The statement also flagged up two financial issues which had recently emerged: that it will have to make a provision for a possible but unanticipated sales tax sales liability and treat certain previously capitalised development costs as an expense. The impact of these two items will be largely offset by exchange rate gains and ECO expects to report sales in excess of £82.5m and EBITDA of £6.5m, both broadly in line with consensus. Current trading has been weak in the key Chinese market and will probably impact consensus results for FY23. This latter aspect of the trading statement has had a predictable effect on the shares, which have fallen by c. 20% in response, and are around their lowest level for many years. ECO should be able to give more colour on its assessment of overall trading in FY23 with its forthcoming results. With cash at the last balance sheet date of almost £23m, its EV currently stands at £45m. Thus, based on known FY22 figures, their EV/sales ratio is currently 0.54 and its EV/EBITDA at 6.9 – both very low by any standards and certainly the norms of the animal health sector.