Annual Financial Report

RNS Number : 7737I

Plant Health Care PLC

30 March 2015

 

RNS

30^th March 2015

PRELIMINARY RESULTS 2014

Plant Health Care (AIM: PHC), a leading provider of novel patent-protected biological products to the global agriculture markets, announces its preliminary results for the full year ended 31 December 2014. 

2014 Highlights

-       Introduced the Innatus™ 3G platform

-       Signed an agreement with Arysta LifeScience Brazil for the foliar use of Harpin αβ in sugar cane

-       Increased the cumulative Harpin αβ treated area by 20% to over 12 million acres worldwide

-       Reached an agreement with SipCam to sell PHC's proprietary products in Italy

-       Increased R&D staff by 40% during 2014 and by more than 100% since mid-2013

-       Submitted product registrations for Harpin αβ and Myconate to a cumulative total of 11 countries

-       Achieved 44% growth of Harpin and Myconate sales, excluding license/milestone payments, to $3.6 million (2013: $2.5m)

-       Derived 53% of total revenue from Harpin and Myconate sales (2013: 34%)

Paul Schmidt, CEO, commented:

"2014 was a transformational year for Plant Health Care as we significantly expanded our R&D capabilities under the leadership of Dr. Zhongmin Wei, our Chief Scientific Officer, and launched our next generation Innatus 3G technology platform. This platform has been positively received by major industry players and we continue to pursue potential development and commercialisation partnerships. In addition, we have started to experience the early stages of a revenue ramp-up with our current generation of proprietary products, Harpin αβ and Myconate, which are securing new distribution agreements in a growing number of countries and awaiting registration approvals in others around the world.

With its world-class level of competence and capabilities in Harpins, Plant Health Care is ideally positioned to capitalise on an increasing industry focus on agricultural bio-stimulants, which offer the potential to improve crop yields across a variety of geographies and environments. Our seasoned management team brings a wealth of experience to our licensing, sales and M&A efforts and we look forward to delivering the fruits of our labour to our shareholders in 2015 and beyond."

For further information, please contact:

Plant Health Care plc

Paul Schmidt, Chief Executive Officer                              Tel: [phone]

Liberum Capital Limited (NOMAD)

Clayton Bush                                                                 Tel: [phone]

LHA

Ed McGregor/Jody Burfening                                           Tel: [phone]

About Plant Health Care plc: Plant Health Care plc ("Plant Health Care") is a leading provider of patent-protected biological products aimed at the agriculture industry that are environmentally beneficial.  Through the commercialisation of these products, Plant Health Care is capitalising on current long-term trends towards natural systems and biological products for plant care and soil and water management.

Chairman's letter

Overview

Plant Health Care is an agricultural bio-technology company and a leader in bio-stimulants.  Plant Health Care's bio-stimulants are products which mobilise plants to increase yields and to defend themselves against attack by pests or from the debilitating effects of drought.

This has been a year of strong progress for the Group.  Following significant investment to expand the research capability and accelerate the pace of innovation, the business now comprises two areas of focus, based on the Company's core competences: (i) Bio-stimulant Discovery and Development and (ii) Commercial Products.

Bio-stimulant Discovery and Development ("Discovery") is focused on the discovery and early development of novel proprietary bio-stimulants using the Group's PREtec science and technology (PREtec signifies Plant Response Elicitor technology) and its world-leading research capability.  New technologies are being invented and patented by Plant Health Care; they will mainly be developed into final products in partnership with major industry players, who will be responsible for commercialising them.  Although research and development ("R&D") expenditure was broadly flat year-on-year at $2.0m and 100% over 2012, there was an increase in spending on our core activities.  R&D expenditure is expected to increase further as progress accelerates.

During the year, the Discovery area has made enormous strides under the technical leadership of our Chief Scientific Officer ("CSO"), Dr. Zhongmin Wei.  PREtec is showing the potential to spin out multiple families of peptides capable of raising crop yields, typically by more than 5%.  They do this by managing the plant's allocation of resources and by priming its defences against diseases and pests.  As products, they can be applied as seed treatments, or as foliar sprays.  We are also exploring the feasibility of embedding them as traits in the germplasm of plants.  The potential for PREtec has been illustrated by the launch of the Innatus 3G technology platform.  Major industry players have responded positively to Innatus 3G and we are in active discussions with several companies as we pursue potential partnerships.  Our intellectual property ("IP") portfolio continues to strengthen our leading position in protein-based bio-stimulants.

The Commercial Products area is focused on the commercialisation and sale of bio-stimulant and related products into markets around the world.  The area's core competence is the final stage development and registration of commercial bio-stimulants and the management of channels to market to deliver the commercial success of those products in target markets.  This segment is currently focused on driving the sales of Harpin αβ and Myconate around the world, both directly and with value chain partners.

The two areas of focus reflect the Group's complementary technical and commercial competences, while providing the flexibility to partner externally across the value chain or in specific geographies.

Financially, the revenues of the Group are dominated by the activities in the area of Commercial Products.  Harpin αβexperienced underlying strong growth in 2014, supported by the distribution agreements signed in the previous year.  Material new distribution agreements were signed during 2014 and management is working on an active pipeline of projects which are expected to lead to substantial sales growth over future years.  Alongside this effort, work is proceeding to obtain product registrations outside current markets, which will underpin this sales growth; we expect to achieve sales permits in Brazil during 2015.  Product sales growth was in line with expectations, but the absence of meaningful license/milestone payments resulted in a year-on-year decline in headline revenue.  However, as a consequence of cost control and working capital management, net loss and cash balances were in line with expectations.

Board changes

Given the exciting expectations we now have for the Group, the Board has requested me to take a more active role in developing strategy and in investor relations.  I will, therefore, become Executive Chairman with effect from 1 April 2015.  My role is to support Paul Schmidt and the management team, who are responsible for all aspects of implementation.

In January 2015, Dr. Richard H. Webb, formerly a non-executive director, became an Executive Director of Plant Health Care plc.  Dr. Webb will be responsible for supporting the CSO, Dr. Zhongmin Wei, as the Company continues to expand its R&D programme.  

With effect from 1 April 2015, Mr. William ("Bill") M. Lewis will join the Company as a non-executive director.  He is currently President and CEO of Summit Agro USA, LLC, a joint venture agro chemicals business between Sumitomo Corporation and ISK Biosciences.  He previously held senior roles within Arysta LifeScience, Syngenta Crop Protection and Zeneca/ICI.  Mr. Lewis brings a wealth of commercial experience and a demonstrated ability to build successful business strategies.

Dr. Webb will step down from the Audit Committee after the 2015 AGM.  James Ede-Golightly joined the Audit Committee on 16 January 2015.

I am delighted to be working with such an experienced, effective and dynamic Board.  This is a remarkably capable group which provides outstanding support to our excellent management team.

Outlook

Bio-stimulants are increasingly favoured within the agriculture sector.  Regulatory and public pressure on the use of agrochemicals encourages the major companies to seek new, greener product ranges, with easier, quicker regulatory pathways.  The majors are seeking technology platforms from which to develop new products quickly, to sell alongside their existing product lines, which will enable them to offer higher yields and benefits such as drought protection and product differentiation.

Plant Health Care has come a long way over the past two years.  The results we are seeing confirm that these are the early steps in a very exciting journey.  We are poised to become technology leaders in the dynamic and growing new bio-stimulant marketplace. 

In closing, I would like to thank the entire Plant Health Care team for their efforts throughout the year in positioning the Group for future success. 

Dr. Christopher Richards

Chairman

30 March 2015

Strategic report

Introduction

Plant Health Care is a global leader in bio-stimulants.  Our products mobilise plants to increase yields and defend themselves against attack by pests or the debilitating effects of drought.  Our vision is to establish Plant Health Care as a highly profitable technology licensing business, embedded in the agrochemical industry.

As outlined in the Chairman's letter, we have now aligned our business around two strategic areas of focus; Commercial Products and Discovery.  The Commercial Products area is focused on the marketing and sales of our proprietary products portfolio and is structured around certain markets and geographies.  The Discovery area has no specific geographic focus; its activities target all global markets and, as such, the costs associated with this area, being our research expenditure, are treated as a Group expense.

Discovery

This area of focus encompasses PREtec (our science and technology assets in Plant Response Elicitors) and is focused on the discovery and evaluation of novel bio-stimulants, which we intend to license to major companies for further development, registration and sale.  At present this segment is primarily engaged in R&D activities, and we plan to increase substantially our investment in this during the coming year, to reflect the exciting results achieved during 2014.

Expansion of R&D continued through 2014, under the leadership of our CSO, Dr. Zhongmin Wei.  Staff numbers are now twice those of 18 months ago, and are set to double again in the next 12 months.  Despite the progress we have made, R&D expenditure remained broadly flat in 2014 compared to 2013 because of better research focus and a reduction in non-core activities. Costs will rise faster in 2015 when we move into expanded laboratory space in Seattle.

Progress in 2014 exceeded expectations, with the invention and characterisation of more diverse and customisable arrays of new peptides than was thought possible a year ago.  Inspired by earlier Harpin proteins, this novel chemistry is covered by established patents and permits new IP rights to be secured that will provide proprietary protection for decades to come.

As a consequence, we have raised our ambitions and developed a strategy for bringing this new technology to market.  Rather than developing or licensing individual products, we are offering new technology platforms to the major research-based companies in the agrochemical and related industries.  These corporations are uniquely placed to exploit the richness of the design space associated with each platform, and have the development capabilities and market access to derive huge value from them.

In 2014 we presented our first new peptide, Innatus 3G, to a number of large research-based companies, proposing a programme of co-evaluation leading to a competitive licensing process for certain exclusive rights to the platform.  Initial responses have been very positive.

Meanwhile, we continue to pursue research into the mode of action of PREtec, including a substantial amount of work outsourced to university groups.  This brings benefits in suggesting better genetic and bioassay methods and, where these are deemed valuable, we are bringing them in-house. 

Commercial Products

The Commercial Products area is focused on the commercialisation and sale of bio-stimulant and related products globally.  Within the area, approximately 53% of sales (excluding license/milestone payments) relate to products over which the Group holds proprietary rights; the balance comes from the distribution and sale of third party products, almost exclusively in Mexico.  Commercial Products comprises three segments (Europe, Mexico and the United States of America ("USA")).

The area's core competence is the final stage development and registration of commercial bio-stimulants and the management of channels to market.  This includes the development of formulations and the registration of final products globally.  The current focus is on driving the sales of Harpin αβ and Myconate around the world, both directly and with value chain partners.  Income from sales of Harpin and Myconate in 2014, excluding license/milestone payments, hit a new high of $3.6m (2013: $2.5m), an increase of 44%. Cumulative Harpin αβ treated area has now exceeded 12 million acres around the world, which is testimony to the value of the product to our customers. 

We have enhanced our ability to take existing and future products to market, with the creation of a Business Development function and by focusing our development and commercial resources on those projects which show most promise of earnings over the next three years.  We are emphasising the pursuit of distribution agreements for Harpin αβ and Myconate with a larger number of regional and country agreements with mid-sized and smaller partners and now have a full pipeline of new commercial opportunities, which will drive increased sales over the next three years.

With respect to the agrochemical majors, our focus is to access these important players by means of the new technology platforms being developed by our Discovery area, as this is an excellent fit with their product development strategies.

We have worked hard during 2014 to develop sales outside the USA and Mexico.  We have now submitted registrations in 11 countries (Argentina, Belgium, Brazil, Canada, Germany, Italy, Kenya, New Zealand, Poland, Sri Lanka and Thailand) and we expect further registrations of Harpin αβ to be granted in 2015.  We have also started to increase resources to support the development and sale of our existing products in South America.

In October 2014, we announced an agreement with SipCam, to sell proprietary Plant Health Care technologies in Italy.  We anticipate that this agreement will bring substantial revenues once the products are registered in other European Union ("EU") countries. 

In December 2014, we announced a development and distribution agreement with Arysta LifeScience Brazil for the foliar use of Harpin αβ in sugar cane.  We have demonstrated remarkable increases, both in the biomass of sugar cane harvested and in the sugar content, leading to substantial economic benefit from the use of Harpin αβ.  This will be a very new type of product for end-use customers and we will have to create a new market, which will take time.  Once registration is achieved, we will work with our partner, Arysta LifeScience Brazil, to demonstrate to growers the benefits of Harpin αβ and to ensure a successful product launch. 

In April 2013, we announced an agreement with Arysta LifeScience Corporation to sell Harpin αβ in combination with certain Arysta products for foliar applications in the USA and elsewhere.  Due to delays in achieving product registration, the 2014 launch of the introductory product offering (Astera™ Fungicide with αβpro™ Yield Enhancer) was limited in scale; we anticipate that Arysta will achieve substantial sales in 2015.

We continue actively to explore opportunities to expand and enhance sales of Harpin αβ for seed treatment, particularly in the Americas on major row crops such as corn and soybean.  Direct Enterprises, Inc. ("DEI") continues to sell N-Hibit (Harpin αβ) for seed treatment in the USA, satisfying its customers' needs for an effective defence against nematodes.  We now anticipate DEI will consume the inventory purchased in previous years during 2015 and will then be in a position to resume purchasing from Plant Health Care.

Sales to South Africa were broadly flat in 2014, due to changes in our local partner.  However, this business remains fundamentally strong and we anticipate a material uplift of the revenue in this and neighbouring markets within the next three years.

In 2014, we conducted a major review of our Myconate manufacture supply chain and now understand our costs and options more clearly.  Sales of the product are anticipated to grow; however, they are likely to remain relatively modest in the near term.

In the USA, revenues derived from our proprietary products increased to $1.82m from $0.93m in 2013, excluding license/milestone payments.  There was an increase from $1.0m to $1.2m in proprietary product sales in Europe; this was largely due to increased sales of our proprietary products in Poland and Turkey.

Our Mexican subsidiary increased sales by 4% to $3.5m (2013: $3.4m).  Sales of our proprietary products in Mexico now represent 16% of the total. In 2014, our operations in Mexico represented approximately 51% of the gross sales of the Group (2013: 45%).  The Mexican subsidiary consistently delivers a positive EBITDA and cash flow.

Product development and process development work continues.  We have undertaken a specific effort to expand the commercial potential of Harpin αβ by developinga cost-effective, long-life liquid formulation. However, we have had only limited success, with the longest shelf-life we have achieved being less than one year. Exploratory work confirms that the new peptides should be much easier to formulate.  In 2014, we completed the initial steps to demonstrate that these small protein fragments can be produced by fermentation technology, although for small research and evaluation quantities we continue to use synthesised material.

Financial summary

A summary of the financial results for the twelve months to 31 December 2014, with comparatives for the previous financial year, is set out below:

	2014 $'000	2013 $'000
Revenue	6,880	7,455
Gross Profit	3,501	5,163
Operating loss from continuing operations	(6,077)	(6,946)
Loss on disposal of discontinued operations	-	(89)
Finance income (net)	116	37
Net loss for the year	(6,130)	(6,881)

Revenues from continuing operations in 2014 decreased by 8% to $6.9m (2013: $7.5m) due to a reduction in license/milestone payments.  The gross margin decreased to 51% of sales in 2014, compared to 69% in 2013.  The decrease is attributable to the higher margin licensing fees recognised in the prior period.

Operating expenses decreased to $9.6m from $12.1m.  Of this decrease, $2.1m related to restructuring costs in 2013.  These restructuring costs related principally to the severance costs of directors, the cost of closing the Pittsburgh office and associated staff severance costs, and the set-up of the new administrative head office in Raleigh.

Expenditure within R&D was broadly flat year-on-year at $2.0m in 2014 (2013: $2.1m). There was an increase in spending on our core activities and there is some lead time in the ability to expand our facilities to enable an uplift in expenditure. There will be a material increase in spending in the current year.

In addition, we have set out in Note 6 the separate category of expenditure relating to Business Development, which increased slightly to $1.0m in 2014 (2013: $0.85m).  This relates to expenditures for field trials with existing and potential customers and other costs relating to customer support, market research and the negotiation of commercial agreements.

Unallocated corporate expenses decreased to $1.2m (2013: $1.4m). 

Cash and investments at 31 December 2014 amount to $16.7 million (2013: $20.5 million).

Key performance indicators ("KPIs")

The Group uses a range of performance measures to monitor and manage the business effectively.  These are both financial and non-financial.  The most significant relate to Group financial performance and to the Group's progress in driving the two pillars of its strategy.

The KPIs for financial performance of the Commercial Products area and for the Group as a whole include revenue, gross profit and margin, and operating profit/loss.  These KPIs indicate the volume of work the Group has undertaken, as well as the efficiency with which this work has been delivered.

The KPIs for financial performance for the year ended 31 December 2014, with comparatives for the year ended 31 December 2013, are set out below; these figures exclude sales attributable to the business divested in November 2013. 

	2014	2013
Revenue ($'000)	6,880	7,455
Gross profit ($'000)	3,501	5,163
Gross profit margin (%)	50.9	69.3
Operating loss ($'000)	(6,077)	(6,946)

In addition, an important KPI is the increase in revenue achieved from the sale of our proprietary products.  These are shown below, separating out the product revenue from the receipt of license/milestone payments and other one-off payments, which are less predictable and tend to distort the product sales growth.

Proprietary sales

	$'000	$'000
	2014	2013
USA	1,821	929
Mexico	563	579
Europe	1,240	1,009
Total	3,624	2,517

The KPIs for non-financial performance relate to the Group's technologies and include the number and nature of contracts realised with partners, and progress along the mutually agreed paths to commercial launch of products. 

The Board continues to monitor the progress of its R&D activities and expenditures.  As each research project advances, specific progress is reported to the Board and costs against budget are monitored.  We anticipate refining the KPIs for R&D as each project develops. 

In addition, the Business Development activities of the Group are assessed against our success in developing specific evaluation and commercial arrangements with third parties for the exploitation of our proprietary products. 

Principal risks and uncertainties

There are a number of potential risks and uncertainties which have been identified within the businesswhich could 
have a material impact on the Group'slonger-term performance.  The key areas of risk identified by the Board are summarised below:   

Liquidity risk

The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by reference to continuously monitored forecast and actual cash flows.  As part of its monitoring, the Group ensures that the financial liabilities due to be paid can be met by existing cash and cash equivalents.  Cash equivalents are composed of short-term investment grade securities and are readily marketable and convertible to cash.  The Group does not currently generate sufficient cash from its operations to meet its annual funding needs. However, the Company is well funded due to an equity placement in April 2013 and is able to meet its obligations.

Technology and commercialisation risk

There are technology and commercialisation risks associated with the Group's proprietary products and itspartners. If the Group's key technologies do not perform as well as anticipated or are not received as favourably as forecasted in the marketplace, the Group's financial results would be adversely affected.  To mitigate this risk, the Group has prioritised its strategic focus and has worked closely with key existing
and potential partners to review, evaluate and improve its technologies to ensure continuedinnovation and 
commercial viability. 

Regulatory risk

The Group is only able to sell products once appropriate registrations have been obtained, permitting commercial sales.  While this process is substantially less onerous for bio-stimulants, for example, compared with agrochemicals, the time-lines and certainties of obtaining final sales permits are unpredictable.  This is exacerbated by uncertainty in the regulatory system with respect to bio-stimulants in many countries, which can lead to delays while governments establish the regulations and procedures under which to review submissions.

Credit risk

Inability to collecton the Group'strade receivables would result in bad debt expenseor legal costs, which would adversely
affect the Group's financial results. The Group has addressedthis risk by utilising a formalcredit policy, monitoring and
estricting further shipments to customerswith overdue payments, and holding monthly credit review meetings. 

Group oversight

The Group is dependent on a small management team.  The result is a risk that the departure of key members of the management team may result in the Group's inability to
adequately perform against its strategic plan. This could adversely impact the Group'sfinancial performance.  To addressthis, the Group has an active Board of directors, which meets a minimum of six times each year to discuss all aspects of the Group's performance and strategy. 

Financial instruments

The Group uses various financial instruments, including equity, cash, short-term investments of investment grade

notes and bonds, and items such as trade receivables and trade payablesthat arise directly from its operations. 

On behalf of the Board

Paul Schmidt

Chief Executive

30 March 2015

Consolidated statement of comprehensive income for the year ended 31 December 2014

	Note	2014 $'000		2013 $'000
Revenue	3	6,880		7,455
Cost of sales		(3,379)		(2,292)
Gross profit		3,501		5,163
Research and development expenses		(2,044)		(2,079)
Business development expenses		(1,037)		(852)
Sales and marketing expenses		(2,731)		(3,474)
Administrative expenses		(3,766)		(3,606)
Restructuring expenses	4	-		(2,098)
Total administrative expenses		(3,766)		(5,704)
Operating loss	5	(6,077)		(6,946)
Finance income	7	119		38
Finance expense	7	(3)		(1)
Loss before tax		(5,961)		(6,909)
Income tax (expense)/credit	8	(169)		117
Net loss from continuing operations		(6,130)		(6,792)
Loss on discontinued operations, net of tax	14	-		(89)
Loss for the year		(6,130)		(6,881)
Other comprehensive income:
Items which will or may be reclassified to profit or loss:
Exchange difference on translation of foreign operations		(29)		(2)
Total comprehensive loss for the year		(6,159)		(6,883)
Net loss attributable to:
Owners of the parent		(6,130)		(6,900)
Non-controlling interest		-		19
		(6,130)		(6,881)
Total comprehensive loss attributable to:
Owners of the parent		(6,159)		(6,902)
Non-controlling interest		-		19
		(6,159)		(6,883)
Basic and diluted loss per share	9	$(0.09)		$(0.11)
Basic and diluted loss per share from continuing operations	9	$(0.09)		$(0.11)

Consolidated statement of financial position at 31 December 2014

                                                                                                                                                            

	Note	2014 $'000		2013 $'000
Assets
Non-current assets
Intangible assets	10	2,707		3,004
Property, plant and equipment		298		276
Trade and other receivables	11	41		316
Total non-current assets		3,046		3,596
Current assets
Inventories		1,084		2,510
Trade and other receivables	11	2,710		3,170
Investments		12,775		11,054
Cash and cash equivalents		3,898		9,495
Total current assets		20,467		26,229
Total assets		23,513		29,825
Liabilities
Current liabilities
Trade and other payables	12	1,832		3,034
Financial leases	13	10		9
Total current liabilities		1,842		3,043
Non-current liabilities
Trade and other payables		-		153
Financial leases	13	24		34
Total non-current liabilities		24		187
Total liabilities		1,866		3,230
Total net assets		21,647		26,595
Share capital		1,234		1,215
Share premium		70,895		70,206
Reverse acquisition reserve		-		10,548
Share-based payment reserve		-		2,556
Foreign exchange reserve		(611)		(582)
Retained earnings		(49,871)		(57,348)
		21,647		26,595
Non-controlling interests		-		-
Total equity		21,647		26,595

 

Consolidated statement of changes in equity for the year ended 31 December 2014

	Share capital $'000	Share premium $'000	Reverse acquisition reserve $'000	Share-based payment  reserve $'000	Foreign exchange reserve $'000	Retained earnings $'000	Total $'000	Non-controlling interests $'000	Total equity $'000
Balance at 1 January 2013	952	50,624	10,548	2,780	(580)	(50,502)	13,822	270	14,092
Loss for year	-	-	-	-	-	(6,900)	(6,900)	19	(6,881)
Exchange difference arising on translation of foreign operations	-	-	-	-	(2)	-	(2)	-	(2)
Total comprehensive income	-	-	-	-	(2)	(6,900)	(6,902)	19	(6,883)
Shares issued	263	20,207	-	-	-	-	20,470	-	20,470
Placement costs	-	(641)	-	-	-	-	(641)	-	(641)
Share-based payments	-	-	-	(224)	-	-	(224)	-	(224)
Reverse acquisition reserve	-	-	-	-	-	-	-	-	-
Options exercised	-	16	-	-	-	-	16	-	16
Purchase of minority interest	-	-	-	-	-	54	54	(289)	(235)
Balance at 31 December 2013	1,215	70,206	10,548	2,556	(582)	(57,348)	26,595	-	26,595
Loss for year	-	-	-	-	-	(6,130)	(6,130)	-	(6,130)
Exchange difference arising on translation of foreign operations	-	-	-	-	(29)	-	(29)	-	(29)
Total comprehensive income	-	-	-	-	(29)	(6,130)	(6,159)		(6,159)
Shares issued	-	-	-	-	-	-	-	-	-
Reverse acquisition reserve reclassification	-	-	(10,548)	-	-	10,548	-	-	-
Share-based payments reclassification	-	-	-	(2,556)	-	2,556	-	-	-
Share-based payments	-	-	-	-	-	503	503	-	503
Options exercised	19	689	-	-	-	-	708	-	708
Balance at 31 December 2014	1,234	70,895	-	-	(611)	(49,871)	21,647	-	21,647

Consolidated Statement of Cash Flows for the year ended 31 December 2014

	Note	2014 $'000	2013 $'000
Cash flows from operating activities
Loss for the year		(6,130)	(6,881)
Adjustments for:
Depreciation		87	108
Amortisation of intangibles	10	297	273
Share-based payment expense/(credit)		503	(224)
Finance income	7	(119)	(38)
Finance expense	7	3	1
Income taxes expense/(credit)		169	(117)
Decrease/(increase) in trade and other receivables		735	(117)
Loss on sale of discontinued operations, net of tax	14	-	185
(Gain)/loss on disposal of fixed assets		5	43
Decrease/(increase) in inventories		1,426	(1,166)
(Decrease)/increase in trade and other payables		(1,334)	1,826
Decrease in provisions		-	(75)
Income taxes paid		(190)	(69)
Net cash used in operating activities		(4,548)	(6,251)
Investing activities
Purchase of property, plant and equipment		(114)	(278)
Expenditure on externally-acquired intangible assets	10	-	(25)
Disposal of discontinued operations, net of cash	14	-	(252)
Finance income	7	119	38
Purchase of investments		(20,831)	(24,765)
Sale of investments		19,110	17,915
Net cash provided by investing activities		(1,716)	(7,367)
Financing activities
Interest paid	7	(3)	(1)
Issue of ordinary share capital		-	19,829
Exercise of options		708	16
Purchase of minority shares		-	(235)
Repayment of borrowings		(9)	(17)
Net cash provided by financing activities		696	19,592
Net (decrease)/increase in cash and cash equivalents		(5,568)	(5,974)
Effects of exchange rate changes on cash
and cash equivalents		(29)	20
Cash and cash equivalents at beginning of period		9,495	3,501
Cash and cash equivalents at end of period		3,898	9,495

Notes forming part of the Group financial statements for the year ended 31 December 2014

1.   Annual Report

The financial information set out in this document does not constitute the Company's statutory accounts for 2013 or 2014.  Statutory accounts for the years ended 31 December 2013 and 31 December 2014 have been reported on by the Independent Auditor.  The Independent Auditor's Reports on the Annual Report and Financial Statements for each of 2013 and 2014 were unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. 

Statutory accounts for the year ended 31 December 2013 have been filed with the Registrar of Companies.  The statutory accounts for the year ended 31 December 2014 will be delivered to the Registrar in due course and will be posted to shareholders shortly, and thereafter will be available from the Company's registered office at 48 Chancery Lane, London, WC2A 1JF and from the Company's website www.planthealthcare.com 

The financial information set out in these preliminary results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs).  The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 December 2014.  The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 31 December 2013.  New standards, amendments and interpretations to existing standards, which have been adopted by the Group have not been listed, since they have no material impact on the financial statements.

2.   Accounting policies

Reporting currency

The financial statements are presented in US dollars.  The directors believe that it is appropriate to use US dollars as the presentational currency for reporting, since the majority of the Group's transactions are conducted in that currency.  The exchange rate used to convert British Pounds to US Dollars at 31 December 2014 was 1.5532 and the average exchange rate for the year was 1.6476.

Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRSs") issued by the International Accounting Standards Board ("IASB") as adopted by the European Union and those parts of the Companies Act 2006 which apply to companies preparing their financial statements under IFRSs.

Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments designated at fair value through the profit and loss (refer to individual accounting policies).

The principal accounting policies are set out below.  The policies have been applied consistently to all the years presented and on a going concern basis. 

Standards, amendments and interpretations to published standards effective in 2014 adopted by the Group

A number of new and amended standards have become effective since the beginning of the year.  None of the new amendments materially affect the Group.

Standards, amendments and interpretations to published standards not yet effective

There are a number of new standards and amendments to and interpretations of existing standards which have been published and are not yet mandatory and which the Group has decided not to adopt early.

Basis of consolidation

On 6 July 2004, Plant Health Care plc became the legal parent company of Plant Health Care, Inc. in a share-for-share transaction.  The former shareholders of Plant Health Care, Inc. became the majority shareholders of Plant Health Care plc.  Further, the continuing operations and executive management of Plant Health Care plc were those of Plant Health Care, Inc. 

This combination was accounted for as a reverse acquisition with Plant Health Care, Inc., the legal acquiree, being treated as the acquirer. Under this method, the assets and results of Plant Health Care plc were combined with the assets, liabilities and results of Plant Health Care, Inc. from the date of combination. There was no adjustment to the carrying values of the assets and liabilities in Plant Health Care, Inc. to reflect their fair value at the date of combination. No goodwill arose on this combination.

These consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group. Control exists when the Group has (i) power over the investee, (ii) exposure, or rights, to variable returns from its involvement with the investee, and (iii) the ability to use its power over the investee to affect the amount of the investor's returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All significant intercompany transactions, balances, revenues and expenses have been eliminated.

The consolidated financial statements incorporate the results of business combinations using the purchase method.  In the consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date.  The results of acquired operations are included in the statement of comprehensive income from the date on which control is obtained.  They are deconsolidated from the date control ceases.

From 1 January 2010, the total comprehensive income of non-wholly-owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests. Before this date, unfunded losses in such subsidiaries were attributed entirely to the Group. In accordance with the transitional requirements of IAS 27 (2008), the carrying value of non-controlling interests at the effective date of the amendment has not been restated.

Revenue

Revenue comprises sales of goods to external customers and revenues generated through the commercialisation of the Group's technology (fee income). Sales of goods to external customers are at invoiced amount less value added tax or local taxes on sales and are recognised at the point that the customer takes legal title to the goods sold. 

License/milestone payment income is recognised when the Group has no remaining obligations to perform under a non-cancellable contract which permits the user to act freely under the terms of the agreement and the collection of the resulting receivable is reasonably assured. 

Goodwill

Goodwill is measured as the excess of the cost of an acquisition over the net fair value of the identifiable assets, liabilities and contingent liabilities, plus any direct costs of acquisition for acquisitions before 1 January 2010.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to administrative expenses in the consolidated statement of comprehensive income.  The Company performs annual impairment tests for goodwill at the financial year-end.

Other intangible assets

Externally-acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within administrative expenses in the consolidated statement of comprehensive income.

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to contractual or other legal rights, and are initially recognised at their fair value.

Expenditure on internally-developed intangible assets (development costs) are capitalised if it can be demonstrated that:

Ø it is technically feasible to develop the product for it to be sold;

Ø adequate resources are available to complete the development;

Ø there is an intention to complete and sell the product;

Ø the Group is able to sell the product;

Ø sale of the product will generate future economic benefits; and

Ø expenditure on the project can be measured reliably.

Capitalised development costs are amortised over the periods of the future economic benefit attributable to the asset. The amortisation expense is included within administrative expenses in the consolidated statement of comprehensive income.

Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in profit or loss.

The significant intangibles recognised by the Group and their estimated useful economic lives are as follows:

Licenses                                                           -           12 years

Registrations                                                     -        5-10 years

Impairment of goodwill and other intangible assets

Impairment tests on goodwill are undertaken annually at the financial year-end.  Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.  Where the carrying value of an asset exceeds its recoverable amount (that is the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Impairment charges are included within administrative expenses in the consolidated statement of comprehensive income.  An impairment loss recognised for goodwill is not reversed.

Foreign currency

Foreign currency transactions of individual companies are translated into the individual company's functional currency.  Any differences are recognised in profit or loss.

On consolidation, the results of operations that have a functional currency other than US dollars are translated into US dollars at rates approximating to those ruling when the transactions took place. Statements of financial position are translated at the rate ruling at the end of the financial period. Exchange differences arising on translating the opening net assets at opening rate and the results of operations that have a functional currency other than US dollars at average rate are included within "other comprehensive income" in the consolidated statement of comprehensive income and taken to the foreign exchange reserve within capital and reserves.

Exchange differences recognised in profit or loss in Group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation concerned are reclassified to other comprehensive income and accumulated in the foreign exchange reserve on consolidation.

Financial instruments

Trade receivables collectible within one year from date of invoicing are recognised at invoice value less provision for amounts the collectibility of which is uncertain.  Trade receivables collectible after more than one year from date of invoicing are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. 

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 or loss.

Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.  The Group's ordinary shares are classified as equity instruments.

Employee benefits

The Group maintains a number of defined contribution pension schemes for certain of its employees; the Group does not contribute to any defined benefit pension schemes. The amount charged to profit or loss represents the employer contributions payable to the schemes for the financial period.

The expected costs of all short-term employee benefits, including short-term compensated absences, are recognised during the period the employee service is rendered.

Equity share-based payments

Share-based payments issued to employees include share options and stock awards under a long-term incentive plan and value creation plan. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant.  The fair value determined at the date of grant is recognised as an expense with a corresponding increase in equity on a straight-line basis over the vesting period, based on the Company's estimate of the shares that will eventually vest and be adjusted for the effect of non-market-based vesting conditions.

Leased assets: lessee

Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as if they had been purchased outright.  The amount capitalised is the lower of fair value and present value of the minimum lease payments payable over the term of the lease.  The corresponding lease commitments are shown as amounts payable to the lessor.  Depreciation on the relevant assets is recognised in profit or loss over the shorter of useful economic life and lease term.

Lease payments are analysed between capital and interest components.  The interest element of the payment is charged to income over the period of the lease and is calculated so that it represents a constant proportion of the balances of capital repayments outstanding.  The capital element reduces the amounts payable to the lessor.

All other leases are treated as operating leases.  Their annual rentals are charged to income on a straight-line basis over the lease term.

Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. Cost includes the purchase price and costs directly attributable to bringing the asset into operation. Depreciation is provided to write off the cost, less estimated residual values, of all property, plant and equipment over their expected useful lives.  It is calculated at the following rates:

Production machinery                 -           10 - 20% per annum

Office equipment                        -           20 - 33% per annum

Vehicles                                    -           20% per annum

Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value.  Cost comprises all costs of purchase and all other costs of conversion.

Deferred tax

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position differs from its tax base, except for differences on:

Ø the initial recognition of goodwill;

Ø the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit; and

Ø investments in subsidiaries and joint arrangements where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the end of the financial period and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.

3.   Revenue

Revenue arises from:	2014 $'000	2013 $'000
Proprietary products	3,774	4,997
Third-party products	3,106	2,458
Total	6,880	7,455

4.   Restructuring costs

Exceptional items in the year ended 31 December 2013 were $2,098,000.  These expenses represented severance payments, relocation costs and other expenses of $1,705,000, $282,000 and $111,000, respectively.

5.   Operating loss

	Note	2014 $'000	2013 $'000
Operating loss is arrived at after charging/(crediting):
Share-based payment charge/(credit)		503	(224)
Depreciation		87	108
Amortisation of intangibles	10	297	273
Operating lease expense		339	443
Loss on disposal of property, plant and equipment		5	43
Foreign exchange losses/(gains)		458	(28)

Auditor's remuneration:
Amounts for audit of parent company and consolidation		69	61
Amounts for audit of subsidiaries		29	28
Amounts for other services		10	-
Total auditor's remuneration		108	89

6.   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.

2014		USA $'000		Mexico $'000		Europe $'000	Unallocated Elimination $'000	Total $'000
Revenue*
Proprietary product sales		1,971		563		1,240	-	3,774
Third-party product sales		138		2,917		51	-	3,106
Inter-segment sales		1,552		38		33	(1,623)	-
Total revenue		3,661		3,518		1,324	(1,623)	6,880
Group consolidated revenue		3,661		3,518		1,324	(1,623)	6,880
Business development		(1,037)		-		-	-	(1,037)
Sales and marketing		(1,174)		(903)		(654)	-	(2,731)
Administration		(1,222)		(303)		(173)	-	(1,698)
Depreciation		(52)		(30)		(5)	-	(87)
Amortisation		(253)		-		(44)	-	(297)
Share-based payment		(169)		(10)		(2)	(322)	(503)
Segment operating (loss) / profit on commercial activities		(2,705)		505		(330)	(322)	(2,852)
Corporate expenses **
Wages and professional fees								(811)
Administration expenses								(370)
Research and development ***								(2,044)
Operating loss								(6,077)
Finance income								119
Finance expense								(3)
Loss before tax and discontinued operations								(5,961)

* Revenue includes $150,000 from a license/milestone payment which is included in Proprietary product sales within the US segment.

Revenue from one customer within the USA segment totals $1,000,000 or 14.5% of Group revenues. In addition, revenue for a customer within the UK segment totals $717,500 or 10.4% 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.

*** The research and development expense comprise the Group's Discovery area.

Of the European segment, $1,168,000 of revenue is related to the Group's UK subsidiary and $156,000 to the Group's Spanish subsidiary.

Other segment information:

		USA $'000	Mexico         $'000	Europe         $'000	Unallocated/ Eliminations $'000	Total $'000
	Segment assets	18,522	2,103	2,888	-	23,513
	Segment liabilities	1,370	418	78	-	1,866
	Capital expenditure	33	81	-	-	114
	Non-cash expenses:
Depreciation		52	30	5	-	87
Amortisation		253	-	44	-	297
Share-based payment		169	10	2	322	503

2013	USA $'000	Mexico $'000	Europe $'000	Unallocated Elimination $'000	Total $'000
Revenue*
Proprietary product sales	2,169	579	1,009	-	3,757
Third-party product sales	72	2,791	2,464	-	5,327
Inter-segment sales	1,274	-	540	(1,814)	-
Total revenue	3,515	3,370	4,013	(1,814)	9,084
Discontinued operations	-	-	(1,629)	-	(1,629)
Group consolidated revenue	3,515	3,370	2,384	(1,814)	7,455
Business development	(852)	-	-	-	(852)
Sales and marketing	(1,624)	(970)	(880)	-	(3,474)
Administration	(1,615)	(292)	(186)	-	(2,093)
Restructuring	(2,098)	-	-	-	(2,098)
Depreciation	(47)	(33)	(28)	-	(108)
Amortisation	(255)	-	(18)	-	(273)
Share-based payment	308	(53)	(48)	17	224
Segment operating profit/(loss) on commercial activities	(3,659)	376	(226)	(2)	(3,511)

Corporate expenses **
Wages and professional fees				(1,101)
Administration expenses				(255)
Research and development				(2,079)
Operating loss				(6,946)
Finance income				38
Finance expense				(1)
Loss before tax and discontinued operations				(6,909)

* Revenue from one customer totals $1,200,000 or 16.1%, of the Group's revenue.  This license/milestone payment is included in Proprietary product sales within the US segment.

** These amounts represent public company expenses for which there is no reasonable basis by which to allocate the amounts across the Group's segments.

Of the European segment, $2,072,000 of revenue is related to the Group's UK subsidiary, $312,000 to the Group's Spanish subsidiary and $1,629,000 to the Group's Netherlands business divested in November 2013.

		USA $'000	Mexico $'000	Europe $'000	Unallocated/ Eliminations $'000	Total $'000
	Segment assets	23,874	1,918	4,033	-	29,825
	Segment liabilities	2,653	207	370	-	3,230
	Capital expenditure	232	46	-	-	278
	Non-cash expenses:
Depreciation		45	34	5	24	108
Amortisation		255	-	18	-	273
Share-based payment		(308)	53	48	(17)	(224)

Segment assets include all operating assets used by a segment and consist principally of operating cash, receivables, inventories, property, plant and equipment and intangible assets, net of allowances and provisions. Segment liabilities include all operating liabilities and consist principally of trade payables and accrued liabilities.

All material non-current assets are located in the USA.

7.   Finance information and expense

	2014 $'000	2013 $'000
Finance income
Interest on deposits and investments	119	38
Finance expense
Interest on finance leases	(3)	(1)

8.   Tax expense

	2014  $'000	2013  $'000
Current tax on profit for the year	167	43
Deferred tax - origination and reversal of timing differences	2	(160)
Total tax expense	169	(117)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

	2014  $'000	2013  $'000
Loss before tax - continuing operations	(5,961)	(6,909)
Loss before tax - discontinued operations	-	(89)
	(5,961)	(6,998)
Expected tax credit based on the standard rate of corporation tax in the UK of 21.49% (2012: 23.25%)	(1,281)	(1,625)
Disallowable expenses	24	10
Share-based payment expense per accounts	138	(52)
Share-based payment expense per tax returns	1	(2)
Losses available for carryover	1,521	1,717
Losses utilised in the year	-	(13)
Amortisation of intangibles	(83)	(73)
Other temporary differences	(153)	81
Movement in deferred tax	2	(160)
Actual tax charge for the year	169	(117)

At 31 December 2014, the Group had a potential deferred tax asset of $21,407,000, which includes tax losses available to carry forward of $20,740,000 (being actual federal, foreign and state losses of $75,425,000) arising from historical losses incurred and other timing differences of $667,000.

Deferred tax asset	Deferred taxation  $'000
At 1 January 2014	23
Charged to the profit and loss account	(2)
At 31 December 2014	21

The deferred tax asset comprises of sundry timing differences.

9.   Loss per share

Basic loss per ordinary share has been calculated on the basis of the loss for the year of $6,130,000(2013: loss of $6,881,000) and the weighted average number of shares in issue during the period of 71,490,056 (2013: 65,598,377).  Basic loss per share from continuing operations has been calculated with a numerator of $6,130,000 loss (2013: $6,792,000 loss) and basic earnings per share from discontinued operations has been calculated with a numerator of nil for 2014 (2013: loss of $89,000). The weighted average number of shares used in the above calculation is the same as for total basic loss per ordinary share. Equity instruments of 5,938,921 (2013: 8,174,421), which includes share options, LTIP's and the Value Creation Plan, that could potentially dilute basic earnings per share in the future have been considered but 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 a loss on continuing operations for the year.

10.  Intangible assets

	Goodwill $'000	Licenses and registrations $'000	Trade name and customer relationships $'000	Total $'000
Cost
Balance at 1 January 2013	1,620	3,317	159	5,096
Additions - externally acquired	-	25	-	25
Balance at 31 December 2013	1,620	3,342	159	5,121
Additions - externally acquired	-	-	-	-
Balance at 31 December 2014	1,620	3,342	159	5,121
Accumulated amortisation
Balance at 1 January 2013	-	1,685	159	1,844
Amortisation charge for the year	-	273	-	273
Balance at 31 December 2013	-	1,958	159	2,117
Amortisation charge for the year	-	297	-	297
Balance at 31 December 2014	-	2,255	159	2,414
Net book value
At 31 December 2013	1,620	1,384	-	3,004
At 31 December 2014	1,620	1,087	-	2,707

The intangible asset balances have been tested for impairment using discounted budgeted cash flows, a pre-tax discount rate of 16% (2013:18%) and performance projections over five years with residual growth assumed at 0%.

Goodwill

Goodwill comprises of a net book value of $1,432,000 related to the 2007 acquisition of the assets of Eden Bioscience and $188,000 related to an acquisition of VAMTech LLC in 2004.  The entire amount is allocated to Harpin, a cash generating unit within the USA segment.   No impairment charge is considered necessary, and no reasonable possible change in key assumptions used would lead to an impairment in the carrying value of goodwill.

Licenses and registrations

These amounts represent the cost of licenses and registrations acquired in order to market and sell the Group's products internationally across a wide geography.  These amounts are amortised evenly according to the straight-line method over the term of the license or registration.  Impairment is reviewed and tested according to the method expressed above. Licenses and registrations have a weighted average remaining amortisation period of four years.

11.  Trade and other receivables

	2014 $'000	2013 $'000
Current:
Trade receivables	2,570	2,981
Less: provision for impairment	(55)	(12)
Trade receivables, net	2,515	2,969
Other receivables and prepayments	195	201
Current trade and other receivables	2,710	3,170
Non-current:
Trade receivables	41	316
Less: provision for impairment	-	-
Non-current trade and other receivables	41	316
	2,751	3,486

The trade receivable current balance represents trade receivables with a due date for collection within a one-year period. The trade receivable non-current balance represents the present value of trade receivables with a collection period that exceeds one year.  

Movements on the provision for impairment of trade receivables are as follows:

	2014 $'000	2013 $'000
Balance at the beginning of the year	12	76
Provided	50	-
Receivables written off as uncollectible	-	(34)
Unused amounts reversed	-	(35)
Foreign exchange	(7)	5
Balance at the end of the year	55	12

The gross value of trade receivables for which a provision for impairment has been made is $79,000 (2013:  $53,000).

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables set out above.

The following is an analysis of the Group's trade and other receivables, both current and non-current, identifying the totals of trade and other receivables which are not yet due and those which are past due but not impaired.

	2014 $'000	2013 $'000
Current	2,333	2,805
Past due:
Up to 30 days	147	138
31 to 60 days	11	-
61 to 90 days	-	-
Greater than 90 days	24	26
Total	2,515	2,969

The main factors used in assessing the impairment of trade receivables are the age of the balances and the circumstances of the individual customer. 

12.  Trade and other payables

	2014 $'000	2013 $'000
Current:
Trade payables	619	425
Accruals	881	786
Restructuring costs	309	1,651
Deferred income	22	68
Taxation and social security	-	82
Income tax liability	1	22
	1,832	3,034
Non-current:
Trade and other payables	-	153
	1,832	3,187

13.  Financial leases

(a)  Current borrowings

	2014 $'000	2013 $'000
Finance leases	10	9

(b)  Non-current borrowings

	2014 $'000	2013 $'000
Finance leases	24	34

Finance lease obligations are secured by retention of title to the relevant equipment and vehicles.

(c)  Due date for payment:

The contractual maturity of the Group's financial liabilities on a gross basis is as follows:

			Trade and other payables		Finance leases
			2014 $'000	2013 $'000	2014 $'000	2013 $'000
In less than one year			1,809	2,862	10	9
In more than one year, but less than two years			-	153	24	34
			1,809	3,015	34	43

14. Discontinued operations

In November 2013, the Group sold the 100% shareholding of its Netherlands business, which represents the only operation presented as discontinued operations for the year ended 31 December 2013.  The results of this business for the year ended 31 December 2013 are shown under "Loss of discontinued operations, net of tax" in the consolidated statement of comprehensive income.

(a) Plant Health Care BV: profit on disposal

In November 2013, the Group sold the 100% shareholding of its Netherlands business. 

The post-tax loss on disposal of discontinued operations was determined as follows:

	2013 $'000
Cash received	-
Net assets disposed of:
Cash	252
Property, plant and equipment	86
Trade and other receivables	287
Inventory	385
Trade and other payables	(252)
Notes payable	(573)
	185
Loss on disposal of discontinued operations	185

(b) The (loss)/profit of discontinued operations, net of tax, was determined as follows:

	2013 $'000
Year ended 31 December
Revenue	1,629
Expense other than finance costs	(1,533)
Loss on disposal of discontinued operations	(185)
	(89)
Earnings per share from discontinued operations	2013 $
Basic earnings per share	0.00
Diluted earnings per share	0.00

(c) Cash flows on discontinued operations

Cash flows attributable to operating, investing and financing activities of the above discontinued operations were as follows:

			Year ended 31 December 2013 $'000
Operating inflows/(outflows)			270
Investing (outflows)/inflows			(252)

15. Cautionary statement

Plant Health Care has made forward-looking statements in this press release, including: statements about the market for and benefits of its products and services; financial results; product development plans; the potential benefits of business relationships with third parties; and business strategies.  These statements about future events are subject to risks and uncertainties that could cause Plant Health Care's actual results to differ materially from those that might be inferred from the forward-looking statements.  Plant Health Care can give no assurance that any forward-looking statements will prove correct.

 

END

 

 

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