PURE.L Regulatory News (PURE)

PureCircle Limited

("PureCircle or "the Company")

Results Announcement for the Year ended 30 June 2013 ("FY2013")

PureCircle (LSE: PURE www.purecircle.com) the world's leading producer and marketer of high purity stevia ingredients announces its audited results for the financial year to 30 June 2013 (FY13) together with audited comparatives for the year ended 30 June 2012 (FY12).

1.1 HIGHLIGHTS FOR THE YEAR

Financial Highlights

The audited results for FY13 comprising the Group's consolidated statement of comprehensive income, statement of financial position and statement of cash flows are set out on page 11 to 13. The Group's full Annual Report and accounts will be posted to shareholders in November 2013. A summary of the financials for FY13 with FY12 comparatives is set out below.

Summary financials

Sales: FY13 sales increased $25.8m (57%) to $71.2m. $68m of the sales were high purity stevia sweeteners and natural flavors, a 74% improvement against FY12.There was growth in sales across all high purity ingredients primarily driven by new innovations in our Stevia PureCircle proprietary portfolio of all-natural sweetener and flavor ingredients, under the PureCircle Stevia 3.0 range. All regions (EMEA, Latin America, Asia Pacific and USA) recorded sales growth. 

Sales of lower value co-products reduced year-on-year in line with our strategy of focusing on high purity stevia ingredients.

During FY13 there has been a series of important launches including Carbonated Soft Drinks using blends of proprietary ingredients developed by PureCircle which further accelerated market adoption. As expected, PureCircle's FY13 sales do not yet fully reflect growth in market usage of Reb A due to the continued unwinding of Beverage Global Key Accounts' inventories. 

Sales volumes: In FY13 total volumes of high purity stevia increased by 89%. Volume increases were led by the sales of new proprietary ingredients introduced to the market over the past 24 months. In addition we continued to grow our customer base and in FY13 serviced over 300 customers worldwide, including the first full year of in market sales from our EU based Joint Ventures.

Gross margin: In FY13 gross margin was $18.8m, an increase of $13.9m (282%) over FY12 reflecting increased volumes and improved sales mix, with a higher proportion of high purity stevia ingredients. At 26% of sales, gross profit % more than doubled against FY12. However our FY13 sales were still modest against our $300m sales production capacity and so we expect further improvements in gross profit margin as volumes increase.

Adjusted EBITDA: FY13's adjusted EBITDA was $8.8m positive, a $18m improvement on the FY12 adjusted EBITDA loss of $9.2m. The EBITDA improvement reflected strong growth in sales volumes and in gross profit as well as reduction in other operating costs and foreign exchange charges. In FY12 the Group incurred $5.7m net of exceptional costs relating to the temporary slowing down of Reb A production.

Net loss after tax: FY13's net loss of $9.4m was a $13.9m (60%) improvement on FY12. The Group's business model and production capacity is highly leveraged towards volumes and as sales demand increases the Group's profitability is expected to continue to improve strongly. 

Net cash from operations, before financing: Reflecting positive EBITDA, the Group's FY13 base operating cashflow was positive $6m. In FY13 the Group built inventories ahead of projected sales growth in FY14 and FY15, which led to a net $10.6m operating cash-outflow. 

Inventories: At $93m FY13 inventories were $19m higher than at June 2012. This reflects management decisions to build inventories of new innovations introduced to the market recently in anticipation of higher and sustained sales growth in FY14 and FY15, in line with accelerating market usage. 

Funding headroom and net debt: The Group ended FY13 with cash and facility headroom of $55m (FY12 $44m) and net debt of $76m (FY12 $78m). The Group is sufficiently funded for its current expansion plans.

Business developments

Overview: Market adoption of PureCircle high purity stevia ingredients continues to accelerate across all Food and Beverage categories and all regions of the world. Of particular note in FY13 has been the increasing take up within the large Carbonated Soft Drinks (CSD) category and in major brand reformulations. There is growing acceptance of stevia as a mainstream ingredient. Many of the new launches with stevia have been enabled by our Stevia 3.0 innovation approach launched over the past 24 months to address market formulation needs.

PureCircle's business model is designed to operate on a mass volume basis, underpinned by continued product innovation. Perhaps FY13 has provided the first tangible indications of the sales volume growth that can flow from that innovation. Going forward our business development priorities will continue to focus on sustainable sales volumes growth underpinned by innovation.

Carbonated Soft Drinks: Carbonated Soft Drinks are likely to represent the largest single category volume for high purity stevia. FY13 saw significant breakthroughs in Carbonated Soft Drink adoption of high purity stevia. The reformulation of Sprite in France was extended to the UK, Ireland, Benelux and Switzerland; and Pepsi Next was launched in Australia and France. In the United States Sprite and Fanta Select were test marketed. Notable expansion took place in Latin America as well with Fanta, Fresca and Sprite reformulations in Mexico; and in June Coca-Cola Life was launched in Argentina. Numerous other Carbonated Soft Drink adoptions have been launched or are ready in development pipelines for launch.

EU impact: FY13 was the first full year of stevia sales in the EU, the world's largest single sweetener market. EU adoption of high purity stevia has been fast and is accelerating with almost 1,000 launches in Calendar Year 2012 (CY2012) alone, the highest of any region. Consumer awareness of stevia in the EU is accelerating rapidly and has more than doubled over the year in all surveyed countries.

Other F&B product launches: Datamonitor reported 2,600 new products with high purity stevia in CY2012, a major acceleration over prior years. Adoption is broadening across all regions and Food and Beverage categories. More products are mainstream reformulations.

Customer base: PureCircle has again increased our customer base significantly: in FY13 we sold to more than 300 different customers around the world: an increase of more than 200 against FY12. The number of orders processed increased proportionately. Moving forward our direct sales focus is on the larger F&B customers worldwide while our distributor partners will service smaller customers.

In FY13, the company announced a joint development agreement and a 5-year supply agreement with the Coca-Cola Company. The supply agreement encompasses high purity stevia sweeteners produced by the Company and the joint development agreement resulted in the discovery and development of a new food ingredient named Rebaudioside X (Reb X), with potential for use in zero calorie food and beverage products.

Regulatory: Regulatory approvals for high purity stevia continue with almost 1.6 billion additional consumers given regulatory access to stevia in FY13 following approvals published in Philippines, Thailand, South Africa and Canada; whilst Indonesia and India have also approved and will publish approval in the coming months.

In FY13 PureCircle progressed the next generation of innovation to achieve no calorie formulations, with new regulatory approvals for Reb D in June 2013, and a GRAS submission for new sweetener Reb X, with expected approval in October 2013. Investments and assets are in place from agriculture to manufacturing to be ready to commercialize these products in FY14.

PureCircle product portfolio: We have launched a portfolio of new ingredients across the last 24 months under the Stevia 3.0 range. These have been developed specifically to address customer application needs and they are proprietary. In FY13 they represented more than 50% of total sales, their volume growth was well in excess of 100% and their future pipeline growth is expected to be even higher.

PureCircle's innovation is helping accelerate market adoption by providing clients combinations of our products to achieve optimum taste results. The combination of our innovation and formulation expertise provides unique formulation options that cannot be matched. Our innovation underpins our business model and we have further innovative products in the pipeline.

Technical support - PureCircle University (PCU): Having expanded our technical support in FY12 by opening application laboratories in key markets, in FY13 we held more than 70 PureCircle University customer events. The PCU programme will accelerate further in FY14 in response to strong customer demand for direct access to our technical support, including deeper understanding of product combination options and innovation developments. The efforts have been further supported by continued expansion of our commercial and technical footprint. In FY13 PureCircle expanded lab capabilities in the United States and China, opened a new office and laboratory in the UK and established a new entity in Mexico to better service our growing customer base.

Stevia advocacy and sustainability initiatives: PureCircle has continued to integrate advocacy and sustainability initiatives with our customer to deliver long term value.

- The PureCircle Stevia TrustmarkTM has reached more than 30 countries. In 2013 it was integrated on pack or as marketing support in customer advertising and included in the marketing of Pepsi Next launches in both Australia and France.

- Our Sustainability leadership has resulted in several joint sustainability initiatives with our customers along with a clear vision for how our footprint can have material reductions in carbon, water and calories for the global food and beverage industry as part of our published 2020 Vision.

- Our Insights Group is building market studies directly in partnership with key customers, with new studies across 9 markets including such markets as India, Argentina and China.

- The Global Stevia Institute (GSI) has continued to expand its reach and position as the leading source on the science and safety of stevia, including new advisers in North America, Europe and Latin America and now has a monthly reach of over 26,000 readers to its monthly newsletter. The website is now highlighted with health professionals around the world through The Coca-Cola Beverage Institute and on packaging of leading ketchup introductions by Unilever across Europe.

Supply chain: In FY13 our core production facilities were successfully re-configured to enable mass volume supply of all products in our widening portfolio. At the same time the facilities delivered overall sales volume increases of 89% with reduced unit costs and they increased production in anticipation of strong market growth in FY14 and FY15. This provides a strong platform for future profitable growth

Commenting on the audited results, the Chairman Paul Selway-Swift said:

"FY 13 saw encouraging growth in usage of PureCircle's high purity stevia in all major markets and the first tangible market indications of stevia developing into a mainstream ingredient.

Whilst sales still remain modest compared to our invested production capacity, the strong improvements in financial result seen in FY13 provide strong evidence of the scalability of our business model. Further improvements in profitability should arise as volumes increase.

We remain confident of the future of our high purity stevia business. Recent product launches, particularly in the Carbonated Soft Drink category, are leading to improved visibility on future sales prospects which, when realised, would drive future profitability.

2. BUSINESS REVIEW

2.1 CHAIRMAN'S STATEMENT

FY 13 has been another year of considerable progress in the development of the high purity stevia industry and in the establishment of PureCircle as the leading company in the industry. With strongly improved volumes and margins, FY13 has perhaps also provided the first indication of PureCircle's potential in our reported financial results.

At a market level FY13 saw good quality progress on many fronts: for example 2,600 products launched in CY 2012 and major new markets such as Canada opening up. Probably the most notable milestones have been the increased size and breadth of new activity in the Carbonated Soft Drinks category. These have the potential to develop into significant future volumes.

At a Company level in FY13 PureCircle has again broadened its already leading product portfolio, further increased our innovation pipeline, further diversified our customer base and increased sales volumes by more than 100%, whilst continuing to expand leaf development.

We remain confident about the long term future of the high purity stevia industry and of the opportunity for PureCircle to play the leading role in it. PureCircle is operationally geared and our financial results are sensitive to sales revenues. Recent product launches, particularly in the Carbonated Soft Drink category, are leading to improved visibility on future sales prospects which, when realised, would drive future profitability

2.2 CEO Review

OPERATIONS

Market

Our market continues to grow as stevia moves toward becoming a mainstream sweetener. This growth is driven by new innovations brought to market by PureCircle, end consumer demand for healthier options and global food and beverage industry's increased acceptance of stevia. FY13 saw important developments in our market such as greater usage in key categories, major brand launches, and increased consumer awareness for high purity stevia in key markets.

Based on data from Mintel's GNPD database, we estimate that more than 1,600 foods and beverages sweetened with stevia will launch globally in CY 2013 (more than 900 launches reported to date). This represents over 50+% growth compared to CY 2012, maintaining a 57% compound annual growth rate (CAGR) since 2009. To date, more than 4,500 food and beverages have launched using high purity stevia as an ingredient.

While the number of stevia launches is on the rise across categories, the landscape of the global stevia market is evolving as certain categories are growing faster than others. In particular, carbonated soft drink launches have begun to develop more aggressively in CY 2013 with over 50+ products launched around the world as well as the first major introductions into the Cola category behind Pepsi Next and Coca-Cola Life. 

In less than two years stevia awareness in major European markets has grown to nearly 1/3rd of the population with awareness in France at over 60%.

Regulatory:

Regulatory approvals for high purity stevia continue with almost 1.6 billion additional consumers given regulatory access to stevia in FY13 following approvals published in Philippines, Thailand, South Africa and Canada; whilst Indonesia and India have also approved and will publish approval in the coming months. In FY13 PureCircle secured important new regulatory approvals for Reb D and other proprietary ingredients that will further accelerate market adoption.

Sales: FY13 sales increased $25.8m 57% to $71.2m. $68m of the sales were high purity stevia sweeteners and natural flavors, a 74% improvement against FY12.There was growth in sales in all regions and across all high purity ingredients primarily driven by new innovations in our Stevia PureCircle proprietary portfolio of all-natural sweetener and flavor ingredients, under the PureCircle Stevia 3.0 range.  

Sales of lower value co-products reduced year-on-year in line with our strategy of focusing on high purity stevia ingredients.

During FY13 there has been a series of important launches including Carbonated Soft Drinks using proprietary ingredients developed by PureCircle which further accelerated market adoption. As expected, PureCircle's FY13 sales do not yet fully reflect growth in market usage due to the continued unwinding of Beverage Global Key Accounts inventories. 

Sales volumes: In FY 2013 total volumes of high purity stevia increased by 89%. Volume increases were led by the sales of new proprietary ingredients introduced to the market over the past 24 months. In addition we continued to grow our customer base and in FY13 serviced over 300 customers worldwide, including the first full year of contribution from our EU based Joint Ventures.

Reviewing the food and beverage products launched into market that are using high purity stevia, it is clear that PureCircle and our partners continue to secure the major share of market. This has been further underpinned by the successes of our proprietary new products launched within the last twenty four months.

Marketing and technical support

We have expanded our technical support and further developed our stevia advocacy and sustainability platforms.

We have opened application support laboratories in Europe (UK) and China and, soon to open, Mexico. Our pipeline of customer technical projects is growing and the number of customer working sessions has increased significantly.

In FY13 we held more than 70 PureCircle University customer events to ensure our customers develop winning food and beverage formulations and bring them quickly to market. The PCU programme will accelerate further in FY14 in response to strong customer interest in having support to help incorporate our leading Stevia 3.0 portfolio into their products.

PureCircle has continued to integrate advocacy and sustainability initiatives with our customer to deliver long term value.

- The PureCircle Stevia TrustmarkTM can be found across more than 30 countries and has been highlighted on notable product launched including Pepsi Next in Australia and France

- Our Sustainability Programs are resulting in deeper partnerships with our customers along with a clear vision for how our stevia can reduce carbon, water and calories in our customers' food and beverage products.

- Our Insights Group is building market studies directly in partnership with key customers, with new studies across 9 markets including India, Argentina and China.

- The Global Stevia Institute (GSI) has continued to expand its position as the leading source on the science and safety of stevia, with a reach of over 26,000 readers to its monthly newsletter. The website is now highlighted with health professionals around the world through The Coca-Cola Beverage Institute and even on packaging of leading ketchup introductions by Unilever across Europe.

Joint Ventures

Sales by our EU joint ventures grew by more than 130%, benefitting from FY13 being the first full year of operation in the world's largest single sweetener market.

On 13 September 2013 the Group sold its interests in the NSV joint venture to our partner, Imperial Sugar. Going forward PureCircle will supply stevia to Imperial without the need for a JV structure.

Supply chain

In FY13 our supply chain successfully delivered an 89% increase in sales volumes whilst simultaneously re-configuring our production capacity to enable scaled production of a much wider product portfolio. Two years ago our factories were configured to manufacture just two high purity stevia products. In FY13 they produced to scale six high purity stevia ingredients and the new configuration has been tested successfully for additional products currently in our innovation pipeline.

At the same time supply chain supported a $19m increase in inventories , ahead of the anticipated growth in FY14 and FY15 demand. The volume increases have been achieved at reduced unit costs. Both Extraction and Purification Plants continued their focus on the KPI's (Key Performance Indicators) to improve efficiency while maintaining flexibility to the changes in demand for our finished goods.

During FY13 we restructured our global leaf buying operations so as to reduce supply volatility, improve leaf quality and increase volumes. The benefits of this will start being evident from FY14 onwards.

After slowing down development in FY12 pending alignment of market stevia inventories, both our Paraguay and Kenya leaf operations increased volumes of leaf shipped, improved leaf quality, and started aggressive plantation development plans to increase the supply capacity for FY14 and future years.

In FY13 we recruited Randy Cook as Corporate VP Supply Chain and Logistics. Randy previously held a number of executive positions within The Coca-Cola Company and its bottling system in Hong Kong and the United States. Randy is spearheading further development and continuous improvement of the entire supply chain and logistics activities within the Group with focus on Strategy, Process and People. He has already made a number of senior operational management appointments that will focus on these value drivers.

R&D

Research and development is and will always be at the core of the PureCircle business. We continue to invest actively in all aspects of R&D from pure research through to core product development, specific application development and, by no means least, leaf research and development. In FY 13 our investment levels increased both in absolute terms and as a % of sales.

Our R&D capability is being recognized increasingly as a unique point of difference in the industry by our customers. New innovative ingredients successfully introduced in the market as well as the September 2012 Joint Development Agreement with The Coca-Cola Company are clearly milestones in this respect. But the success of our PureCircle University programme, the pace of our new product and application launches show clearly the wider picture.

Our R&D capability is backed up by a comprehensive patent and Intellectual Property protection program. This too expanded in activity and registrations across FY13.

We expect our R&D, innovation and patent programs to accelerate again in FY14 and FY15.

3. Management

The Group has ambitious long term growth plans. To deliver these we will continue to invest in management with the skills and experience to drive and support our growth plans in all aspects of our business. During FY13 our investments have had particular functional emphasis on product application development, supply chain process and efficiency, customer service and logistics and management reporting .

Moving forward we will extend further our global sales coverage, upgrade our IT systems and further strengthen our supply chain and logistics to better service the anticipated increase in demand.

4. Group Financial review

The Group's FY 2013 financial year covers the year from 1 July 2012 to 30 June 2013. FY 2012 comparatives are for the year from 1 July 2011 to 30 June 2012.

Set out below is an extract from the audited FY 2013 accounts. The full consolidated statement of comprehensive income, statement of financial position and statement of cash flows follow in pages 11 to 13.

Adjusted EBITDA comprises EBITDA adjusted for other expenses

Segmental reporting: The Group operates as a single segment company comprising the integrated production and marketing of high purity stevia products.

Sales: In FY 13 sales of $71.2m were $25.8m (57%) higher than FY 12, with High Purity Stevia sales totalling $68m, up $29m on FY12. Sales increased in all geographies and included the Group's share of the first full year of EU operations.

Sales volumes: In FY 13 high purity stevia volumes increased 89%, led by the growth in proprietary new products launched within the last 24 months. Our customer base increased and in FY13 we serviced over 300 customers worldwide. 

Gross margin: In FY 13 gross margin was $18.8m, an increase of $13.9m (282%) over FY12. The improvement reflects higher sales volumes; improved sales mix with less low margin co-products, and lower unit costs. Whilst strongly improved in FY13 from 11% to 26% of sales, gross profit margins are expected to improve further as sales volumes increase to better reflect the Group's current invested production capacity.

Other income and foreign exchange: In FY13 the Group had other income of $2.8m, which reflect foreign exchange gains of $2.5m.

Other expenses: FY13 other expenses comprise $2.4m of LTIP and related discretionary remuneration payments, a $0.9m charge related to the unwinding of the Group's Natural Sweet Ventures joint venture and a $0.6m write down on biological asset. In FY12, other expenses principally comprised $5.9m of exceptional production costs charged to profit relating to the temporary slowdown in Reb A production.

Adjusted EBITDA: In FY 13 the Group's adjusted EBITDA was a gain of $8.8m, an $18m improvement on the FY12 EBITDA loss of $9.2m. This reflects the sales volume increases and gross margin improvements noted earlier, together with the absence of FY12 exceptional production costs charged to profit.

Net cash from operations, before financing: The Group generated $6m of operating cash-flow in FY13 before inventories, reflecting positive EBITDA. Production of inventories was increased by $19m in FY13 ahead of stronger sales demand in FY14 and FY15, resulting in an operating cash-outflow before interest of $10.6m. Adjusting for inventory movements underlying operating cash-flow in FY13 was $8.4m favourable on FY12.  

Inventories: At $93m inventories are $19m higher than at June 2012 as production of new innovations introduced to the market recently was increased in FY13 in anticipation of future sales.

Funding headroom and net debt: The Group ended FY13 with cash and facility headroom of $55m (FY12: $44m), net debt of $76m (FY12 $78m). Gross cash and net debt were strengthened in FY13 by the $31m share issue in August 2012, partially offset by the decision to boost production ahead of future sales growth.

Gross assets: The Group has gross assets of $289m representing the fully invested supply chain capable of delivering 2,800 tonnes of high purity stevia. When running at capacity the existing supply chain can support sales of $250 to $300 million.

The Group is sufficiently funded for its current expansion plans.

Appendix 1 - AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CASHFLOWS

AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2013 2012

USD'000 USD'000

Revenue 71,206 45,412

Cost of sales (53,023) (40,516)

──────── ────────

Gross profit 18,183 4,896

Other income 2,789 1,040

Other expenses (1,538) (8,045)

Administrative expenses (20,672) (17,096)

Finance income 180 377

Finance costs (8,420) (7,829)

──────── ────────

Loss before taxation (9,478) (26,657)

Income tax 50 3,379

──────── ────────

Loss for the financial year (9,428) (23,278)

Other comprehensive (loss)/income (net of tax)

Exchange differences arising on translation of foreign operations (432) 297

──────── ────────

Total comprehensive loss for the financial year (net of tax) (9,860) (22,981)

════════ ════════

Loss for the financial year

Attributable to:

Owners of the company (9,492) (23,255)

Non-controlling interest 64 (23)

──────── ────────

(9,428) (23,278)

════════ ════════

Total comprehensive loss

Attributable to:

Owners of the company (9,928) (22,971)

Non-controlling interest 68 (10)

──────── ────────

(9,860) (22,981)

════════ ════════

Loss per share (US cents)

- Basic (5.80) (15.06)

- Diluted (5.80) (15.06)

AUDITED STATEMENT OF FINANCIAL POSITION

2013 2012

USD'000 USD'000

ASSETS

NON-CURRENT ASSETS

Intangible assets 32,472 26,812

Property, plant and equipment 65,889 66,586

Biological assets 4,172 6,047

Prepaid land lease payments 3,181 3,102

Deferred tax assets 5,979 6,209

──────── ────────

111,693 108,756

CURRENT ASSETS

Inventories 92,802 73,656

Trade receivables 29,352 21,827

Other receivables, deposits and prepayments 6,315 4,778

Tax recoverable 47 44

Short-term deposits with licensed banks 37,599 9,733

Cash and bank balances 11,599 14,555

──────── ────────

177,714 124,593

TOTAL ASSETS 289,407 233,349

════════ ════════

EQUITY AND LIABILITIES

EQUITY

Share capital 16,460 15,449

Share premium 162,898 132,330

Foreign exchange translation reserve 1,432 1,868

Share option reserve 1,530 204

Accumulated losses (40,519) (31,027)

──────── ────────

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 141,801 118,824

NON-CONTROLLING INTEREST 715 652

──────── ────────

TOTAL EQUITY 142,516 119,476

════════ ════════

NON-CURRENT LIABILITIES

Deferred tax liabilities 59 594

Long-term borrowings 96,581 84,026

Deferred income 483 548

──────── ──────── 

97,123 85,168

CURRENT LIABILITIES

Trade payables 12,532 3,625

Other payables and accruals 7,566 5,932

Amount due to joint venture partners 517 789

Income tax liabilities 248 34

Short-term borrowings 28,905 18,325

──────── ──────── 

49,768 28,705

──────── ──────── 

TOTAL LIABILITIES 146,891 113,873

──────── ──────── 

TOTAL EQUITY AND LIABILITIES 289,407 233,349

════════ ════════ 

NET ASSETS PER SHARE (USD) 0.86 0.77

════════ ════════

AUDITED CONSOLIDATED STATEMENT OF CASHFLOWS

2013 2012

USD'000 USD'000

CASH FLOWS FROM OPERATING ACTIVITIES

Loss before taxation (9,478) (26,657)

Adjustments for:

Amortisation of prepaid land lease payments 136 134

Amortisation of deferred income (88) (77)

Amortisation of intangible assets 160 -

Depreciation of property, plant and equipment 5,793 3,900

Interest expense 8,420 7,829

Interest income (180) (377)

Loss on disposal of plant and equipment 54 50

Share based payment expense/(credit) 1,481 (595)

Intangible assets written off 40 -

Inventories written off 209 291

Change in fair value of biological asset 628 (1)

Unrealised exchange gain (1,234) (1,139)

──────── ────────

Operating cash flow before working capital changes 5,941 (16,642)

(Increase)/Decrease in inventories (19,355) 24,330

Decrease/(Increase) in biological assets 1,353 (1,009)

Increase in trade and other receivables (8,966) (6,284)

Increase in trade and other payables 10,426 3,735

──────── ────────

NET CASH (FOR)/FROM OPERATIONS (10,601) 4,130

Interest received 180 377

Interest paid (8,420) (7,829)

Tax paid (28) (23)

──────── ────────

NET CASH FOR OPERATING ACTIVITIES (18,869) (3,345)

CASH FLOWS FOR INVESTING ACTIVITIES

Addition of intangible assets (5,949) (2,573)

Addition of property, plant and equipment (4,299) (2,070)

Proceeds from disposal of property, plant and equipment 147 106

──────── ────────

NET CASH FOR INVESTING ACTIVITIES (10,101) (4,537)

──────── ────────

CASH FLOWS FROM FINANCING ACTIVITIES

Drawdown of borrowings 44,046 11,233

Repayment of borrowings (21,264) (21,254)

Repayment of hire purchase (40) (61)

Proceeds from private placement 31,322 -

Proceeds from share options exercised 102 -

(Increase)/Decrease in restricted cash (1,373) 383

──────── ────────

NET CASH FROM/(FOR) FINANCING ACTIVITIES 52,793 (9,699)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 23,823 (17,581)

Effects of foreign exchange rate changes on cash and cash equivalents (313) (1,061)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 23,171 41,813

──────── ────────

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 46,681 23,171

════════ ════════