Full Year Results and Announcement of Consultation
Company is on track to deliver long-term targeted revenue, cash breakeven and profitability
Plant Health Care® (AIM: PHC.L), a leading provider of novel patent-protected biological products to help farmers feed the world sustainably, is pleased to announce its results for the year ended 31 December 2022.
· Revenue up 40% to $11.8m (2021: $8.4m)
· Gross margin improved 200 basis points to 61% (2021: 59%)
· Adjusted LBITDA* improved 20% to $3.7m (2021 $4.6m)
· Substantial improvement in working capital which decreased 20% to $3.1m (2021: $3.9m)
· Company is on track to deliver long-term targeted revenue, cash breakeven and profitability.
*Adjusted LBITDA: loss before interest, tax, depreciation, amortisation, share-based payments and foreign exchange loss
· The Company has recorded strong commercial sales growth of Harpinαβ (36%) - the recombinant protein which acts as a powerful bio-stimulant to improve the quality, nutrient use, tolerance to abiotic stress and yield of crops.
· Appointed Ager Agro SAS as a distributor of Harpinαβ product, ProAct®, in Argentina and Uruguay with the first sales in Argentina in Q4 2022.
· Developed partnerships in new regions, as Harpinαβ was successfully registered for use as a fertilizer with bio-stimulant properties in France, the largest agricultural producer in the European Union. The structure of the EU mutual recognition process will also ensure the expansion of the use of Harpinαβ to other European markets.
· The Company's PREtec technology platform (Vaccines for Plants™) continues to build on the success of the launch of our first PREtec product, Saori, which is used in Brazil for the prevention and treatment of soybean diseases.
· Submitted applications to the relevant regulatory agencies in Brazil for approval to commercialise our new PREtec products, PHC279 and PHC949, for use on major crops. Brazil is the world's largest producer of sugar cane and coffee with 8.3 million hectares of sugar cane under cultivation.
· Second new product from Plant Health Care's PREtec was launched in the US. The Company's target is to launch at least one PREtec product in a major market every year and, following regulatory approval of PHC279 by the US Environmental Protection Agency (EPA) in early 2023, we expect to commercially launch PHC279 in the US in the second half of 2023.
· Signed a trial agreement with agronomy services and technology provider, Agrii UK, to evaluate PREtec technology for use in the UK.
· Signed an agreement for EDAF Unipessoal LDA to become the exclusive distributor in Portugal for a proprietary PREtec-containing fertilizer, PREzym™, for use in fruit, vegetables and cereals crop production across the European market.
· Plant Health Care remains firmly on track to achieve annual revenue of $30 million by 2025 through the launch of new peptides and growth through current and future distributor relationships and delivering cash breakeven within our existing cash reserves.
· The planned growth is well underpinned by increasing market share in existing markets, plus the impact of new distribution agreements for Harpinαβ and launches of PHC279 and, later, PHC949 in several markets.
· Prospects for 2023 are positive, in spite of a slow start to the US farming season; other areas of the business have had a good start to the year. With the usual warning that weather events can affect sales, trading is currently in line with market expectations for the full year.
· The PHC business model is now more relevant than ever as the issue of food security continues to grow, and the farming world looks for technological solutions to achieve a sustainable future with better crops delivering higher yields and reducing environmental effects to help meet global sustainability targets.
· The Board has decided to evaluate a range of financing and strategic options for the Company, including how Plant Health Care might access non-dilutive capital to support its growth ambitions, and, as part of this process, to consult with key shareholders as to whether AIM remains the right environment for Plant Health Care to achieve its ambitions. Further details of the proposed consultation are below.