The strong-arm tactics of US border control added a sour note to sweetener producer PureCircle (PURE), whose sales were hit by delayed shipments. The producer of stevia, a plant-based substitute for sugar, said some US shipments were quarantined following false allegations that forced labour was used to harvest the crops. PureCircle has provided verification of the origin of its shipments and while all three have now been released, the company remains on the border control's watchlist. The delayed timing of a customer's product launch also compounded the lower growth in turnover.
Gross margins rose 9 percentage points to 41 per cent thanks partly to the mix of sales, which included a greater proportion of recently launched products than the previous year. Management said it had seen particular success with clients in the dairy and tea categories as well as "accelerating adoption in new categories such as ketchups and confectionery". Its leaf supply chain has also been restructured and now focuses more on larger farmers (those with more than 100 hectares dedicated to stevia growth) and planting trials are taking place in Africa and South America.
House broker Liberum has cut its forecasts for the year to June 2017 and now expects pre-tax profit of $15.4m leading to EPS of 8.2¢, down from $17.9m and 8.5¢ in FY2016.
| PURECIRCLE (PURE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 313p | MARKET VALUE: | £542m | |
| TOUCH: | 310-313.3p | 12-MONTH HIGH: | 448p | LOW: 261p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 48 | |
| NET ASSET VALUE: | 117p* | NET DEBT: | 26% | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 45 | -26.7 | -15.1 | nil |
| 2013 | 70 | -9.3 | -5.8 | nil |
| 2014 | 101 | 2.6 | 1.4 | nil |
| 2015 | 127 | 1.0 | 2.5 | nil |
| 2016 | 139 | 17.9 | 8.5 | nil |
| % change | +9 | +1608 | +242 | - |
Ex-div: na Payment: na Includes intangible assets of $48.5m, or 28¢ a share £1=$1.30 | ||||
