TIDMPHC
RNS Number : 9591Y
Plant Health Care PLC
15 September 2020
RNS
15 September 2020
Plant Health Care plc
( " Plant Health Care", the " Group " and the " Company")
Interim Results 2020 and update on Current Trading
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 2020.
Financial Highlights
- Revenue for the six months ended 30 June 2020 was $3.1 million (2019: $2.7 million).
- Cash operating expenses decreased 10% to $3.6 million (H1 2019: $4.0 million).
- Cash used in operations decreased 29% to $2.0 million (2019: $2.8 million).
- Adjusted LBITDA* improved to $1.8 million (2019: $2.4 million).
- In March of 2020, the Group raised $4.4 million (net of expenses).
- Cash reserves of $5.1 million at 30 June 2020 (2019: $1.4 million).
Operational Highlights
- Harpin revenue increased by 43% to $1.9 million.
o Revenue in the US increased 50% to $0.6 million, on-ground
sales into corn were almost double prior year.
o Sales to Brazil for sugar cane ($0.35 million) resumed, in Q2;
on-ground sales were nearly 2.5 times the prior year.
- Covid-19 has had only modest impact on the business to date but some uncertainty remains.
- The registration of PHC279 in Brazil has accelerated, with
launch now targeted in H2 2021. Registration in the US in now
expected in 2022.
- Scaling up of production of PHC279 is in hand.
Dr Christopher Richards, Chief Executive Officer, commented:
" The Company ' s robust revenue growth in the first half of
2020 demonstrates the merits of exposure to sustainable
agriculture, an essential industry moving to new, greener
technologies. Strong growth in the US reflects the excellent
support we are receiving from our major distribution partners and
the resulting wide market access. In Brazil, on-ground sales of
H2Copla are growing rapidly, in spite of the low price of
ethanol.
We expect to deliver continued revenue growth in the second half
of the year, while continuing to drive down the cash burn and move
towards building a sustainably profitable business. While we remain
optimistic about the market opportunity, the effects of Covid-19
have not yet played out around the world. We will maintain our
cautious stance on growth investments for the time being."
*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 - Chief Executive Officer
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
Chief Executive Officer ' s statement
Introduction
Plant Health Care is at the heart of the movement towards
sustainable food production. Our core products are derived from
naturally occurring proteins, which stimulate plant growth. They
provide growers with higher yield and better quality crops, while
having much lower impact on the environment than conventional
agricultural chemicals.
The heart of our Commercial business is Harpin 𝜶
<BETA>, which offers remarkable benefits to farmers in a wide
range of crops. We have reached new agreements with major
distributors in large target crops over the last three years.
Resulting launches are starting to deliver increased on-ground
sales, which will bring more consistent, balanced and profitable
revenue growth.
In New Technology, PREtec is a novel, environmentally friendly
approach to growing crops more sustainably. PREtec peptides can be
thought of as 'vaccines for plants' - they stimulate the plants'
natural defence systems and result in improved crop yield and
quality. Research on PREtec started in 2012, with a cumulative
investment since then of more than $20 million. The Company is now
poised to launch the first products from a broad pipeline of PREtec
peptides, targeting markets which have a value of greater than $5
billion. The Company has developed a global scientific lead in the
use of peptides for agriculture, with the first patents now granted
in the US.
As we move to launch the first of many PREtec products, we are
seeking regulatory approvals in Brazil and the USA. In parallel, we
are working to define routes to market and establish low cost
manufacture.
Our aim is to take the Group to cash positive quickly, while
investing to drive sales growth and launch the first products from
the PREtec platform. The Board expects to begin the monetisation of
PREtec intellectual property in 2022.
Commercial Products
Our Commercial business markets our proprietary products Harpin
𝜶 <BETA> and Myconate(R) worldwide through
distributors and also distributes complementary third-party
products alongside our own products in Mexico. Harpin-based
products are well established in certain niche markets, with more
recent expansion into large crops. We now have access to markets
covering more than 30 million hectares, with strong, committed
partners. Since their launch, our commercial products have taken
longer to gain predicted revenue growth; however, the Directors
believe that the foundations for steady growth in its products are
now in place.
During the first half of 2020, overall product sales were $3.1
million (H1 2019: $2.7 million). Sales of Harpin 𝜶
<BETA> increased by 43% (48% in constant currency) to $1.9
million. The gross margin increased to 59% (2019: 57%) due to the
increased sales of Harpin 𝜶 <BETA> and the
reduced proportion of third-party sales.
Sales in the US increased by 50% to $0.6m (H1 2019: $0.4
million), on demand from our major distribution partners for both
specialty crops and corn.
In US corn, the seed treatment product based on Harpin
𝜶 <BETA> results in the crop emerging from the
ground taller and more robustly than untreated corn. We understand
that on-ground sales were more than double those in 2019.
In specialty crops in the US, our partner Wilbur-Ellis is
promoting the Employ(R) Harpin 𝜶 <BETA> product
in many fruit and vegetable crops, where it improves yield and
quality. Thanks to Wilbur-Ellis's strong presence across the
nation, the product is now reaching more growers than before. We
understand that on-ground sales increased significantly compared
with 2019.
In Brazil, our partner Coplacana launched the H2Copla Harpin
𝜶 <BETA> product in 2018. Demonstration trials
over the last four years have shown a remarkable average yield
increase of more than 20%. On-ground sales of H2Copla in the first
half of 2020 were nearly 2.5 times those in the same period of
2019. Given the collapse of ethanol prices, this is an excellent
performance. Sales of Harpin 𝜶 <BETA> to
Coplacana resumed ($0.35m) as their inventory reduces.
Sales in EMEAA increased by 9% (12% in constant currency). In
the UK, sales into the UK amenity market were significantly
impacted by Covid-19 but sales into the potato market doubled from
2019 levels. Sales in Spain increased 29% (32% in constant
currency) through increased sales into the citrus and rice markets.
Sales through our Spanish subsidiary expanded into the citrus and
grape markets in Peru and Chile.
Sales in Mexico decreased by 14% (4% in local currency); reduced
domestic demand for fresh fruit and vegetables due to Covid-19
impacted sales. Sales of Harpin 𝜶 <BETA> were
$0.2 million (2019: $0.3 million); third party sales were $1.2
million (2019: $1.3 million).
In recent years, sales by Plant Health Care have not always been
well matched to on-ground sales and this has led to in-market
inventories which have obscured under-lying growth of sales to
growers. Closer relationships with our distribution partners are
now giving us much better visibility of on-ground sales. This will
drive supply chain efficiencies and should lead to more consistent
growth in our revenues.
New Technology
Plant Response Elicitor technology (PREtec)
PREtec is a platform technology, with the potential to generate
many products, offering a wide range of specific grower benefits.
These 'vaccines for plants' act by stimulating the plant's own
natural defence mechanisms. Inspired by natural proteins, these
peptides can be customised to target features such as growth
promotion, disease resistance or drought stress. Since 2012, our
research efforts have brought forward six lead products, from three
major platforms. The Innatus 3G platform targets growth and disease
resistance. The T-Rex 3G platform targets nematode defence, while
the Y-Max 3G platform delivers increase yield and growth. Our aim
over the next three years is to launch the first products from
these platforms, before investing further to expand the product
range. Development work continues with partners in the US and
Brazil, in parallel with seeking regulatory approvals.
Launching the first PREtec products
Encouraging progress has been made during H1 2020 towards the
first product launches, which are expected to be in Brazil and the
USA. PHC279, an Innatus 3G peptide, is likely to be the first
product to be launched. Plans are advancing to achieve product
registrations, to secure distribution partners and to manufacture
for launch. The timing of product launches will depend on achieving
product registrations in the target markets, alongside establishing
distribution contracts and low-cost manufacturing. Securing
intellectual property in parallel will protect the value of the
business.
PHC279 - a revolutionary new seed treatment for ASR control
Brazil is the world's largest exporter of soybeans, with some 36
million hectares planted in 2019. 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. With increasing regulatory scrutiny
of the safety of chemical fungicides, the use of biological
products such as PHC279 is growing rapidly: sales of biological
inputs and biopesticides for the soybean crop in Brazil totalled
US$200 million in the 2019-20 season, a 30% rise compared to the
previous season.
Similar to last year, PHC279 demonstrated strong performance
this season in field trials in Brazil as a soybean seed treatment.
Compared to a standard foliar fungicide programme alone, the
addition of a PHC279 seed treatment improved disease control by an
average of 8% to 14% across the rates evaluated and increased yield
by 3.6% to 5.1%, with some sites reporting increases in yield as
great as 27%.
These promising results support the launch of PHC279 as a truly
revolutionary biological seed treatment for ASR control. The
product has the potential both to reduce significantly the use of
toxic fungicides and to increase growers' productivity.
The Company submitted PHC279 for regulatory approval in Brazil
in October 2019 and it is progressing well through the process.
Assuming PHC279 receives regulatory approval, the Company is now
planning on launching PHC279 in soybeans in Q4 2021, one year
earlier than previously forecast. Discussions are underway to
market PHC279 through one or more distributors in Brazil.
PHC279 development in the USA
In June of this year, the EPA (the US Environmental Protection
Agency) approved the registration of the first PREtec peptide,
PHC398, as a biopesticide. This important milestone paves the way
for an accelerated, low cost path to registration of other PREtec
peptides. The EPA has now provided an initial review of the
Company's application for the registration of its next peptide,
PHC279, for disease control in a wide range of row crops and fruit
and vegetable crops. They requested some additional studies;
approval is now expected in mid-2022.
Together with potential distribution partners, we are evaluating
several products based on PHC279. T rials this season continue to
evaluate the potential of PHC279 in corn and vegetables. Last
season, when PHC279 was applied together with a leading chemical
fungicide, it significantly improved control of two key corn
diseases compared to the fungicide treatment alone, and yields were
increased by as much as 26 bushels per acre depending on
application timing. Given that 92 million acres of corn were
planted in the US in 2020, the economic opportunity for an
effective corn treatment is considerable.
Further PREtec products in development
While PHC279 is the most advanced peptide in development, other
peptides are also progressing towards launch. PHC949, from the
T-Rex 3G nematode control platform, continues to show strong
results in PHC's and partner's field trials in specialty and row
crops.
PHC404, another peptide from the Innatus 3G platform has shown
strong yield benefits in almond trees in California.
PHC414, from the Y-Max 3G platform, is showing promise as a
biostimulant, promoting yield and quality in a range of fruit and
vegetable crops. As episodes of severe drought and high
temperatures become more frequent across the globe, products such
as PHC414 that help plants manage abiotic stress are expected to
play an increasing role in sustaining agricultural production.
Manufacturing PREtec peptides
Scaling up of PHC279 manufacture at Penn State University has
been achieved during the first half of 2020. The promise of a low
cost of goods is being delivered. With the target of a Brazil
launch being brought forward by one year, initial launch quantities
of PHC279 will be produced at Penn State's facility. We are now
engaging with several potential toll manufacturers of PREtec
peptides and expect to have commercial scale production of PHC279
in place by 2022.
We continue to advance the laboratory efficiency of production
of other peptides in our pipeline, as both granule and liquid
formulations. Scale-up work with Penn State on the next PREtec
peptides in the pipeline has been initiated.
Intellectual property
Plant Health Care has filed more than 50 patent applications
worldwide for its PREtec peptide technology since 2012. The first
of these patents has been granted by the US Patent and Trademark
Office (USPTO). Additional patents are expected to be granted prior
to the end of the year, providing protection for a large number of
PREtec peptides in a wide range of agricultural uses in key
countries around the world.
Summary of financial results
Financial highlights for the six months ended 30 June 2020, with
comparatives for the six months ended 30 June 2019, are set out
below:
2020 2019
$'000 $'000
Revenue 3,100 2,684
Gross profit 1,814 1,526
Research and development (1,366) (1,423)
Sales and marketing (1,268) (1,636)
Administrative * (3,374) (1,430)
-------------------------------- ---------- ----------
Total operating expenses (6,008) (4,489)
Operating loss (4,194) (2,963)
-------------------------------- ---------- ----------
Net finance income 181 142
Net loss for period before tax (4,013) (2,821)
-------------------------------- ---------- ----------
Cash operating expenses decreased $0.4 million to $3.6 million
(H1 2019: 4.0 million).
* Includes $2.0 million foreign exchange losses in non-US dollar
denominated inter-company funding (2019: $0.1 million) .
Revenue
Revenues for the six-month period ended 30 June 2020 were $3.1
million (H1 2019: $2.7 million) producing a gross profit of $1.8
million (H1 2019: $1.5 million) and the loss before tax was $4.0
million (H1 2019: $2.8 million). The gross profit margin was 59%
(H1 2019: 57%). Harpin revenue increased 43% (48% constant
currency) to $1.9 million (2019: 1.3 million). Revenues were higher
than prior year due to strong sales in the row and speciality crop
markets in North America and resumed sales into the Sugarcane
market in Brazil.
Cash operating expenses
Operating expenses, excluding non-cash items, decreased $0.4
million to $3.6 million (2019: $4.0 million) due to decreased
personnel costs in sales and marketing. Adjusted LBITDA improved
$0.6 million to $1.8 million (H1 2019: $2.4 million) primarily due
to increased gross margin and decreased Sales and Marketing
costs.
Operating expenses
Operating expenses increased by $1.5 million for the six-month
period to $6.0 million (2019: $4.5 million). This is primarily due
to a $2.0 million of currency loss primarily related to a Pound
Sterling loan with a subsidiary company (H1 2019: $0.1 million
currency loss).
Cash position and liquidity
As of 30 June 2020, the Group had cash and investments of $5.1
million. Cash and costs continue to be tightly controlled.
During H1 2020, cash outflows decreased 39% to $1.8 million (H1
2019: $2.9 million). The decrease was due mainly to reductions in
cash operating expenses, supported by the receipt of an unsecured
note in the amount of $0.3 million as part of the US Payroll
Protection Plan.
Net cash outflows from operating activities decreased 29% to
$2.0 million (H1 2019: $2.8 million). Included in the cash used in
operations is a decrease in the Group ' s inventory balance offset
by lower accounts payable balances. Adjusted LBITDA decreased $0.6
million to $1.8 million (H1 2019: $2.4 million).
Net cash flows from financing activities increased $4.9 million
(H1 2019: ($0.2 million)). The increase is due to the March 2020
equity raise of $4.4 million and the receipt of $0.3 million
through the US Payroll Protection Plan.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Group remain
broadly consistent with the Principal Risks and Uncertainties
reported in Plant Health Care ' s 31 December 2019 Annual Report.
In addition, since then, the Board have been monitoring and
mitigating the effects of the following international events on the
Group ' s business:
Covid-19
In March 2020, the World Health Organisation declared a global
pandemic due to the Covid-19 virus that has spread across the
globe, causing different governments and countries to enforce
restrictions on people movements, a stop to international travel,
and other precautionary measures. This has had a widespread impact
economically and a number of industries have been heavily impacted.
This has resulted in impacts on certain industries and a more
general need to consider whether budgets and targets previously set
are realistic in light of these events
As described above, the Covid-19 pandemic to date has had
limited impact to our business. The Board remains optimistic that
the business is well positioned to be able to navigate through the
impact of Covid-19 due to the strength and flexibility of its
relationships with its distributors, its strong balance sheet and
its cash position.
Brexit
The United Kingdom ( ' UK ' ) formally left the European Union (
' EU ' ) on 30 January 2020. The period of time from when the UK
voted to exit the EU on 23 June 2016 and the formal process
initiated by the UK government to withdraw from the EU, or Brexit,
created volatility in the global financial markets. The UK now
enters a transition period, being an intermediary arrangement
covering matters like trade and border arrangements, citizens '
rights and jurisdiction on matters including dispute resolution,
taking account of The EU (Withdrawal Agreement) Act 2020, which
ratified the Withdrawal Agreement, as agreed between the UK and the
EU. The transition period is currently due to end on 31 December
2020 and ahead of this date, negotiations are ongoing to determine
and conclude a formal agreement between the UK and EU on the
aforementioned matters.
The UK currently represents some 3% of revenues for the Group
and is not a manufacturing centre. As the Group operates
subsidiaries in many countries, there are several channels
available to us to continue business with the same customers,
should the need arise, with little to no effect from Brexit
changes. As such, the Directors currently deem that the effects of
the UK ' s current transitional period outside the EU and the
impact of ongoing discussions with the EU will not have a
significant impact on the Group ' s operations. However, the
Directors and Senior Leadership Team are closely monitoring the
situation to be in a position to manage the risk of any volatility
in global financial markets and impact on global economic
performance due to Brexit.
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 2020 and are confident of achieving material
revenue growth in 2020, despite macro-level market-driven
challenges.
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
Chief Executive Officer
15 September 2020
Consolidated statement of comprehensive income
FOR THE SIX MONTHSED 30 JUNE 2020
Six months Six months
to 30 June to 30 June
2020 2019
(Unaudited) (Unaudited)
Note $'000 $'000
Revenue 3,100 2,684
Cost of sales (1,286) (1,158)
Gross profit 1,814 1,526
Research and development (1,366) (1,423)
Sales and marketing (1,268) (1,636)
Administrative expenses (3,374) (1,430)
------------------------------------- ----- ------------------- -----------------
Operating loss 4 (4,194) (2,963)
Finance income 193 160
Finance expense (12) (18)
------------------------------------- ----- ------------------- -----------------
Loss before tax (4,013) (2,821)
Income tax expense (14) (1)
Net loss for the period (4,027) (2,822)
------------------------------------- ----- ------------------- -----------------
Other comprehensive income:
Exchange difference on translation
of foreign operations 1,444 155
------------------------------------- -----
Total comprehensive loss for
the period (2,583) (2,667)
===================================== ===== =================== =================
Basic and diluted loss per
share 6 $(0.02) $(0.02)
===================================== ===== =================== =================
Consolidated statement of financial position
AT 30 JUNE 2020
30 June 31 December
2020 2019
(Unaudited) (Audited)
Note $'000 $'000
Assets
Non-current assets
Intangible assets 1,627 1,649
Property, plant and equipment 287 475
Right-of-use 257 416
Trade and other receivables 129 150
Total non-current assets 2,300 2,690
--------------------------------- ----- ------------------------ ------------------
Current assets
Inventories 3,284 2,960
Trade and other receivables 2,995 3,747
Investments 3 3,532 1,964
Cash and cash equivalents 1,581 457
--------------------------------- ----- ------------------------ ------------------
Total current assets 11,392 9,128
--------------------------------- ----- ------------------------ ------------------
Total assets 13,692 11,818
--------------------------------- ----- ------------------------ ------------------
Liabilities
Current liabilities
Trade and other payables 1,134 1,406
Short term lease liabilities 195 353
Short-term borrowings 448 -
Total current liabilities 1,777 1,759
--------------------------------- ----- ------------------------ ------------------
Non-current liabilities
Long term lease liabilities 83 107
Total non-current liabilities 83 107
--------------------------------- ----- ------------------------ ------------------
Total liabilities 1,860 1,866
--------------------------------- ----- ------------------------ ------------------
Total net assets 11,832 9,952
================================= ===== ======================== ==================
Capital and reserves
attributable to owners
of the Company
Share capital 3,605 3,030
Share premium 92,520 88,647
Foreign exchange reserve 1,383 (61)
Retained earnings (85,676) (81,664)
--------------------------------- -----
Total equity 11,832 9,952
================================= ===== ======================== ==================
Consolidated statement of cash flows
FOR THE SIX MONTHSED 30 JUNE 2020
Six months ended Six months ended
30 June 30 June
2020 2019
(Unaudited) (Unaudited)
$'000 $'000
Cash flows from operating activities
Loss for the year (4,029) (2,822)
Adjustments for:
Depreciation of property, plant
and equipment 168 179
Depreciation of right-of-use assets 161 166
Amortisation of intangibles 22 22
Share-based payment expense 16 54
Finance income (126) (160)
Finance expense 11 18
Foreign exchange on intercompany 1,460 155
Decrease in trade and other receivables 903 811
Gain on disposal of fixed assets - (16)
Increase in inventories (324) (476)
Decrease in trade and other payables (273) (735)
Net cash used in operating activities (2,011) (2,804)
------------------------------------------ ----------------- -----------------
Investing activities
Purchase of property, plant and
equipment (2) (56)
Sale of property, plant and equipment - 42
Finance income 67 200
Purchase of investments (2,733) (19)
Sale of investments 1,098 1,085
------------------------------------------ ----------------- -----------------
Net cash (used)/provided by investing
activities (1,570) 1,252
------------------------------------------ ----------------- -----------------
Financing activities
Finance expense (2) (2)
Lease payments (190) (186)
Issue of ordinary share capital 4,449 -
Proceeds from unsecured loan 448 -
------------------------------------------ ----------------- -----------------
Net cash provided/(used) by financing
activities 4,705 (188)
------------------------------------------ ----------------- -----------------
Net increase/(decrease) in cash
and cash equivalents 1,124 (1,740)
Effects of exchange rate changes
on cash
and cash equivalents - (29)
Cash and cash equivalents at beginning
of period 457 2,459
------------------------------------------ ----------------- -----------------
Cash and cash equivalents at end
of period 1,581 690
========================================== ================= =================
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 2020 comprise the Company and its
subsidiaries (together referred to as the "Group").
The Board of Directors approved this interim report on 15
September 2020.
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 2019 Annual Report. The
financial information for the half years ended 30 June 2020 and 30
June 2019 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 statutory Annual Report and Financial
Statements for 2019 have been filed with the Registrar of
Companies. The Independent Auditors' Report on the Annual Report
and Financial Statements for the year ended 31 December 2019 was
unqualified, did draw attention to a matter by way of emphasis,
being going concern and did not contain a statement under 498(2) or
498(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 31 December 2019 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
2020 and will be adopted in the 2020 financial statements. There
are deemed to be no new and amended standards and/or
interpretations that will apply for the first time in the next
annual financial statements that are expected to have a material
impact on the Group.
Going Concern
In March 2020, the World Health Organisation declared a global
pandemic due to the Covid-19 virus that has spread across the
globe, causing different governments and countries to enforce
restrictions on people movements, a stop to international travel,
and other precautionary measures. This has had a widespread impact
economically and a number of industries have been heavily impacted.
This has resulted in supply chain disruption in certain industries,
uncertainty over cash collection from certain suppliers, and a more
general need to consider whether budgets and targets previously set
are realistic in light of these events.
In carrying out the going concern assessment, the Directors have
considered a number of scenarios, taking account of the possible
impacts of the pandemic, in relation to revenue forecasts for the
next 12 months. An analysis was performed to reflect a variety of
possible cash flow scenarios where the Group had significantly
reduced revenues for the twelve months following the date of this
Interim Report. A material downside scenario assumed that current
agreed contractual minimum revenues will be maintained over the
period and no new contract revenues. In such a scenario, the Group
has identified cost reductions which could be implemented, to help
mitigate the impact on cash outflows.
As such, the Directors have concluded that taking account of the
Group's contractually secured working capital at the date of this
report, there exists a material uncertainly which may cast doubt as
to the Groups ability to continue as a going concern. However,
given working capital options available, including the Group's
track record of raising funding when required, the Directors
believe the Group will continue as a going concern for the
foreseeable future. The interim financial statements do not include
the adjustments that would be required if the Group were unable to
continue as a going concern
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
2020 2019
(unaudited) (unaudited)
$'000 $'000
Operating loss is stated after
charging:
Depreciation 329 345
Amortisation 22 22
Share-based payment expense 16 54
Foreign exchange loss 2,045 80
================================ ================== ==============
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 2020 (unaudited)
Rest Total New
Americas Mexico of World Elimination Commercial Technology Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Revenue*
Proprietary
product
sales 975 230 737 - 1,942 - 1,942
Third-party
product
sales - 1,154 4 - 1,158 - 1,158
Inter-segmental
product sales 353 - 46 (399) - - -
Total revenue 1,328 1,384 787 (399) 3,100 - 3,100
--------- ------- ----------- ------------ ----------- ----------- --------
Group
consolidated
revenue 1,328 1,384 787 (399) 3,100 - 3,100
--------- ------- ----------- ------------ ----------- ----------- --------
Cost of sales (655) (721) (309) 399 (1,286) - (1,286)
Research and
development - - - - - (1,089) (1,089)
Sales and
marketing (689) (290) (289) - (1,268) - (1,268)
Administration (395) (186) (87) - (668) (96) (764)
Non-cash
expenses:
Depreciation (47) (35) (7) - (89) (240) (329)
Amortisation (19) - (3) - (22) - (22)
Share-based
payment - - - - - (11) (11)
--------- ------- ----------- ------------ ----------- ----------- --------
Segment
operating
(loss)/profit (477) 152 92 - (233) (1,436) (1,669)
Corporate
expenses
**
Wages and
professional
fees (518)
Administration
*** (2,007)
Operating loss (4,194)
Finance income 193
Finance expense (12)
--------- ------- ----------- ------------ ----------- ----------- --------
Loss before tax (4,013)
--------- ------- ----------- ------------ ----------- ----------- --------
* Revenue from one customer within the Mexico segment totalled
$508,000 or 16% of Group revenues.
Revenue from one customer within the America's segment totalled
$365,000 or 12% 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 $5,000
attributed to corporate employees who are not affiliated with any
of the Commercial or New technology segments. Includes $2.0 million
foreign exchange losses in non-US dollar denominated inter-company
funding.
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)
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.
6 Loss per share
Basic loss per ordinary share has been calculated on the basis
of the loss for the period of $4,027,000 (loss for the six months
ended 30 June 2019: $2,822,000) and the weighted average number of
shares in issue during the period of 238,510,886 (six months ended
30 June 2019: 172,822,881).
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.
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END
IR FLFITASISLII
(END) Dow Jones Newswires
September 15, 2020 02:00 ET (06:00 GMT)
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