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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Plant Impact | LSE:PIM | London | Ordinary Share | GB00B1F4K366 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 10.45 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMPIM
RNS Number : 7996N
Plant Impact PLC
31 October 2016
For immediate release 31 October 2016
Plant Impact plc
('Plant Impact', 'PI' or 'the Group')
Preliminary results for 12 months ended 31 July 2016
Another year of significant progress for the Group
Plant Impact plc (AIM: PIM), a leader in research and development in crop enhancement products that growers can rely on to improve the yield and quality of their crops, today announces its audited preliminary results for the year ended 31 July 2016.
Financial highlights
-- Revenue increased significantly by 60% to GBP7.2m (2015: GBP4.5m) -- 59% increase in gross profit to GBP5.6m (2015: GBP3.5m)
-- Cash at 31 July 2016 was GBP5.6m (31 July 2015: GBP7.6m); reflecting continued investment in the multi-year R&D and geographic expansion programme
Operational highlights
-- Revenue from Veritas(R) in Brazil increased more than 80% year-on-year -- First commercial sales of Banzai(TM) for West Africa cocoa -- Operations established in United States to target the very significant local soybean market
-- A second generation soybean product, Fortalis(R), launched in partnership with Bayer CropScience in Argentina
-- New Scientific Advisory Network established, enabling collaboration with ten world-leading experts on key areas of scientific interest
-- Soybean and wheat R&D pipeline of new products on track
John Brubaker, Chief Executive Officer of Plant Impact, commented:
"We are pleased by the progress Plant Impact has achieved over the past year and the Directors believe that the Group is well positioned to continue to develop successfully through the new financial year and beyond.
"The current 2016/17 financial year is important in consolidating our longer-term prospects in current and new markets and establishing crop enhancement products as an important and trusted category of agricultural chemicals. With our commercial partners we are focused on achieving this important goal and believe we have the products, people and programmes to succeed."
For further information please contact:
Plant Impact plc John Brubaker, Chief Executive Tel: +44 (0) Officer 1582 465 540 Richard Amos, Chief Financial Officer Ailish Tracy, Global Communications Manager Peel Hunt - Nominated Adviser and Broker Adrian Trimmings Tel: +44 (0) George Sellar 207 418 8900 Buchanan - Financial PR Tel: +44 (0) Charles Ryland 207 466 5000 Sophie Cowles Jane Glover
Plant Impact - Business Overview
Plant Impact plc leads research and development in crop enhancement, creating products that growers can rely on to get more yield from their crops. We use our agricultural industry expertise to find efficient, cost effective ways to offer our solutions to those growers, worldwide.
Research and development - in-house and in collaboration
We find that innovation is best nurtured by combining expert scientists 'in-house' with additional specialised input from regular collaborations with academic and research institutions such as Lancaster University and Rothamsted Research.
In April 2016 we announced the creation of our new Scientific Advisory Network. This network brings together world-renowned academics and foremost authorities on soybean and wheat crop physiology, biostimulants, agrochemicals, biochemistry and formulation chemistry. Together they act as scientific advisers to our R&D team as part of a collaborative network of experts with diverse industry and specialism backgrounds and a shared goal to help advance innovation in crop enhancement.
Our offices and people
Our head office and primary research facilities are at the Rothamsted Centre for Research and Enterprise in Harpenden, United Kingdom. We have additional offices in São Paulo, Brazil; in Raleigh, North Carolina, USA; and are soon to establish an office in Buenos Aires, Argentina.
Manufacturing - outsourced to certified experts
All of our products are outsourced for manufacture at three leading UK contract manufacturers. We benefit from being able to have products manufactured to order and we do not need to invest capital in our own production facilities or carry inventory.
Distribution - industry leading partners
Key to the success of our business model is choosing to work with partners that growers trust. We market our products via respected global strategic partners such as Bayer CropScience and Arysta LifeScience as well as smaller and well-connected regional agrochemical distributors.
Regulatory compliance - staying ahead in an evolving space
This year we became members of the European Biostimulants Industry Council, complying in full with their new code of conduct. We also fully comply with all national product registration and international transport shipping regulations for road, sea and air.
PRELIMINARY RESULTS ANNOUNCEMENT FOR YEARED 31 JULY 2016
Chairman's Statement
I am pleased to report that, during the last year, Plant Impact achieved continued growth of the business, fully in line with market expectations. The main feature of this performance was the consolidation of our market position with Veritas(R) in Brazilian soybean, which owed much to the excellent working partnership of our team with the Bayer CropScience team in Brazil. The Company also rolled out its commercial campaign with Banzai(TM), a novel product for West African cocoa, with our partner Arysta LifeScience, the Agchem market leader in this geography. During the year we also made good progress with further initiatives and key hires were made to start our geographical expansion in soybean to all the major markets in the Americas along with the previously announced strengthening of our in-house research and development (R&D) team. These investments will be reflected on both sides of the P&L in the coming year.
I want to highlight a few points, made in full later on in this announcement by John Brubaker, our CEO, which have strategic implications for our approach to the business and which will be reflected in our reporting in the future.
During 2015, Plant Impact doubled its 'on the ground' sales of Veritas(R) creating momentum for the coming year. This was against the background of a tough year for soybean growers and a tough year for the Brazilian economy which resulted in sales of Agchem products in the market generally reducing as growers trimmed their input usage. The current year promises much improved grower economics, however last year we had to work hard to achieve this good result. Veritas(R) is still a new product not yet on growers' essentials list. Our work involved intensive grower engagement programmes aimed at ensuring the merits of the product were raised to top of mind amongst the most progressive elements of the farming community. Our conclusion at the close of the campaign, is that we should expect this intensity of work will need to be an ongoing feature of our in-market support each year. It follows that there are trade-off decisions to be made between this level of commitment to in-market activity to make each 'Globalise and Scale' entry successful and the number of such initiatives we can pursue. Breadth stretches resources on things that must be done thoroughly and well, but breadth spreads risk across countries and crops. We have tackled this by reducing our efforts in the 'Direct to Market' elements of our work; principally in Europe and the Middle East in favour of fully resourcing the larger opportunities in the Americas with soybean and our so far single step out into cocoa. In R&D we continue to make progress, not only with extensions of the soybean portfolio, but also products for wheat, the world's most important crop.
Turning to Board activities during the past year, we were pleased to welcome Richard Amos as CFO in May. Richard has the ability, experience and temperament for business building in small technology companies and we are already benefiting from his energy and counsel. The Board has reviewed its Governance processes and is determined to comply with the highest standards set by the Quoted Companies Alliance. Our good progress to date on this will be described in the Annual Report.
I thank shareholders for their support through the year and acknowledge the professional and energetic performance of our staff in what has been a time of significant recruitment and team expansion. I am reassured by the performance and drive of both new staff members and our veterans of three to four years, that everyone at Plant Impact is fully on board with what the Company is seeking to achieve, the relevance of their specific roles to those goals of the Group and the desired culture of performance, enquiry and integrity we have.
Dr David Jones
Chairman
Chief Executive's Review
The Directors are pleased to report another year of good progress against the Group's strategic, operational and financial goals for the year ended 31 July 2016. Significant revenue growth was achieved, primarily through a further year of commercial progress for the flagship Veritas(R) soybean product in Brazil. The Group also expanded its commercial presence, making the first commercial sales of the product Banzai(TM) for cocoa in West Africa and opening commercial operations in the United States and Argentina. The research and field development teams also made considerable progress in the first full year of our GBP11m, multi-year investment programme in new products and technologies.
Strategy
The Group continues to operate according to a 2011 strategic plan which directs commercial and product development efforts toward high potential opportunities. This strategic plan has the following three pillars:
To sell "direct to market" in territories which could be served affordably from the Group's home base in the United Kingdom. This activity was directed at developing and marketing products which improve the post-harvest quality of high value horticultural crops such as field lettuce, root vegetables, soft fruit and tree fruit. In these markets, the Group provides direct, technical "on-farm" support to the growers who use Plant Impact products and to the distributors who sell them. This commercial approach aims to carefully select customers in order to develop stable relationships and recurring revenue. The operating cash flow generated from this element of the strategy, particularly in markets such as the United Kingdom, France and various markets of the Middle East, has helped to finance much of the operating cost of the Group whilst we developed the other elements of our strategy.
To "globalise and scale" by selecting crop targets and countries in which to enter the business of supplying technical inputs to growers of large-scale world crops, such as soybean, rice, maize, and wheat. The Group's strategy is to market its products for these crops via strategic partnerships with major agrochemical suppliers. The Group initially identified the Brazilian soybean market in partnership with Bayer CropScience as its first "globalise and scale" objective. Subsequently in the 2015 financial year, the Group also identified the West African cocoa market, in partnership with Arysta LifeScience as a meaningful additional growth opportunity. As the Group starts to achieve the targeted growth from its entry into these world-scale crops, the cash generated from this element of the strategy is now providing financial and organisational capacity to develop new products and technologies.
To "accelerate innovation" by identifying and commercialising new technologies and products to bring a complete crop enhancement portfolio offering to growers of large-scale world crops. This aspect of the strategy follows the improvement in cash flow from sales into the first target crop: soybean. The Group has set in motion development and marketing plans to build a complete portfolio of new crop enhancement products for soybean and wheat crops over the medium term.
Our progress in Brazil with Veritas(R) represents the first commercial success of our "globalise and scale" strategy. Two important observations from our three commercial seasons are driving us to refine our 2011 strategic plan:
First is that - even when selling into broad-acre crops through strategic partners - we have identified a clear requirement for Plant Impact to provide focused technical and commercial support to establish our products within our partners' annual commercial programmes and their grower customers' annual crop spray regime. This work is very similar to the approaches we developed under the "direct to market" phase of our 2011 plan.
The second is that investing in such focused support in broad-acre crops offers significantly greater potential returns than we can achieve in the European fruit and vegetable markets that we have targeted directly in the past.
As a result, we have refined the "globalise and scale" element of our strategy. We are adapting our approach by providing more focused commercial support to our agrochemical strategic partners and their onward distributors. We will continue to market directly to distributors in territories where we believe that discrete customer populations, overall credit conditions, distributor reach, and corporate reputational requirements do not require us to approach the market in partnership with large agrochemical multinationals. And we are refining the allocation of our resources to focus on the geographies and crops where we see the greatest potential return on investment.
Business review
Sales of Veritas(R), the Group's flagship yield improvement product for soybean, achieved our own targets in the period and accounted for the majority of revenue in the year. Sales of Veritas(R) in Brazil are made through the long-term marketing agreement that we signed in August 2014 with our partner Bayer CropScience ("BCS"). The increase in sales was achieved despite the 2015/16 soybean growing season in Brazil being particularly challenging for growers, as low commodity prices and a declining Brazilian Real currency during the seasonal period of grower purchases put margin pressure on farm outputs. These conditions meant that growers were generally more cautious about investing in new yield improvement technologies such as Veritas(R). Against this backdrop, increased use of the product by growers was encouraging and was in part driven by considerable commercial investment that we made alongside BCS. Over the 2015/16 growing season, we expanded our team of in-field agronomists and supported a marketing roadshow programme that targeted 2,000 key soybean growers in 26 locations across Brazil.
Over 5,000 Brazilian growers have now used Veritas(R) on at least part of their crop in the three years since its commercial launch. Hectares of soybeans treated with Veritas(R) in the last season (an important metric in measuring our success in commercialising the product) were more than double those of the previous season demonstrating considerable success in sales of the product particularly given the tough market economic backdrop. Extending that usage further is the main opportunity that we have in the 2016/17 growing season and our objectives for this year are ambitious. To help achieve our objectives, we are increasing our investment in commercial support of the Brazilian business through a more extensive full year sales and marketing campaign aimed at growers and distributors. In the 2016/17 growing season, we will also extend our commercial relationship with BCS to Paraguay where tests with Veritas(R) have demonstrated that the product delivers similar yield improvements to those achieved in Brazil.
Whilst the opportunities that we have in soybean represent our most immediate significant scale opportunity, part of our strategy has been to diversify into other significant crops. With that in mind we were pleased that the financial year also saw the first significant revenues from Banzai(TM), a product that we launched to cocoa growers in West Africa with our partners Arysta LifeScience ("Arysta"). Our partnership with Arysta was announced in 2015 and gives them exclusive marketing rights to Banzai(TM) in Ivory Coast, Cameroon, Nigeria, Ghana and Togo, countries that account for over 70% of annual world cocoa production. Trials of Banzai(TM) have demonstrated significant yield benefits for growers and, although the challenges of gaining adoption amongst some of the poorest farmers in the world are not to be underestimated, the long-term commercial opportunity remains significant.
Revenues in Europe and the Middle East were disappointing in the year, as political issues in the Middle East and market challenges in continental Europe and the UK led to a year-on-year reduction in revenues from these areas, a historically important region for the "direct to market" pillar of our strategy. Recognising this, we have restructured this area of our business since the year end, focusing our activity on supporting distributor-led activities, rather than driving market adoption directly through resource-intensive campaigns. This restructure has reduced the cost base of this part of the business, and though we do anticipate increased revenue in the future, our new approach will deliver more modest growth than prior expectations.
In 2015 we announced a multi-year, GBP11m investment programme. This is aimed at the development of new products and technologies to improve the yield and resilience of soybean and wheat production, as well as the geographic expansion of our commercial footprint to important American markets for these crops, such as the United States and Argentina. To date we have invested around GBP4.0m of the total GBP11m planned. Our objective, on completion of the programme, is to have developed and successfully commercialised a portfolio of products in our target crops and territories which generate sufficient surplus cashflow to organically fund additional technology research. Of the GBP4.0m of the programme spent to date, around half has been spent in developing and commercialising existing technologies, with the balance invested in new research.
Consistent with this programme and with our second strategic imperative, "globalise and scale", in February, we launched commercial operations in North America based from the Research Triangle Park area of North Carolina, the agricultural technology hub of that region. The Group has long-established distribution relationships in Mexico and Canada, and this new commercial operation is to introduce our products to the United States soybean market, which slightly exceeds Brazil as the largest in the world. We anticipate introducing our technologies into this market in the 2017 growing season, pending the outcome of a significant 2016 grower field trial programme on more than one hundred commercial farms across the United States. These trials are expected to confirm that the yield enhancements we have seen from our technology in Brazil are repeatable in the different growing conditions that exist for soybean growers in the United States.
In July 2016, we announced the launch with BCS of a second generation soybean product Fortalis(R) for the Argentinian market, which, after Brazil and the US, is the third largest of the world's soybean growing areas. This is a further extension of our relationship with BCS and represents an important step in globalising the soybean crop enhancement technology that we have been commercialising over the last three years.
Further R&D activities in line with the investment programme have seen progress made on "F1" and "S1", our second and third soybean crop enhancement product prototypes and "W1" our first wheat product prototype. These products have undergone additional formulation, glasshouse and field trials during the year which have in each case progressed their development. The activities are on course for commercial piloting and launches in the coming years at which time we will announce trade names.
To progress these investments the Group has made a number of appointments to senior management in the commercial, R&D and back-office functions. The addition of these resources has ensured that the Group has the resources and infrastructure needed to effectively manage the complexity and scale of our global expansion.
Although we re-prioritised our Group focus away from biological pesticides some years ago, we have continued to maintain the intellectual property associated with the Group's early development of TGT-101. This is an effective, low residue insecticide used for the treatment of mites, whitefly and aphids on commercially important crops such as vegetables, almonds and apples. Although there has been no material development expenditure incurred during the year, there was further work on obtaining the necessary regulatory approvals of the product to allow its commercialisation in the United States, a potentially attractive market. Following regulatory approval of TGT-101 by the US Environmental Protection Agency in 2012 and further field testing in 2013, we commenced work in 2014 to secure a product registration with the California Department of Pesticide Regulation (DPR). Approval by the California DPR is critical to any potential US commercial launch, as that state contains a significant concentration of US vegetable, almond and other tree fruit production. We are pleased to announce that the Group received formal notification of TGT-101's registration by the California DPR on 10 October 2016. Based on this progress, we are actively considering our options for realising a return on our historic investments.
Outlook
The Directors believe that the Group is well positioned to continue to develop successfully through the new financial year and beyond.
Sales of Veritas(R) products in Brazil are expected to continue to make up the bulk of Group revenues over the next twelve months. Shipments of Veritas(R) products have already been made in the early weeks of the new financial year, and the Group expects to receive further orders through the 2016/17 Brazilian growing season consistent with its previous expectations of demand. As Veritas(R) becomes more successful in Brazil, and commensurate financial commitments for distributors become ever larger, we expect that future orders will be much more closely timed with actual usage of the product by growers throughout the growing season. Our early years of commercialisation have seen channel buffer stock inventory build to appropriate levels that are likely to be maintained rather than increased. This will make forecasting of revenues for future seasons harder to predict far in advance of the season. To achieve our longer-term goals for Veritas(R), we are transitioning our commercial focus from gaining trial use with progressive growers to establishing the product as an essential input across the grower's entire farm production.
Revenue from outside Brazil is also expected to grow over the financial year. The Group has announced new product launches in Argentina and Paraguay and anticipates first material sales in the United States. Banzai(TM) is expected to achieve its commercial targets, whilst revenues from products marketed to European and Middle East customers are expected to return to modest growth following the recent restructuring of that business.
The recent weakness in Sterling compared with the US Dollar, in which we earn most of our revenues, should help gross margins remain in line with those achieved in the current year, whilst as previously guided, operating expenses will rise year-on-year, broadly in line with revenue. This reflects the full year impact of investments in commercial expansion and additional R&D resources that we undertook across the last financial year.
The current financial year is an important one in consolidating the longer-term prospects of the Group and establishing crop enhancement products as an important and trusted category of agricultural chemicals. With our commercial partners we are focused on achieving this important goal and believe we have the products, people and programmes to succeed.
Financial review
Throughout this review reference to adjusted results means the results for continuing operations before, where applicable, share-based payment costs.
Financial results
Hot Features
Premium
Year Year Year
to to to
31 July 31 July 31 July
2016 2015 2014
GBP'm GBP'm GBP'm
Revenue 7.2 4.5 2.5
Cost of sales (1.6) (1.0) (0.7)
--------- --------- ---------
Gross profit 5.6 3.5 1.8
Operating expenses (excl share-based
payment costs) (5.8) (3.7) (2.7)
--------- --------- ---------
Adjusted operating loss (0.2) (0.2) (0.9)
Net tax credit 0.5 0.4 0.2
--------- --------- ---------
Adjusted net income/(loss) 0.3 0.2 (0.7)
Share-based payment costs (1.0) (0.1) -
--------- --------- ---------
Net (loss)/income (0.7) 0.1 (0.7)
========= ========= =========
The table above shows the reconciliation of adjusted results to statutory results. The reconciling item, share-based payment costs, in the opinion of the Board, is primarily non-cash related and therefore not indicative of the Group's underlying trading. In the opinion of the Board the adjusted results give a better representation of the underlying performance of the Group.
Revenue
Overall revenue increased 60% from GBP4,513k in the year to 31 July 2015 to GBP7,211k in the year to 31 July 2016. Increase in sales of the Veritas(R) product to our customer in Brazil was the main driver of the growth.
The Group's customers are agrochemical distributors and global strategic partners who will each typically place orders for physical volumes of the Group's products once or twice for each agricultural selling and growing season. Revenue for product sales is typically recognised when the product is despatched to customers. Product is typically despatched to customers in the northern hemisphere (United States, Europe and the Middle East) between February and July. Product will typically be despatched to southern hemisphere customers (eg. Brazil, reported in the Americas geographic segment) between July and December.
Revenue relating to the initial fee received in February 2015 from Bayer CropScience is being recognised over a five year term. GBP388k was recognised in the year (2015: GBP194k), leaving GBP1,360k in deferred revenue. This deferred revenue will be released to the Income Statement over the next 42 months.
Americas
Revenue in the Americas grew materially in FY16, to GBP6,494k vs. GBP3,540k in the prior year. This was largely as a result of the expansion of sales of Veritas(R) to Brazil which developed in line with our business plan for the region. The revenue includes an early order for Veritas(R) for growing season 2016/17 which was shipped in the final weeks of the financial year. Revenue in the Americas region also includes the initial fee income of GBP388k (2015: GBP194k) and sales to distributors in Canada and Mexico.
Europe
Europe had a disappointing season, with a generally weak agricultural market adversely impacting distributor demand. Revenue in the region was GBP286k compared to GBP698k in the prior year. Year-on-year declines in revenues were experienced in all the major markets of the UK, Germany and Spain.
Rest of World
Revenue in the Rest of World segment increased to GBP431k from GBP275k in the prior year. The Rest of World segment includes revenues to West Africa for our Banzai(TM) product for cocoa as well as sales of more traditional products into Turkey and the Middle East. Banzai(TM) revenues were in line with expectations in the first season of commercial sales which is encouraging for future prospects with the product. They made up the bulk of Rest of World revenues as sales into the Middle East were down year-on-year due to political turmoil in the region.
Gross profit
Gross profit margins remained at 78% with a slightly adverse overall product mix offsetting the benefit of the increase in fee-based revenue.
Operating expenses excluding share-based payments
Excluding costs for share-based payments, underlying operating expenses increased from GBP3,728k to GBP5,848k, reflecting the increased headcount and on-costs associated with the strategy of geographic expansion and increased R&D.
Sales and Marketing costs more than doubled to GBP2,914k (2015: GBP1,365k) reflecting, in part, increased activity supporting the Veritas(R) campaign in Brazil where we had a team of 14 permanent and contract staff through the growing season supporting our partner BCS and the channel distributors. Additional sales and marketing costs have also been incurred in the year opening commercial operations in Argentina and the United States.
In total the Group spent GBP2,923k on R&D activities (2015: GBP1,434k). Of this, GBP1,754k (2015: GBP1,281k) was expensed through the Income Statement. Additionally, a net GBP1,169k (2015: GBP153k) was capitalised within intangible assets as it relates to the development of products that are expected to be technically feasible and commercially viable and satisfy all the conditions prescribed by IAS 38 for recognition as an intangible asset. More R&D projects than the prior year satisfied this condition as, with Veritas(R) proven as a commercial product and with it the underlying technology that supports it, confidence in the technical and commercial feasibility of other related pipeline products has increased.
Other administration costs increased to GBP1,180k (2015: GBP1,082k) reflecting investment in back office functions to support the larger and more complex business.
Share-based payments
The Income Statement charge for the cost of share-based payments has increased significantly in the year to GBP1,009k (2015: GBP43k). As explained in last year's Annual Report this increase primarily reflects the first year of charge relating to options granted under the Value Creation Plan (VCP) that was adopted by shareholders at the Annual General Meeting in November 2014 and for which the first options were granted on 31 July 2015. The charge is predominantly a non-cash expense other than GBP213k (2015: GBPnil) related to employer's National Insurance costs on expected exercises.
Income tax
The Group benefits from UK Research and Development tax credits, in the form of a cash refund. GBP326k was claimed in the year relating to the period to 31 July 2015, with the cash received after the year end in early August. This was GBP38k more than had been accrued in the accounts for that period and that, together with the expected tax credit for the current year of GBP562k, brings the UK R&D tax credit for the year to GBP600k. Combined with Brazilian income tax this results in a net tax credit in the Income Statement of GBP514k (2015: GBP368k).
The Group currently has an accumulated tax loss of GBP8,700k (2015: GBP8,700k). The Group has not recognised the potential deferred tax asset of GBP1,458k related to these accumulated losses and other timing differences in the current year. The asset should only be recognised if it is probable that there will be sufficient taxable profits against which the loss can be utilised. The Group is currently in an operating loss position, and the Directors do not consider there is sufficient certainty over the timing of future taxable profits to crystallise the deferred tax asset.
Balance sheet
Non-current assets
The net book value of non-current assets at 31 July 2016 has increased to GBP3,424k (2015: GBP2,206k) reflecting the significant increase in development activities related to projects that satisfy the requirements of IAS 38 for recognition as intangible assets as explained above.
Trade and other receivables
Trade and other receivables at 31 July 2016 were GBP2,313k (2015: GBP1,301k). The balance outstanding predominantly related to invoices for the first shipments of Veritas(R) to Brazil for the 2016/17 growing season, which were all collected by the report date.
Trade and other payables
Trade and other payables at 31 July 2016 increased to GBP2,565k (2015: GBP1,613k). The main increase related to accruals and other payables which were GBP1,175k (2015: GBP432k) with the increase primarily related to accruals for NI on share-based payment costs and accruals for R&D trials that are being conducted in the northern hemisphere over the year end period for which payment is only required on completion.
Cash flow and cash
The cash balance at 31 July 2016 was GBP5,564k (2015: GBP7,633k). The outflow of GBP2,069k mainly reflects a net cash outflow from operating activities of GBP699k and GBP1,365k of expenditure incurred on capitalised development expenditure and purchasing tangible fixed assets. Within cash flow from operating activities, movements in working capital largely offset, other than the GBP388k related to recognition of deferred revenue where the cash was received in February 2015 when the contract with BCS was signed.
The Group has a GBP1.0m invoice financing facility with HSBC Bank plc under which it can draw down up to 80% of all outstanding invoices, subject to a concentration limit. At 31 July 2016 there was GBP50k of cash drawn down with recourse (2015: GBP57k).
The Group has sufficient funds to support its near- and mid-term operating requirements and has the operational flexibility to reduce or increase expenditure to respond to challenges or opportunities.
John Brubaker
Chief Executive Officer
Group Statement of Comprehensive Income
For the year ended 31 July 2016
Year Year
ended ended
31 July 31 July
2016 2015
Note GBP'000 GBP'000 GBP'000 GBP'000
Revenue from product sales 6,823 4,319
Fees 388 194
--------- ----------
Total revenue 3 7,211 4,513
Cost of sales (1,575) (972)
Gross profit 5,636 3,541
Sales and marketing costs (2,914) (1,365)
Research and development
costs (1,754) (1,281)
Other administrative expenses (1,180) (1,082)
--------- ----------
Operating loss before
share-based payments (212) (187)
Share-based payments (1,009) (43)
Total operating loss 3 (1,221) (230)
Finance income 13 -
Finance cost (11) (19)
--------- ----------
Net finance income / (costs) 2 (19)
Loss before tax (1,219) (249)
Income tax credit 4 514 368
(Loss) / profit for the
period attributable to
equity shareholders (705) 119
========= ==========
Exchange differences on
translating foreign operations
- may be subsequently
reclassified to profit
or loss (1) (11)
--------- ----------
Total comprehensive income (706) 108
========= ==========
(Loss) / profit per ordinary
share attributable to
equity shareholders
Total and continuing:
Basic and diluted 5 (0.9) 0.2 pence
pence
========= ========== ==========
Group Statement of Changes in Equity
For the year ended 31 July 2016
Share Share Other Merger Retained Total
capital premium reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
July 2014 649 14,343 404 287 (13,577) 2,106
Share issue (net) 165 6,096 - - - 6,261
Share-based payments - - 43 - - 43
Forfeited and
exercised share-based
payments - - (239) - 239 -
Transactions
with owners 165 6,096 (196) - 239 6,304
Foreign exchange
on translation - - - - (11) (11)
Profit for the
period - - - - 119 119
------------------------ --------- --------- --------- --------- --------- --------
Total comprehensive
income - - - - 108 108
------------------------ --------- --------- --------- --------- --------- --------
Balance at 31
July 2015 814 20,439 208 287 (13,230) 8,518
------------------------ --------- --------- --------- --------- --------- --------
Share issue (net) 2 33 - - - 35
Share-based payments - - 796 - - 796
Forfeited and
exercised share-based
payments - - (24) - 24 -
Transactions
with owners 2 33 772 - 24 831
Foreign exchange
on translation - - - - (1) (1)
Loss for the
period - - - - (705) (705) ------------------------ --------- --------- --------- --------- --------- -------- Total comprehensive income - - - - (706) (706) ------------------------ --------- --------- --------- --------- --------- -------- Balance at 31 July 2016 816 20,472 980 287 (13,912) 8,643 ------------------------ --------- --------- --------- --------- --------- --------
Group Statement of Financial Position
As at 31 July 2016
Note 31 July 31 July
2016 2015
GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 6 2,976 1,865
Property, plant and equipment 448 341
3,424 2,206
Current assets
Inventories 39 118
Trade and other receivables 2,313 1,301
Corporation tax receivable 888 288
Cash and cash equivalents 5,564 7,633
--------- ---------
8,804 9,340
Total assets 12,228 11,546
--------- ---------
LIABILITIES
Current liabilities
Borrowings (50) (57)
Trade and other payables 7 (2,565) (1,613)
--------- ---------
(2,615) (1,670)
Liabilities falling due
after more than one year (970) (1,358)
Total liabilities (3,585) (3,028)
--------- ---------
Net assets 8,643 8,518
========= =========
EQUITY
Equity attributable to
equity shareholders of
the Company
Share capital 816 814
Share premium 20,472 20,439
Other reserve 980 208
Merger reserve 287 287
Retained losses (13,912) (13,230)
--------- ---------
Total equity 8,643 8,518
========= =========
Group Cash Flow Statement
For the year ended 31 July 2016
Note Year Year
ended ended
31 July 31 July
2016 2015
GBP'000 GBP'000
Cash flows from operating activities
Loss before tax (1,219) (249)
Adjusted for:
Depreciation and amortisation 146 117
Loss on disposal of fixed assets 4 -
Net foreign exchange (gain) (175) -
/ loss
Share-based payments 1,009 43
Finance income (13) -
Finance cost 11 19
Operating cash flows before
working capital changes (237) (70)
(Increase) in trade and other
receivables (1,012) (758)
Decrease / (increase) in inventories 79 (100)
Increase in trade and other
payables 7 945 201
(Decrease) / increase in deferred
income 7 (388) 1,748
Cash (absorbed) / generated
by operations (613) 1,021
Research and development tax
credit received - 241
Corporation tax paid (Brazil) 4 (86) (56)
Net cash (outflow) / inflow
from operating activities (699) 1,206
Cash flows from investing activities
Purchase of property, plant
and equipment (196) (179)
Expenditure on intangible assets 6 (1,169) (153)
Interest received 13 -
Net cash absorbed by investing
activities (1,352) (332)
Cash flows from financing activities
Proceeds from issue of share
capital (net of expenses) 35 6,262
Interest paid (11) (19)
Net cash generated by financing
activities 24 6,243
(Decrease) / increase in cash
and cash equivalents (2,027) 7,117
Effect of fluctuating exchange (42) -
rates
Cash and cash equivalents at
the beginning of the period 7,633 516
Cash and cash equivalents at
the end of the period 5,564 7,633
-------------------------------------- ----- --------- ---------
Notes to the Preliminary Results
1. Nature of operations and general information
The financial information for the years ended 31 July 2016 and 31 July 2015 included in the preliminary announcement, which was approved by the Board on 30 October 2016, is derived from the full Group audited statements for the year ended 31 July 2016 and does not constitute the statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Group financial statements for the year ended 31 July 2016, on which the auditor has given an unqualified report which does not include a reference to any matter to which the auditor drew attention by way of emphasis of matter and does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the financial statements for 2016, will be delivered to the Registrar of Companies in due course.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards, as adopted by the European Union (EU) (IFRS), this announcement does not in itself contain sufficient information to comply with IFRS.
The statutory financial statements for the year ended 31 July 2015 have been delivered to the Registrar of Companies.
The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange. The consolidated financial information of Plant Impact plc is presented in round thousands Sterling (GBP), which is also the functional currency of the Group.
2. Going concern
The Group has demonstrated its capability in securing contractual arrangements and maintaining customer relationships which increase the probability of improving revenues.
The Group has undertaken a review of forecasts and projections, which have been prepared for the period to 31 January 2018. These indicate anticipated growth in product revenues and cash flows. The projections take into account the new business opportunities highlighted in the commentary above, the timing and quantum of which will affect the Group's cash requirements, which are continually monitored by the Board. The sensitivity analysis undertaken included a number of scenarios surrounding uncertainties of achieving forecast product revenues and a review of the ability of the Group to manage its cost base to meet working capital and funding requirements in the event that forecast revenues and cash flows are not achieved. This review supports the Directors' conclusion that the Group should be able to operate within the level of its current cash resources and on this basis the Directors believe that the Group is well placed to manage its business risks successfully.
In summary, the Group's financial resource reporting is managed in a way that identifies potential risks, is forward looking and provides sufficient time to respond to these risks while maintaining a going concern status. The Group's financial resource management includes regular reporting to the Board. This reporting includes up-to-date cash resource visibility and forward looking projections of the Group's financial position.
The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group financial statements.
3. Segment information
The Group's operating segments have been identified based on internal management reporting information that is regularly reviewed by the chief operating decision maker which is defined as the Board.
All of the results for the year ending 31 July 2016 related to Crop Nutrients, other than GBP21k (2015: GBP16k) of costs relating to Pest Control. All assets relate to Crop Nutrients other than net book value of GBP817k of intangible assets which relate to Pest Control.
The Group further monitors its business based on geography. These segments are monitored and strategic decisions are made on the basis of the segment results for the year ended 31 July 2016, which are as follows:
Rest
Americas Europe of World Total
GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- ---------- ----------
Segment revenue
from external customers 6,494 286 431 7,211
----------- ---------- ---------- ----------
Operating profit 3,489 (362) 106 3,233
Other costs not
allocated (3,299)
Depreciation and
amortisation (146)
Share-based payments (1,009)
----------- ---------- ---------- ----------
Total operating
loss (1,221)
-------------------------- ----------- ---------- ---------- ----------
The segment results for the year ended 31 July 2015 were as follows:
Americas Europe Rest Total
GBP'000 GBP'000 of World GBP'000
GBP'000
Segment revenue
from external customers 3,540 698 275 4,513
----------- ---------- ----------- ----------
Operating profit 2,091 53 99 2,243
Other costs not
allocated (2,313)
Depreciation and
amortisation (117)
Share-based payments (43)
Total operating
loss (230)
-------------------------- ----------- ---------- ----------- ----------
Only one customer constituted more than 10% of the Group's sales, with revenue of GBP6,456k (2015: GBP3,408k).
4. Income tax credit
Recognised in the Group Income Statement
Year Year
ended ended
31 July 31 July
2016 2015
GBP'000 GBP'000
Current UK tax (562) (288)
Overseas tax 86 45
Adjustments for prior years (38) (125)
-------- --------
Total tax credit in Group Income
Statement (514) (368)
--------------------------------- -------- --------
Reconciliation of effective tax rate
Year Year
ended ended
31 July 31 July
2016 2015
GBP'000 GBP'000
Loss before tax (1,219) (249)
Loss before tax multiplied by
rate of corporation tax in the
UK of 20% (2015: 20.85%) (244) (52)
Non-deductible expenses 13 5
Accelerated capital allowances (21) (29)
Enhanced R&D tax relief (630) (494)
Losses not recognised for tax
purposes 100 368
Other temporary differences 220 (86)
UK corporation tax re earlier
years (38) (125)
Overseas corporation tax 86 45
Total tax in Group Income Statement (514) (368)
------------------------------------ -------- --------
Unrelieved tax losses of GBP8.7m (2015: GBP8.7m) remain available to offset against future taxable trading profits.
5. Loss per ordinary share
The loss per ordinary share is based on the loss after taxation of GBP705k (2015: profit GBP119k) and 81,432,824 (2015: 71,207,446) ordinary shares of 1 pence each, being the weighted average number of shares in issue during the period.
Year Year
ended ended
31 July 31 July
2016 2015
(Loss) /profit for the period (GBP705,000) GBP119,000
attributable to equity shareholders
Weighted average number of
ordinary shares in issue 81,432,824 71,207,446
Basic and diluted (loss) /
profit per share (0.9p) 0.2p
-------------------------------------- ------------- -----------
6. Intangible assets
Goodwill Development Total
costs
GBP'000 GBP'000 GBP'000
Cost at 1 August
2014 585 1,367 1,952
Expenditure in
the year - 153 153
--------- ------------ ---------
Cost at 1 August
2015 585 1,520 2,105
Expenditure in
the year - 1,169 1,169
Cost at 31 July
2016 585 2,689 3,274
--------- ------------ ---------
Accumulated amortisation
at 1 August 2014 - 170 170
Charge in the year - 70 70
--------- ------------ ---------
Accumulated amortisation
at 1 August 2015 - 240 240
Charge in the year - 58 58
--------- ------------ ---------
Accumulated amortisation
at 31 July 2016 - 298 298
--------- ------------ ---------
Net book value
at 31 July 2016 585 2,391 2,976
--------- ------------ ---------
Net book value
at 31 July 2015 585 1,280 1,865
--------- ------------ ---------
Net book value
at 31 July 2014 585 1,197 1,782
--------- ------------ ---------
7. Trade and other payables
31 July 31 July
2016 2015
GBP'000 GBP'000
Current
Trade payables 698 608
Other taxation and social
security 302 183
Accruals and other payables 1,175 432
Deferred income 390 390
--------- ---------
2,565 1,613
----------------------------- --------- ---------
31 July 31 July
2016 2015
GBP'000 GBP'000
Falling due after more than
one year
Deferred income 970 1,358
--------- ---------
970 1,358
----------------------------- --------- ---------
The deferred revenue is in respect of the Initial Fee received from Bayer CropScience in February 2015. This is being recognised over a five-year period.
8. Availability of the financial statements
Copies of the full financial statements will be available from the registered office from 9 November 2016 and will also be available from the Group's website at www.plantimpact.com.
9. Annual General Meeting
The Annual General Meeting will be held on 9 December 2016 at 9.00am at Rothamsted Conference Centre, Rothamsted, West Common, Harpenden, Herts, AL5 2JQ. Investors who plan to attend are requested, if possible, to register their attendance by email to investorrelations@plantimpact.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QVLFLQBFZFBF
(END) Dow Jones Newswires
October 31, 2016 03:00 ET (07:00 GMT)
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