TIDMPURE
RNS Number : 2732R
PureCircle Limited
10 September 2014
PURECIRCLE LIMITED
("PureCircle" or "the Company")
FY14 RESULTS
PureCircle (www.purecircle.com) the world's leading producer and
marketer of high purity stevia ingredients announces its audited
results for the financial year to 30 June 2014 (FY14) together with
audited comparatives for the year ended 30 June 2013 (FY13).
HIGHLIGHTS FOR THE YEAR
Financial Highlights
Summary financials
FY14 FY13 Change
(Restated)* % or
Financial year ended USD' m USD' m USD
30 June
Sales 101.0 70.2 +44%
Gross margin 36.6 17.8 +106%
Operating profit 17.2 1.0 +$16.2m
EBITDA** 22.9 9.1 +$13.8m
Net profit/(loss)
after tax 2.3 (9.4) +$11.7m
Operating cashflow
before financing 15.5 (9.6) +$25.1m
Net debt (79.9) (75.2) ($4.7m)
Net assets 147.5 141.8 +$5.7m
Net assets per share
(US cents) 0.90 0.86 +0.04
*FY13 results are restated for adoption of IFRS 11 "Joint
Arrangements" (i.e.:- accounting for Joint Ventures) that the Group
implemented from 1 July 2013. The impact is to reduce FY13 sales by
$1m)
**Gross margin, operating profit and EBITDA are as per
management segmental reporting in the Group Financial Review note
set out below. The full consolidated statement of income is set out
in Appendix 1 of this results announcement
Sales:
-- FY14 sales increased $31m (44%) to $101m. The Group now has
twelve products in market under our proprietary Stevia 3.0 TM
portfolio (FY13 six). The whole portfolio showed growth in FY14,
most notably new innovations and our natural flavour range. All
sales regions grew compared with FY13.
-- Average pricing increased 5% in FY14 principally due to
product mix including some increases in Reb A volumes against FY13
and continued reduction in lower value co-product sales in line
with our strategy of focusing on our Stevia 3.0 TM portfolio.
-- Sales to our Global Key Accounts grew slightly faster than
sales to smaller regional customers.
-- FY14 sales do not include sales by our Joint Ventures as
these are now equity accounted. FY13 sales have been restated on
the same basis which has the effect of reducing FY13 sales by
$1m.
Sales volumes:
-- Volumes increased 37% led by sales of new ingredients from
our Stevia 3.0 TM portfolio. Overall volumes of new innovations
showed strong year on year growth, offset by lower co-product
volumes.
-- Growing use by customers of blends of our proprietary Stevia
3.0 TM portfolio to formulate great tasting consumer products. The
use of blends increases market usage, provides PureCircle with a
balanced revenue portfolio and enhances our market share.
Gross margin:
-- $37m, an increase of 106% (FY13: $18m) reflecting increased
volumes and improved sales mix, with a continued higher proportion
of Stevia 3.0 TM products. The FY14 gross margin percentage of 36%
was an 11 percentage point improvement against FY13.
-- Capacity utilisation remains modest and we expect further
improvements in gross margin as sales volumes increase further.
Operating profit and EBITDA:
-- Operating profit improved $16m to $17m and EBITDA increased
$14m (152%) to $23m compared with FY13 reflecting growth in sales
volumes and improving gross margin percentage, partially offset by
increased investment in our market application capacity.
-- The Group has an operationally geared business model. Higher
sales volumes translate to higher operating profit and EBITDA due
to the high fixed costs of the Group's global sales, marketing and
production capacity.
Net profit after tax:
-- $2m net profit in FY14, an $11m improvement on FY13.
-- This reflects the $14m EBITDA improvement partially offset by higher interest charge.
Net cash from operations before financing:
-- $16m of cash from operations before financing, an improvement
of $25m against FY13 reflecting stronger EBITDA and a levelling of
inventory. Further improvements are expected as sales volumes
increase.
Inventories:
-- FY14 inventories of $86m steady against FY13 $86m. In FY13
the Group built inventory volumes of new innovation products in
anticipation of higher and sustained sales growth in FY14 and FY15
in line with accelerating market demand.
-- Higher inventory volumes have been sustained again in
anticipation of higher sustained future sales volume growth.
Financing and funding headroom:
-- The Group ended FY14 with cash and facility headroom of $60m and net debt of $80m.
-- Since the FY14 year end the Group has repaid early $34m of
gross debt and has accepted an offer of a new five year $71m
facility with its existing bankers to replace its principal debt
facilities that were due to expire in June 2015. The new facility
is expected to complete in September 2014 with a lower interest
rate.
-- The Group is sufficiently funded for its current expansion plans.
Business developments
Overview
Market adoption of PureCircle Stevia 3.0 TM ingredients has
accelerated across all Food and Beverage categories and all regions
of the world. The scale, breadth and rapidity of adoption is strong
evidence of stevia being accepted as a mainstream ingredient with
the real potential to develop further into a mass volume
ingredient.
At a macro level the health and regulatory pressures to moderate
calorific intakes continue to increase with FY14 seeing a series of
reports and legislation drafted on this issue.
At a product level, Mintel estimates there are now over 5,000
Food and Beverage products in the market using stevia and within
these the average size of brand adopting continues to increase.
Carbonated Soft Drinks, discussed in more detail below, are a
particularly important example of increased market usage.
PureCircle's business model is designed to service mass volumes
sustainably, underpinned by continued product innovation. With
increased market adoption of proprietary blends and with six new
products added to our portfolio, FY14 has again confirmed that our
innovation unlocks market access thereby increasing sales volumes.
Looking ahead our priorities will continue to focus on sustainable
sales volumes underpinned by innovation. The December 2013 GRAS
approval for Reb M is one indication of the further potential we
have in our innovation pipeline.
Carbonated Soft Drinks: FY14 was an important year for the
development of stevia as a mainstream ingredient in the Carbonated
Soft Drink category, which is likely to represent the largest
single category by volume for PureCircle's Stevia 3.0 TM. Following
its success in Argentina and Chile, The Coca Cola Company announced
the roll out of Coca-Cola Life into the USA, Mexico, UK and Sweden
in calendar year 2014. PepsiCo has also extended Pepsi Next into
Canada, Finland and the Netherlands. Dr Pepper has launched a range
of products with stevia in the USA. Reformulations of global brands
such as Sprite and Fanta are in markets in Europe, Latin America
and Asia.
Taken together the Carbonated Soft Drink launches in FY14
represent a step change in market adoption of stevia and numerous
other Carbonated Soft Drinks using stevia are already in
development pipelines for launch.
Other F&B product launches: as noted earlier, adoption of
PureCircle Stevia 3.0 TM has accelerated across more categories and
countries in FY14. Mintel data shows adoption by numbers of product
continuing to grow at more than 50% a year. Notable new categories
adopting across multiple regions include dairy and confectionery.
Again more launches are mainstream reformulations.
Customer base: having built a well-diversified customer base of
more than 300 clients during FY11 to FY13, in FY14 PureCircle
consolidated its customer base with an increased focus on larger
accounts. In FY14 our Global Key Accounts contributed approximately
50% of sales and a proportion of smaller clients were serviced by
value added ingredient distributors that act as PureCircle
extensions into the market.
Regulatory: FY14 saw PureCircle secure regulatory approvals for
important next generation innovation. GRAS Letter of No Objection
from the U.S. FDA for Reb M a new, zero-calorie sweetener from the
stevia leaf jointly developed by The Coca-Cola Company and
PureCircle is an important milestone for us. It is another example
of our ongoing commitment to sweetener innovation and our global
commitment to offering solutions to help the food and beverage
industry to develop more reduced, low and no-calorie food and
beverage options.
In FY14 PureCircle also secured approval for an increased range
of natural flavours. There are now four approved flavours in market
and they provided a significant contribution to FY14 sales
growth.
PureCircle continues to work with regulatory authorities to
widen the range of Stevia 3.0 TM product available to consumers
around the world. During FY14 the Indonesian market opened and
further regulatory approvals, including India, are in the pipeline
for subsequent years.
Integrated business model: Our business model is based on
proprietary innovation, supported by a fully integrated supply
chain. PureCircle is unique as a Stevia producer and marketer in
that we 100% control our supply chain from leaf through production
to end customer relationship and formulation support. Our in-market
application and formulation support with customers enables us to
identify developing market needs. Our integrated supply chain
enables us to develop and deliver solutions to those market needs
at pace.
PureCircle Stevia 3.0 TM is the name we use to describe our
proprietary portfolio of high purity stevia ingredient solutions.
PureCircle Stevia 3.0TM is a range of stevia products that provide
customers with formulating flexibility across calorie reduction,
specific taste and formulation requirements and price points.
Frequently used in blend combinations of products, Stevia 3.0 TM
provides unparalleled operational flexibility for our clients.
During FY14 our Stevia 3.0 TM portfolio comprised eight sweetener
and four natural flavour ingredients.
PureCircle product portfolio: PureCircle continued its expansion
of proprietary ingredients this year with the launch of six new
products that further rounded out the PureCircle Stevia 3.0 TM
portfolio of sweeteners and flavours. Each of these innovations
played a critical role in enabling major Food and Beverage brands
to find a customized stevia solution that surpasses consumer
expectations and meets their company goals.
An important development in FY14 was the increased use by
customers of blends of PureCircle products. Facilitated by our
extensive in-market application laboratory support, the growing use
of blends further enables great tasting formulations to be created
thereby driving market adoption. In addition blended formulations
using PureCircle proprietary products further strengthen our market
share.
Application formulation and technical support: During FY14
in-market application laboratories were opened in Mexico and
Malaysia to support the important LATAM and South East Asia
Markets.
To introduce the newest taste breakthroughs to the market
faster, PureCircle expanded its PureCircle University program.
Started in 2013, this program allows customers to take advantage of
PureCircle's expertise and actively engages in extensive
side-by-side development. In FY14, our PureCircle Technical Team
hosted more than 100 PureCircle University programs around the
globe for Fortune 500 companies across all food and beverage
categories.
A key output from the FY14 PureCircle University program has
been the accelerated use by customers of blends of proprietary
PureCircle Stevia 3.0 TM products.
Stevia advocacy: The Global Stevia Institute ("GSI")
(www.globalsteviainstitute.com ) has taken stakeholder engagement
to a new level this year through partnering with key customers to
enhance relationships with health professionals in all areas of the
world on events, speaking engagements and seminars. Through
advisory board member led activity, the GSI was able to reach more
than 6,000 health professionals and influencers in FY14. In
addition, the GSI is working in tighter collaboration than ever
before with key customers to tailor advocacy support for
significant product launches and reformulations.
Supply chain: In FY14 the Group supply chain delivered record
sales volumes across a wider product portfolio to a wider range of
delivery locations than ever before. The supply chain achieved this
whilst also supporting the practical aspects of scaling up new
innovation and whilst reducing unit costs of production. Overall
this provides a sound platform for future profitable growth and
confirmation of the scalable nature of the Group's business
model.
Within the supply chain, investment in leaf supply was increased
sharply in anticipation of sustained growth in market demand. Our
leaf businesses in Africa and South America increased supply and
looking ahead we expect these regions to significantly contribute
in overall supply.
Organisation: In FY14 in anticipation of sustained sales
growth,the Group further strengthened its senior management team.
Jordi Ferre, previously President of our Commercial division, was
appointed Chief Operating Officer (COO) and effective 1 July 2014
relocated to Kuala Lumpur. Jordi Ferre was replaced as President of
Commercial Division by Jason Hecker, formerly Group Head of
Marketing who has been with PureCircle since 2009 and is based in
our Global Sales and Marketing headquarters in Oakbrook,
Illinois.
A new Operating Committee reporting to the COO has been
implemented including new senior hires in key areas of Leaf
Development and Supply, Quality Control, Operational Finance and
Human Resources.
The Group will continue to invest in management to support
growth effectively in a sustained manner.
The audited results for the year to 30 June 2014 comprising the
Group's Consolidated Statement of Comprehensive Income, Statement
of Financial Position and Statement of Cashflows are set out in
Appendix 1 in pages 11 to 15. The Group's full Annual Report and
accounts will be posted to shareholders in November 2014.
Commenting on the FY14 performance and outlook, the Chairman
Paul Selway-Swift said:
"Our strategy of introducing new and innovative ingredients and
customizable ingredient combinations to meet growing market needs
is winning business for PureCircle. We are generating revenues from
a well-balanced range of natural sweetener and flavour products and
from a wide range of customers and regions directly and through our
business partners.
I commented in our FY13 results statement that FY13 had seen the
first tangible market indications of stevia developing into a
mainstream ingredient. Developments in all our markets during FY14
have clearly confirmed this and adoption is accelerating. In
particular, recent Carbonated Soft Drinks launches with
PureCircle's natural ingredients, most notably reformulated Cola
drinks by major soft drink companies into large markets, provide
enhanced confidence of sustainable sizeable growth for our
business.
Our operationally geared business model means that larger sales
volumes translate directly into improved profitability. FY14 has
again confirmed this and has endorsed our earlier decision to
invest in production facilities capable of delivering stevia in the
volume we anticipated the market would demand. Since 1 July 2012 we
have achieved a $56m (124%) increase in annual sales which has led
to a $25m improvement in annual net profit.
We remain confident in the future growth of the PureCircle
Stevia 3.0 TM enabled market and that it will generate sustained
sales growth for our business. Once delivered we expect the
increased sales volumes to generate further improved
profitability."
Enquiries:
PureCircle Limited (www.purecircle.com)
Magomet Malsagov, CEO +603 2166 2066
William Mitchell, CFO +44 7974 005 163
RFC Ambrian Ltd (NOMAD) +61 8 9480 2500
Stephen Allen
NOTES TO EDITORS
PureCircle is the global leader in production and marketing
of stevia ingredients. PureCircle leads the industry with
development of a vertically integrated, sustainable and
natural supply chain. Stevia is grown for PureCircle across
South America, Africa, Asia and the United States where
it provides a sustainable cash crop for farming communities.
As part of the company's proprietary Stevia 3.0 TM portfolio,
PureCircle has developed a broad range of ingredient solutions
and has pioneered such ingredients as Reb A, SG95, and breakthrough
ingredients such as PureCircle Alpha, Reb D, Reb M as well
as PureCircle Flavors. PureCircle also established joint
venture partnerships with sugar industry leaders to innovatively
combine stevia and sugar for natural sweetening solutions
and locally support customers. These global partnerships
include Tereos PureCircle Solutions, with Tereos and NPSweet
A/S with Nordzucker, in Europe. As part of its industry
leadership, PureCircle pioneered the trust mark Stevia PureCircle(R),
which educates consumers about the benefits of stevia and
provides a strong base of trust for both consumers and food
and beverage companies alike. The company also founded The
Global Stevia Institute, (www.globalsteviainstitute.com
) the leading resource for accurate, science-based information
on stevia led by a global advisory board of internationally
recognized health professionals. PureCircle's global headquarters
are in Kuala Lumpur, Malaysia. PureCircle is listed on the
London Stock Exchange AiM market under the ticker symbol:
PURE. For more information on PureCircle, visit: www.purecircle.com.
BUSINESS REVIEW
CHAIRMAN'S STATEMENT
FY14 saw strong evidence of stevia becoming established as a
sustainable mainstream ingredient of choice for the world's leading
Food and Beverage brands. The range of categories and regions using
stevia is now truly global and continues to accelerate. The
combination of product successes enabled by PureCircle's Stevia 3.0
TM and the continued pressures to moderate calorific content in
Food and Beverage suggest stevia adoption will continue to grow. In
this context the FY14 developments in Carbonated Soft Drink use of
proprietary PureCircle stevia blends warrant particular
mention.
At a Company level FY13 and FY14 demonstrated the robustness and
scalability of our business model. Our proprietary innovation
unlocks additional market and leads to improved sales volumes which
in turn improve margins and profitability. Encouragingly, in FY14
we again broadened our Stevia 3.0 TM portfolio and further
increased our innovation pipeline which gives further confidence
about future sustainable sales growth.
We remain confident about the long term future of the high
purity stevia market and of the opportunity for PureCircle to play
the leading role in it. Sustainable mainstream usage of PureCircle
stevia will lead to increased sales which, when realised, will
drive future profitability.
CEO REVIEW
Market: In FY14 the stevia market continued to accelerate.
Mintel data indicates that more than 2,200 Food and Beverage
products using Stevia were launched in FY14 alone, a cumulative
annual increase of over 55% a year since FY09. Importantly, in FY14
adoption included larger brands in larger categories, as well as
continued penetration of new categories and new regions. In this
context, the accelerated adoption of stevia by the important
Carbonated Soft Drink category warrants particular note. Currently
over 4.1 billion people across 68 countries have access to products
with PureCircle ingredients, helping to cut an estimated 500
billion calories a year.
With increased product usage, consumer awareness and positive
sentiment for stevia continues to grow across all major markets. In
all of the key markets we have been tracking, awareness levels have
jumped significantly in just a few short years. For example, US
awareness levels are now over 60%, up from only 23% in 2010. In
both the UK and Mexico, CY2013 awareness levels jumped to over 20%
from only 8% in 2011.
The consumer and brand trends indicate a growing mainstream
adoption of stevia and a strong platform for sustainable sales
growth.
Regulatory: Having secured regulatory access for more than a
billion new consumers in FY13, new regulatory approvals have
continued in FY14. Product approvals have included new flavour
ingredients and in December 2013 FDA GRAS approval for Reb M,
(formerly Reb X) a new zero-calorie sweetener from the stevia leaf
jointly developed by The Coca-Cola Company and PureCircle, was
granted.
Regional approvals achieved have included Indonesia with India,
Bangladesh and Sri Lanka in final stages of approval.
Marketing and technical support: As the Everything Stevia
company, PureCircle's marketing strategy is to offer our customers
a unique combination of consumer insights, stevia advocacy support,
practical in-region application formulation support and ongoing
unparalleled innovation. The improved FY14 results endorse this
strategy.
The PureCircle Consumer Insights Group continued to strengthen
its global expertise with industry-leading market and consumer
research on the sweeteners category. In FY14 we have expanded our
proprietary database of research to include markets such as Russia,
Turkey and Sweden, expanding the total number of countries to
15.
The Global Stevia Institute ("GSI")
(www.globalsteviainstitute.com ), already recognised as the leader
in stevia advocacy, was strengthened with additional Advisory Board
members and its reach now extends to cover regularly more than
6,000 health and food professionals. In addition, the GSI works in
tight collaboration with key customers, to tailor advocacy support
for significant product launches and reformulations.
Our in region formulation support was strengthened with the
opening of application laboratories in Mexico and Malaysia. Our
PureCircle university program was extended to more than 100
customer sessions in FY14.
All our marketing activity is underpinned by sustained product
innovation.
Joint Ventures: The Group goes to market in mainland EU through
its two joint ventures NP Sweet and TPCS. FY14 was only the second
full year of EU approval for stevia. Both JVs continue to develop
their businesses in line with our wider Group innovation led
strategy. We increased investment in the EU in market application
support in FY14 and this is helping to build market.
Supply chain: In FY14 our factories produced record volumes of
finished goods including twelve Stevia 3.0 TM products commercially
for market against six in FY13 and just two in FY12. At the same
time our production team was engaged in scaling production of new
innovation to come on stream in FY15. In FY14 our product unit
costs were reduced due to the benefits of innovation, higher
volumes and process efficiency. We expect further improvements with
continued innovation and volume increases.
Investment in leaf supply was increased sharply in anticipation
of sustained growth in market demand. Our leaf businesses in Africa
and South America increased supply and moving forward we expect
these regions to contribute significantly in overall supply.
R&D: We strengthened our position as the stevia industry
innovation leader in significant ways this year. The PureCircle
Leaf Research scientists successfully sequenced the entire stevia
genome. This proprietary, scientific breakthrough will
significantly accelerate the development of naturally sourced,
superior-tasting stevia leaf extracts through PureCircle's
traditional plant breeding program.
In addition, we expanded the Global Innovation Lab based in the
US and the created a dedicated Global Innovation Group. The Group
evaluated over 100 new items, leading to the successful launch of
six new products, each incrementally adding distinct technical
advantages and benefits to our portfolio of offerings. We also
expanded our pipeline of innovation projects to include more
fundamental glycoside research and focused research against still
largely untapped segments of the global food and beverage market
such as flavour enhancement and geographic specific
opportunities.
Management: PureCircle continues to invest in management with
the skills and experience to drive and support our ambitious growth
plans across all aspects of our business. In FY14 our investments
have had a particular emphasis on product application development
and increased in region sales and marketing including the opening
of sales offices in Mexico, India, Malaysia and Turkey and
additional investment into the UK and Shanghai.
Effective 1 July 2014 Jordi Ferre, previously President of our
Commercial division, was appointed Chief Operating Officer (COO)
and relocated to Kuala Lumpur. Jason Hecker, formerly Group Head of
Marketing, took over as President of Commercial division based in
our Global Sales and Marketing headquarters in Oakbrook,
Illinois.
A new Operating Committee reporting to the COO has been
implemented including new senior hires in key areas of Leaf
Development and Supply, Quality Control, Operational Finance and
Human Resources.
Looking forward we will further upgrade our IT systems including
the implementation of a global ERP system across FY15 and FY16 and
further strengthen our supply chain and customer service
organisation to support sustained sales growth.
GROUP FINANCIAL REVIEW
The Group's FY14 financial year covers the year from 1 July 2013
to 30 June 2014. FY13 comparatives are for the year from 1 July
2012 to 30 June 2013.
Set out below is an extract from the audited FY14 financial
statements. The full consolidated statement of comprehensive
income, statement of financial position and statement of cash flows
follow in pages 11 to 15.
FY14 FY13
USD'000 USD'000
(Restated)
Trading
Revenue 101,045 70,200
Cost of sales (64,403) (52,382)
Gross margin 36,642 17,818
--------- -----------
Gross margin % 36% 25%
Other income 434 423
Administrative expenses (19,860) (17,260)
--------- -----------
Adjusted operating profit 17,216 981
Other expenses (6,140) (3,917)
Foreign exchange gain 1,265 2,381
Finance costs (9,253) (8,416)
Share of loss in joint ventures* (503) (355)
Taxation (265) (102)
Profit/(Loss) for the financial year 2,320 (9,428)
--------- -----------
Net debt and funding headroom
Gross debt 125,850 124,070
Gross cash (45,865) (48,919)
--------- -----------
Net debt 79,985 75,151
--------- -----------
Financing and funding headroom 60,000 55,000
EBITDA** 22,862 9,062
*Share of loss in joint ventures includes group margin on sales
by Joint Ventures to external parties.
** EBITDA is defined as EBITDA with other expenses (principally
the charge for the Group's LTIP scheme) added back.
Segmental reporting: The Group operates as a single segment
company comprising of the integrated production and marketing of
PureCircle Stevia 3.0 TM products.
Sales: FY14 sales were $31m (44%) higher than FY13, reflecting
higher sales across all products and regions, led by our innovation
and flavour range in particular. Average prices improved 5% due to
sales mix including more Reb A sales and less co-products than
FY13. Sales to Global Key Accounts increased slightly faster than
sales to Regional and smaller accounts.
Sales volumes: FY14 total volumes increased by 37% led by the
accelerating usage of stevia by Food and Beverages companies and
underpinned by PureCircle's proprietary Stevia 3.0 TM portfolio of
innovation which continues to enable market adoption. Our flavour
range which now has four products in market showed the highest rate
of growth. Volume growth was partially offset by reduced co-product
sales.
Gross margin: In FY14 gross margin was $37m, an increase of $19m
(106%) over FY13 reflecting improved sales volumes, better sales
mix and lower production unit costs. At 36%, the FY14 gross margin
represents an 11 percentage point improvement over the 25% in FY13.
However, sales volume utilisation of capacity remains modest and
gross margin percentage should improve further as sales volumes
increase.
Operating profit and EBITDA: The Group has a highly geared
operational business model and increases in sales volumes should
flow through to improved profitability due to the high fixed cost
nature of the Group's sales, marketing and production capacity.
FY14 Operating profit and EBITDA again confirm that this is the
case. On a $31m increase in sales FY14, Operating profit was $16m
higher than FY13 at $17m and EBITDA was $14m (152%) higher at
$23m.
Other expenses: FY14 other expenses principally comprise non
cash costs of the Group's LTIP scheme and similar discretionary
remuneration.
Share of loss of Joint Ventures: the Group goes to market in
mainland EU through its two joint ventures NP Sweet and TPCS. FY14
was only the second full year of EU approval for stevia and both
JVs are developing their businesses in line with PureCircle's
innovation led strategy. The FY14 JV share of results reflect the
Group's full gross margin realised on sales by the JVs to third
parties and increased investment in in-market application support
made during the year.
Finance costs: As expected the Group has run a higher net debt
balance across FY14 reflecting the decision to build inventories in
H2 FY13 ahead of anticipated sales growth in FY14 and FY15. The
higher average net debt has resulted in an increased interest
charge of $9m (FY13 $8m). This will reduce with sustained higher
operational cashflow and reduced interest rates on the newly
secured principal debt facility.
Net profit after tax: The Group moved to a $2m net profit in
FY14, an $11m improvement on FY13. This reflects the $14m EBITDA
improvement partially offset by higher interest charge and lower
tax credit as all entities improved profitability.
Net cash from operations before financing: The Group generated
$16m of cash from operations before financing, an improvement of
$25m against FY13. The improvement reflects stronger EBITDA and a
levelling of inventory volumes from historic highs. Further
improvements are expected as sales volumes increase.
Financing and funding headroom: The Group ended FY14 with cash
and facility headroom of $60m and net debt of $80m.
Since the FY14 year end the Group has repaid early $34m of gross
debt and has accepted an offer of a new five year $71m facility
with its existing bankers to renew and extend its principal debt
facilities that were due to expire in June 2015. The new facility
is expected to complete in September 2014 and will attract a lower
interest rate than the existing facility. The Group is sufficiently
funded for its current expansion plans.
Appendix 1 - AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME, STATEMENT OF FINANCIAL POSITION AND STATEMENT OF
CASHFLOWS
AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FY14 FY13
USD'000 USD'000
(Restated)
Revenue 101,045 70,200
Cost of sales (63,570) (52,167)
---------------- ----------------
Gross profit 37,475 18,033
Administrative expenses (24,461) (19,159)
Other income 1,426 2,625
Other expenses (1,539) (2,019)
Finance income 273 180
Finance costs (9,253) (8,416)
Share of loss in joint ventures (1,336) (570)
---------------- ----------------
Profit/(Loss) before taxation 2,585 (9,326)
Income tax (265) (102)
---------------- ----------------
Profit/(Loss) for the financial year 2,320 (9,428)
Other comprehensive income/(loss)
(net of tax)
Items that may be reclassified subsequently to
profit or loss:
Exchange differences arising on
translation of foreign operations (514) (379)
Share of other comprehensive income/(loss)
of joint ventures 5 (53)
---------------- ----------------
Total comprehensive income/(loss) for the
financial year (net of tax) 1,811 (9,860)
Profit/(Loss) for the financial year
Attributable to:
Owners of the company 2,316 (9,492)
Non-controlling interest 4 64
---------------- ----------------
2,320 (9,428)
Total comprehensive income/(loss)
Attributable to:
Owners of the company 1,804 (9,928)
Non-controlling interest 7 68
---------------- ----------------
1,811 (9,860)
Profit/(Loss) per share (US cents)
- Basic 1.41 (5.80)
- Diluted 1.37 (5.80)
AUDITED STATEMENT OF FINANCIAL POSITION
FY14 FY13 FY12
USD'000 USD'000 USD'000
(Restated) (Restated)
ASSETS
NON-CURRENT ASSETS
Investment in joint ventures 149 330 171
Intangible assets 38,023 32,280 26,684
Property, plant and equipment 63,715 65,889 66,586
Biological assets 4,237 4,172 6,047
Prepaid land lease payments 2,999 3,181 3,102
Deferred tax assets 5,876 5,661 6,048
Trade receivables 1,950 - -
Other receivables, deposits
and prepayments 553 - -
---------------- ---------------- ----------------
117,502 111,513 108,638
CURRENT ASSETS
Inventories 86,519 86,475 66,315
Trade receivables 37,362 34,779 28,910
Other receivables, deposits
and prepayments 4,962 5,924 4,425
Tax recoverable 581 47 44
Amount owing by subsidiaries - - -
Short-term deposits with
licensed banks 10,718 37,599 9,733
Cash and bank balances 35,147 11,320 14,246
---------------- ---------------- ----------------
175,289 176,144 123,673
TOTAL ASSETS 292,791 287,657 232,311
EQUITY AND LIABILITIES
EQUITY
Share capital 16,472 16,460 15,449
Share premium 163,240 162,898 132,330
Foreign exchange translation
reserve 920 1,432 1,868
Share option reserve 5,076 1,530 204
Accumulated losses (38,203) (40,519) (31,027)
---------------- ---------------- ----------------
EQUITY ATTRIBUTABLE TO
OWNERS OF THE COMPANY 147,505 141,801 118,824
NON-CONTROLLING INTEREST 722 715 652
---------------- ---------------- ----------------
TOTAL EQUITY 148,227 142,516 119,476
NON-CURRENT LIABILITIES
Deferred tax liabilities - 59 594
Long-term borrowings 2,169 96,581 84,026
Deferred income 360 483 548
Other payables and accruals 2,111 1,147 1,069
---------------- ---------------- ----------------
4,640 98,270 86,237
CURRENT LIABILITIES
Trade payables 5,879 11,714 3,572
Other payables and accruals 10,364 7,420 5,923
Income tax liabilities - 248 34
Short-term borrowings 123,681 27,489 17,069
---------------- ---------------- ----------------
139,924 46,871 26,598
---------------- ---------------- ----------------
TOTAL LIABILITIES 144,564 145,141 112,835
---------------- ---------------- ----------------
TOTAL EQUITY AND LIABILITIES 292,791 287,657 232,311
NET ASSETS PER SHARE
(USD) 0.90 0.86 0.77
AUDITED CONSOLIDATED STATEMENT OF CASHFLOWS
2014 2013
USD'000 USD'000
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) before taxation 2,585 (9,326)
Adjustments for:
Amortisation of prepaid land lease payments 140 136
Amortisation of deferred income (105) (88)
Amortisation of intangible assets 168 126
Depreciation of property, plant and equipment 6,016 5,793
Interest expense 9,253 8,416
Interest income (273) (181)
Loss on disposal of plant and equipment 14 54
Share based payment (credit)/expense 3,768 1,481
Intangible assets written off 105 40
Inventories written off 78 209
Change in fair value of biological asset - 628
Unrealised exchange gain (408) (1,234)
Share of loss in joint ventures 1,336 570
---------------- ----------------
Operating cash flow before working capital 22,677 6,624
changes
Decrease/(Increase) in inventories 121 (20,584)
Decrease in biological assets - 1,352
Increase in trade and other receivables (4,423) (6,883)
(Decrease)/Increase in trade and other payables (2,906)
9,898
---------------- ----------------
NET CASH FROM/(USED IN) OPERATIONS 15,469 (9,593)
Interest received 273 181
Interest paid (9,253) (8,416)
Tax paid (1,248) (19)
---------------- ----------------
NET CASH FROM/(USED IN) OPERATING ACTIVITIES 5,241 (17,847)
CASH FLOWS FOR INVESTING ACTIVITIES
Addition of intangible assets (6,200) (5,856)
Addition of property, plant and equipment (4,495) (4,299)
Proceeds from disposal of property,
plant and equipment 30 147
Increase in investment in joint ventures (684) (613)
---------------- ----------------
NET CASH USED IN INVESTING ACTIVITIES (11,349) (10,621)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of borrowings 34,648 42,768
Repayment of borrowings (31,521) (20,296)
Repayment of hire purchase (45) (40)
Proceeds from private placement - 31,322
Proceeds from share options exercised 133 102
Increase in restricted cash (5,537) (1,373)
---------------- ----------------
NET CASH FROM FINANCING ACTIVITIES (2,322) 52,483
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (8,430) 24,015
Effects of foreign exchange rate changes on
cash and cash equivalents (161) (448)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE YEAR 46,605 23,038
---------------- ----------------
CASH AND CASH EQUIVALENTS
AT END OF THE FINANCIAL YEAR 38,014 46,605
This information is provided by RNS
The company news service from the London Stock Exchange
END
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