TIDMPHC
RNS Number : 0415O
Plant Health Care PLC
30 September 2019
RNS
30 September 2019
Plant Health Care plc
("Plant Health Care", the "Group" and the "Company")
Interim Results 2019, Update on Current Trading and Revised
Strategic Focus
Plant Health Care(R) (AIM: PHC.L), a leading provider of novel
patent-protected biological products to global agriculture markets,
announces its unaudited interim results for the six months ended 30
June 2019.
Financial Highlights
- Revenue for the six months ended 30 June 2019 was $2.7 million
(2018: $3.0 million); a first-half order of $0.5 million for Brazil
fell into July due to import licence delays.
- Cash outflows decreased 35% to $2.9 million (2018: $4.4 million).
- Adjusted LBITDA* improved to $4.2 million (2018: $5.6 million).
- The Company had cash reserves of $1.4 million as at 30 June 2019.
Operational Highlights
- Sales orders were up 10% at $3.3 million (2018: $3.0 million),
despite challenging market conditions.
- Excluding Brazil, sales were up 4% at $2.7 million (2018: $2.6 million).
- Harpin 𝜶<BETA> is delivering exceptional
results in both Brazil sugar cane and US corn despite the difficult
market environment.
- Trials with the Group's PREtec peptides continue to show
strong results, in Brazil soybeans and in a range of crops in the
US and EU.
- The Group has made good progress towards preparing for direct
sales of PREtec peptides, targeting markets worth more than $5
billion. Registration is progressing and production of PREtec
peptides is now scaling up from laboratory to pilot scale.
Commercial Business
The success of Harpin 𝜶<BETA> has encouraged
the Company to rebalance its resources to focus on accelerating the
rate of profitable organic growth in the commercial business.
The Commercial business is forecast to be profitable and cash
generative in 2019, with profitable growth continuing in future
years. The Board is committed to achieving cash breakeven within
existing resources and will take the necessary steps to achieve
it.
PREtec
Trials with the Group's first PREtec peptide (PHC279) as a seed
treatment in Brazil soybeans, showed up to 45% improved control of
Asian Soybean Rust (ASR) and up to 16% yield increase. These
compelling results have attracted material interest from growers
and distributors.
Projected production costs of PREtec peptides are lower than
previously anticipated, and we have robust commercial formulations.
The Company is now progressing through a well-established process
to register and sell directly into major markets where the total
value of opportunity is c$5 billion.
Following a review by the Board, the Company will rebalance its
resources to prioritise profitable growth from the Commercial
business. As a consequence, the resources applied to R&D,
registration and launch of new products will be reset to achieve
their goals within our financial means. The Company will continue
to explore opportunities to fund the development of the PREtec
peptides.
Board changes
As part of this review the Company is strengthening the Board
with changes aimed at improving execution of the strategy; Richard
Webb will become Non-Executive Chairman, while Chris Richards will
become CEO to focus on operational delivery, with effect from
October 1(st) , 2019.
In parallel, Michael Higgins, Audit Committee Chair and Senior
Independent Director, will stand down from the Board on September
30(th) . We are at an advanced stage of appointing a successor to
Michael, with details to be announced in due course. Until then,
interim arrangements include the appointment of Bill Lewis to serve
as Interim Audit Committee Chair.
Dr Christopher Richards, Executive Chairman and Interim CEO,
commented:
"I am delighted with the progress Plant Health Care has made
during the first half of 2019. The Group's Commercial business is
forecast to generate a material EBITDA in 2019, for the first time.
The substantial benefits of Harpin 𝜶<BETA> to
growers are now abundantly clear.
We are confident of achieving material revenue growth in 2019
despite macro-level market-driven challenges, although revenue will
be slightly lower than previous expectations.
Finally, I would like to express my thanks to Michael Higgins
for his outstanding work on the Plant Health Care Board over the
past six years."
*LBITDA: loss before interest, tax, depreciation, amortisation,
shared-based payments and intercompany currency adjustments.
In this document, references to "the Company" are to Plant
Health Care plc. References to "Plant Health Care", "the Group",
"we" or "our" are to Plant Health Care plc and its subsidiaries and
lines of business, or any of them as the context may require. The
Plant Health Care name and logo, Myconate, and Innatus and other
names and marks appearing herein and on company literature are
trademarks or trade names of Plant Health Care. All other
third-party trademark rights are acknowledged.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
Plant Health Care plc
Chris Richards - Executive Chairman and
Interim CEO
Jeffrey Hovey - Chief Financial Officer +1 919 926 1600
Arden Partners plc - Nomad and Broker
John Llewellyn-Lloyd / Dan Gee-Summons +44 (0) 20 7614 5900
Company website: www.planthealthcare.com
Chairman's statement
Introduction
I am pleased to report the interim results for the six months
ended 30 June 2019. The Commercial business has continued to make
good progress, with sales orders up 10% in a very challenging
market environment. We anticipate that the Commercial business will
generate a material EBITDA in the full year 2019; the continued
strong growth of Harpin 𝜶<BETA> sales will take
the Group to cash positive in due course.
Harpin 𝜶<BETA> is gaining more users in Brazil
sugar cane; we are targeting sugar mills which plant 3 million
hectares of sugarcane. Restrictions on import licences are
currently holding back sales and we are working to resolve those
limitations. With very low sugar prices, the area of sugarcane has
reduced to some 8.4 million hectares (previously 10 million
hectares) and producers are seeking extended payment terms. Harpin
𝜶<BETA>, however, provides very substantial
benefits in efficiency, which is encouraging increased use even in
these conditions.
In the US, the launch into the 90 million acre corn market has
been well received. Corn treated with Harpin
𝜶<BETA> at planting have emerged from the ground
taller and more robust than untreated corn; we anticipate that this
will boost yield at harvest in the coming weeks. US corn, however,
has been hit very hard by the combination of low commodity prices
and the worst weather in decades, which delayed planting. While
this held back on ground sales, the area treated (approx. 350,000
acres) was an encouraging start. We are currently in discussion
with our distributor on sales for Q4 2019.
The recent agreement with Wilbur Ellis for the distribution of
Employ (Harpin 𝜶<BETA>) into specialty crops in
the US is already leading to increased sales into those crops.
Distribution agreements with strong partners now give Harpin
𝜶<BETA> access to crops grown on more than 30
million hectares. We expect this to drive accelerated revenue
growth over the coming years.
In New Technology, we were excited to report positive results
with PHC279 as a seed treatment in Brazil soybeans. PHC279
significantly improved ASR control of foliar fungicide programmes,
even in fields facing heavy disease pressure. Disease control was
improved by up to 45% when PHC279 was applied as a seed treatment.
In addition, yields of soybeans were increased by up to 16% when
compared with foliar fungicide programmes alone. These results
provide increasing support for the acceptance of PHC279 as a
compelling tool to combat ASR.
Positive results continue to be generated in other crops, in the
US and in Europe. Based on these results, the Group intends to
commercialise PREtec peptides in markets worth more than $5
billion, starting with PHC279, an Innatus 3G peptide. The first
launches are likely to be into corn and soybeans in the USA and in
soybeans in Brazil for the control of ASR.
The Group has recently announced an agreement with Penn State
University, which will scale up production of PHC279 from our
laboratory scale methods to pilot scale. This is the next step
towards full commercial production. PHC279 is progressing through
the registration in the US and the Group intends to seek a fast
track product registration in Brazil. Other PREtec peptides will
follow.
Commercial Products
Our Commercial business markets our proprietary products
worldwide through distributors and also distributes complementary
third-party products alongside our own products in Mexico. The
Group has a portfolio of existing products, based on our
proprietary Harpin 𝜶<BETA> and Myconate(R)
technologies. Harpin-based products are now well established in
certain markets. Over the last three years, the Group has extended
distribution into large crops; we now have access to markets
covering more than 30 million hectares, with strong, committed
partners.
During the first half of 2019, overall product sales were $2.7
million (H1 2018: $3.0 million). Orders were up 10% to $3.3m ($3.0m
in 2018) but delays in achieving an import licence in Brazil pushed
some sales into H2. The gross margin decreased to 57% compared to
60% over the same period in 2018, due to the increased proportion
of third-party sales.
Sales in Mexico increased by 12% (12% in local currency).
Despite headwinds caused by the possible tariffs imposed by the US
government, Harpin 𝜶<BETA> sales increased by 28%
with launches into the strawberry and chilies markets in northwest
Mexico.
Sales in the Americas decreased 47%, mainly due to delays in the
import of product into Brazil in the first half of 2019. These
sales occurred in the beginning of the second half of 2019. The
Group has a limited licence to import into Brazil and continues to
work with Brazilian authorities to secure an unlimited licence
which will allow for timely shipments of Harpin
𝜶<BETA> into Brazil. Harpin
<ALPHA><BETA> was launched in Brazil in February 2018
for use on sugarcane, through Coplacana, a leading cooperative.
Demonstration field trials conducted in 2016-2019 showed an average
yield increase of over 21%. Subsequent to these trials, the Group
has also initiated 56 trials with 15 sugar mills in São Paulo state
representing 3.0 million hectares of sugarcane. First results from
these trials are expected in late October.
The launch of Harpin 𝜶<BETA> as a seed
treatment product for field corn in the US has been well received.
Demonstration plots showed that corn treated with Harpin
𝜶<BETA> emerged from the ground taller and more
robust than conventionally treated corn. This was especially
visible when the crop was under stress, for example from excess
soil moisture. Despite record rainfall and reduced planted corn
acres due to flooding, we estimate that 350,000 acres were treated
in 2019. Our distribution partner considers the launch to have been
successful.
In June 2019, we signed an exclusive agreement with Wilbur
Ellis, one of the largest US agricultural distributors, with sales
of over $3 billion, for distribution of Employ to specialty crops.
These crops are grown on some 7 million acres in the US; the
agreement with Wilbur Ellis gives us materially increased access to
these crops. We are already seeing increased orders resulting from
this agreement.
Sales in Europe/Africa decreased by 18% (12% in constant
currency). This was partially due to channel stock remaining high
in the South African region. The Group is also experiencing a
registration delay in Turkey, which delayed sales in the first half
of 2019. We expect to obtain the registration in the second half of
2019, which will allow sales to occur in the fourth quarter of
2019. Sales in Spain increased 8% (15% in constant currency)
through increased sales into the citrus and rice markets. We expect
to further expand sales through our Spanish subsidiary into the
citrus and grape markets in Peru and Chile.
Sales by the Group in any one period will be subject to a number
of seasonal and market-related factors, as well as the terms of
agreements with third parties and the timing of product
registrations. As a result, the Group's sales may not follow a
strictly linear trend. Historically, Group sales have been heavily
weighted towards the second half of the year.
New Technology
Plant Response Elicitor technology (PREtec)
Plant Health Care develops and commercialises novel peptides
that work in a manner analogous to 'vaccines' for plants. When they
come in contact with plants, these substances provoke the plants'
natural defence systems, and elicit a variety of useful responses
for the farmer, such as improved growth and yield. A pipeline of
these peptides is being evaluated by the Group and its partners in
many crops around the world. For each of a number of targeted crops
and uses, a lead peptide has been selected and is advancing towards
commercialisation.
Product development
In support of product development, we continue to conduct a wide
range of field trials in 2019. Promising results from this season
that demonstrate improved disease and nematode control and yield in
vegetables are now being reviewed. Later this year we will see
results from the first field trials of a new liquid formulation for
use as soybean and corn seed treatments, as well as data from a set
of European disease control studies in wheat.
Asian Soybean Rust in Brazil
Brazil is the world's largest exporter of soybeans, with some 36
million hectares planted in 2018. One of the challenges of
producing soybeans in Brazil is Asian Soybean Rust (ASR), which can
be a devastating disease. Growers spent $2.1 billion in 2017 on
soybean fungicides in Brazil.
In independent trials, PHC279 applied as a seed treatment
significantly improved ASR control of foliar fungicide programmes,
even in fields facing heavy disease pressure. Disease control was
improved by up to 45%. In addition, yields of soybeans were
increased by up to 16% when compared with foliar fungicide
programmes alone. These results demonstrate the value of PHC279 as
a tool to combat ASR.
Given this second year of positive results, Plant Health Care
intends to move forward to commercialise PHC279 in Brazil. The
Company intends to seek a fast track product registration and is
making plans to produce PHC279 at commercial scale.
Brazil sugarcane
This year for the first time the Group is evaluating PREtec in
sugarcane to enhance yield and treat disease. Based on the success
of its Harpin product in raising sugarcane yields, the Group is
optimistic that PREtec will bring additional benefits to sugarcane
growers on the more than eight million hectares under cultivation
in Brazil and other areas where sugarcane is grown.
Corn and soybean seed treatment in the United States
Almost 90 million acres (36 million hectares) of corn were
planted in USA in 2018, with a similar area of soybeans. In the
USA, seed treatments are applied to more than 90% of the corn
planted and over 80% of the soybeans. PREtec peptides have
demonstrated yield benefits in this application over years of field
trials. Large commercial seed treatment operations increasingly
demand that products are provided as liquids. PHC has developed a
stable, easy to handle liquid PREtec formulation that is currently
in field trials.
Enhanced nutrient uptake
Proof of concept field studies are underway in corn and soybeans
to explore the potential of using PREtec in conjunction with foliar
micronutrients. The intention is to enhance plant nutrient uptake
and improve yield, while reducing the micronutrient application
rates. Assuming positive results and with the accelerated
regulatory path available for this class of products in the US, the
Group believes a commercial launch within two years is
feasible.
Nematode Control in Row and Vegetable Crops
Recent field trial results support the continued development of
PREtec for nematode control in vegetable crops, which are estimated
to be grown on over seven million acres in the US In a head-to-head
comparison, PREtec performed as well as a leading chemical
nematicide to reduce crop damage caused by nematodes.
Seed Treatment for Corn/Soybean Drought Tolerance
In areas of South America, Asia and Africa, seed companies are
looking for regional solutions to protect yield under both drought
and non-drought conditions. PREtec has shown strong potential in
maintaining corn yields in fields faced with persistent
drought.
Moving to commercial sales
The Group is now committed to taking PREtec peptides directly to
market through distribution partners. The first target markets are
in the US and Brazil. They are worth more than $5 billion in total.
PHC279, an Innatus 3G peptide, will be the first product to be
launched. The timing of product launches will depend on achieving
product registrations and signing up committed distributors. We are
progressing with plans to register PHC279, followed by other
products, in the US and Brazil. Discussions are in hand with
distributors, who have expressed interest; some distributor field
trials are already in progress. In parallel, we continue to pursue
options for licensing PREtec peptides to larger companies.
In the first half of 2019, three of our evaluation partners
expanded their PREtec testing programmes in a variety of row and
vegetable crops in the US and abroad. These partners are evaluating
a variety of product concepts, including improved disease control,
drought tolerance, yield, nematode control, and others. Other
partners have continued their programs started in 2018. Positive
results with multiple PREtec peptides in soybeans in South America
have been reported and we are actively exploring next steps for an
expanded collaboration in 2020. At the end of the 2019 growing
season we will receive additional results from partners' field
trials in Europe and the Americas, including in corn, soy, sugar
beets and vegetables. We are optimistic that these results can lead
to opportunities for commercial distribution of PREtec. In
addition, discussions are ongoing with new partners to initiate
similar collaborative programmes next year.
Manufacturing
The Group has developed low cost production methods for PREtec
peptides at laboratory scale in our own facilities in Seattle,
based on fermentation. The next stage in moving to commercial
production is to establish a pilot plant, which will scale up those
methods in larger vessels. The pilot plant will refine the Group's
production methods, which will then be used in the manufacture of
peptides for commercial sales.
The Group has signed an agreement with the CSL Behring
Fermentation Facility at Penn State University to establish pilot
production of PHC279. The University is providing excellent
facilities for optimising production methods, focusing initially on
PHC279, including production of initial commercial quantities. We
anticipate this project will take less than 12 months, after which
the Group expects to contract full scale manufacture with a
commercial manufacturer.
Summary of financial results
Financial highlights for the six months ended 30 June 2019, with
comparatives for the six months ended 30 June 2018, are set out
below:
2019 2018
$'000 $'000
Revenue 2,684 3,011
Gross profit 1,526 1,806
Research and development (1,423) (2,442)
Sales and marketing * (1,636) (2,138)
Administrative (1,430) (2,271)
--------------------------- ---------- ----------
Total operating expenses (4,489) (6,851)
Operating loss (2,963) (5,045)
--------------------------- ---------- ----------
Net finance income 142 31
Net loss for period (2,821) (5,014)
--------------------------- ---------- ----------
* - The 2018 amount includes $258,000 of Business Development
costs. Starting in 2019, Business Development costs are included in
the Sales and Marketing expense category.
Revenue
Revenues for the six-month period ended 30 June 2019 were $2.7
million (H1 2018: $3.0 million) producing a gross profit of $1.5
million (H1 2018: $1.8 million) and the loss before tax was $2.8
million (H1 2017: $5.0 million). The gross profit margin was 57%
(H1 2018: 60%). Revenues and gross margin were lower than the prior
year due to delays in the importation of product into Brazil in the
first half of 2019. These sales slipped into the beginning of the
second half of 2019.
Operating expenses
Operating expenses decreased by $2.4 million for the six-month
period to $4.5 million.
LBITDA decreased $1.4 million to $4.2 million (H1 2018: $5.6
million) primarily due to decreased Research and Development and
Sales and Marketing costs as part of an ongoing cost reduction
programme implemented at the beginning of 2019. The majority of the
savings were achieved through lower personnel ($0.8 million) and
consulting ($0.7 million) costs.
Cash position and liquidity
As of 30 June 2019, the Group had cash and investments of $1.4
million. Cash and costs continue to be tightly controlled.
During H1 2019, cash outflows decreased 35% to $2.9 million (H1
2018: $4.4 million). The decrease was due to a working capital
initiative and expense reductions as part of an ongoing Group wide
cost reduction programme. Expenses decreased in Research and
Development ($1.0 million) and Sales and Marketing ($0.5 million)
through reduced personnel and consulting costs.
Net cash outflow from operating activities decreased $2.0
million to $2.8 million (H1 2018: $4.8 million). Included in the
cash used in operations is an increase in the Group's inventory
balance offset by lower accounts receivable and accounts payable
balances. Adjusted LBITDA decreased $1.4 million to $4.2 million
(H1 2018: $5.6 million)
In February 2018, the Group successfully completed an equity
raise of $6.7 million (net of costs) to help fund operations.
Current trading and outlook
The Board remains confident about the prospects for building a
growing, profitable Commercial business, as sales of Harpin
𝜶<BETA> continue to increase. We anticipate a
strong second half of 2019. We are confident of achieving material
revenue growth in 2019 despite macro-level market-driven
challenges, although revenue will be slightly lower than previous
expectations.
Preparations for the first launches of PHC279 are progressing to
plan, with further PREtec peptides following. The medium term
prospects for PREtec peptides, in markets worth more than $5
billion, are very exciting.
The Board has reviewed the Company's cash position and concluded
that we are able to achieve cash breakeven within existing cash
resources. The Board will take whatever steps are necessary,
including by reducing cash expenses, to achieve that.
Dr. Christopher Richards
Chairman
30 September 2019
Consolidated statement of comprehensive income
FOR THE SIX MONTHSED 30 JUNE 2019
Six months Six months
to 30 June to 30 June
2019 2018
(Unaudited) (Unaudited)
Note $'000 $'000
Revenue 2,684 3,011
Cost of sales (1,158) (1,205)
Gross profit 1,526 1,806
Research and development (1,423) (2,442)
Sales and marketing (1,636) (2,138)
Administrative expenses (1,430) (2,271)
------------------------------------- ----- ------------------- -----------------
Operating loss 4 (2,963) (5,045)
Finance income 160 31
Finance expense (18) -
------------------------------------- ----- ------------------- -----------------
Loss before tax (2,821) (5,014)
Income tax expense (1) -
Net loss for the period (2,822) (5,014)
------------------------------------- ----- ------------------- -----------------
Other comprehensive (loss)/income:
Exchange difference on translation
of foreign operations 155 (421)
------------------------------------- -----
Total comprehensive loss for
the period (2,667) (5,435)
===================================== ===== =================== =================
Basic and diluted loss per
share 6 $(0.02) $(0.03)
===================================== ===== =================== =================
Consolidated statement of financial position
AT 30 JUNE 2019
30 June 31 December
2019 2018
(Unaudited) (Audited)
Note $'000 $'000
Assets
Non-current assets
Intangible assets 1,670 1,692
Property, plant and equipment 582 701
Right-of-use 581 -
Trade and other receivables 143 140
Total non-current assets 2,976 2,533
--------------------------------- ----- ------------------------ ------------------
Current assets
Inventories 3,450 2,975
Trade and other receivables 2,943 3,757
Investments 3 720 1,825
Cash and cash equivalents 690 2,459
--------------------------------- ----- ------------------------ ------------------
Total current assets 7,803 11,016
--------------------------------- ----- ------------------------ ------------------
Total assets 10,779 13,549
--------------------------------- ----- ------------------------ ------------------
Liabilities
Current liabilities
Trade and other payables 1,612 2,404
Short term lease liabilities 377
Total current liabilities 1,989 2,404
--------------------------------- ----- ------------------------ ------------------
Non-current liabilities
Long term lease liabilities 258 -
Total non-current liabilities 258 -
--------------------------------- ----- ------------------------ ------------------
Total liabilities 2,247 2,404
--------------------------------- ----- ------------------------ ------------------
Total net assets 8,532 11,145
================================= ===== ======================== ==================
Capital and reserves
attributable to owners
of the Company
Share capital 2,586 2,586
Share premium 86,126 86,126
Foreign exchange reserve 886 731
Retained earnings (81,066) (78,298)
--------------------------------- -----
Total equity 8,532 11,145
================================= ===== ======================== ==================
Consolidated statement of cash flows
FOR THE SIX MONTHSED 30 JUNE 2019
Six months ended Six months ended
30 June 30 June
2019 2018
(Unaudited) (Unaudited)
$'000 $'000
Cash flows from operating activities
Loss for the year (2,822) (5,014)
Adjustments for:
Depreciation of property, plant
and equipment 179 202
Depreciation of right-of-use assets 166 -
Amortisation of intangibles 22 130
Share-based payment expense 54 370
Finance income (160) (31)
Finance expense 18 -
Foreign exchange on intercompany 155 -
Decrease/(increase) in trade and
other receivables 811 1,139
Gain on disposal of fixed assets (16) -
Increase in inventories (476) (1,361)
Decrease in trade and other payables (735) (202)
Net cash used in operating activities (2,804) (4,767)
---------------------------------------- ----------------- -----------------
Investing activities
Purchase of property, plant and
equipment (56) (109)
Sale of property, plant and equipment 42 -
Finance income 200 31
Purchase of investments (19) (2,150)
Sale of investments 1,085 1,362
---------------------------------------- ----------------- -----------------
Net cash (used)/provided by investing
activities 1,252 (866)
---------------------------------------- ----------------- -----------------
Financing activities
Finance expense (2) -
Payment of lease liability (186) -
Issue of ordinary share capital - 6,688
Repayment of borrowings - (4)
---------------------------------------- ----------------- -----------------
Net cash provided/(used) by financing
activities (188) 6,684
---------------------------------------- ----------------- -----------------
Net (decrease)/increase in cash
and cash equivalents (1,740) 1,051
Effects of exchange rate changes
on cash
and cash equivalents (29) 423
Cash and cash equivalents at beginning
of period 2,459 1,175
---------------------------------------- ----------------- -----------------
Cash and cash equivalents at end
of period 690 2,649
======================================== ================= =================
Notes to the unaudited financial information
1 General information
Plant Health Care plc is a company incorporated and domiciled in
England. The unaudited interim financial information of the Group
for the six months ended 30 June 2019 comprise the Company and its
subsidiaries (together referred to as the "Group").
2 Basis of preparation and accounting policies
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the EU. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 December 2018 ('2018')
Annual Report. The financial information for the half years ended
30 June 2019 and 30 June 2018 does not constitute statutory
accounts within the meaning of Section 434 (3) of the Companies Act
2006 and both periods are unaudited.
The annual financial statements of Plant Health Care, Plc ('the
Group') are prepared in accordance with IFRS as adopted by the
European Union. The comparative financial information for the year
ended 31 December 2018 included within this report does not
constitute the full statutory Annual Report for that period. The
statutory Annual Report and Financial Statements for 2018 have been
filed with the Registrar of Companies. The Independent Auditors'
Report on the Annual Report and Financial Statements for the year
ended 30 December 2018 was unqualified, did not draw attention to
any matter by way of emphasis and did not contain a statement under
498(2) - (3) of the Companies Act 2006.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2018 annual financial statements, except for those that
relate to new standards and interpretations effective for the first
time for periods beginning on (or after) 1 January 2019 and will be
adopted in the 2019 financial statements. New standards impacting
the Group that will be adopted in the annual financial statements
for the year ended 31 December 2019, and which have given rise to
changes in the Group's accounting policies are:
IFRS 16 leases:
Details of the impact of this standard is given below. Other new
and amended standards and interpretations issued by the IASB that
will apply for the first time in the next annual financial
statements are not expected to have a material impact on the
Group.
The group adopted IFRS 16 from 1 January 2019, replacing the
existing guidance in IAS 17 - "Leases" (hereafter - "IAS 17"). IFRS
16 changes the existing guidance in IAS 17 and requires lessees to
recognise a lease liability that reflects future lease payments and
a "right-of-use asset" in all lease contracts within scope, with no
distinction between financing and capital leases. IFRS 16 exempts
lessees in short-term leases or the when underlying asset has a low
value. The Group has elected to apply the practical expedient not
to recognise right-of-use assets and lease liabilities for leases
of low-value assets only.
The adoption of IFRS 16 has resulted in the Group recognising
right of use assets and lease liabilities for all contracts that
are, or contain, a lease. For leases historically classified as
operating leases, under legacy accounting requirements the group
does not recognise related assets or liabilities, disclosing
instead the total commitment in its annual financial statements.
The Group has elected to apply the modified retrospective method.
Therefore, there will be no impact on any comparative accounting
period (interim or annual), with any leases recognised on balance
sheet at the date of initial application of IFRS 16, being 1
January 2019.
The nature of expenses related to these leases in the income
statement will change because IFRS 16 replaces the straight line
operating lease expense with a depreciation charge for right of use
assets and interest expense on lease obligations over the life of
the lease. This has increased the reported EBITDA by the amount of
its current operating lease cost, which for 6 months ended 30 June
2019 was approximately $175,000).
Going Concern
This Interim Report has been prepared on the assumption that the
business is a going concern. In reaching their assessment, the
directors have considered a period extending at least 12 months
from the date of approval of this half-yearly financial report.
This assessment has included consideration of the forecast
performance of the business for the foreseeable future and the cash
and financing facilities available to the Group,.
3 Investments
Investments comprise short-term investments in notes and bonds
having investment grade ratings. These assets are actively managed
and evaluated by key management personnel on a fair value basis in
accordance with a documented investment strategy. They are carried
at fair value as determined by quoted prices on active markets,
with changes in fair values recognised through profit and loss.
4 Operating loss
Six months to Six months to
30 June 30 June
2019 2018
(unaudited) (unaudited)
$'000 $'000
Operating loss is stated after
charging:
Depreciation 345 202
Amortisation 22 130
Share-based payment expense 54 370
===================================== ================== ==============
5 Segment information
The Group views, manages and operates its business according to
geographical segments. Revenue is generated from the sale of
agricultural products across all geographies.
Six months to 30 June 2019 (unaudited)
Rest Total New
Americas Mexico of World Elimination Commercial Technology Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Revenue*
Proprietary
product
sales 380 288 678 - 1,346 - 1,346
Third-party
product
sales 21 1,317 - - 1,338 - 1,338
Inter-segmental
product sales 330 - 236 (566) - - -
Total revenue 731 1,605 914 (566) 2,684 - 2,684
--------- ------- ----------- ------------ ----------- ----------- --------
Group
consolidated
revenue 731 1,605 914 (566) 2,684 - 2,684
--------- ------- ----------- ------------ ----------- ----------- --------
Cost of sales (477) (814) (433) 566 (1,158) - (1,158)
Research and
development - - - - - (1,095) (1,095)
Business - - - - - - -
development
Sales and
marketing (782) (412) (443) - (1,637) - (1,637)
Administration (328) (129) (76) - (533) (110) (643)
Non-cash
expenses:
Depreciation (46) (27) (4) - (77) (268) (345)
Amortisation (19) - (3) - (22) - (22)
Share-based
payment - - (2) - (2) (37) (39)
--------- ------- ----------- ------------ ----------- ----------- --------
Segment
operating
(loss)/profit (921) 223 (47) - (745) (1,510) (2,255)
Corporate
expenses
**
Wages and
professional
fees (611)
Administration
*** (98)
Operating loss (2,964)
Finance income 160
Finance expense (18)
--------- ------- ----------- ------------ ----------- ----------- --------
Loss before tax (2,822)
--------- ------- ----------- ------------ ----------- ----------- --------
* Revenue from one customer within the Mexico segment totalled
$525,000 or 20% of Group revenues.
.
** These amounts represent public company expenses for which
there is no reasonable basis by which to
allocate the amounts across the Group's segments.
*** Includes net share-based payments expense of $15,000
attributed to corporate employees who are not affiliated with any
of the Commercial or New technology segments. Includes $0.1 million
foreign exchange losses in non-US dollar denominated inter-company
funding.
Six months to 30 June 2018 (unaudited)
Rest Total New
Americas Mexico of World Elimination Commercial Technology Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Revenue*
Proprietary
product
sales 703 230 826 - 1,759 - 1,759
Third-party
product
sales 48 1,204 - - 1,252 - 1,252
Inter-segmental
product sales 501 - 68 (569) - - -
Total revenue 1,252 1,434 894 (569) 3,011 - 3,011
--------- ------- ----------- ------------ ----------- ----------- --------
Group
consolidated
revenue 1,252 1,434 894 (569) 3,011 - 3,011
--------- ------- ----------- ------------ ----------- ----------- --------
Cost of sales (710) (709) (355) 569 (1,205) - (1,205)
Research and
development - - - - - (2,135) (2,135)
Business
development (235) - - - (235) (23) (258)
Sales and
marketing (801) (365) (714) - (1,880) - (1,880)
Administration (309) (126) (81) - (516) (106) (622)
Non-cash
expenses:
Depreciation (14) (27) (3) - (44) (158) (202)
Amortisation (127) - (3) - (130) - (130)
Share-based
payment (6) - (13) - (19) (215) (234)
--------- ------- ----------- ------------ ----------- ----------- --------
Segment
operating
(loss)/profit (950) 207 (275) - (1,018) (2,637) (3,655)
Corporate
expenses
**
Wages and
professional
fees (660)
Administration
*** (730)
Operating loss (5,045)
Finance income 31
Finance expense -
--------- ------- ----------- ------------ ----------- ----------- --------
Loss before tax (5,014)
--------- ------- ----------- ------------ ----------- ----------- --------
* Revenue from one customer within the Americas segment totalled
$400,000 or 13% of Group revenues.
Revenue from one customer within the Mexico segment totalled
$410,000 or 13% of Group revenues.
** These amounts represent public company expenses for which
there is no reasonable basis by which to
allocate the amounts across the Group's segments.
*** Includes net share-based payments expense of $136,000
attributed to corporate employees who are not affiliated with any
of the Commercial or New technology segments. Includes $0.7 million
foreign exchange losses in non-US dollar denominated inter-company
funding.
6 Loss per share
Basic loss per ordinary share has been calculated on the basis
of the loss for the period of $2,822,000 (loss for the six months
ended 30 June 2018: $5,014,000) and the weighted average number of
shares in issue during the period of 172,822,881 (six months ended
30 June 2018: 164,906,214).
The weighted average number of shares used in the above
calculation is the same as for total basic loss per ordinary share.
Instruments that could potentially dilute basic earnings per share
in the future have been considered, but were not included in the
calculation of diluted earnings per share because they are
anti-dilutive for the periods presented. This is due to the Group
incurring losses on continuing operations for the period.
7 Cautionary statement
This document contains certain forward-looking statements
relating to Plant health Care plc ('the Group'). The Group
considers any statements that are not historical facts as
"forward-looking statements". They relate to events and trends that
are subject to risk and uncertainty that may cause actual results
and the financial performance of the Group to differ materially
from those contained in any forward-looking statement. These
statements are made by the directors in good faith based on
information available to them and such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such
forward-looking information.
Copies of this report and all other announcements made by Plant
Health Care plc are available on the Company's website at
www.planthealthcare.com/for-investors.
Plant Health Care plc
2626 Glenwood Avenue, Suite 350
Raleigh, NC 27608 USA
+1 (919) 926 1600
ir@planthealthcare.com
www.planthealthcare.com/for-investors
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LPMLTMBJTBML
(END) Dow Jones Newswires
September 30, 2019 02:01 ET (06:01 GMT)
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