PureCircle Limited Trading Update (4103T)
January 05 2017 - 2:00AM
UK Regulatory
TIDMPURE
RNS Number : 4103T
PureCircle Limited
05 January 2017
5th January 2017
PureCircle Limited
Trading Update
PureCircle (LSE: PURE), the world's leading producer and
marketer of high purity stevia ingredients, today provides a
trading update for the six-month period ended 31 December 2016 (H1
FY17).
PureCircle's mission is to lead the global expansion of stevia
as the next mass volume, natural sweetener and thus to encourage
healthier diets around the world.
Financial Performance
Sales
The Group has achieved very strong growth in Europe and Latin
America, which together represent over half of its sales. Globally,
in the last six months, there have been over 100 launches that
contain PureCircle products, an increase on the prior year. This is
a clear indication that the demand for stevia based products is
increasing and that, on an underlying basis, our business is in
growth.
Group sales in H1 FY17 are expected to be $47m, a decrease of
14% against H1 FY16 (US$54m). This decrease is a direct consequence
of the previously announced detainment of shipments by US Customs
Border Protection ('CBP') partially offset by strong growth in the
rest of the world.
Margins, EBITDA and Net Profit
The Group expects gross margin, EBITDA and net profit to be
lower compared to H1 FY16 due to the aforementioned US CBP
detainment order. The cost of this weighed on our margins in H1,
though we expect margins to be restored to previous levels once the
issue has been resolved.
Group gross profit for the first half is expected to be US$18m,
a decline of 19% against H1 FY16 (US$22m) and EBITDA is expected to
be US$8m, a decrease of $5m, reflecting the lower sales and adverse
margins.
The Group's net loss is expected to be US$2m (1H FY16 profit:
US$5m).
Cash, Net Debt and Funding Headroom
Following the planned capital expenditure for the capacity
expansion of the company's refinery facility in Kuala Lumpur, the
Group ended H1 FY17 with net debt of US$80m (H1 FY16 US$46m). The
Group has cash and facility headroom of US$75m (H1 FY16
US$73m).
The company's interim results will be announced on Tuesday 7
March 2017.
US Customs Border Protection ("US CBP") Update
The company has worked extensively with the US CBP, providing
tracking documents and related data in response to their detailed
requests. We are now awaiting a decision from the CBP.
The impoundment of our shipments and the inclusion of
PureCircle's name on the Withhold Release Order ("WRO") has
inevitably had a significant negative impact on our market in the
US, hence adversely impacting our H1 results. The US market
constitutes one third of our sales.
We anticipate a further communication to the market in the near
term.
Commenting on the H1 FY17 trading update, the Group CEO Magomet
Malsagov said:
"H1 FY17 has seen continued positive market sentiment for stevia
with an ever increasing array of products being launched in the
food and beverage categories. These launches are not just confined
to the traditional mature markets of North America and Western
Europe. I am particularly excited to see our expansion in Latin
America and South Asia with a new office being opened in India.
The macro market trends continue to develop in our favour with
increasing global obesity and diabetes trends well documented. The
implementation of sugar taxes in various countries has also added
to the momentum of our industry.
Whilst the US CBP process has been a major distraction for our
business in H1 FY17 and has adversely impacted our sales growth in
the United States, I am delighted by the continued growth in sales
in the rest of the world, which has further diversified our sales
footprint, and by the strong customer support that we continue to
receive. We have progressed our R&D and leaf development
programmes by conducting large scale field trials of new leaf
varieties with high content of better tasting novel natural
sweeteners Reb M and Reb D. These new leaf plantations are planned
to be scaled to thousands of hectares beginning in 2017. Our new
state of the art, fully automated refinery, encapsulating all the
latest technology developments is complete and will be commissioned
in the first quarter of CY2017. With these positive dynamics, and
an anticipated resolution to the US CBP issue in the near future, I
am confident in our mid to long term prospects and look forward to
returning to our growth trajectory."
Enquiries:
PureCircle Limited www.purecircle.com
Magomet Malsagov, CEO Via Redleaf
Rakesh Sinha, CFO
Redleaf Communications purecircle@redleafpr.com
Emma Kane +44 20 7382 4747
Rebecca Sanders-Hewett
David Ison
Notes to Editors
PureCircle is the world's leading producer
of high-purity stevia ingredients for the global
food and beverage industry. Its mission is
to encourage healthier diets around the world
through the supply of natural ingredients to
the global food and beverage industry. Its
vision is to lead the global expansion of stevia
as the next mass volume, natural-origin sweetener.
PureCircle has offices around the world with
the global headquarters in Kuala Lumpur, Malaysia.
The Business was founded in 2002. PureCircle's
shares are listed on the main market of the
London Stock Exchange and trade under the ticker
symbol PURE. For more information, visit: www.purecircle.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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