Can Apiam’s Strategic Reset Reverse Profit Slide Amid $0.88 Per Share Takeover Bid?

Modest Revenue Growth Masks Profit Pressure

Apiam Animal Health Limited has released its FY25 results, revealing a nuanced performance marked by modest revenue growth of 1.4% to $207.6 million, but a steep 83.1% fall in net profit after tax to just $0.8 million. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 5.2% to $25.8 million, reflecting operational efficiencies and strong performance in its Intensive Animal Veterinary Services segment.

However, the overall profit decline was driven by a $4.5 million impairment charge linked to the divestment of the underperforming Agnes Banks Equine Clinic in New South Wales. This divestment, alongside revenue declines in the Clinical Veterinary Services segment; particularly in equine services and ACE Laboratories diagnostics; highlighted challenges in parts of Apiam’s portfolio.

Strategic Reset Program and Leadership Changes

In response to these challenges, Apiam appointed Bruce Dixon as Interim Managing Director in June 2025. Dixon, with over 30 years of leadership experience across healthcare and consumer sectors, has swiftly implemented a Strategic Reset Program aimed at lifting clinic performance and embedding financial discipline across the business.

The program targets the lowest-performing clinics initially, with enhanced oversight and increased EBITDA margin thresholds across the network. Cost savings have already been realised through head office restructuring, expected to deliver $1.5 million in annualised savings from FY26. The company is focused on shifting from top-line growth to sustainable, higher-quality earnings and improved return on capital.

Dividend and Balance Sheet Stability

Despite the profit slump, Apiam declared a fully franked final dividend of 1 cent per share, maintaining a total dividend of 2 cents for FY25. The company’s balance sheet remains stable, with net debt reduced slightly to $63.1 million and compliance with banking covenants intact. Operating cash flow remains strong, underpinning the company’s financial flexibility.

Acquisition Proposal from Adamantem Capital Management

Post reporting period, Apiam disclosed receipt of a non-binding, indicative proposal from Adamantem Capital Management to acquire all shares via a scheme of arrangement at $0.88 cash per share, adjusted to $0.87 after the FY25 final dividend. The proposal includes an option for shareholders to receive part consideration in unlisted shares of the acquiring entity, subject to uptake thresholds.

Apiam’s Independent Board Committee has evaluated the proposal and intends to recommend it to shareholders, subject to due diligence, execution of a binding scheme implementation deed, and absence of a superior offer. The transaction remains conditional on shareholder and regulatory approvals, with no certainty of completion at this stage.

Outlook – Navigating Growth and Profitability

Apiam remains optimistic about the veterinary sector’s growth prospects, driven by increasing demand for animal health services and products. The company’s Strategic Reset Program is central to its FY26 strategy, aiming to enhance profitability and operational efficiency. Meanwhile, the potential acquisition introduces a significant variable for shareholders and the market.