Plant Health Care PLC Trading Update (2049U)
November 22 2023 - 1:00AM
UK Regulatory
TIDMPHC
RNS Number : 2049U
Plant Health Care PLC
22 November 2023
PLANT HEALTH CARE plc
("Plant Health Care" or the "Company")
Trading update
Plant Health Care(R) (AIM: PHC.L), a leading provider of novel
patent-protected biological products to global agriculture markets,
is announcing an update on trading and the outlook for the full
year to 31 December 2023 ("FY23").
Highlights
-- Market conditions in the wider agriculture market have
diminished over the course of the year, particularly in the recent
months;
-- Due to these challenging market conditions, particularly in
the key USA end market, the Company now anticipates revenue in
FY2023 to be in line with or show modest growth over the year ended
31 December 2022 ("FY22");
-- The Company continues to make significant progress in
obtaining new product registrations and widening geographic
distribution, positioning the Company well for growth in 2024 and
beyond;
-- Trading in Brazil, Mexico and Europe broadly in line with market expectations.
As highlighted at the time of the Company's interim results in
September 2023, market conditions for traditional agriculture input
businesses were extremely challenging in the first half of the
year, and the environment has continued to deteriorate over recent
months. This has been particularly evident in the US; however,
global markets, including Brazil, Europe and some Asian markets,
have also been subdued, leading a number of companies across the
sector to revise guidance on current year performance.
Pleasingly, Plant Health Care's trading in Brazil, Mexico and
Europe has been broadly in line with market expectations in the
second half of the year, in spite of these challenging market
conditions. However, sales orders in the US have not materialised
as originally anticipated as the Company's distribution partners in
the region have gone through a significant inventory correction.
This has, in large part, been driven by volatility in demand and
price following the global COVID-19 pandemic, as well as the
effects of an increasing interest rate environment and change in
growers purchasing habits. Distributors are shifting demand from Q4
FY23 into H1 FY24 and are planning to manage lower levels of
inventory for FY24. While inventories of the Company's products
with distributors are not high, it is not immune to this structural
change. In addition, regulatory delays in India and a number of
other countries have resulted in delays to some product launches;
whilst this is expected to have a limited impact on the Company in
FY23, this is likely to affect performance more materially in
FY24.
Accordingly, the Board now anticipates revenue for FY23 to show
flat to modest growth over FY22, with the final result dependent on
the timing of expected orders. Revenue in FY24 is now anticipated
to be approximately 28% lower than market expectations of $23m, due
to lower levels of inventory being maintained by the Company's
distributors and regulatory delays in some territories. The Board
intends to review operating expenses accordingly.
Against this backdrop, the pace of new product registrations and
the widening of distribution partnerships into new geographies
continues. Sales of Harpin<ALPHA><BETA> are increasing
in all of the Company's core markets, excluding the US market.
Critically, the first products from the new PREtec platform are
being well received in the market, with successful product launches
across three continents. Although there are some delays to product
launches, the growth trajectory is clear for the medium term. After
more than 10 years and an investment in excess of $30m, PREtec
product adoption is poised for a significant step up from
distributors and end customers. Accordingly, the Board is confident
that order intake will increase once our customers have corrected
their inventory levels.
Jeff Tweedy, Chief Executive Officer, commented:
"Sales of Plant Health Care products experienced significant
growth in all regions with the exception of the US market.
Deteriorating market conditions driven by distributor destocking of
channel inventories impacted PHC sales in the US. Registration
delays have impacted our 2024 outlook; however, we remain positive
on the revenue growth opportunities for our technology. PHC now
markets PREtec on three continents and we anticipate the launch of
Teikko in Brazil during the 2024/2025 growing season."
For further information, please contact:
Plant Health Care plc Tel: +1 919 926 1600
Jeff Tweedy, CEO
Cavendish Capital Markets Limited Tel: +44 (0) 131 220 9771
- Nomad & Broker
Neil McDonald / Peter Lynch
About Plant Health Care
Plant Health Care offers products to improve the health, vigour
and yield of major field crops such as corn, soybeans, potatoes,
and rice, as well as specialty crops such as fruits and vegetables.
We operate globally through subsidiaries, distributors and supply
agreements with major industry partners. Our innovative,
patent-protected biological products help growers to protect their
crops from stress and diseases, and to produce higher quality fruit
and vegetables, with a favourable environmental profile.
Find out more at www.planthealthcare.com
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under the UK version of the Market Abuse Regulation No 596/2014
which is part of English Law by virtue of the European (Withdrawal)
Act 2018, as amended.
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END
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