“Looking ahead, stronger market conditions and benefits from improved operational efficiency in Europe put the business in a strong position to return to growth in 2020.”
Revenue increased to £50.9m (2018: £49.8m); however, excluding the impact of the favourable currency movements revenue reduced marginally by 0.3% on a constant currency basis. On a constant currency basis, Interface grew revenue by 0.8% but there were reductions in PCI revenue of 3.8% and Farm Services of 1.6%. The line of business trends reflect the difficult global dairy market trading conditions over the first half of the year. Improved farmer confidence in the second half is a reflection of increased global milk prices, with stable feed prices and moderate production volume growth. This is highlighted by the order intake growing ahead of revenue at £52.1m (2018: £48.7m), increasing 4.5% at constant currency and an opening order book of £3.7m (2018: £2.5m) providing confidence into 2020. Adjusted operating profit and adjusted EBITDA reduced to £7.5m (2018: £8.0m) and £10.5m (2018: £10.9m) respectively, with constant currency decreases of 9.5% and 6.6% respectively.
Operating profit was down to £3.8m (2018: £6.0m) taking into account the impact of the one-off vacant property impairment of £1.1m recognised in the year. The adjusted EBITDA margin of 20.6% (2018: 21.9%) reduced by 1.3% on a constant currency basis. The profit trends reflect the negative operational leverage from lower revenues and the costs of consolidating the European commercial operations into Italy. Looking ahead, stronger market conditions and benefits from improved operational efficiency in Europe put the business in a strong position to return to growth in 2020.
Interface revenue increased to £36.9m (2018: £35.6m), including the impact of favourable currency movements. On a constant currency basis, Interface revenues grew by 0.8% driven by a stronger performance in Europe and Asia Pacific in the second half of the year highlighting the impacts of recovering farmer confidence and our strong relationships with customers. North America revenues of £18.5m (2018: £17.8m) declined by 1.5% on a constant currency basis, reflecting the challenging market conditions over the year with increased farm closures and consolidation in the sector. In Europe, revenue grew by 7.4% to £11.1m at constant currency. Asia Pacific liner revenues increased by 10.2%, at constant currency, as a result of our continued market penetration in these important Chinese and European markets during 2019.
The sales of our PCI range were most affected by the difficult trading over the first half of the year with farmers more hesitant to invest during uncertain market conditions. Revenue fell to £8.7m (2018: £9.0m), a reduction of 3.8% at a constant currency rate as dairy farmers sought to delay investment in our PCI products until more certainty returned to the market. The stabilising market conditions from the spring onwards meant that farmers were more confident to invest in farm efficiency again, highlighted by the order intake of £9.1m (2018: £8.3m), an increase of 5.5% on a constant currency basis. The strong closing order book of £1.4m (2018: £1.0m) gives us confidence in the stronger performance of PCI looking into 2020.
The challenging market conditions in North America impacted Farm Services and interrupted the growth of the lease model with the addition of new farms offsetting farm closures and consolidations. Reflecting the impact of the changing market dynamics, revenue of £5.3m (2018: £5.2m) was down 1.6% at constant currency. The constant currency decline was focused on North America which reduced by 5.3%, offset by an increase of 6.0% in Europe. The consolidation of the North American dairy market we’ve seen in 2019 will fundamentally support the return to growth in Farm Services as the larger dairies are most focused on labour and farm efficiency and animal welfare which is well supported by the full service model and direct to farm relationship of Farm Services.