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PureCircle anticipates Starleaf boom

The stevia company could produce triple the amount of its Starleaf product this year as reformulation of sugary products continues
September 18, 2018

Consumers looking for a healthier alternative to sugar often turn to stevia – a low-calorie and sugar-free sweetener derived from a plant – but are often left disappointed with the taste. PureCircle (PURE) believes its Starleaf product tastes closer to sugar than other stevia products, including those it has produced in the past. It's based on where in the leaf the molecules come from, and companies busy reformulating once-sugary products seem to agree. Chief executive Magomet Malsagov said PureCircle expects to produce around 16,000 metric tonnes (mt) of Starleaf during this financial year, more than three times the 5,000mt produced during this reported period.

IC TIP: Hold at 321p

PureCircle currently has 117 stevia related patents, another 295 pending, and has filed a complaint in California claiming two competitors infringed on one of its patents. Mr Malsagov says he doesn’t mind competition, but wants rivals "to respect [our] intellectual property". In the past, PureCircle has licensed out patents for use by other companies.

Analysts at Numis expect pre-tax profits of $13.6m (£10.4m) during the year to June 2019, giving EPS of 6.7¢, compared with $8.3m and 5.5¢ in FY2018.

PURECIRCLE (PURE)   
ORD PRICE:321pMARKET VALUE:£560m
TOUCH:320-321p12-MONTH HIGH:517pLOW: 293p
DIVIDEND YIELD:nilPE RATIO:84
NET ASSET VALUE:130¢*NET DEBT:43%
Year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
20141012.61.4nil
20151271.02.5nil
201613917.98.5nil
20171197.74.2nil
20181317.55.0nil
% change+10-2+20-
Ex-div:na   
Payment:na   
*Includes $64.1m of intangible assets, or 37¢ a share  £1=$1.31