Plant Health Care PLC Trading Statement (7257C)

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RNS Number : 7257C

Plant Health Care PLC

24 January 2018

PLANT HEALTH CARE plc

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

Trading Update

Plant Health Care(R) , a leading provider of novel patent-protected biological products to global agriculture markets, issues the following post year-end trading update ahead of the announcement of the Company's audited full year financial results for the year ended 31st December 2017, which is expected to be announced by early April. All results provided are preliminary and subject to completion of the 2017 audit.

Financial and Commercial Highlights

- Revenue increased by 22% to $7.7million (2016: $6.3m); in constant currency, sales increased by 23%. Strong sales growth in Europe/Africa (up 100%; 107% in constant currency) was offset by weaker sales in Mexico due to low produce prices in the first half of the year; sales in North America grew 8%.

- Initial sales to Brazil were delayed due to importation issues; these sales will now occur in 1Q 2018, with the launch into sugar cane.

- Sales of core Harpin(TM) <ALPHA><BETA> products increased by 42% (44% in constant currency), driven by broadly based growth in all geographies. Harpin <ALPHA><BETA> and Myconate(R) products represented 69% of sales in 2017 (2016: 59%).

   -     Gross Margin was steady at 62%. 
   -     Cash and cash equivalents at 31(st) December 2017 were $3.9m. 

New Technology Highlights

- All five of the top agricultural/seeds companies and a number of other companies tested Innatus(TM) 3G in the field in 2017.

- Four of these majors are running field trials of Innatus 3G added to chemical sprays for the control of Asian Soybean Rust (ASR) in Brazil, a devastating fungal disease of soybeans. Farmers spent US$1.7 billion on soybean fungicides in 2016 in Brazil*; in spite of that investment, there are increasing concerns about disease resistance.

- Data from these ASR trials are due in 2Q 2018. Exclusive rights to Innatus 3G for use in South American soybeans are expected to be auctioned thereafter.

- PHC's lead peptide for control of ASR (PHC279) is being produced by high yield fermentation at pilot scale.

- PHC expanded its programme of specialist trials. Results continued to show good performance for Innatus 3G under disease and drought stress, and for T-Rex 3G against nematodes. Y-Max 3G peptides increased yields even under optimal growing conditions.

   -     Discussions continue with partners about future licensing of T-Rex 3G and Y-Max 3G. 

Chris Richards, Interim CEO, commented:

"In 2017, Plant Health Care continued to show strong progress in implementing our key strategic objectives.

We have continued to make exciting progress with our PREtec peptide platforms and are now working with all five of the top agricultural/seeds companies, as well as four other partners. Evaluation continues on all three platforms - Innatus 3G, T-Rex 3G and Y-Max 3G - in a wide range of crops. We have focused resources on trials of Innatus 3G for control of ASR in Brazil, with our lead peptide PHC279; successful conclusion of those trials is expected to lead to a competitive auction of exclusive rights to this platform in South America soybeans in 2018. Due to this focus, we de-prioritised other areas in 2017 but will resume work towards other licensing opportunities during 2018.

On the commercial side, we are pleased to report the resumption of revenue growth. We are particularly pleased that this growth is broadly based, with targeted marketing programmes delivering strong growth in a wide range of countries. This is also delivering a more even distribution of sales through the year. In the USA, sales through Sym-Agro in the Pacific North West were affected by weather but sales into other sectors grew; channel inventory is now back on target. Sales in Southern Africa doubled, as our distributor Dux Agri entered new markets. Sales in Spain continue to grow strongly by 60%. In Mexico, sales improved in the second half of the year but failed to make up for the 19% fall in the first half. In Brazil, we are ready to launch in sugar cane; while import delays mean that first revenue slipped from the end of December 2017 and will now take place in early 2018. New distribution agreements currently in advanced negotiation show potential for further growth in Commercial sales during 2018."

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

   Chris Richards, Interim Chief Executive Officer                                Tel: [phone] 

Jeffrey Hovey, Chief Financial Officer

Liberum Capital - Nomad and Broker

Clayton Bush / Chris Clarke Tel: [phone]

Company website: www.planthealthcare.com

*Source: Phillips McDougall

This information is provided by RNS

The company news service from the London Stock Exchange

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January 24, 2018 02:00 ET (07:00 GMT)