The latest Trading Update from Plant Health Care (LON:PHC) demonstrates that the year to end December 2022 was one of significant product development and offering global sales prospects.
Capitalised at some £36m, the group is a leading provider of peptides for plant protection to agriculture markets across the world.
The Business
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.
The group operates globally through subsidiaries, distributors and supply agreements with major industry partners.
Its 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.
The Last Year
The last year saw a 40% increase in group revenues to $11.8m ($8.4m), with sales in North America up 74% driven by strong demand for its Harpin ab product, while the Saori launch saw sales up 104% in South America.
The group, which already markets its products in Argentina, Brazil, Chile, Greece, Mexico, Morocco, the Netherlands, Portugal, South Africa, Spain, Turkey and the UK, is expanding its markets into France, Uruguay and India.
CEO Jeff Tweedy stated that:
“2022 was excellent despite the challenging macroeconomic conditions. Our success was driven by the growing demand for Harpin in North and South America and the successful commercialisation of Saori in Brazil following its launch in 2021.
Plant Health Care is on track to achieve revenue of $30 million by 2025 through the launch of new peptides, and growth through current and future distributor relationships and deliver cash breakeven within our existing cash reserves.”
Analyst Opinion – forecasting a major uplift
John-Marc Bunce, analyst at the group’s NOMAD and Broker Cenkos Securities, has re-iterated his Buy rating on its shares, suggesting a 33p Target Price.
His estimates for the year to end December 2022 suggest revenues of $11.4m ($8.4m) with the annual loss significantly reduced to a third lower at $3.0m ($4.6m).
Looking at his figures for the current year he sees $15.9m sales, leading to just a small loss of $0.3m.
However, for 2024 he forecasts a major uplift in the group’s fortunes – $24.8m sales, a $5.2m profit, worth 1.6c per share in earnings.
Conclusion – impressive growth potential offers big upside
This group really is developing impressively.
It has now created a substantial platform for its strong growth.
The next year is expected to see growth from its Harpin and Saori products, while preparing PHC949 for its launch in 2024.
This group’s shares at the current 11.62p offer investors some significant upside.