Veterinary pharmaceutical firm Norbook profits plunge 60%

Operating profits have plunged by around 60% in just a year at Northern Ireland headquartered veterinary pharmaceutical firm Norbrook.

The latest accounts for Norbrook Holdings cover the group’s performance for the 12-month period up until July 31, 2020, and state “supply chain issues” this year led to a £25 million fall in revenue (down from £237 million in 2019).

Norbrook is headquartered in Newry, Co. Down, but also has operations in Brazil, the Netherlands, the USA, Australia, New Zealand, England, Ireland, and South Africa among others.

The manufacturing and sale of veterinary pharmaceutical drugs, as well as associated research, remains the group’s main activity.

AgriLand readers will be familiar with products such as Alamcyin, Betamox, Bovaclox, Calcijet and Closamectin, all of which are made by Norbrook.

Over the same period, group operating profits fell from £11 million last year to £4.4 million – down 60%.

Northern Ireland operations

The Northern Ireland arm of the business – Norbrook Laboratories – also reported a significant drop in revenue – down more than £20 million from £188.4 million in 2019 to £167.7 million this year.

Operating loss for the business locally was reported at £100,000 compared to a loss of £4.3 million the year before.

The report stated that the firm was the first in Northern Ireland to install an on-site Covid-19 testing facility for staff.

‘A difficult first half of the year’

The strategic report explained the group experienced a “difficult” first half of the year driven by “a number of manufacturing and supply chain issues”, which it claimed adversely impacted its ability to supply the market.

“The second half of the year was characterised by a recovery of the manufacturing and supply chain capability back to normalised levels while managing the effects of the coronavirus,” it added.

Year-on-year the group saw a 10.7% fall in sales, coming on the back of a 13.8% drop in 2019.

2019 was also a difficult year for the company as the detection of impurities saw 34 batches of veterinary drugs made at the firm’s site in Newry, Co. Down recalled.

Gross margin, however, was up – going from 33.1% in 2019 to 34.8% this year. The report explained this was due to decreased waste levels and changes to product mixes.

It also revealed that the company had been planning for a ‘no-deal’ exit from the EU, with “clear contingency plans” in place to minimise the impact.

“The board believes that the business is as well prepared as possible in the circumstances,” it stated.