Post-Close Trading Update

RNS Number : 7065S

Plant Health Care PLC

18 July 2022

 

18 July 2022

PLANT HEALTH CARE plc 

("Plant Health Care" or the "Company")

Post-Close Trading Update

Significant revenue growth and on track to deliver $30 million of sales in 2025

Plant Health Care^® (AIM: PHC.L), a leading provider of novel patent-protected biological products to help farmers feed the world sustainably, provides the following update on trading in the six months to 30 June 2022 ("H1 2022"). The Company expects to announce its interim results for H1 2022 in early September 2022.

Financial highlights:

· Revenue up 60% (62% in constant currency) to $5.6 million (H1 2021: $3.5 million)

o  Sales in South America up 333% driven by the launch of first PREtec product Saori™ in Brazil

o  Sales in North America up 133%

o Harpin � β revenue increased by 37% to $3.3 million (H1 2021: $2.4 million). Growth was strong in sugar cane, citrus, cotton, and specialty crops.

o  Third-party revenue up 36% to $1.5 million (H1 2021: $1.1 million),

· Gross margin increased to 61% (H1 2021: 56%)

· Company's cash reserves were $6.3 million as of 30 June 2022

Operational highlights:

· Signed multiple new distribution agreements for Plant Health Care products, including with Ager Agro SAS ("Ager") in Argentina and Uruguay for ProAct® and Nutrien in Brazil for Saori. The Company now has significant market access through some of the world's biggest distributors.

· Signed a long-term production and supply agreement with a leading Europe-based fermentation company to secure low-cost production capacity for several products to help meet projected global demand.

· Jeff Tweedy appointed Chief Executive Officer (CEO) with effect from 22 June 2022, with former CEO Chris Richards appointed Non-Executive Chairman.

Outlook:

· Second new product from Plant Health Care's PREtec (Vaccines for Plants^TM) technology platform expected to be launched in second half of 2022 in the US; the Company's target is to launch at least one PREtec product in a major market every year.

· The Board is confident that the Company is trading in line with market expectations for the full year to 31 December 2022

· Good visibility of 2023 order book from major distribution partners

Business breakdown

Commercial

Plant Health Care's Commercial business includes sales of Harpin α and, as they are launched, of PREtec products such as Saori.  Harpin α is a recombinant protein which acts as a powerful biostimulant, promoting the yield and quality of crops. The Company sells Harpin α through specialist distributors around the world. In Mexico, the Company also distributes third-party biological products.

During H1 2022, the Company has continued to see the accelerated adoption of Harpin � β in large markets, including the US and Brazil.  In the US, sales are focused on grapes, citrus, and specialty crops, with plans to extend into cotton and soybeans.

Sales in North America were up 133% to $1.4 million (H1 2021: $0.6 million). In South America, sales were up 333% to $1.3 million (H1 2021: $0.3 million), primarily driven by the full-scale launch of Saori (see below), and strong demand for H2Copla (Harpin α) from sugar cane processors.  In Mexico, revenue was up 31% to $1.7 million (H1 2021: $1.3 million) following a strong bounce-back in the vegetable markets and expansion into the agave and avocado markets.  Sales in EMEAA decreased 8% to $1.2 million (2021: $1.3 million) due to exceptional weather, which held back sales in Spain.

In April 2022, the Company announced plans to commence commercial sales in two new and significant markets with the appointment of Ager. Sales of ProAct will start in Q3 2022 in Argentina, the world's third largest grower of soybeans.  Sales of Proact in Uruguay will start once the registration is complete.

PREtec

PREtec is a novel class of technology which stimulates the plant to defend itself.  These 'vaccines for plants' use environmentally friendly peptides derived from natural proteins to make plants healthier and help growers produce larger yields and better-quality crops.

Saori, the first product launched from the PREtec platform, is based on Plant Health Care's PHC279, a novel technology that makes soy plants healthier, improves resistance to multiple diseases and increases yield.

Saori was launched in Brazil in 2021 by Nutrien Soluçes Agrícolas, the retail business of Nutrien in Brazil. Nutrien is the world's largest provider of crop inputs and services. In May 2022, Plant Health Care and Nutrien signed a five-year commercial agreement under which Plant Health Care will supply Saori for Nutrien's use on soybeans in Brazil.

Nutrien expects to treat approximately 150,000 hectares of soybeans in 2022, expanding to more than one million hectares by 2025. The Company's revenue from sales of Saori to Nutrien is expected to grow to more than $5 million by 2025.

Saori is the first of many launches of products expected from the PREtec platform. The Company plans to launch PHC279 in the USA through distributor Wilbur Ellis in the second half of 2022, once regulatory permits have been obtained.  The Company's target is to launch at least one PREtec product in a major market every year.

Jeff Tweedy, CEO, Plant Health Care, said: "This has been an exceptional start to the year with revenue up significantly. This gives us confidence that we will meet market expectations for the full year. Our ambitious target to deliver $30 million of sales in 2025 is on track. Our strong performance was driven by the growing demand for Harpin � β in North America and the launch of Saori in Brazil last year. In Brazil, there are $10 million of potential sales of Saori and Harpin α.  As well as growth from existing products and markets, we are accelerating global launch plans for more PREtec products. After launching Saori in Brazil in September 2021, we plan to launch a PREtecproduct in the US later this year, and then launch a new PREtecproduct every subsequent year.

"We are also expanding relationships with major global distribution partners, with a new agreement with Nutrien signed this year and are looking at new markets, including Argentina and Uruguay, following a deal with Ager.

"Plant Health Care is well positioned to ride buoyant market conditions. Even in current volatile economic conditions globally markets, we expect to see continued robust demand for our products in the second half of 2022. Over the longer term, sustainable agriculture is a growing sector. Farmers face many challenges, including the impacts of climate change such as drought and the need to work more sustainably. Our biological products produce better quality crops and deliver higher yield which means Plant Health Care is the ideal company to help farmers."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

Plant Health Care plc
Jeffrey Tweedy, Chief Executive Officer	Tel: [phone]
Jeffrey Hovey, Chief Financial Officer
Cenkos Securities plc - Nomad & Broker	Tel: [phone]
Neil McDonald / Peter Lynch
SEC Newgate (Financial Communications)	Tel: [phone]
Robin Tozer / Richard Bicknell / George Esmond	Email: [e-mail]

About Plant Health Care plc

Plant Health Care offers products to improve the health, vigor, and yield of major field crops such as corn, soybeans, potatoes, and rice, as well as specialty crops such as fruits and vegetables. We operate globally through subsidiaries, distributors, and supply agreements with major industry partners. Our innovative, patent-protected biological products help growers to protect their crops from stress and diseases, and to produce higher quality fruit and vegetables, with a favourable environmental profile. Find out more at:   www.planthealthcare.com

 

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