TIDMPHC
RNS Number : 3338O
Plant Health Care PLC
29 January 2019
PLANT HEALTH CARE plc
("Plant Health Care" or the "Company")
Trading Update
Plant Health Care(R) , a leading provider of novel
patent-protected biological products to global agriculture markets,
issues the following post year-end trading update ahead of the
announcement of the Company's audited full year financial results
for the year ended 31st December 2018, which are expected to be
announced in April. All results provided are preliminary and
subject to completion of the 2018 audit.
Financial and Commercial Highlights
- Revenue increased to $8.0 million (2017: $7.7 million); in
constant currency, sales increased by 7%.
- Gross Margin improved to 65% (2017: 62%).
- Strong sales growth in the US (up 32% to $2.1 million), Brazil
($1.1 million from zero in 2017), Spain (up 16%) and Mexico (up
10%) was offset by reduced sales in Europe/Africa (down 62%), due
to slower draw-down of in-market inventory in South Africa.
- US sales were driven largely by the launch of a new product
into corn ($1.6 million). The launch of a new product into US soy,
expected in December, is now moving to initial market entry; sales
began in January 2019.
- Sales in Brazil were mainly in sugar cane ($1.0 million), with
additional volumes for the launch into soy through a new partner
($0.1 million).
- Sales of core Harpin <ALPHA><BETA> products increased by 10% (14% in constant currency). Harpin <ALPHA><BETA> and Myconate(R) products represented 67% of sales in 2018 (2017: 69%). Harpin <ALPHA><BETA> sales have now grown at 20% CAGR since 2013.
- Cash and cash equivalents at 31 December 2018 were $4.3
million; the delayed US product launch increased inventory by
approximately $0.5 million. The Company's year end cash reserves
remain sufficient to take us to cash positive in 2020, as
Commercial income grows.
New Technology Highlights
- In 2018, three new partners joined the group of companies
already evaluating the Company's PREtec (Plant Response Elicitor
technology).
- Field trials results of seed treatments based on the three
PREtec platforms, Innatus(TM) 3G, T-Rex 3G, and Y-Max 3G in corn
and soy in North America continue to be promising; several partners
will continue testing in 2019.
- While results of Innatus 3G for the control of Asian Soybean
Rust (ASR) were not sufficient to reach a licence agreement, field
trials continue in the current season, focused on the yield
benefit.
- Excellent progress has been made in production methodology,
with PHC's lead peptide (PHC279) showing potential for
cost-effective production; other peptides are following on a
similar track.
- Submission has been made to the EPA in the US for registration
of PREtec peptides. The Company expects regulatory approval in the
US in 2020. Submission in Brazil is expected in early 2019.
- Discussions on technology licences continue with several
partners. However, given the uncertain timing of concluding the
licences, the Company is evaluating additional routes to market,
with a view to launching product soon after first registrations are
granted.
- The Company is moving lead peptides forward into eight target
markets for fast track product development.
Chris Richards, Interim CEO, commented:
"Plant Health Care continued to make exciting progress in 2018,
in spite of recently announced set-backs.
The launch of our new corn product in the US holds great promise
for future sales growth. Independent field trials in 2018 reported
an average yield increase of 6.2 bushels (3%), which represents an
illustrative 7x ROI for growers. This has encouraged our very
strong channel partner to make significant purchases and recommend
the product widely for use in the 2019 crop. With the expected
level of grower sales in 2019, we anticipate strong sales growth
thereafter.
Sales of our new soy product, which we had expected our channel
partner to launch before the end of 2018, have now started on a
modest scale, as our partner introduces the product to the market.
We expect sales to be comparable to the corn product, over
time.
Our Commercial team in Brazil has got off to an impressive
start. The launch of H2Copla into sugar cane with our partner
Coplacana has gone well, with over 20,000Ha treated to date. With
growers reporting yield increases of up to 20% and an ROI of up to
20x, we have strong expectations for growth in 2019 and progress
towards our target of 500,000 Ha treated in four to five years'
time. The launch of Harpin <ALPHA><BETA> as a soy seed
treatment in Brazil holds out the prospect of sales comparable to
those in sugar cane.
Elsewhere, Mexico bounced back in 2018 and sales growth
continues in Spain. In South Africa, however, sales were held back
by drought and we are still working through inventory.
While 2018 trials of Innatus 3G in Brazil did not show
commercially useful levels of disease control, they did show
significant improvement in yield. Trials continue in the current
crop. Elsewhere, field trials with Innatus 3G, T-Rex 3G and Y-Max
3G continue to expand, with an increasing number of partners, as we
target eight large markets for our lead peptides.
Within the Company, we have made strong progress in production
methods, which gives us great confidence in our ability to produce
PREtec peptides at low cost. At the same time, the submission for
registration by the EPA in the US holds out the prospect of fast
track registration as early as 2020, with registration in Brazil
following later.
As previously stated, the Company's cash reserves remain
sufficient to take us to cash positive in 2020."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Plant Health Care plc
Chris Richards, Interim Chief Executive Officer Tel: +1 919 926 1600
Jeffrey Hovey, Chief Financial Officer
Arden Partners - Nomad and Broker
John Llewellyn-Lloyd / Dan Gee-Summons- Corporate finance Tel: +44 (0) 20 7614 5900
Paul Brotherhood - Equity sales
IFC Advisory - Financial PR Tel: +44 (0) 20 3934 6630
Graham Herring / Miles Nolan / Zach Cohen
Company website: www.planthealthcare.com
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END
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