Plant Health Care, a leading provider of naturally-derived products to the agriculture industry, provides the following post year-end update ahead of the announcement of its full year results to 31 December 2011, which are expected on 27 February 2012. All results provided are preliminary and subject to completion of the 2011 audit.
The Board is pleased to report that the operating loss before share-based payments is expected to be approximately $6.7 million, on revenues of $7.9 million. Due to tight control over operating costs, the operating loss was better than expectations, with revenues being slightly less than expectations. As a consequence of the lower losses and strong collections from debtors, the Company is expecting to report cash and cash equivalents at year-end of US$14 million, significantly ahead of expectations. The Company is focused on accelerating the development and improving performance of its core Harpin and Myconate technologies. As a result, R&D spend on next generation product development and formulations doubled in 2011, and is expected to increase at a similar rate in 2012 to over $1mm.
The Company has also been strongly focused on the pursuit of further significant partnering relationships. The following is a progress report on the most significant aspects of the business:
- On-ground sales (end-user application of the product) of Harpin in the US rose approximately 40% in 2011 from programmes driven by the Company and its partners to increase market awareness and acceptance of Harpin as a critical biological enhancement to existing seed treatment options. As a result of in-hand distributor orders, we expect 2012 on-ground sales to more than triple 2011 levels. On-ground sales of Harpin have also grown rapidly in Mexico and South Africa as a result of initiatives in those markets. Both countries experienced roughly 50% growth in on-ground sales in 2011, and we expect this to accelerate by 70% in 2012.
- As a result of the success of on-ground sales, Plant Health Care is in discussions with a number of global and regional agrichemical and agricultural supply companies to further exploit its Harpin and Myconate technologies, on new crops, by new product applications and in new geographical regions. Good progress is being made towards finalising substantial new partnering agreements during 2012.
- 2011 delivered the best set of trial results with Harpin and Myconate that the Company has ever experienced. The strength of these results has helped escalate our partnering discussions.
- We have developed six next generation Harpin product candidates that will be moving into initial field trials in 2012. All six candidates have exhibited significantly stronger attributes in greenhouse trials than the Harpin products that are currently in the market.
The Board has been greatly encouraged by the progress made in the past 12 months and believes that the increasing use of Harpin and Myconate-based products and the pipeline of potential new partnering transactions will ensure that our present cash resources will be sufficient to fund the Company through to profitability in future periods.
John Brady, Chief Executive of Plant Health Care, said: "The sale of the US retail and landscape business at the start of 2011 has allowed us to focus on obtaining licensing agreements for Harpin and Myconate and on supporting our partners in the introduction of new products. Good progress across the business and our strong trial results mean we remain confident of substantial progress and further important developments during 2012."