PHC.L Regulatory News (PHC)

6 February 2023

Plant Health Care plc

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

FY2022 Trading Statement

On track to achieve revenue of $30 million by 2025

Plant Health Care® (AIM.PHC.L), a leading provider of peptides for plant protection to global agriculture markets, announces its trading update for the 12-month period to 31 December 2022. 

Financial highlights:

· Revenue up 40% to $11.8m (2021: $8.4m)

o  Sales in North America up 74%, driven by strong Harpin ab demand

o  Sales in South America up 104%, driven by Saori® launch in soybeans and Harpin ab sales in sugar cane

· Saori sales of $0.8m in first year since launch

· Harpin αβ sales increased by 36% to $8.2m (2021: 6.0m)

· Third party product revenue up 17% to $2.8m (2021: 2.4m)

· Gross margin improved 200 basis points to 61% (2021: 59%)

· LBITDA improved 24% to $3.5m (2021 $4.6m)

Cash:

· Cash and cash equivalents as of 31 December 2022 of $5.7m

· Substantial improvement in working capital which decreased 21% to $3.1m (2021: $3.9m)

· Cash used in operations decreased 16% to $2.7m (2021: $3.2m)

· Company is on track to deliver cash breakeven, profitability and internally funded growth within existing financial resources

Operational highlights:

Commercial - Harpin αβ

· In April, appointed Ager Agro SAS as a distributor of Harpin αβ product, ProAct®, in Argentina and Uruguay with first sales in Argentina in Q4 2022.

·  Successfully registered Harpin αβ for use as a fertilizer with biostimulant properties in France, the largest agricultural producer in the European Union. The EU mutual recognition process will help expand the use of Harpin αβ to other European countries.

· Low-cost production agreement for Harpin αβ signed with a leading Europe-basedbiomanufacturing company; secures capacity to accommodate long-term growth indemand and ensures gross margin.

New Technology - PREtec (Vaccines for PlantsTM) platform

· Company plans one major new product launch every year from the PREtec platform.

· Launch in 2021 of the first PREtec product Saori® in Brazil, the world's largest soybean market, has been well received. Revenue of $0.8m in FY2022; Signed long-term commercial agreement with Nutrien for distribution of Saori in Brazil.

· Submitted applications to the regulatory agencies in Brazil for approval to commercialize new PREtec products, PHC279 and PHC949, for use on major crops.

· US registration for PHC279 pending following delays caused by backlog at the US Environmental Protection Agency (EPA). EPA approval expected by end of Q1 2023.

· In August, announced a trials agreement with Agrii UK under which Agrii will 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.

Post-period highlights:

· In January 2023, signed an agreement for the exclusive distribution of Harpin αβ with Novozymes South Asia Pvt. for use in sugar cane production in India.

Outlook:

· Company has seen continued growth into 2023 as it builds key global distributor relationships for Harpin ab market expansion based on new registration approvals.

· Saori is expected to be a significant driver of growth, building on its successful launch in Brazil.

Jeff Tweedy, CEO of Plant Health Care, said: "2022 was excellent despite the challenging macroeconomic conditions. Our success was driven by the growing demand for Harpin αβ in North and South America and the successful commercialisation of Saori in Brazil following its launch in 2021.

"We expect Saori to be a significant driver of growth especially in Brazil. It has the potential to deliver disease control and yield increase worth approximately US$75 per hectare for Brazilian soybean growers, giving them an ROI of six times or more, while reducing the use of potentially less safe agrochemicals. Brazilian soybean farmers spent US$2.85bn on disease control in the 2020/21 season. Early in 2022, we signed a new long-term commercial agreement with Nutrien for distribution of Saori in Brazil.

"Plant Health Care has continued to expand into new markets around the world and has grown our relationships with major distribution partners. This year, we started selling ProAct in Argentina. After the year-end, we announced a deal for distribution of Harpin αβ in India. 

"We plan to launch one major PREtec product each year building on the success of Saori. Applications have been submitted to the regulatory agencies in Brazil for approval to commercialize new PREtec products PHC279 and PHC949 for use on major crops.

"Plant Health Care is on track to achieve revenue of $30 million by 2025 through the launch of new peptides, and growth through current and future distributor relationships and deliver cash breakeven within our existing cash reserves."

For further information, please contact: 

About Plant Health Care

Plant Health Care offers products to improve the health, vigour and yield of major field crops such as corn, soybeans, potatoes, and rice, as well as specialty crops such as fruits and vegetables. We operate globally through subsidiaries, distributors and supply agreements with major industry partners. Our innovative, patent-protected biological products help growers to protect their crops from stress and diseases, and to produce higher quality fruit and vegetables, with a favourable environmental profile.

Find out more at www.planthealthcare.com