PuriCore: Trading Update and Strategic Review
11 July 2014 – PuriCore plc (LSE: PURI), a global company focused on safe and effective protection against the spread of infectious pathogens, today issues an update on trading ahead of the publication of its results for the six months ended 30 June 2014, which is expected during the week of 4 August 2014, as well as an update on the initiation of a strategic review to determine the next phase in the Company’s development.
Trading Update
With the sale of the Endoscopy business now successfully completed, PuriCore is focusing additional resources on the adoption and rollout of bottled Supermarket Retail concentrate products, ProduceFresh® and FloraFresh®, as its key operational priority. As previously reported, with the rebalancing of the product mix, the Company is experiencing a reduction in revenue in this business in the near term as customers transition to consumable products and capital equipment sales decline. In-market demand for consumable implementations has been encouragingly strong with existing and new customers signing on for the new products. Meeting this demand in a short timeframe has resulted in higher than expected service costs during the period, which is being addressed as an operational priority. The Board remains confident that with enhanced investment in sales and marketing resources, accelerated market share can continue to be achieved.
Further, the trends reported in Health Sciences in the Q1 Interim Management Statement continued into Q2. With the distraction of the Endoscopy business sale process and the delay in capital sales preceding the launch of the new endoscope washer disinfector, earnings in H1 are expected to be lower than in prior year H1. The Wound Care and Dermatology business showed progress in H1, but with the absence of comparable milestone payments as were booked in H1 2013, revenues and earnings are expected to be softer.
As a result of all these factors, the Company expects to report an operational EBITDA* loss for H1 2014, materially lower than the positive EBITDA reported for H1 2013. Full results, including the financial impact of the sale of the Endoscopy business, will be provided in the interims to be released in early August.
Strategic Review
Meanwhile, the Board has initiated a strategic and operational review of the business to optimise the use of the proceeds from the sale of the Endoscopy business to build shareholder value. This review covers growth investment strategies, operational efficiency initiatives, R&D programmes, strategic acquisitions, and a potential return to shareholders. The Company will continue to focus on tight cost control to optimise margins whilst recognising that growth initiatives will require further investment in key areas. Following review and approval by the Board, the strategic plan will be communicated to shareholders in Q4 2014, along with revised expectations of full-year performance.
The Board believes sustainable growth should be driven by increasing recurring revenues in both continuing businesses. The Company has therefore identified the following key areas of strategic focus within these businesses for further investment and potential complementary acquisitions.
Supermarket Retail
• Identify additional investment opportunities to drive rapid adoption of ProduceFresh and FloraFresh
• Extend the footprint with supermarket customers by delivering novel product formats in new areas within the store
Wound Care and Dermatology
• Develop opportunities to expand the product portfolio, formats, and geographic reach
• Invest in clinical studies to support both infection control regulatory approvals and wider marketing initiatives
Michael Ashton, Chief Executive Officer, said:
“The sale of the Endoscopy business opens a new chapter for PuriCore. Whilst we faced some disruption in the first half as a result of selling the UK business, transitioning away from a capital-intensive business in Supermarket Retail, and meeting demand for our new concentrate products, we continue to see opportunities for sustainable growth within and around our refocused businesses. Our strengthened cash position provides us with the resources and confidence to optimise these opportunities through investment in a targeted and disciplined manner. We look forward to sharing our new strategic plan together with our revised expectations for current year results in the autumn.”
* Earnings before interest, tax, depreciation, amortisation, and non-cash equity-related charges.
Enquiries:
UK
FTI Consulting
Mo Noonan/Simon Conway
Victoria Foster Mitchell
+44 203 727 1000
US
Sage Strategic Marketing
Jennifer Guinan
+1 610.410.8111
jennifer@sagestrat.com
About PuriCore
PuriCore plc (LSE: PURI) is a global company focused on safe and effective protection against the spread of infectious pathogens without causing harm to human or animal health or to the environment. PuriCore’s antimicrobial technology and complementary products are used in a well-established core business and emerging sectors of two broad markets: Food & Agriculture and Health Sciences. In the Food & Agriculture market, PuriCore’s portfolio is used by thousands of US supermarket retailers, including three of the top-five, to provide savings in labour costs and improvements in inventory loss and to address cross contamination of pathogens on fresh produce and floral products. In the Health Sciences market, PuriCore’s breakthrough wound care technology is used to treat chronic and acute wounds including diabetic ulcers and burns in humans, for atopic dermatitis as private-labelled dermatologic treatments for humans, and to manage wounds in all species of companion and farm animals in the animal health segment. PuriCore is headquartered in Malvern, Pennsylvania. To receive additional information on PuriCore, visit www.puricore.com.
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