PURE.L Regulatory News (PURE)

PURECIRCLE LIMITED

TRADING UPDATE

PureCircle (LSE: PURE), the world's leading producer and marketer of high purity stevia ingredients, today provides a trading update in respect of the six month period from 1 July 2015 to 31 December 2015, being the first half of its Financial Year 2016 (1H FY16). The Company's interim results for 1H FY16 will be announced on Monday 29 February 2016.

Sales

Sales in 1H FY16 are expected to be not less than US$54m, an increase of 25% against 1H FY15 (US$43m).

There has been growth in sales across all global sales regions and across all ingredients as our innovation continues to unlock new Food and Beverage adoption of stevia and support continued roll-outs of products already launched.

Margins, EBITDA and net result

The Group expects gross margin, EBITDA and net result all to increase significantly compared to 1H FY15.

Group gross margin is expected to be not less than US$22m, an increase of 52% against 1H FY15 (US$14m). The improvement in gross margin principally reflects higher sales volumes, increasing contributions from our expanding portfolio of innovative new products and more stable leaf supply.

EBITDA is expected to be not less than US$13m, an increase of US$7m (105%) against 1H FY15 (US$6m), reflecting the benefit of higher sales volumes and improving margins.

Other expenses: In 1H the Group moved to the Main Market of the London Stock Exchange and incurred costs of US$2m doing so, which will be charged to profit in 1H FY16. In addition in 1H FY16 the Group has incurred Long Term Incentive Plan and related costs of US$4m (1H FY15 $3m).

Foreign exchange: In 1H the Malaysian Ringgit has devalued by more than 20% against the US$ giving rise to a foreign exchange gain of US$3m.

The Group's net result for 1H FY16 is expected to be a net profit of approximately US$5m, an improvement of almost US$6m against 1H FY15 (loss of US$0.9m). A net profit of US$5m would represent Earnings Per Share of US$0.03 per share.

Cash, net debt and funding headroom

The Group ended 1H FY16 with net debt of US$ 46m (1H FY15 US$52m) and cash and facility headroom of US$73m (1H FY15 US$76m). The Group is sufficiently funded for its current expansion plans.

Commenting on the 1H FY16 trading update, the Group CEO Magomet Malsagov said: 1H FY16 has seen continued market growth across all Food and Beverage categories and all geographical regions enabled by our stevia innovation. In July we launched Sigma D and Sigma T, the first products in our Matrix Solutions range that provide category specific taste solutions. Then in December we launched our Zeta TM suite of ingredients that enable great tasting product formulations with deeper calorie reductions.

In November India finally approved the use of stevia which opens up the market to a further 1.3 billion consumers.

Latest Mintel data shows there are now more than 9,000 products in market using stevia, more than 70% of which have been launched within the last three years.

Global obesity continues to worsen with more than 600 million people now predicted to be obese by 2035 (up 50% from 400 million in 2013). Public debate and calls for regulatory action to address the issue are increasing, particularly concerning added sugar. At the same time, consumers are actively seeking natural sustainable sources for their sweeteners, as opposed to using artificial low calorie products.

These developments give further support to our long held assessment that stevia has the potential to become a mass volume mainstream ingredient in Food and Beverage products and for PureCircle to continue to play a leadership role in the development of that market. With continued sales growth we would expect further improvements in profitability.

6 January 2016