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LONDON (Alliance News) - Plant Health Care PLC Monday moved to fulfill its strategy of streamlining to focus on one technology platform and two products, selling Plant Health Care BV to the Netherlands subsidiary's management for EUR1 and the repayment of a USD536,230 inter-company loan.
In a statement, the agricultural biochemistry firm said it will write off about USD281,471 on the disposal, which includes the company's European distribution businesses and all the inventory held by its Spanish and UK subsidiaries, except that of Harpin and Myconate. Those inventories are valued at around USD19,956 and USD89,193, respectively.
The company had set out its new strategy back in March, saying it wanted to create a business focused on accelerating the research and development of its Harpin technology platform and maximising sales of the current Harpin and Myconate products over the next three years.
The subsidiary being sold had sales of USD1.1 million in the year ended June 30, 2013. Harpin and Myconate accounted for around 4% of those sales. It posted a pretax profit of USD173,439 pence.
Harpin and Myconate had become the company's main growth drivers. In total, Plant Health Care reported revenues of USD4.8 million in the first half, up from USD3.5 million a year earlier, driven mainly by licensing of Harpin. Revenues associated with Harpin and Myconate as a percentage of total revenue increased from 27% in 2012 to 43% in the the first half of 2013.
"This divestment leaves Plant Health Care a much more focused business, better able to drive the development of our core products and technologies, in line with our strategy," Plant Health Care Chief Executive Paul Schmidt said in a statement.
Harpin is a protein technology for improving crop health and production. Plants treated grow faster and are more resilient to disease. Myconate technology helps crops to develop larger root mass, so that they can repel pests and prosper under growing conditions that normally inhibit growth.
Pius Floris will take over as director of the subsidiary, which will change its name within 12 months.
"I am delighted that we have reached an agreement to divest these businesses to Pius and his team," said Chief Executive Officer Paul Schmidt in a statement.
Shares in Plant Health Care were trading down 2.1% at 57.25 pence Monday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @hanassallnews
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