PureCircle narrows losses despite shrinking margins

Stevia ingredients firm PureCircle saw losses narrow in the six months leading to 31 December, bouncing back from a "difficult" financial year in 2016.

PureCircle's pretax loss for the half improved to $1.8m from the $2.2m posted during the same period a year before as revenue increased to $53.5m from $47.2m.

Adjusted EBITDA over the latest six months came in 22% higher at $7.8m and gross profit rose $600,000 to $19.7m.

However, PureCircle's gross margin narrowed to 36.8% from 40.4% as a result of currency movements, sales mix, and its transition to a more expensive stevia leaf variety, dragging operating profit down 44% to $3.1m.

PureCircle, with its main product of stevia, a sweet plant aimed at being used as a replacement for sugar in food and drinks, said its previous financial year was a challenging one, after the US banned imports of its stevia-based sweeteners in June 2016, claiming that its shipments contained products produced using forced labour - a ban that wasn't lifted until January 2017.

The US represented around one-third of PureCircle's total sales before the ban was imposed.

Chief executive Magomet Malsagov, said, "After a difficult year in financial year 2017, where access to one third of our market was denied due to the CBP action, I'm pleased that the business is back on track and this is reflected in our first half results where we have returned to double-digit growth."

"I am particularly excited about our launch of Starleaf, a proprietary non-GMO stevia plant that yields roughly 20 times more of the newest and best-tasting stevia leaf sweeteners than conventional stevia varieties. Starleaf is at the heart of our evolving strategy where over the next five-years we believe this will transform both our business and the stevia market by providing breakthrough solutions," she added.

As of 1120 GMT, shares had picked up 1.33% to 419.50p.