TIDMPURE
RNS Number : 4720H
PureCircle Limited
16 March 2015
PureCircle Limited
("PureCircle" or the "Company")
Interim results for the six months ended 31 December 2014
PureCircle (LSE: PURE) the world's largest producer and marketer
of high purity stevia today announces its unaudited interim results
for the six month period from 1 July 2014 to 31 December 2014 ("1H
FY 15").
The unaudited financial statements comprising the profit and
loss and cashflow statements for the six months to 31 December 2014
("1H FY15") along with the balance sheet as at 31 December 2014 are
set out below, together with the unaudited profit and loss and
cashflow comparatives for the six months to 31 December 2013 ("1H
FY14").
SUMMARY FINANCIALS
Period ended 31 December (US$m) 1H FY15 1H FY14 Change
--------------------------------- -------- -------- -------
Sales 43.2 34.9 24%
--------------------------------- -------- -------- -------
Gross margin 14.5 12.3 18%
--------------------------------- -------- -------- -------
Operating profit** 3.5 2.9 21%
--------------------------------- -------- -------- -------
EBITDA** 6.4 5.2 24%
--------------------------------- -------- -------- -------
Net result after tax (0.9) (1.9) 53%
--------------------------------- -------- -------- -------
Net debt (52) (85) 39%
--------------------------------- -------- -------- -------
Net assets 188 141 33%
--------------------------------- -------- -------- -------
Net assets per share (US cents) 1.1 0.9 29%
--------------------------------- -------- -------- -------
** Operating profit and EBITDA are as per segmental reporting on
page 13. The full profit and loss account is detailed on page
4.
Sales: Sales of $43m increased 24% over 1H FY14 ($35m). There
was growth in sales in all of our global sales regions.
Gross margin: Gross margin increased 18% to $14.5m. Gross margin
% of 34% was consistent with 1H FY14 (35%).
EBITDA: EBITDA increased 24% in line with sales revenues to
$6.4m. EBITDA improvements are after $1.5m increased SG&A
investment in PCL's operational management and global customer
service infrastructure, including in-region application capacity,
to support anticipated future sales growth.
Net Result after Tax: 1H FY15 net result of ($0.9m) represented
a $1m (53%) improvement on 1H FY14. The net result reflects $1.2m
improved EBITDA, $0.6m increased Long Term Incentive Plan (LTIP)
costs, $3m adverse foreign exchange movements and $3.8m favourable
interest and tax.
Net debt: Net debt of $52m is $33m lower than the $85m at 31
December 2013. This reflects $43m November 2014 placement proceeds,
offset by increases in inventory production ahead of anticipated H2
and FY16 sales growth.
During 1H FY15 the Group successfully restructured its principal
bank facilities. $20m of debt was repaid a year early and the
balance refinanced onto a new $71m 5 year facility (to September
2019) at a 3% lower interest rate.
Share Placement: In November 2014 the Group issued 5 million new
ordinary shares at GBP 5.50 per share raising $43m to fund
expansion of its production capacity, described in more detail
below.
Interim results for the six months ended 31 December 2014
(continued)
BUSINESS DEVELOPMENTS
Market: Since the end of FY14 the Stevia market has seen an
unparalleled series of milestone F&B product launches and
roll-outs integrating stevia into mainstream products. High profile
Cola roll-outs led by Coca-Cola Life, Pepsi Next and Pepsi True
into major markets like the USA, Mexico, UK, France, Japan and
other markets and reformulations across a range of leading
carbonated Lemon Lime, Orange and other brands indicate clearly
that stevia is now seen as a mainstream sweetener of choice in the
Carbonated Soft Drink (CSD) category. The period has also seen a
wide range of stevia sweetened product launches from major
retailers across Europe and America and iconic brand adoption in
categories as diverse as Ketchups, Yogurts and Confectionery.
Global brand adoption has been mirrored with growth in product
launches by large regional F&B brands across the world: from
Chile in the South to Finland in the North and from Japan, China,
and Philippines in the East to Mexico in the West. Mintel reports
2,274 new product launches in 2014 taking 5 year launches over
6,000. Mintel report that food product adoption exceeded beverages
by number, confirming the widening usage of stevia as a mainstream
ingredient. With 4 billion consumers now having regulatory access
to stevia, market estimates suggest that the current footprint of
products already launched using stevia has the potential to support
billion dollar industry when existing launches are rolled out fully
across the next 10+ years.
Innovation: PureCircle continues to lead stevia innovation with
new products and applications designed to meet identified market
needs and unlock further demand to help moderate calories
naturally. 1H FY15 saw important developments including the
successful launch of Sigma D, which has excellent application
properties in the dairy sector, and further developments within our
proprietary flavor systems. Each of our new developments continue
to grow overall market usage and strengthen further our market
share.
With our strong diversified customer base, our unique breadth of
product innovation and application support and our global supply
chain and customer support infrastructure already established
PureCircle continues to retain and build further market
leadership.
Production capacity expansion: With the prospects of sustained
long term market growth, PureCircle has started to expand its
production capacity so as to meet anticipated future increased
volume demand and further sustain market share and its first mover
advantage. The PureCircle Board has approved $42m of capital
expenditure projects that will increase production capacity of
refined stevia sweeteners and natural flavor systems and provide
additional investment in next generation stevia innovation.
It is expected that $34m of the investment will be for
production capacity expansion to come on stream in FY17 with the
balance of $8m supporting innovation projects through FY18. The
$42m investment will be funded from the $43m November 2014
Placement proceeds described earlier.
The production capacity expansion will be centred on the Group's
existing Malaysia and China production facilities.
Leaf: with growth in end consumer demand, leaf supply has
tightened. Prices in China have increased year on year. We are
actively managing this long term through leading the
diversification of leaf supply outside China. But in the short term
higher leaf prices will increase cost of sales.
Interim results for the six months ended 31 December 2014
(continued)
Sustainability: In January PureCircle issued the industry's
first sustainability report. The report demonstrates the efficient
carbon and water footprint of stevia relative to other major
sweeteners and tracks progress against the Company's social and
environmental goals. The full report may be downloaded at
http://purecircle.com/company/corporate-social-responsibility/
Management and systems: To support management of growth, in 1H
FY15 we strengthened our management with the appointment of Jordi
Ferre as Chief Operating Officer and implemented an Operating
Committee reporting to him with key new hires in Manufacturing,
Leaf Development, HR and Planning. At the same time we have
strengthened management in each of our key Commercial regions. We
also implemented the first stages of Group ERP information
systems.
Outlook: Commenting on the 1H FY15 trading, the Group CEO
Magomet Malsagov said: the size and breadth of F&B product
launches and roll-outs in 1H FY15 indicate that stevia is well on
the way to becoming an important ingredient for F&B companies
wishing to moderate calories. Further the existing footprint of
products launched using stevia provides a sound basis for a
multi-billion $ stevia industry in the years to come.
In 1H FY15 we again strengthened our position as market leader
with further proprietary product innovation and growth in both
delivered sales and project pipelines. With sustained long term
growth prospects, PureCircle has started to expand our production
capacity and expect this to come on stream in FY17.
We are generating revenues from a wide range of natural
sweetener and flavor products and from a wide range of customers
directly and through our business partners. With accelerating
roll-outs of food and beverage products using PureCircle's stevia
solutions, particularly in the important Carbonated Soft Drink
category, the Company is confident of large long term sales growth
and with it improvements in profitability. However, until market
consumption smooths out, that growth will come with a lumpy sales
profile and therefore some volatility: this adds some complexity to
our ability to provide guidance in the short term.
Magomet Malsagov, CEO +603 2166 2066
William Mitchell, CFO +44 7974 005 163
RFC Ambrian Ltd (NOMAD) +61 8 9480 2500
Stephen Allen
NOTES TO EDITORS
PureCircle is the global leader in the production of high purity
Stevia sweeteners and natural flavors. PureCircle is leading the
industry with the development of a sustainable, vertically
integrated supply chain operating in four continents. Across these
regions, PureCircle sources dry stevia leaves, undertakes
extraction processes and refines the extract into sweeteners which
it markets as a mainstream ingredient to Food and Beverage
manufacturers worldwide. PureCircle provides a sustainable cash
crop for rural farming communities in each region and works closely
with these communities to maximize the social, economic, and
environmental benefits of its operations. PureCircle's investment
in research and development has given it a leadership position in
the Stevia industry and its scientists are globally recognized
experts in their field. PureCircle has pioneered the industry trust
mark "Stevia PureCircle" that educates consumers about the benefits
of Stevia and provides a strong base of trust for both consumers
and Food & Beverage companies alike. PureCircle also funds the
Global Stevia Institute (globalsteviainstitute.com) which provides
a global platform for stevia education and outreach, led by
internationally recognized health professionals. PureCircle's
corporate offices are located in Chicago, USA; Asuncion, Paraguay;
Kuala Lumpur, Malaysia; Ganzhou, China; Shanghai, China and
Kericho, Kenya. PureCircle is listed on the London Stock Exchange
AiM market under the ticker symbol: PURE. For more information on
PureCircle, visit: www.purecircle.com.
Condensed consolidated statement of comprehensive income
for the period ended 31 December 2014
Unaudited
Notes Six months ended
31 December 31 December
2014 2013
USD'000 USD'000
Continuing operations
Revenue 43,228 34,851
Cost of sales (28,435) (22,596)
========================================================= ====== ====================== =======================
Gross profit 14,793 12,255
Other income 6 148 2,057
Other expenses 7 (1,348) -
Administrative expenses (13,693) (11,782)
Finance income 12 180
Finance costs (3,768) (4,537)
Share of loss of joint ventures (516) (532)
========================================================= ====== ====================== =======================
Loss before taxation (4,372) (2,359)
Income tax credit 15 3,445 470
========================================================= ====== ====================== =======================
Loss for the period (927) (1,889)
Other comprehensive income (net of tax):
Items that may be reclassified subsequently to profit or
loss:
Exchange difference arising on translation of foreign
operations (5,646) (1,160)
Share of other comprehensive income of investments accounted
for using equity method (34) (43)
(5,680) (1,203)
========================================================= ====== ====================== =======================
Total comprehensive loss for the period (net of tax) (6,607) (3,092)
========================================================= ====== ====================== =======================
Loss for the financial period attributable to:
Owners of the company (899) (1,894)
Non-controlling interest (28) 5
(927) (1,889)
========================================================= ====== ====================== =======================
Total comprehensive loss attributable to:
Owners of the company (6,590) (3,106)
Non-controlling interest (17) 14
(6,607) (3,092)
========================================================= ====== ====================== =======================
Earnings per share (US cents)
Basic 17 (0.54) (1.15)
Diluted 17 (0.54) (1.15)
========================================================= ====== ====================== =======================
Condensed consolidated statement of financial position
As at 31 December 2014
Unaudited Audited
31 December 30 June
Notes 2014 2014
USD'000 USD'000
Assets
Non-current assets
Property, plant and equipment 11 59,651 63,715
Intangible assets 11 37,818 38,023
Biological assets 13 3,990 4,237
Prepaid land lease payments 2,973 2,999
Deferred tax assets 9,282 5,876
Investment in joint ventures 312 149
Trade receivables - 1,950
Other receivables 1,415 553
115,441 117,502
============================================== ====== ====================== ====================
Current assets
Inventories 12 96,810 86,519
Trade receivables 36,220 37,362
Other receivables and prepayments 7,547 4,962
Tax recoverable 501 581
Cash and bank balances 58,325 45,865
199,403 175,289
Total assets 314,844 292,791
============================================== ====== ====================== ====================
Equity and liabilities
Equity
Share capital 16 16,973 16,472
Share premium 16 206,251 163,240
Foreign exchange translation reserve (4,771) 920
Share option reserve 7,597 5,076
Accumulated losses (39,102) (38,203)
============================================== ====== ====================== ====================
Equity attributable to owners of the company 186,948 147,505
Non-controlling interest 705 722
Total equity 187,653 148,227
============================================== ====== ====================== ====================
Non-current liabilities
Long-term borrowings 14 67,515 2,169
Deferred income 319 360
Other payables and accruals 2,180 2,111
70,014 4,640
============================================== ====== ====================== ====================
Current liabilities
Trade payables 5,799 5,879
Other payables and accruals 9,090 10,364
Short-term borrowings 14 42,288 123,681
57,177 139,924
============================================== ====== ====================== ====================
Total liabilities 127,191 144,564
Total equity and liabilities 314,844 292,791
Net assets per share (USD) 1.11 0.90
============================================== ====== ====================== ====================
Condensed consolidated statement of changes in equity
as at 31 December 2014
Attributable to owners of the Company
--------------------------------------------------------------------
Foreign
exchange Share Non-
Share Share translation option Accumulated controlling Total
capital premium reserve reserve losses Sub-total interest equity
-------- -------- ------------ -------- ------------ ---------- ------------ --------
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
Balance at 1 July 2014 16,472 163,240 920 5,076 (38,203) 147,505 722 148,227
Loss for the period - - - - (899) (899) (28) (927)
Other comprehensive
income - - (5,691) - - (5,691) 11 (5,680)
-------- -------- ------------ -------- ------------ ---------- ------------ --------
Total comprehensive
loss for the period
(net of tax) - - (5,691) - (899) (6,590) (17) (6,607)
-------- -------- ------------ -------- ------------ ---------- ------------ --------
Share option scheme
compensation expense
granted during the
period - - - 2,570 - 2,570 - 2,570
Issuance of shares 500 42,963 - - - 43,463 - 43,463
Exercise of share
options 1 48 (49)
Balance at 31 December
2014 16,973 206,251 (4,771) 7,597 (39,102) 186,948 705 187,653
-------- -------- ------------ -------- ------------ ---------- ------------ --------
Condensed Consolidated Statement of Changes in Equity
as at 31 December 2013
Attributable to owners of the Company
--------------------------------------------------------------------
Foreign
exchange Share Non-
Share Share translation option Accumulated controlling Total
capital premium reserve reserve losses Sub-total interest equity
-------- -------- ------------ -------- ------------ ---------- ------------ --------
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
Balance at 1 July 2013 16,460 162,898 1,432 1,530 (40,519) 141,801 715 142,516
Loss for the period - - - - (1,894) (1,894) 5 (1,889)
Other comprehensive
income - - (1,212) - - (1,212) 9 (1,203)
-------- -------- ------------ -------- ------------ ---------- ------------ --------
Total comprehensive
loss for the period
(net of tax) - - (1,212) - (1,894) (3,106) 14 (3,092)
-------- -------- ------------ -------- ------------ ---------- ------------ --------
Share option scheme
compensation expense
granted during the
period - - - 1,522 - 1,522 - 1,522
Exercise of share
options 2 41 - (43) - - - -
Balance at 31 December
2013 16,462 162,939 220 3,009 (42,413) 140,217 729 140,946
-------- -------- ------------ -------- ------------ ---------- ------------ --------
Condensed consolidated cash flow statement for the period ended
31 December 2014
Unaudited 6 months ended
31 December 31 December
2014 2013
USD'000 USD'000
CASH FLOWS FOR OPERATING ACTIVITIES
Loss before taxation (4,372) (2,359)
Adjustments for:-
Amortisation of deferred income (49) (21)
Amortisation of prepaid land lease payments 73 70
Depreciation of property, plant and equipment 2,893 2,927
Interest expense 3,768 4,537
Interest income (12) (180)
Share based payments 2,570 1,522
Amortisation of intangible assets 113 40
Inventories written off 12 4
Intangible assets written off 47 -
Unrealised exchange loss/(gain) 1,922 (1,250)
Share of loss in joint ventures 516 532
Operating cash flow before working capital changes 7,481 5,822
---------------------------------------------------------- ------------- ------------
Increase in inventories (10,044) (4,038)
(Increase)/decrease in trade and other receivables (355) 1,428
Decrease in trade and other payables (1,930) (5,205)
NET CASH FOR OPERATIONS (4,848) (1,993)
---------------------------------------------------------- ------------- ------------
Interest received 12 180
Interest paid (3,768) (4,537)
Tax refund/(paid) 101 (121)
NET CASH FOR OPERATING ACTIVITIES (8,503) (6,471)
---------------------------------------------------------- ------------- ------------
CASH FLOWS FOR INVESTING ACTIVITIES
Addition of intangible assets (1,964) (2,708)
Addition of leasehold land (50) -
Addition of property, plant and equipment (1,411) (3,436)
Proceeds from disposal of property, plant and equipment 1 -
Investment in joint venture (342) (336)
---------------------------------------------------------- ------------- ------------
NET CASH FOR INVESTING ACTIVITIES (3,766) (6,480)
---------------------------------------------------------- ------------- ------------
BALANCE CARRIED FORWARD (12,269) (12,951)
---------------------------------------------------------- ------------- ------------
Condensed consolidated cash flow statement for the period ended
31 December 2014 (continued)
Unaudited 6 months ended
31 December 31 December
2014 2013
USD'000 USD\'000
BALANCE BROUGHT FORWARD (12,269) (12,951)
CASH FLOWS FOR FINANCING ACTIVITIES
Placement of shares 43,463 -
Drawdown of borrowings 105,101 17,066
Repayment of borrowings (123,047) (22,194)
Net repayment of hire purchase (19) (19)
Decrease/(increase) in restricted cash 7,589 (36)
NET CASH FROM/(FOR) FINANCING ACTIVITIES 33,087 (5,183)
---------------------------------------------- ------------- ------------
Effects of foreign exchange rate changes on
cash and cash equivalents (769) (232)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE FINANCIAL PERIOD 38,014 46,605
CASH AND CASH EQUIVALENTS AT END OF THE
FINANCIAL PERIOD 58,063 28,239
---------------------------------------------- ------------- ------------
GROSS CASH 58,325 30,589
LESS: RESTRICTED CASH (262) (2,350)
---------------------------------------------- ------------- ------------
CASH AND CASH EQUIVALENTS 58,063 28,239
---------------------------------------------- ------------- ------------
Notes to interim financial statements
1. General information
The Company was incorporated and registered as a private limited
company in Bermuda, under the Companies (Bermuda) Law 1991 (as
amended). The Company has its primary listing on the AIM market
operated by the London Stock Exchange, plc (AIM).
The Company is engaged principally in the business of investment
holding whilst the principal activities of the rest of the Group
are the production, marketing and distribution of natural
sweeteners and flavours.
The unaudited condensed consolidated interim financial
statements have been authorised for issue by the Board of Directors
on 16 March 2015.
2. Basis of preparation
The condensed consolidated interim financial statements for the
six months ended 31 December 2014 have been prepared in accordance
with IAS 34, "Interim financial reporting". In preparing these
condensed interim financial statements, the significant judgments
and estimates made by management in applying the Group's accounting
policies were the same as those that applied to the consolidated
financial statements for the year ended 30 June 2014. The condensed
consolidated interim financial statements should be read in
conjunction with the Group's annual financial statements for the
year ended 30 June 2014 ("FY2014"), which have been prepared in
accordance with IFRSs.
3. Accounting policies
The accounting policies adopted for 1H FY2015 are as stated in
the Group's FY2014 financial statements, with the addition of new
standards and amendments to standards that are mandatory for the
financial year beginning 1 July 2014, the new standards are
summarised below:
(i) Financial year beginning on/after 1 July 2014
-- Amendment to IAS 32, 'Financial Instruments: Presentation'
does not change the current offsetting model in IAS 32. It
clarifies the meaning of 'currently has a legally enforceable right
of set-off' that the right of set-off must be available today (not
contingent on a future event) and legally enforceable for all
counterparties in the normal course of business. It clarifies that
some gross settlement mechanisms with features that are effectively
equivalent to net settlement will satisfy the IAS 32 offsetting
criteria.
-- Amendments to IFRS 10, IFRS 12 and IAS 27 introduce an
exception to consolidation for investment entities. Investment
entities are entities whose business purpose is to invest funds
solely for returns from capital appreciation, investment income or
both and evaluate the performance of its investments on fair value
basis. The amendments require investment entities to measure
particular subsidiaries at fair value instead of consolidating
them.
-- Amendment to IFRS 2 'Share-based Payment' clarifies the
definition of 'vesting conditions' by separately defining
'performance condition' and 'service condition' to ensure
consistent classification of conditions attached to a share-based
payment.
Notes to interim financial statements (continued)
4. Accounting policies (continued)
The accounting policies adopted for 1H FY2015 are as stated in
the Group's FY2014 financial statements, with the addition of new
standards and amendments to standards that are mandatory for the
financial year beginning 1 July 2014, the new standards are
summarised below (continued):
(i) Financial year beginning on/after 1 July 2014
(continued)
-- Amendment to IFRS 8 "Operating Segments" requires disclosure
of the judgements made by management in aggregating operating
segments. This includes a description of the segments which have
been aggregated and the economic indicators which have been
assessed in determining that the aggregated segments share similar
economic characteristics.
The standard is further amended to require a reconciliation of
segment assets to the entity's assets when segment assets are
reported.
-- Amendment to IFRS 13 "Fair Value Measurement" relates to the
Basis for Conclusions which is not an integral part of the
Standard. The Basis for Conclusions clarifies that when
International Accounting Standards Board (IASB) issued IFRS 13, it
did not remove the practical ability to measure short-term
receivables and payables with no stated interest rate at invoice
amounts without discounting, if the effect of discounting is
immaterial.
-- Amendment to IAS 24 "Related Party Disclosures" extends the
definition of 'related party' to include an entity, or any member
of a group of which it is a part, that provides key management
personnel services to the reporting entity or to the parent of the
reporting entity.
The adoption of the above standards and interpretations does not
have any material impact on the interim financial statements in the
period of initial application.
5. Fair value estimation
Assets and liabilities measured at fair value can be determined
based on valuation methods as defined in the fair value measurement
hierarchy as follows:
(i) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
(ii) Inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices)
(Level 2).
(iii) Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
The Group's biological assets are measured at fair value less
cost to sell and classified as Level 3 of which valuation inputs
are not based on observable market data as management considers
that the costs of the biological assets approximate fair value as
little biological transformation has taken place since initial cost
incurrences, and expect that the impact of the biological
transformation on price is not expected to be material.
There are no other assets and liabilities of the Group which are
measured at fair value. The carrying values of the financial assets
and liabilities of the Group at the balance sheet date approximated
their fair values.
Notes to interim financial statements (continued)
6. Other income
Other income represents net foreign exchange gain and other
miscellaneous income.
7. Other expenses
Other expenses represent net foreign exchange loss and other
operating expenses.
8. Principal risks and uncertainties
The Group set out in its FY2014 Annual Report and Financial
Statements the financial risks including foreign currency risk,
interest rate risk, credit risk, liquidity and cash flow risks and
capital risk management that could impact its performance; these
remain unchanged since the Annual Report was published. The Group
operates a structured risk management process, which identifies and
evaluates risks and uncertainties and reviews mitigation
activity.
9. Seasonality
At 31 December 2014 the Group had gross cash of USD58 million
(30 June 2014: USD46 million) and net debt of USD52 million (30
June 2014: USD80 million). Net debt is defined as short-term and
long-term borrowings less cash and bank balances. The Group's sales
are seasonally weighted towards the H2 of each year and net debt is
expected to reduce over time as sales increase and then convert to
cash. At 31 December 2014, the Group had more than USD76 million
cash and banking facilities headroom. The Directors believe the
banking facilities to be sufficient for projected funding
requirements.
10. Segmental information
Management determines the Group's operating segments based on
the criteria used by the Chief Operating Decision Maker who has
been identified as the Chief Executive Officer (CEO) for making
strategic decisions. Management considers the Group to be a single
operating segment whose activities are the production, marketing
and distribution of natural sweeteners and flavors.
From a geographical perspective, the Group is a multinational
with operations located on all continents, but managed as one
unified global organization.
Notes to interim financial statements (continued)
10. Segmental information (Cont'd)
31 December 31 December
2014 2013
USD'000 USD'000
Revenue 43,228 34,851
Cost of sales (28,735) (22,596)
Gross profit 14,493 12,255
=================================================================== ============ ============
Other income 160 305
Administrative expenses (11,156) (9,665)
Operating profit 3,497 2,895
=================================================================== ============ ============
Other expenses (2,811) (2,242)
Foreign exchange (loss)/gain (1,074) 2,057
Finance costs (3,768) (4,537)
Share of loss in joint ventures (216) (532)
Taxation 3,445 470
Loss for the financial period (927) (1,889)
------------------------------------------------------------------- ------------ ------------
EBITDA 6,393 5,175
Reconciliation of Adjusted EBITDA to loss for the financial year
EBITDA 6,393 5,175
Share based payment (2,570) (1,522)
Others (246) (500)
Foreign exchange (loss)/gain (1,074) 2,057
Finance costs (3,768) (4,537)
Taxation 3,445 470
Non-controlling interest (28) 5
Depreciation and amortisation (3,079) (3,037)
Loss for the financial period (927) (1,889)
=================================================================== ============ ============
Under segmental reporting, share of loss in joint venture
includes Group's realised profit amounting to USD 0.3 million,
arising from its sales to the joint ventures. Under the statement
of comprehensive income, the profit is included within the gross
profit line.
Notes to interim financial statements (continued)
10. Segmental information (Cont'd)
31 December 31 December
2014 2013
Cash Flow USD'000 USD'000
Operating cash flow before working capital changes 7,481 5,822
Increase in inventories (10,044) (4,038)
(Increase)/decrease in receivables (355) 1,428
Decrease in payables (1,930) (5,205)
Net cash for operations (4,848) (1,993)
Net cash from/(for) financing activities 33,087 (5,183)
Gross cash at end of the financial period 58,325 30,589
31 December 30 June
2014 2014
Statement of Financial Position USD'000 USD'000
Property, plant and equipment 59,651 63,715
Inventories 96,810 86,519
Third party trade receivables 26,091 29,107
Trade receivables from jointly controlled entities 10,129 10,205
Cash and bank balances 58,325 45,865
Total assets 314,844 292,791
Borrowings 109,803 125,850
Net debt 51,478 79,985
Geographical information
Bermuda Asia Europe Americas Goodwill Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
31 December 2014
Sales - 9,622 4,851 28,755 - 43,228
Non-current assets 725 98,092 2,007 12,811 1,806 115,441
31 December 2013
Sales - 7,879 3,144 23,828 - 34,851
Non-current assets 1,577 100,894 1,624 11,601 1,806 117,502
The primary performance indicators used by the Group are
revenues, gross profit, EBITDA, net cash from operations and net
debt.
Notes to interim financial statements (continued)
10. Segmental information (Cont'd)
EBITDA is calculated as EBITDA adjusted to exclude discretionary
items such as share based, bonus, foreign exchange gain/losses and
any other non-recurring expenses.
The entity is domiciled in Bermuda. The entity's non-current
assets are located in countries other than Bermuda. There is no
revenue from Bermuda.
11. Property, plant and equipment and intangible assets
During the period, the Group invested USD1.4 million in
property, plant and equipment.
The addition to intangible assets is in respect of
capitalisation of project developments during the period, net of
amortisation for products now launched commercially.
12. Inventories
31 December 30 June
2014 2014
USD'000 USD'000
Raw materials 14,343 14,422
Work-in-progress 18,030 11,898
Finished goods 64,437 60,199
96,810 86,519
================== ============ ========
13. Biological assets
As at 31 December 2014, total biological assets of USD 3.9
million (30 June 2014: USD 4.2 million) represent 5.4 million
nursery plants (30 June 2014: 5.2 million). Nursery plants are
carried at cost as it is deemed to have limited biological
transformation. Seedlings from nursery plants are sold to farmers
upon harvest and are carried at a consistent unit cost.
Notes to interim financial statements (continued)
14. Borrowings
31 December 30 June
2014 2014
USD'000 USD'000
Current
- Hire purchase 20 32
- Term loans 42,268 123,649
42,288 123,681
================== ============ ========
Non-Current
- Hire purchase 25 36
- Term loans 67,490 2,133
67,515 2,169
================== ============ ========
Total borrowings 109,803 125,850
=================== ============ ========
During the period, the Group repaid bank loan amounting to
USD123 million, in line with previously disclosed repayment terms.
The Group then drew down bank loans amounting to USD105 million at
a weighted average effective interest rate of 5% per annum. The
proceeds were used to meet working capital.
15. Income taxes
Income tax expense is recognised based on management's best
estimate of the weighted average annual income tax rate expected
for the full financial year. The Group has no estimated assessable
profit.
The Company was granted a tax assurance certificate dated 18
August 2007 under the Exempted Undertakings Tax Protection Act 1966
pursuant to which it is exempted from any Bermuda taxes (other than
local property taxes) until 28 March 2016 which was extended to 31
March 2035 following the enactment of the Exempted Undertakings Tax
Protection Amendment Act 2011.
A subsidiary of the Group, PureCircle Sdn Bhd (PCSB), has been
granted the Bio-Nexus Status by the Malaysian Biotechnology
Corporation Sdn Bhd in which PCSB is entitled to a 100% income tax
exemption for a period of 10 years on its first statutory income
commencing in 2009. Upon the expiry of the 10-year incentive
period, PCSB will be entitled to a concessionary tax rate of 20% on
income derived from qualifying activities for a further period of
10 years.
Another subsidiary of the Group, PureCircle (Jiangxi) Co. Ltd.
(PCJX), has also been granted a 10% exemption on corporate tax from
1 January 2013 to 31 December 2020 by Ganzhou State Tax Revenue
Department under the Western Ganzhou State Development program.
Notes to interim financial statements (continued)
16. Share capital and share premium
Number of shares Ordinary shares Share premium Total
'000 USD'000 USD'000 USD'000
Balance at 1 July 2014 164,722 16,472 163,240 179,712
Issuance of shares 5,000 500 42,963 43,463
Exercise of share options 6 1 48 49
Balance at 31 December 2014 169,728 16,973 206,251 223,224
============================== ================= ================ ============== ========
Balance at 1 July 2013 164,602 16,460 162,898 179,358
Exercise of share options 12 2 41 43
Balance at 31 December 2013 164,614 16,462 162,939 179,401
============================== ================= ================ ============== ========
In November 2014, the Group completed a placement of 5 million
new ordinary shares at GBP5.50 per share. The placement raised
USD43.5 million in cash, net of expenses.
17. Earnings per share
The basic earnings per share is calculated by dividing the loss
attributable to owners of the Company by the weighted average
number of ordinary shares in issue during the period.
6 months ended
31 December 31 December
2014 2013
Loss attributable to equity holders of the Company (USD'000) (899) (1,894)
Weighted average number of ordinary shares in issue ('000) 166,041 164,616
Basic loss per share (US Cents) (0.54) (1.15)
Diluted earnings per share is not applicable as the potential
ordinary shares under the Company's Long Term Incentive Plan would
have an anti-dilutive effect.
18. Dividends
No dividends were declared or paid by the Company during the
interim period.
19. Contingent liabilities and capital commitments
At the end of the period, there are no material contingent
liabilities which, upon becoming enforceable, may have a material
impact on the financial position of the Group.
Capital commitments amounting to approximately USD1.1million is
approved and contracted for, these are incurred for the purchase of
land and upgrading of plant and machinery in Malaysia.
Subsequent to the period, the Group approved an expansion
capital expenditure of USD7.8 million.
Notes to interim financial statements (continued)
20. Events after the end of the reporting period
There were no events that had a material impact to the condensed
consolidated interim financial statements after the end of the
reporting period.
Please refer to note 19 relating to post balance sheet capital
expenditure expansion.
21. Significant related party transactions
(a) Identities of related parties:
The Group and / or the Company have related party relationships
with:
(i) its subsidiaries and joint ventures;
(ii) the directors who are the key management personnel; and
(iii) companies in which certain directors are common directors
and / or substantial shareholders.
The following transactions were carried out by the Group during
the period:
(b) Related parties
(i) Related Parties
31 December 31 December
2014 2013
USD'000 USD'000
Sales of goods to jointly controlled entities 2,885 2,536
--------------------- ------------
(ii) Key Management Personnel
Key management includes executive and non-executive directors.
The compensation paid or payable to key management for employee
services is shown as below:
31 December 31 December
2014 2013
USD'000 USD'000
Paul Selway-Swift 84 44
Magomet Malsagov 279 165
John Robert Slosar - 21
Olivier Phillipe Marie Maes 42 23
Peter Lai Hock Meng 45 26
Christopher Pratt 34 -
William Mitchell 192 166
----------------------- ------------
676 445
----------------------- ------------
31 December 31 December
2014 2013
USD'000 USD'000
Remuneration 676 445
----------------------- ------------
Notes to interim financial statements (continued)
21. Significant related party transactions (continued)
(b) Related parties (Cont'd)
(ii) Key Management Personnel (Cont'd)
Number of Ordinary Shares Of USD0.10 Each
At At
The Company 1 July Bought Sold 31 December
2014 2014
Direct
Interests
Paul
Selway-Swift 202,300 5,500 - 207,800
Magomet
Malsagov 14,855,612 11,300 - 14,866,912
Christopher
Pratt 686,916 5,500 - 692,416
Olivier
Phillipe
Marie Maes 408,210 10,100 - 418,310
Peter Lai
Hock Meng 191,400 8,700 - 200,100
William
Mitchell 910,890 13,650 - 924,540
Number of Options over Ordinary Shares Of USD0.10 Each
At At
The Company 1 July Award Exercise 31 December
2014 2014
Direct
Interests
Magomet
Malsagov 686,640 5,336 - 691,976
Christopher
Pratt - 3,280 - 3,280
Olivier
Phillipe
Marie Maes 2,900 4,110 (2,900) 4,110
Peter Lai
Hock Meng 3,200 4,360 (3,200) 4,360
William
Mitchell 529,170 4,689 - 533,859
Independent review report to PureCircle Limited
PureCircle Limited
(Incorporated in Bermuda)
Registration No.: 40431
Introduction
We have been engaged by the Company to review the condensed
consolidated interim financial statements for the six months ended
31 December 2014 set out on pages 4 to 19, which comprise the
consolidated statement of comprehensive income, consolidated
statement of financial position, consolidated statement of changes
in equity, consolidated statement of cash flows and related
notes.
Directors' responsibilities
The condensed consolidated interim financial statements are the
responsibility of, and have been approved by, the directors of
PureCircle Limited. The directors are responsible for preparing the
condensed consolidated interim financial statements in accordance
with the AIM Rules for Companies which require that the financial
information must be presented and prepared in a form consistent
with that which will be adopted in the Company's annual financial
statements.
As disclosed in Note 2, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards. The condensed consolidated interim financial
statements have been prepared in accordance with International
Accounting Standard 34, "Interim Financial Reporting" ("IAS
34").
The maintenance and integrity of the PureCircle Limited website
is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the condensed consolidated interim
financial statements since they were initially presented on the
website.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed consolidated interim financial statements based on
our review. This report, including the conclusion, has been
prepared for and only for the Company for the purpose of preparing
the condensed consolidated interim financial statements under IAS
34 and for no other purpose. We do not, in producing this report,
accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in
writing.
Independent review report to PureCircle Limited (continued)
PureCircle Limited
(Incorporated in Bermuda)
Registration No.: 40431
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements 2410, 'Review of Interim Financial
Information Performed by the Independent Auditor of the Entity'. A
review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated interim
financial statements for the six months ended on 31 December 2014
are not prepared, in all material respects, in accordance with IAS
34.
PricewaterhouseCoopers
(No. AF: 1146)
Chartered Accountants
Kuala Lumpur
Malaysia
16 March 2015
Corporate Information
BOARD OF DIRECTORS
Non-executive Chairman
Paul Selway-Swift
Executive Directors
Magomet Malsagov, Chief Executive
William Mitchell, Chief Financial Officer
Non-executive Directors
Peter Lai Hock Meng
Olivier Maes
Christopher Pratt
Audit Committee
Peter Lai Hock Meng (Chairman)
Olivier Maes
Christopher Pratt
Remuneration Committee
Olivier Maes (Chairman)
Paul Selway-Swift
Christopher Pratt
Nomination Committee
Paul Selway-Swift (Chairman)
Magomet Malsagov
Olivier Maes
NOMINATED ADVISERS
RFC Ambrian Limited
Level 14, 19-31 Pitt Street
Sydney NSW 2000
Australia.
Level 28, QV1 Building
250 St George's Terrace
Perth WA 6000
Australia.
CORPORATE BROKERS
Macquarie Capital (Europe) Limited
Ropemaker Place
28 Ropemaker Street
London EC2Y 9HD
United Kingdom
Mirabaud Securities Limited
33 Grosvenor Place
London SW1X 7HY
United Kingdom
Liberum Capital Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London EC2Y 9LY
United Kingdom
AUDITORS
PricewaterhouseCoopers
Chartered Accountants
Level 10, 1 Sentral
Jalan Travers, Kuala Lumpur Sentral
PO Box 10192
50706 Kuala Lumpur
Malaysia
Shareholder Information
INTERNET
Investors and corporate stakeholders
www.purecircle.com
Consumers
www.steviapurecircle.com
Health professionals, customers, policy makers, consumers
www.globalsteviainstitute.com
REGISTERED OFFICE
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
CORPORATE HEADQUARTERS MALAYSIA
10(th) Floor, West Wing
Rohas Perkasa
No. 9 Jalan P. Ramlee
50250 Kuala Lumpur, Malaysia
T +606 2166 2206
F +606 2166 2207
E info@purecircle.com
INVESTOR RELATIONS
Request for further copies of the annual report or other
investor relation matters should be addressed to PureCircle
office
SHARE REGISTRAR
In Jersey (Shares)
Computershare Investor
Services (Jersey) Limited
Queensway House, Hilgrove Street
St Helier, Jersey
JE1 1ES
Channel Islands
In the UK (Depositary Interests)
Computershare Investor Services plc
The Pavilions, Bridgwater Road
Bristol BS13 8AE, United Kingdom
ANNUAL GENERAL MEETING
The Annual General Meeting (AGM) will be announced following
publication of the Group's results for financial year 2015.
2015 financial year and corporate calendar
Half year end 31 December 2014
Year end 30 June 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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