Apiam Posts 1.4% Revenue Rise, NPAT Plunges 83% on Impairments

Modest Growth Amid Operational Challenges

Apiam Animal Health’s FY25 results reveal a company navigating a mixed performance landscape. Group revenue edged up 1.4% to $207.6 million, supported by a strong 13.1% surge in the Intensive Animal Veterinary Services segment. However, the Clinical Vet Services segment, which accounts for 75% of group revenue, saw a 2.2% decline, weighed down by softer demand in specialty procedures and international market disruptions.

The company’s underlying EBITDA (pre AASB 16) grew 3.2% to $21 million, reflecting modest operational improvements and cost efficiencies. Yet reported net profit after tax plunged 83.1% to just $0.8 million, primarily due to a $4.5 million impairment loss linked to the divestment of underperforming assets, including the NSW-based Agnes Banks Equine Centre.

Strategic Reset and Cost Discipline

In response to these challenges, Apiam initiated a Strategic Reset Program in the final quarter of FY25. This initiative focuses on enhancing clinic network earnings and reducing head office overheads, with $1.5 million in annualised savings already realised through redundancies and restructuring. The program also introduced a Business Improvement Team to intensify clinic-level performance oversight, aiming to lift revenue growth particularly in lower-performing clinics.

These efforts are designed to position Apiam for a stronger FY26, leveraging favourable market dynamics in animal health and veterinary services. The company plans to capitalise on growth drivers such as the ageing cohort of COVID-era companion pets and expanded vaccine business opportunities, while continuing to streamline operations.

Acquisition Proposal from Adamantem Capital

Adding a significant development to the FY25 narrative, Apiam has received a non-binding indicative proposal from private equity firm Adamantem Capital to acquire the company via a scheme of arrangement at $0.88 per share, adjusted to $0.87 after the declared final dividend. The Board has granted Adamantem exclusivity to conduct due diligence and negotiate a binding agreement, with an independent board committee signalling intent to recommend the proposal subject to conditions and the absence of a superior offer.

This potential transaction introduces an element of uncertainty but also opportunity for shareholders, as the Board considers declaring a special dividend to enhance value through franking credits. Shareholders will be closely watching forthcoming updates as the process unfolds.

Outlook and Market Implications

Looking ahead, Apiam’s FY26 strategy hinges on executing the Strategic Reset Program to drive revenue growth and operational efficiencies, alongside prudent capital management focused on debt reduction. The company’s ability to reverse the Clinical Vet Services segment’s recent underperformance will be critical to restoring investor confidence and sustaining momentum.

While the acquisition proposal adds a layer of complexity, it also underscores the value seen in Apiam’s core business and growth prospects. Market participants will be keen to assess how these strategic moves translate into financial performance and shareholder returns in the coming year.