PureCircle (PURE), which manufactures sweeteners derived from the stevia plant, is making robust progress. Growing demand from food producers and drinks giants drove sales volumes up 37 per cent in the year to end-June. With operating costs having risen rather more sedately, the group was able to report a maiden profit.
Market adoption of stevia is being driven by mounting pressure to cut the calorific content of food and drink products, and PureCircle now boasts a customer base of over 300 clients. Significantly, the carbonated drinks sector is becoming a major customer, with multinational groups like Coca Cola and PepsiCo busy launching drinks containing stevia.
PureCircle is adept at developing variants of the sweetener to reflect specific customer needs. Its partnership with Coca-Cola to produce the Reb M sweetener is a good example. Analysts reckon that ability gives PureCircle a competitive advantage over rival stevia makers. These are generally focused on the original version of the sweetener (called Reb A), which isn’t ideal for all applications.
Market researcher Mintel calculates that over 2,200 food and drink products were launched last year containing stevia. As a result, broker Mirabaud expects PureCircle’s sales to rise 70 per cent by mid-2016. Pending upgrades, the broker expects pre-tax profits for the current financial year of $21m (£13m), giving EPS of 11.1¢.
PURECIRCLE (PURE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 624p | MARKET VALUE: | £1.03bn | |
| TOUCH: | 618-630p | 12-MONTH HIGH: | 645p | LOW: 345p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 718 | |
| NET ASSET VALUE: | 90¢* | NET DEBT: | 54% | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 61 | 1.2 | 0.7 | nil |
| 2011 | 53 | -19.5 | -11.9 | nil |
| 2012 | 45 | -26.7 | -15.1 | nil |
| 2013 | 70 | -9.3 | -5.8 | nil |
| 2014 | 101 | 2.6 | 1.4 | nil |
| % change | +44 | - | - | - |
*Includes intangible assets of $38m or 23¢ a share £1=$1.61 | ||||
