Plant Health Care climbs after Americas propel revenue growth

Plant Health Care's (PHC) shares gained on Wednesday as annual revenues increased despite "challenging conditions", although a jump marketing and administrative expenses led to a wider loss.

The agricultural science company recorded revenue of $8.1m for 2018, an increase of 6% compared to the year before, after 105% sales growth in the Americas, excluding Mexico where revenue increased 9% to $3.1m due to the rebound of produce prices in the north-west portion of the country.

Meanwhile, sales in the Rest of World segment decreased by 46% to $1.7m due to slower draw-down of in-market inventory in the South African region, though this was partially offset by a sales increase of 16% in Spain.

Chris Richards, executive chairman & Interim chief executive, said: "The launch of our new corn product in the US holds great promise for future sales growth. With the expected level of grower sales in 2019, we anticipate strong sales growth thereafter. Sales of our new soy product, which we had expected our channel partner to launch before the end of 2018, have now started on a modest scale, as our partner introduces the product to the market."

Despite overall revenue growth, the AIM traded company's loss before tax increased by 39% to $7.9m as administrative expenses jumped 211% to $5.6m and sales and marketing costs rose by 5% to $3.2m.

The company said the administrative cost increase was principally due to a non-cash expense in relation to Sterling loans within PHC's UK subsidiary resulting in a foreign currency loss of $1.2m.

Cash and cash equivalents stood at $2.5m at the end of the year, up from $1.2m at the same point the year before.

A statement from the company said: "Growers are increasingly adopting biological products, because of their potential to improve productivity while reducing environmental impact. Based on various reports, we expect growth in the demand for biological products to increase at approximately 10% per annum from 2018 to 2020."

Plane Health Care's shares were up 7.03% at 6.85p at 1614 BST.