LONDON (Alliance News) - Plant Health Care PLC Monday said its net loss narrowed in the first half of the year, as cost cutting and the absence of restructuring costs that affected the year-earlier period more than offset a reduction in overall revenue.
It also said trading in the second half of the year had started positively, and it is confident that it can deliver "significant progress" in the remaining months of the year.
The company, which makes biological foliar sprays and seed treatments to improve the health, vigor and yield of major field crops such as corn, soybeans, cotton and rice, reported a net loss of USD3.6 million for the six months to June 30, compared with the USD4.9 million loss it made a year earlier.
Its revenue dropped to USD3.3 million, from USD3.8 million, after the previous year was buoyed by milestone payments of license revenue for Harpin aß, one of its main products. However, this was more than offset by a fall in operating expenses costs to USD5.4 million, from USD5.5 million, and as restructuring costs fell to zero from the USD2.2 million it booked in the first half of last year.
It said it had cut costs in head office and on the corporate level, reallocating some spending to research and development.
Excluding the Harpin aß licence revenue, sales of Harpin aß and Myconate, its main products, rose to USD1.8 million, from USD0.9 million. They represented 53% of total revenue, up from 43% a year earlier.
"While much remains to be done, we consider that underlying sales of Harpin aß and Myconate are now on a firmly growing track. However, sales by Plant Health Care in any one period will continue to be subject to a number of seasonal and market-related factors, including the terms of agreements with third parties and the timing of product registrations. As a result, the group's sales of these products may not follow a strictly linear trend," Chairman Chris Richards said in a statement.
The company has been restructuring, streamlining operations to focus on one technology platform and the two main products. It sold Plant Health Care BV to the Netherlands subsidiary's management for EUR1 last year, and revamped its business in Mexico. It said the Mexican business is now profitable.
"We continue to seek commercial agreements for both Harpin aß and Myconate and have an active pipeline of negotiations. We anticipate completing at least one additional commercial agreement during the remainder of 2014," the company said in its earnings statement.
It is also working on expanding market access, and is deploying "substantial resources" in applying for registrations in South America, Europe and Asia. It expects to get two new country registrations in 2014 and six more in 2015.
Plant Health Care shares were down 0.7% at 68.00 pence Monday morning,
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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Plant Health (PHC)