ECO Animal Health Group plc (LSE:EAH) expects to report a decline in half-year revenue to approximately £33 million, compared with £39 million a year earlier, as weak pork prices in China continue to affect demand for veterinary products.
The animal health company said trading for the six months ended September 30, 2026, remained in line with management’s expectations, with growth in markets outside China helping to offset some of the decline in its China and Japan business.
Revenue excluding China increased 6% year on year, supported by growth of more than 50% across South and Southeast Asia.
Despite lower group revenue, ECO expects adjusted EBITDA of approximately £3.0 million, unchanged from the corresponding period last year, supported by improving gross margins and continued cost control.
China Pork Market Weakness Reduces Veterinary Product Demand
ECO Animal Health said an oversupply of pork in China had depressed prices and contributed to financial losses among producers, reducing expenditure on animal health treatments.
The downturn has particularly affected sales within the company’s China and Japan geographical segment.
According to figures cited by the company, China’s national wholesale pork price declined to approximately 14.3–14.5 yuan per kilogram in late June and early July before recovering to 16.40 yuan by mid-September.
Prices subsequently weakened to 15.49 yuan per kilogram in the week ending November 1, approximately 6% below the September peak and 13.8% lower than a year earlier.
However, ECO noted signs of adjustment in the Chinese pork market, with the breeding sow population falling 10.7% year on year to 36 million animals at the end of September.
The company believes this reduction in future supply could support a recovery in pork prices during 2027.
Management also expects seasonal demand and increased disease prevalence during the autumn and winter months to support demand for veterinary treatments, including its Aivlosin antibiotic.
Nevertheless, ECO warned that full-year revenue from its China and Japan segment was likely to be less than half the level recorded in FY2026.
Gross Margin Expected to Improve to 52%
ECO Animal Health expects its gross profit margin to increase to approximately 52% for the first half, compared with 49.6% in the corresponding period last year.
The improvement, alongside continued operating cost discipline, is expected to offset the impact of weaker sales on adjusted EBITDA.
The company anticipates reporting adjusted EBITDA of approximately £3.0 million, broadly unchanged year on year.
Earnings per share are expected to improve significantly compared with the previous year, reflecting the exclusion of the minority interest previously associated with the China segment.
ECO reported a cash balance of approximately £24 million at September 30, 2026, consistent with management’s expectations.
ECOVAXXIN MS Vaccine Begins Generating Revenue Following EU Launch
The company confirmed that its ECOVAXXIN MS poultry vaccine recorded its first commercial sales following its European Union launch in July 2026.
The vaccine targets Mycoplasma synoviae, a bacterial infection affecting poultry.
Initial revenue contributions were modest and in line with expectations, although ECO reported that customer adoption was accelerating as users progressed beyond initial product trials.
The launch represents an important development in the company’s strategy to expand beyond its established antibiotic portfolio into preventative animal health products.
ECO continues to invest in research and development, with a particular focus on vaccines and other products intended to improve livestock health and productivity.
Its principal product, Aivlosin, remains a significant part of the business, with distribution across more than 70 markets.
Full-Year EBITDA Expectations Maintained Despite Revenue Pressure
ECO Animal Health expects trading in markets outside China to remain consistent with management’s forecasts during the second half of the financial year.
However, the continued weakness in China is expected to result in full-year group revenue falling below market consensus.
The board nevertheless anticipates that improving gross margins and ongoing cost management will help protect profitability.
As a result, adjusted EBITDA for the full year is expected to remain broadly in line with market expectations, while earnings per share are also forecast to be broadly consistent with consensus.
Chief Executive David Hallas said the downturn in China’s pork market had affected first-half trading, although stronger performance in other regions and margin improvements had helped maintain profitability.
He added that management expected conditions in China to improve during the second half, while increasing sales of ECOVAXXIN MS and progress across the company’s product development pipeline could support future growth.
ECO Animal Health is scheduled to publish its interim results for the six months ended September 30, 2026, on November 30, 2026.
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