7 Dec 2009 07:00
Plant Impact plc ("Plant Impact" or the "Group")
Unaudited Consolidated Interim Results for the six months ended 30 September 2009
Plant Impact plc (AIM: PIM), a global developer of technologies that improve crop productivity, today announces its unaudited consolidated interim results for the six months ended 30 September 2009.
Highlights
Martin Robinson, Chairman of Plant Impact plc, commented "The Company has achieved significant progress in terms of commercialising our key technologies over the past six months. The license agreement with Arysta demonstrates our ability to secure significant distribution opportunities. Our ongoing and successful field trials for our products help to validate the performance of our technologies and supports both our direct sales and our ability to secure further licensing agreements."
For further information, please contact:
| Plant Impact plc | |||
| Peter Blezard, Chief Executive Officer Michael Panteli, Chief Financial Officer | +44 (0) 1772 645 164 +44 (0) 1772 645 165 | ||
| Nominated Adviser | |||
| Blomfield Corporate Finance Ltd | |||
| Peter Trevelyan-Clark/Derek Crowhurst/James Pinner | +44 (0) 20 7444 0800 | ||
| Joint Broker | |||
| Religare Hichens, Harrison plc | |||
| Daniel Briggs, Nicholas Malins Smith, James Wood Joint Broker | +44 (0) 20 7444 0500 | ||
| Hybridan LLP | |||
| Stephen Austin/Claire Noyce | +44 (0) 207 947 4351 | ||
| Financial PR/IR | |||
| Conduit PR | |||
| Charlie Geller | +44 (0) 20 7429 6604 |
Chairman's Statement
The Group has recorded a number of important achievements during the six months under review. These achievements include entering into a licensing agreement for BugOil, the Group's pesticide product, with Arysta LifeScience Corporation ("ALS") under which it has received the first regulatory milestone payment, and signing an extramural agreement with the United States Department of Agriculture for extensive trials on PiNT, the Group's nitrogen delivery technology.
Financial Review
Revenue for the period was £969,554, compared with £225,287 for the six months ended 30 September 2008. The increase in revenue has come primarily from sales of nutrient products in the USA and the milestone payments for BugOil.
The operating loss reduced to £879,381, compared with £1,300,464 for the six months ended 30 September 2008, with revenue increases offset to an extent by increases in sales and distribution costs and administrative expenses. Interest and R&D tax credit receivable reduced the loss for the period attributable to equity shareholders to £745,583, compared with £1,146,259 for the six months ended 30 September 2008. Cash balances at 30 September 2009 amounted to £1,584,942, compared with £1,850,423 at 30 September 2008. This follows net placing proceeds obtained in July 2009 of £1,332,635 and a final £500,000 drawdown of the ALS loan agreement, following from the £250,000 drawdown in February 2009. Cash as at 30 November 2009 stood at £1,429,175.
Operational Review
Commercial
Plant Impact has continued to experience commercial growth in both its BugOil technology and crop nutrient products. In June 2009 it was announced that the Group had completed the licensing agreement for BugOil with ALS, a significant commercial milestone. ALS will provide regulatory, manufacturing, marketing and distribution strength to enable full commercialisation of BugOil. The license is for a term of 20 years and ALS will make payments to Plant Impact in accordance with agreed milestones, both regulatory and sales, as well as royalties upon sales. The first regulatory milestone was achieved in September 2009 when Plant Impact submitted the BugOil dossier to the Environmental Protection Agency ("EPA") in the USA. The next regulatory milestone is UK approval for BugOil which is anticipated during the first half of 2010.
Crop nutrient sales continue to grow especially in the key territories of the Americas and Europe. In the USA, sales of Inca have improved as a result of the continued relationship with Miller Chemicals and the efforts of the Group's sales team. European sales activity has improved as a result of significant field trial developments in the UK, Holland, Germany, France and Spain. Sales have however been impacted by difficult trading conditions mainly as a result of reduced credit facilities available to growers and distributors. This was especially evident in Southern Europe and the Mediterranean countries. Growers and distributors in Europe have also reduced their inventories of crop nutrient products and have seen crop pricing fall significantly.
During the period the Company recruited an additional salesman in Spain (July 2009) and has subsequently added a business development manager for the Americas (November 2009), who brings 30 years of industry experience to having held senior positions at Gowan, Tyratech and Rohm & Haas.
Technical
A number of strategic initiatives have been undertaken during the period including a collaboration agreement with CEM Analytical Services Limited ("CEMAS") in June 2009, the establishment of the Plant Impact Scientific Advisory Board ("SAB") in September 2009, the United States Department of Agriculture ("USDA") agreement on the PiNT technology in June 2009, and the appointment of the Group as a Member of the Parliamentary Science Committee to the House of Commons in July 2009. Work with CEMAS has commenced with initial studies being undertaken on the environmental benefits of PiNT. The SAB met for the first time in October 2009 where the Company's R&D strategy and pipeline were reviewed. The USDA research for PiNT is ongoing and initial results look promising from the work carried out on reducing nitrogen application to crops.
In September 2009, Plant Impact submitted the BugOil dossier to the EPA. On completion of the data review by the EPA the Group anticipates first sales of BugOil in the USA during 2011. The dossier submitted to the Chemicals Regulation Directorate ("CRD") in the UK (formerly the Pesticide Safety Directorate), is being reviewed and distributed to European member states. UK approval for BugOil is anticipated during the first half of 2010.
In October 2009, the Group received approval under the European Framework 7 grant process for a grant to assist in development of its nematicide technology. The grant is for €1m and Plant Impact is the nematicide technology provider and coordinator of a consortium of seven members with approximately €300,000 payable in respect of Plant Imapct's contribution to the consortium.
Plant Impact continues to improve its patent portfolio, with two patents granted in the UK in 2009 on the Alethea technology.
Field trial development continues in Europe, USA, Central America, Middle East and Africa. The objective is to expand both geographically and in the number of crops. The trials focus on high value fruit and vegetables, ornamentals and nuts. We have also seen encouraging results on some arable crops. ALS is also engaged in a significant field trial development programme for BugOil conducting approximately 150 trials in 15 countries in preparation for commercial sales.
Since the period end, the Company received the final field trial results from Eurion Consulting on melons, cucumbers, tomatoes and lettuce using InCa ( from Plant Impact's CaT technology). The field trials were conducted at Montpellier University and by Phytex. Eurion Consulting is an accredited Contract Research Organisation which specialises in regulatory approvals of agricultural input products.
The trials measured CaT technology against standard practice and a commercially available calcium fertiliser product. The key findings included a 41% increase in marketable yield for standard melons, a 50% in marketable yield for standard tomatoes, a 22% increase for standard cucumbers and the fresh weight of lettuce was 9% better than standard and 12% better than competing product.
Circulation to Shareholders
Following this RNS announcement, a pdf copy of the unaudited consolidated interim results will be posted on the Group's website (www.plantimpact.com) rather than made available in hard copy. This is in line with the Group's efforts to minimise the environmental impact of printing and distributing sets of unaudited consolidated interim results.
Outlook
The Directors are pleased with the progress made during the last six months.
In particular, the ALS licensing agreement is a major step forward in the commercialisation of BugOil and the expected payments, as each regulatory milestone is achieved, will improve the Group's cash flow in the medium term before the full commercialisation of BugOil and the receipt of royalty
payments under the agreement.
Our work with the USDA on PiNT will enable a thorough independent assessment of the product's performance and provide pivotal data for the validation of PiNT in the USA. The studies include a comparison of its performance with other nitrogen fertilizers and an assessment of environmental losses by leaching, as part of an exercise to find solutions which improve water quality in areas which receive run off and leachate from agricultural land. This data will provide valuable information for the registration of PiNT and assist in the identification of the best commercial markets.
The growth in sales of nutrient products during the six months ended 30 September 2009 is further evidence of the Group's potential as growers see the economic benefits of using our products. We will continue to work with growers and distributors to expand the direct sales of our products. This bottom up approach provides valuable information, which can be used to demonstrate the efficacy of our products to potential customers and commercial partners.
The recognition of the contribution which the Group can make to the debate on the sustainability of agriculture, as shown by the appointment of the Group as a Member of the Parliamentary Science Committee to the House of Commons and our work with the USDA, is part of a top down approach to gaining acceptance of the benefits of our products from governments and food groups. The benefits may take longer to materialise, but are key to the widespread commercialisation of our products. The fact that a young company like Plant Impact can engage at this level gives the Directors confidence that the Group can play a significant role in sustainable agriculture.
Martin RobinsonChairman7 December 2009
Plant Impact plc
Unaudited Consolidated Income Statement
For the six months ended 30 September 2009
| Unaudited | Unaudited | Audited | ||
| Six months to 30 September 2009 | Six months to 30 September 2008 | Year ended 31 March 2009 | ||
| Note | £ | £ | £ | |
| Revenue | 3 | 969,554 | 225,287 | 829,616 |
| Cost of sales | (208,696) | (123,908) | (434,562) | |
| Gross profit | 760,858 | 101,379 | 395,054 | |
| Sales and distribution costs | (446,962) | (339,726) | (553,353) | |
| Research and development costs | (733,969) | (730,064) | (1,476,010) | |
| General and administrative expenses | (459,308) | (332,053) | (912,017) | |
| Total expenses | (1,640,239) | (1,401,843) | (2,941,380) | |
| Operating loss | 3 | (879,381) | (1,300,464) | (2,546,326) |
| Finance income | 883 | 54,757 | 72,553 | |
| Finance cost | (10,829) | - | (1,293) | |
| Loss before tax | (889,327) | (1,245,707) | (2,475,066) | |
| Income tax credit | 143,744 | 99,448 | 219,991 | |
| Loss for the period attributable to equity shareholders of the parent | (745,583) | (1,146,259) | (2,255,075) | |
| Loss per share attributable to equity shareholders of the parent | ||||
| Basic and diluted (pence) | 5 | (0.03) | (0.04) | (0.09) |
The Group has no items to be recognised in the "Unaudited Statement of Comprehensive Income" and consequently this statement has not been shown.
All results are from continuing activities.
The notes are an integral part of these Unaudited Consolidated Interim Results.
Plant Impact plc
Unaudited Consolidated Statement of Financial Position
At 30 September 2009
| Unaudited | Unaudited | Audited | ||
| At 30 September 2009 | At 30 September 2008 | At 31 March 2009 | ||
| £ | £ | £ | ||
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 23,025 | 27,054 | 27,603 | |
| Intangible assets | 666,948 | 585,383 | 656,757 | |
| 689,973 | 612,437 | 684,360 | ||
| Current assets | ||||
| Inventories | 71,520 | 43,377 | 99,822 | |
| Trade and other receivables | 778,623 | 303,508 | 763,663 | |
| Corporation tax receivable | 361,480 | 201,549 | 217,735 | |
| Cash and cash equivalents | 1,584,942 | 1,850,423 | 756,012 | |
| 2,796,565 | 2,398,857 | 1,837,232 | ||
| Total assets | 3,486,538 | 3,011,294 | 2,521,592 | |
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | (737,152) | (654,950) | (978,755) | |
| (737,152) | (654,950) | (978,755) | ||
| Non-current liabilities | ||||
| Borrowings | (762,122) | - | (251,293) | |
| (762,122) | - | (251,293) | ||
| Total liabilities | (1,499,274) | (654,950) | (1,230,048) | |
| Net assets | 1,987,264 | 2,356,344 | 1,291,544 | |
| EQUITY | ||||
| Equity attributable to equity holders of the parent | ||||
| Share capital | 314,321 | 263,108 | 263,108 | |
| Share premium | 8,773,771 | 7,412,348 | 7,412,348 | |
| Other reserve | 350,977 | 443,662 | 487,678 | |
| Merger reserve | 182,892 | 182,892 | 182,892 | |
| Retained losses | (7,634,697) | (5,945,666) | (7,054,482) | |
| Total equity | 1,987,264 | 2,356,344 | 1,291,544 | |
The notes are an integral part of these Unaudited Consolidated Interim Results.
Plant Impact plc
Unaudited consolidated statement of changes in equity
For the six months ended 30 September 2009
| Share capital | Share premium | Other reserve | Merger reserve | Retained losses | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 1 April 2009 | 263,108 | 7,412,348 | 487,678 | 182,892 | (7,054,482) | 1,291,544 |
| Share-based payments | - | - | 28,667 | - | - | 28,667 |
| Exercised options | 2,713 | 77,288 | (28,268) | - | 28,268 | 80,001 |
| Lapsed options | - | - | (137,100) | - | 137,100 | - |
| Issue of share capital | 48,500 | 1,284,135 | - | - | - | 1,332,635 |
| Transactions with owners | 314,321 | 8,773,771 | 350,977 | 182,892 | (6,889,114) | 2,732,847 |
| Loss for the financial period | - | - | - | - |
(745,583) | (745,583) |
| Balance at 30 September 2009 | 314,321 | 8,773,771 | 350,977 | 182,892 | (7,634,697) | 1,987,264 |
| Share capital | Share premium | Other reserve | Merger reserve | Retained losses | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 1 April 2008 | 263,108 | 7,412,348 | 399,646 | 182,892 | (4,799,407) | 3,458,587 |
| Share-based payments | - | - | 44,016 | - | - | 44,016 |
| Transactions with owners | 263,108 | 7,412,348 | 443,662 | 182,892 | (4,799,407) | 3,502,603 |
| Loss for the financial period | - | - | - | - | (1,146,259) | (1,146,259) |
| Balance at 30 September 2008 | 263,108 | 7,412,348 | 443,662 | 182,892 | (5,945,666) | 2,356,344 |
| Share capital | Share premium | Other reserve | Merger reserve | Retained losses | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 1 April 2008 | 263,108 | 7,412,348 | 399,646 | 182,892 | (4,799,407) | 3,458,587 |
| Share-based payments | - | - | 88,032 | - | - | 88,032 |
| Transactions with owners | 263,108 | 7,412,348 | 487,678 | 182,892 | (4,799,407) | 3,546,619 |
| Loss for the financial year | - | - | - | - | (2,255,075) | (2,255,075) |
| Balance at 31 March 2009 | 263,108 | 7,412,348 | 487,678 | 182,892 | (7,054,482) | 1,291,544 |
Plant Impact plc
Unaudited Consolidated Statement of Cash Flows
For the six months ended 30 September 2009
| Unaudited | Unaudited | Audited | ||
| Six months to 30 September 2009 | Six months to 30 September 2008 | Year to 31 March 2009 | ||
| £ | £ | £ | ||
| Cash flows from operating activities | ||||
| Loss before tax | (889,327) | (1,245,707) | (2,475,066) | |
| Adjusted for: | ||||
| Depreciation | 10,526 | 6,783 | 15,234 | |
| Share-based payments | 28,667 | 44,016 | 88,032 | |
| Finance income | (883) | (54,757) | (72,553) | |
| Finance cost | 10,829 | - | 1,293 | |
| Operating loss before working capital changes | (840,188) | (1,249,665) | (2,443,060) | |
| Increase in trade and other receivables | (14,960) | (91,489) | (551,521) | |
| Decrease / (increase) in inventories | 28,302 | (39,584) | (96,029) | |
| (Decrease) / increase in trade payables | (241,603) | 126,352 | 450,157 | |
| Cash absorbed by operations | (228,261) | (4,721) | (197,393) | |
| Research and development tax credit received | - | 74,493 | 178,850 | |
| Net cash outflow from operating activities | (1,068,449) | (1,179,893) | (2,461,603) | |
| Cash flows from investing activities | ||||
| Purchase of plant and equipment | (4,038) | (4,367) | (13,367) | |
| Purchase of intangible assets | (12,102) | - | (71,374) | |
| Interest received | 883 | 54,757 | 72,430 | |
| Net cash (absorbed by) / generated from investing activities | (15,257) | 50,390 | (12,311) | |
| Cash flows from financing activities | ||||
| Proceeds from issue of share capital (net of expenses) | 1,332,635 | - | - | |
| Proceeds from borrowings | 500,000 | - | 250,000 | |
| Share options exercised | 80,001 | - | - | |
| Net cash generated from financing activities | 1,912,636 | - | 250,000 | |
| Net increase / (decrease) in cash and cash equivalents | 828,930 | (1,129,503) | (2,223,914) | |
| Cash and cash equivalents at the beginning of the period | 756,012 | 2,979,926 | 2,979,926 | |
| Cash and cash equivalents at the end of the period | 1,584,942 | 1,850,423 | 756,012 |
Notes to the Unaudited Consolidated Interim Results
1. Nature of operations and general information
Plant Impact plc and its subsidiaries' ('the Group') principal activities include the research, development, manufacturing and sale of crop nutrients and crop pest control products and technologies.
Plant Impact plc is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of Plant Impact plc's registered office, which is also its principal place of business, is 12 Cuerden Way, South Preston Office Village, Bamber Bridge, Preston, PR5 6BL, United Kingdom. Plant Impact plc's shares are quoted on AIM, a market operated by the London Stock Exchange plc and are also traded on the PLUS Market.
Plant Impact plc's unaudited consolidated interim results are presented in Pounds Sterling (£), which is also the functional currency of the parent company.
These unaudited consolidated interim results have been approved for issue by the Board of Directors on 7 December 2009.
The financial information set out in this unaudited consolidated interim results statement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 March 2009, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain any statement under Section 237(2) of the Companies Act 1985.
2. Basis of preparation
These unaudited consolidated interim results are for the six months ended 30 September 2009. They have not been prepared in accordance with IAS 34, Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2009.
The Group's existing financial resources together with contractual arrangements with certain economic partners in different geographical areas provides a sound platform for launching the Group's products and generating future sales and revenues. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook.
The Group's forecasts and projections, which have been prepared for the period to 31 March 2011, including sensitivity analysis, and taking account of reasonably possible changes in performance and achievement of certain regulatory milestones, show that the Group should be able to operate within the level of its current cash resources.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the unaudited consolidated interim results.
2. Basis of preparation (continued)
These unaudited consolidated interim results have been prepared in accordance with the accounting policies expected to be adopted in the annual financial statements for the year to 31 March 2010. The Company has adopted IAS 1 Presentation of Financial Statements (Revised 2007), IFRS 8 Operating Segments and IFRS 2 (amendment) Share based payments on vesting conditions and cancellations.
The adoption of IAS 1 (Revised 2007) does not affect the financial position or profits of the Group, but gives rise to additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged. IAS 1 (Revised 2007) affects the presentation of owner changes in equity and introduces the requirement for a 'Statement of comprehensive income'.
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance. The standard is effective in the EU for accounting periods beginning on or after 1 January 2009. In contrast, the predecessor Standard (IAS 14 'Segment Reporting') required the Group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments.
The Group has determined that its reported operating segments are based on geographies, and the segmental information set out in note 3 is presented on this basis.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these unaudited consolidated interim results.
3. Segmental analysis
Management have determined the operating segments based on the reports reviewed by internal management personnel in order to make strategic decisions.
The Group had previously reported as two divisions: Crop Nutrients and Pest Control. Following the implementation of IFRS 8 (see note 2) the segments are now based on geography. Segment information is presented below:
| Unaudited | Unaudited | Audited | ||
| Six months to 30 September 2009 | Six months to 30 September 2008 | Year ended 31 March 2009 | ||
| £ | £ | £ | ||
| Revenue | ||||
| Americas | 386,050 | 52,724 | 185,682 | |
| Europe | 407,348 | 116,876 | 383,654 | |
| Middle East | 119,672 | 47,889 | 244,746 | |
| Africa | 56,484 | 7,798 | 15,534 | |
| 969,554 | 225,287 | 829,616 | ||
3. Segmental analysis (continued)
| Unaudited | Unaudited | Audited | ||
| Six months to 30 September 2009 | Six months to 30 September 2008 |
Year ended 31 March 2009 | ||
| £ | £ | £ | ||
| Segment operating profit/(loss) | ||||
| Americas | 156,570 | (118,821) | (162,229) | |
| Europe | 132,181 | (93,075) | (121,842) | |
| Middle East | (51,812) | (53,160) | (156,736) | |
| Africa | 429 | (17,078) | (26,276) | |
| 237,368 | (282,134) | (467,083) | ||
| Unallocated expenses | (1,116,749) | (1,018,330) | (2,079,243) | |
| Consolidated operating loss | (879,381) | (1,300,464) | (2,546,326) | |
4. Share options and share issues
On 18 May 2009, 271,290 new ordinary shares of 1 pence each were issued to satisfy exercised share options.
On 2 July 2009, 4,850,000 new ordinary shares of 1 pence each were issued via a placing at a price of 30 pence per share.
During the period to 30 September 2009, 1,859,789 share options were granted to employees and 1,201,063 share options lapsed.
5. Loss per ordinary share
The calculations of loss per ordinary share are based on the following losses and weighted average number of shares in issue during the period:
|
| Unaudited Six months to 30 September 2009 | Unaudited Six months to 30 September 2008 | Audited Year to 31 March 2009 |
| Loss for the period (£) | (745,583) | (1,146,259) | (2,255,075) |
| Weighted average number of ordinary shares | 29,007,103 | 26,310,813 | 26,310,813 |
| Loss per share (pence) | (0.03) | (0.04) | (0.09) |
The exercise of outstanding share options in the periods would have the effect of reducing the loss per ordinary share and are not therefore dilutive under the terms of IAS 33.