Pre-Close Update

RNS Number : 4078A

Provexis PLC

30 March 2012

 



30 March 2012

Provexis plc

PRE-CLOSE UPDATE

Provexis plc ("Provexis" or the "Company"), the life-science business that develops, licenses and markets scientifically-proven functional food and sports nutrition technologies, announces a pre-close update for the year ended 31 March 2012.

In its preliminary results statement expected in July, the Company expects to report on a year of strong progress in which it completed and integrated the acquisition of Science in Sport ("SiS"), made good progress with its alliance partner DSM Nutritional Products ("DSM") in developing and commercialising its novel Fruitflow® heart-health technology, and underwent a major restructuring to reduce cash burn and focus on the two major commercial opportunities of SiS and Fruitflow®.

Fruitflow®

The syrup version of Fruitflow® continues to gain acceptance in the market. DSM has received a commitment by a significant dietary supplement marketer in Europe to launch Fruitflow in quarter two of 2012, this in addition to existing regional consumer healthcare customers in Europe, the US and Asia-Pacific markets. Fruitflow® travel shot concepts are being featured this week at the World Travel Catering & Onboard Services Expo in Hamburg.

Much focus is being given to the commercialisation of the powder version of the product. DSM is carrying out consumer research and in addition seeking further improvements in cost in use, in order to support ongoing discussions with global brand owners. The powder form will be widely available to dietary supplement manufacturers in the second half of 2012. This new form allows for broadening of sales into the traditional dietary supplement formats of tablets, capsules and soft gels.

Healthy interest in both formats of Fruitflow® continues to grow, with the highest interest being from dietary supplements brand owners. Fruitflow® is attracting attention from regional and global brand owners in all major global markets. To underpin this interest, strategic manufacturing facilities are in place for both formats, and registration of intellectual property in major markets has been completed.

Science in Sport

The business has performed strongly in March and the Company expects to finish the year with sales meeting the expectations of the Directors. Growth for the year has been strong across all key accounts in major multiple retailers including Tesco, and the wholesale channel which supplies the retail heartland of cycling, triathlon and running shops. While operating profit is, as expected, negatively affected by the off-season winter trading months and investment in the new factory, peak season trading is expected to be strong. Revenue growth is to be supported further by efficiencies from the new factory and a margin improvement programme, both of which will be used to fund marketing and sales investment.

The SiS brand will be relaunched during April and key elements include new branding and packaging, a new website with e-commerce capability, and two new product launches. In parallel, long-term sponsorship and ambassador arrangements have been signed with major Olympic and professional sports teams, as well as key opinion leaders from elite sport and nutritional science. These initiatives will underpin and develop the reputation of SiS as a highly regarded elite sports nutrition brand.

Other intellectual property

Unblinding of the Crohn's disease human trial data and subsequent analysis will be complete by the end of April and this will inform whether value can be extracted from the intellectual property through a sale to, or partnering arrangement with, a large healthcare business.

Financial position

£3.5m before expenses was raised during the summer of 2011 by way of a placing and open offer to fund the acquisition of SiS. The Company expects to report net cash of £1.3m at the year-end and this will be enhanced by the sale and lease back of the new factory plant. The Equity Financing Facility of £25m was renewed for a period of three years in November 2011. Restructuring of the business announced at the interim results has significantly reduced underlying cash usage and the effect of this was seen in the second half of the year. Expenditure continues to be monitored closely by the management team and Board.

Stephen Moon, CEO of Provexis, commented:

"This has been a year of great change and strong progress for the business. Our alliance with DSM continues to progress and we have strategic manufacturing in place, two commercially viable formats of Fruitflow®, and promising customer interest comprising brand owners in all major global markets from regional to global food, beverage and consumer healthcare companies.

The Science in Sport business is in strong sales growth and we have put a new supply chain platform in place, as well as bringing a new and substantially strengthened commercial team and viable growth strategy to bear. We intend to enhance our reputation as the leading elite sports nutrition brand.

The business has undergone a major transformation in order to focus on our two major commercial opportunities and we believe that the coming year will deliver good growth."

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For further information please contact:

Provexis plc

Stephen Moon, Chief Executive                      Tel: [phone]

Cenkos Securities plc

Max Hartley / Bobbie Hilliam                         Tel: [phone]

Haggie Financial LLP

Matthew Longbottom / Peter Rigby               Tel: [phone]

                                                                        [e-mail]

 

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