
(43,602)
Employee benefit expenses
(64,892)
(59,945)
Depreciation of property, plant and equipment
(7,943)
(7,038)
Other operating expenses
(12,112)
(12,836)
Finance costs
(5,026)
(3,519)
Share of profit from equity accounted investments
50
53
Profit/(loss) before income tax
5,564
3,106
Income tax (expense)/benefit
(1,638)
(1,030)
Profit from continuing operations
3,926
2,076
Profit for the year
3,926
2,076
Apiam Animal Health Limited
72
Financial statements for the year ended 30 June 2024
Set out below is a consolidated statement of financial position of the parties to the Deed.
Statement of Financial Position
2024
2023
as at 30 June 2024
$’000
$’000
Assets
Current assets
Cash and cash equivalents
1,391
2,716
Trade and other receivables
11,848
13,571
Inventories
11,171
10,866
Other current assets
1,977
1,820
Total current assets
26,387
28,973
Non-current assets
Intangible assets
166,795
161,716
Property, plant and equipment
34,472
28,786
Investments
271
270
Deferred tax assets
2,558
2,355
Total non-current assets
204,096
193,127
Total assets
230,483
222,100
Current liabilities
Trade and other payables
11,721
10,597
Amounts payable to vendors for business acquisitions
1,562
1,321
Current tax liabilities
1,086
862
Borrowings
-
2,934
Lease liabilities
4,608
3,870
Provisions
8,482
7,750
Total current liabilities
27,459
27,334
Non-current liabilities
Borrowings
64,265
66,066
Lease liabilities
22,592
17,219
Provisions
412
388
Deferred tax liabilities
1,068
1,661
Total non-current liabilities
88,337
85,334
Total liabilities
115,796
112,668
Net assets
114,687
109,432
Equity
Equity attributable to owners of the parent
- share capital
134,104
133,174
- corporate reorganization reserve
1,093
993
- share based payment reserve
(26,692)
(26,692)
- non-controlling interest acquisition reserve
(6,610)
(6,587)
- retained earnings
12,792
8,544
Total Equity
114,687
109,432
Apiam Animal Health Limited
73
Financial statements for the year ended 30 June 2024
Consolidated Entity Disclosure Statement
Name of Entity
Type of Entity
Trustee,
partner or
participant in
joint venture
% of
share
capital
held
Country of
incorporation
Australian
resident or
foreign resident
(for tax purpose)
Foreign tax
jurisdiction(s)
of foreign
residents
Apiam Animal Health Limited
Body Corporate
n/a
n/a
Australia
Australian
n/a
AAH - Bell Vet Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
AAH Clinics NSW & QLD Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
AAH Veterinary Clinics Pty Ltd
Body Corporate
n/a
80
Australia
Australian
n/a
AAH Veterinary Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Agnes Banks Equine Clinic Pty Limited
Body Corporate
n/a
100
Australia
Australian
n/a
Animal Consulting Enterprises Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Apiam Logistics Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Apiam Management Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Apiam Solutions LLC
Partnership
n/a
51
United States
of America
Foreign
United States of
America
Chris Richards & Associates Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Country Vet Wholesaling Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
CrosVet Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
CVH Gippsland Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
CVH Southern Riverina Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Fur Life Foundation Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Gympie & District Veterinary Services Pty
Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Hunter Equine Centre Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Macleay Valley Veterinary Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
McAuliffe Moore & Perry Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
North Hill Veterinary Clinic Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Pork Storks Australia Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Portec Veterinary Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Quipolly Equine Centre Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Quirindi Feedlot Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Quirindi Veterinary Clinic Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Scottsdale Veterinary Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Singleton Veterinary Hospital Pty Limited
Body Corporate
n/a
100
Australia
Australian
n/a
Smithton Veterinary Service Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
South Yarra Pharma Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Southern Cross Feedlot Services Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Tasvet Wholesale Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
The Trustee for Grampians Animal Health
Unit Trust
Trust
Trustee
100
Australia
Australian
n/a
The Vet Practice Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Warrnambool Veterinary Clinic Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Westvet Wholesale Pty Ltd
Body Corporate
n/a
100
Australia
Australian
n/a
Apiam Animal Health Limited
74
Financial statements for the year ended 30 June 2024
Basis of Preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act
2001. It includes certain information for each entity that was part of the consolidated entity at the end of the financial
year.
Determination of Tax Residency
Section 295 (3A) of the Corporation Acts 2001 defines tax residency as having the meaning in the Income Tax
Assessment Act 1997. The determination of tax residency involves judgement as there are currently several different
interpretations that could be adopted, and which could give rise to a different conclusion on residency. It should be
noted that the definitions of ‘Australian resident’ and ‘foreign resident’ in the Income Tax Assessment Act 1997 are
mutually exclusive. This means that if an entity is an ‘Australian resident’ it cannot be a ‘foreign resident’ for the
purposes of disclosure in the CEDS.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax
Commissioner's public guidance in Tax Ruling TR 2018/5.
Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in
determining tax residency and ensure compliance with applicable foreign tax legislation.
Partnerships and Trusts
Australian tax law does not contain specific residency tests for partnerships and trusts. Generally, these entities are
taxed on a flow-through basis, so there is no need for a general residence test. Some provisions treat trusts as residents
for certain purposes, but this does not mean the trust itself is an entity that is subject to tax.
Apiam Animal Health Limited
75
Financial statements for the year ended 30 June 2024
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 2024 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 39 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 39.
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 2024.
3 Note 2 confirms that the consolidated financial statements also comply with International
Financial Reporting Standards.
4 The consolidated entity disclosure statement is true and correct.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
23 August 2024
Grant Thornton Audit Pty Ltd
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#12186469
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 2024, 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 material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance
for the year ended on that date; and
b
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.
76
Grant Thornton Audit Pty Ltd
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 14
At 30 June 2024 the carrying value of goodwill, customer
relationships and trademarks is $150.1M, $13.1M 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.
Goodwill must be tested for impairment annually, irrespective
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.
Our procedures included, amongst others:
•
Documenting our understanding of the internal processes
and controls in relation to the valuation of intangible
assets;
•
Assessing the design and implementation of relevant
control(s) in relation to the valuation of intangibles assets;
•
Assessing management’s determination of CGUs based
on the nature of the business and how independent cash
flows are generated;
•
Reviewing management's allocation of intangible assets
resulting from acquisitions;
•
Assessing management’s impairment assessment for
compliance with AASB 136 and evaluating the
reasonableness of key assumptions including discount
rate, growth rate and forecast assumptions;
•
Verifying the mathematical accuracy of the underlying
value in use calculations and evaluating the methodology
used for appropriateness; and
•
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 2024, 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 Company are responsible for the preparation of:
a) the financial report that gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 (other than the consolidated entity disclosure statement); and
b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act
2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
77
Grant Thornton Audit Pty Ltd
i) the financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error; and
ii) the consolidated entity disclosure statement that is true and correct and is free of 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
Responsibilities
The Directors of the Company 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, 23 August 2024
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended
30 June 2024.
In our opinion, the Remuneration Report of Apiam Animal Health Limited, for the year ended 30 June 2024
complies with section 300A of the Corporations Act 2001.
78
Apiam Animal Health Limited
79
Financial statements for the year ended 30 June 2024
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 22 July 2024 (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
42,400,000
23.37%
PETSTOCK INVESTMENTS PTY LTD
Ordinary Shares
21,240,500
12.30%
REGAL FUNDS MANAGEMENT PTY
LIMITED AND ITS ASSOCIATES
Ordinary Shares
20,136,315
11.19%
Apiam Animal Health Limited
80
Financial statements for the year ended 30 June 2024
Number of holders
As at the Reporting Date, the number of holders in each class of equity securities:
Class of Equity Securities
Number of
holders
Fully paid ordinary shares quoted on ASX
178,798,763
Fully paid ordinary shares restricted until 1 November 2024 and quoted on ASX
341,924
Fully paid ordinary shares restricted until 9 December 2024 and quoted on ASX
311,750
Fully paid ordinary shares restricted until 3 February 2025 and quoted on ASX
1,986,676
Total restricted ordinary shares
2,640,350
Total Ordinary Shares on issue
181,439,113
Performance Rights
4,430,570
Voting rights of equity securities
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 1,749 holders of a total of 181,439,113 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
81
Financial statements for the year ended 30 June 2024
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
308
183,403
0.10
1,001 – 5,000
532
1,300,608
0.72
5,001 – 10,000
263
1,997,892
1.10
10,001 – 100,000
483
15,897,401
8.76
100,001 – 999,999,999
167
162,059,809
89.32
Totals
1,753
181,439,113
100.00
Distribution of performance rights holders
Holdings Ranges
Holders
Total Units
%
1 – 1,000
0
0
0.00
1,001 – 5,000
0
0
0.00
5,001 – 10,000
0
0
0.00
10,001 – 100,000
30
1,643,862
37.10
100,001 – 999,999,999
15
2,786,708
62.90
Totals
45
4,430,570
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 ($0.355) is as follows:
Total Shares
UMP Shares
UMP Holders
% of issued
shares held by
UMP holders
181,439,113
326,188
429
0.18%
Apiam Animal Health Limited
82
Financial statements for the year ended 30 June 2024
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
36,661,071
20.21%
PETSTOCK INVESTMENTS PTY LTD
21,240,500
11.71%
UBS NOMINEES PTY LTD
10,947,749
6.03%
CITICORP NOMINEES PTY LIMITED
8,228,248
4.53%
BNP PARIBAS NOMINEES PTY LTD
3,363,296
1.85%
3FJ PTY LTD
3,138,174
1.73%
MR BRIAN SCUTT
2,728,822
1.50%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2,682,139
1.48%
CJOEA FAMILY COMPANY PTY LTD
2,655,767
1.46%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
1,977,759
1.09%
COBASH PTY LIMITED
1,872,006
1.03%
MR ROGER CHARLES CARMODY & MRS MARIS MOORE
CARMODY
1,742,791
0.96%
JINLAND PTY LTD
1,740,000
0.96%
OREM HOLDINGS PTY LTD
1,669,306
0.92%
HAMILTON ANIMAL HEALTH PTY LTD
1,564,270
0.86%
CERTANE CT PTY LTD
1,484,009
0.82%
FERGUS MACBETH HAY
1,446,946
0.80%
FOUR POST INVESTMENTS PTY LTD
1,386,700
0.76%
MRS RACHEL LOUISE O'MEARA
1,377,888
0.76%
SIMON JAMES ROBINSON
1,347,657
0.74%
MICHAEL JAMES WHITEFORD
1,347,657
0.74%
SARAH LEONNIE JALIM
1,347,657
0.74%
Total Securities of Top 20 Holdings
111,950,412
61.70%
Total of Securities
181,439,113
100.00%
Apiam Animal Health Limited
83
Financial statements for the year ended 30 June 2024
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
2,640,350 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
4,430,570
45
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.
ANNUAL REPORT 2024
APIAM.COM.AU
DIRECTORS
Professor Andrew Vizard
Dr Christopher Richards
Mr Richard Dennis
Dr Jan Tennent
Evonne Collier
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
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
BANKERS
National Australia Bank
395 Bourke Street
Melbourne VIC 3000
SHARE REGISTRY
Boardroom Pty Ltd
Level 8, 210 George Street
Sydney NSW 2000
T 1300 737 760
STOCK EXCHANGE
LISTING
Australian Securities Exchange
Level 50, South Tower, Rialto
525 Collins Street
Melbourne VIC 3000
ASX CODE
AHX
WEBSITE
apiam.com.au
CORPORATE
DIRECTORY