Plant Health Care losses narrow as commercial arm turns cash positive

Agricultural biological products company Plant Health Care said cash used in operations reduced to $2.5m (£1.8m) in its final results on Friday, from $4.4m in the prior year.

The AIM-traded firm said its adjusted EBITDA loss narrowed to $3.3m for the year ended 31 December, from $3.8m in 2019, while cash and cash equivalents including investments at year-end totalled $4.1m, up from $2.4m a year earlier.

It successfully raised £3.6m ($4.4m ) through the issue of new ordinary shares during the year in March 2020, with a further £6.6m being raised in March 2021.

On the commercial front, revenue was up 3% year-on-year at $6.6m, or ahead 10% at constant currencies.

Plant Health Care said its commercial business was EBITDA and cash positive for the first time, adding that in-market sales in the United States and Brazil doubled in 2020, with product adoption pointing to “strong” revenue growth.

In-market distributor inventory reduced by more than $1m, and the board said it now had access to a market of 30 million hectares.

In-market sales of ‘Harpin αβ’ doubled in the company’s core markets.

“Plant Health Care is well-positioned for growth in 2021,” said chief executive officer Christopher Richards.

“In our core markets, Harpin αβ is gaining traction together with very strong distributor partners.

“The prices of agricultural commodities have bounced back to the highest level for many years; growers will be investing more in their crops and may be willing to try new, yield-enhancing products.”

Richards said the PREtec product pipeline looked stronger and stronger, with the first product launch of ‘Saori’ in Brazil a “pivotal moment” for the group.

“With regulatory submissions in the US and in South America, the schedule of product launches is taking shape, with profitable sales building from there.

“The recent fundraise will allow us to invest, to accelerate this growth, not only in the Americas but also to enter Europe, the largest market in the world for sustainable agriculture.”

Supporting that growth was an “exciting challenge” for Plant Health Care, Richards quipped.

“As we grow, the team is increasing in size, but we remain a small team of high-performing professionals, around the world.

“The global team is increasingly sharing ideas for product development and growth, learning from each other.

“What works for citrus and fruit in Spain, often works also in the US; exceptional results on golf courses in the UK offer learnings for the much larger market in the US; [and] seed treatment in Brazil and the US can teach much to Europe.”

At 1403 BST, shares in Plant Health Care were down 3.7% at 15.79p.