PHC.L Regulatory News (PHC)

8 May 2024

Plant Health Care plc

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

Trading Update

Plant Health Care® (AIM.PHC.L), a leading provider of peptides for plant protection to global agriculture markets, announces an update for the year ended 31 December 2023 and for trading in the first four months of 2024. 

Highlights

· Revenue in 2023 was $11.2m (2022: $11.8m).

· In the first four months of 2024, revenue was approximately $4.3m, up 72% versus the same period in 2023 (2023: $2.5m), boosted by sales to US distributors.

· Revenue outside the US grew by 23% in 2023, driven by strong sales of Harpinab and PREtec; this positive trend has continued in 2024.

· Sales of the Company's novel PREtec peptides in 2023 increased 153% to $2.0m (2022: $0.8m), reaching 18% of sales, driven by sales to new and existing customers following new product registrations.

· Gross margin remained steady in 2023 at 60% (2022: 61%) and has improved materially in the first four months of 2024 due to increased sales of high margin Harpinab and PREtec products.

· LBITDA in 2023 improved 32% to $2.8m (2022: $3.5m), with further improvement expected during 2024.

· At 31st December 2023, cash was $2.1m, increasing to $2.3m at 3rd May 2024. Cash burn for the same period in 2023 was $4.4m.

Operational highlights:

· In the US, on-ground sales have started the year strongly, with sales of Employ® (Harpinab) through Wilbur-Ellis currently up more than 75% against the same period in 2023; distributor inventory now appears to be rebalancing and to be well matched to on-ground sales, following a period of destocking in the second half of 2023.

· In Brazil, sales of H2Copla® (Harpinab) are currently up 35% against the same period in 2023. For the first four months of the year, our distributors in the US and Brazil have reduced the inventory of our products substantially while maintaining price.

· Also in Brazil, the peptide nematicide PHC68949 was granted registration for commercial sale; launches under the brand name Teikko® will take place over the coming months. Approximately 10 distributors have expressed interest in selling Teikko in the upcoming growing season. Due to strong field trials results and expected high grower ROI, multiple distributors are expressing interest in selling Teikko.

· In the UK, an agreement was signed with Agrii UK to commercialise PREtec technology; this product is now being launched under the brand Innocul8.

· The registration of Harpinab in India and of PHC68949 in the USA are progressing more slowly than anticipated, leading to a year's delay in both launches.

· For full year 2023 through April of 2024 PHC has signed 4 new distribution agreements and received 5 new product registrations.

Outlook:

· New registrations and distribution agreements in 2023 and 2024 point to significant revenue growth in 2024, in line with market forecasts.

· With increased sales in the first four months of 2024, the Company is assessing potential non-dilutive short-term financing options to ensure it is able to maintain sufficient working capital and financial flexibility through its typical order cycle.

· The audit of the Company's final results for its financial year ended 31 December 2023 is ongoing, with the final results and Annual Report currently expected to be finalised and published prior to the end of May 2024.

Jeff Tweedy, CEO of Plant Health Care, said:

"Sales of Plant Health Care products experienced significant growth in 2023 in all regions, with the exception of the US market. Sales in the US were held back in 2023, throughout the agriculture inputs business, by distributors making major steps to reduce inventory.

As expected, strong on-ground sales of PHC products has led to a rebound in sales by PHC in the first four months of 2024. Outside the US, sales by PHC grew strongly in 2023 and have continued that trend in the first four months of 2024.

PHC now markets PREtec on three continents and the launch of Teikko in Brazil on soybeans during the 2024/2025 growing season is an exceptional opportunity. As we grow the Company's profitable revenue, we are taking appropriate steps to control all discretionary costs and to live within our means, becoming cash positive on the earliest possible timescale."

For further information, please contact: 

This update is provided in advance of the financial statements for the year ended 31 December 2023. The information and commentary provided is based on unaudited management accounts and other internal performance measures and is subject to concluding the routine annual accounting adjustments as well as any adjustments that arise as a result of the external audit process.

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