PuriCore Release: Trading Update for the Year Ended 31 December 2012
Published: Mar 07, 2013
Full-Year Financial Highlights (unaudited)
-- Group revenue up 11.3% (12.0% at constant currency) to $47.4m (2011: $42.6m)
o Supermarket Retail revenue up 14.0% to $22.2m (2011: $19.4m)
o Endoscopy revenue up 4.6% (5.9% at constant currency) to $23.5m (2011: $22.5m)
o Wound Care revenue up 160.0% to $1.7m (2011: $0.7m)
-- Improvement in gross profit margin to 32.7% (2011: 29.4%)
-- EBITDA* profitable: increase of $3.6m to $1.3m (2011: -$2.3m)
-- Cash flow generated from operations $4.5m (2011: -$0.6m)
-- Operating expenses reduced 9% to $17.5m (2011: $19.2m)
-- Gross cash of $2.5m at 31 December 2012
Business and Operational Highlights
Food & Agriculture
-- Supermarket Retail: signed two major deals valued at approximately $9m
-- Agriculture: reported positive results from research collaboration at Oxford University
-- Water Treatment: signed a marketing partnership agreement with Lohas Products GmbH
-- Endoscopy: recurring revenue increased 6.2% (7.5% at constant currency) to $18.2m (2011: $17.2m), accounting for 78% of divisional revenue
-- Wound Care: revenue continued to grow; partnership discussions advanced Post-Period Events
-- Converted 95% of the £7.95m of Convertible Loan Notes in January 2013
-- Raised approximately £2.3m (before expenses) in a placing in January 2013
-- Received US FDA regulatory clearance for Vashe Skin and Wound Hydrogel formulation for itch related to atopic dermatitis in February 2013
-- Announced marketing partnership with Onset Dermatologics for Vashe-based dermatologic hydrogel product in March 2013
-- Appointed Marella Thorell as Finance Director and Executive Director in March 2013
-- Appointed Peter Larkin as a Non-Executive Director effective 1 April 2013
Michael Ashton, Executive Chairman of PuriCore, said:
“PuriCore improved trading in 2012 with revenue growth in all business divisions in addition to improving the gross margin and generating significant cash flow from operations. Additionally, post-period we strengthened our balance sheet by successfully restructuring the Convertible Loan Notes and raised more than £2 million through a placing of shares. The Directors remain confident of the Company’s prospects. We continue to drive sales aggressively, whilst focusing on controlling costs, to achieve sustainable growth in key business areas and to seek to capitalise on new partnering opportunities.” *Earnings before interest, tax, depreciation, and amortisation.
2012 Business Report
Revenue for the Group increased 11.3% (12.0% at constant currency) to $47.4 million in 2012 (2011: $42.6 million). The Company improved gross profit margin to 32.7% (2011: 29.4%), and reduced operating expenses by 9% compared with 2011. For the year, PuriCore was EBITDA profitable with an improvement of $3.6 million to $1.3 million (2011: a loss of $2.3 million) and generated $4.5 million in cash flow from operations (2011: -$0.6m). Gross cash at 31 December 2012 was $2.5 million.
The Company continued to focus on strengthening its balance sheet with the restructuring 95% of the £7.95 million of Convertible Loan Notes, which mature December 2013, and the successful raising of £2.3 million (before expenses) in a placing, both of which were announced in December 2012 and approved at the General Meeting in January 2013. In addition, PuriCore further reduced debt as it continues to shift from financing Sterilox Fresh System installations through leases to more capital sales.
Food & Agriculture
In 2012, the Supermarket Retail business increased revenues 14.0% to $22.2 million (2011: $19.4 million). In October, the Company announced two new significant commercial agreements. The first agreement is valued at approximately $7 million over four years with an existing customer, a top-five US supermarket retailer, to implement and use PuriCore’s new formulation of FloraFresh across the enterprise. The second agreement is valued at approximately $2 million with a long-standing US supermarket customer for the capital sale of new Sterilox Fresh Systems. As at 31 December 2012, the Company had captured approximately 22% of the target market in the US and Canada.
Also in October, the Company announced further positive results from its ActiVita Agriculture programme. Testing and analysis carried out in conjunction with The University of Oxford Department of Plant Sciences continues to demonstrate ActiVita’s potential as a potent broad-spectrum antifungal agent. Research is ongoing, and the Company plans to enter into discussions with potential commercialization partners.
In November, the Company announced that it signed a marketing and distribution partnership agreement with Lohas Products GmbH. PuriCore will provide technical and scientific knowledge in the development and commercialisation of new applications, and Lohas will have an exclusive license to market and distribute the applications in certain markets and territories (exclusive of the US and UK). These new potential applications include but are not limited to the use of PuriCore’s technology for seafood production, water treatment in restaurants, and livestock husbandry. Collaboration on marketing plans and application development will be on-going in 2013 with revenue generation expected no later than 2014.
In the Endoscopy business, strong recurring revenue streams contributed to the division’s revenue increase of 4.6% (5.9% at constant currency) to $23.5 million for 2012 (2011: $22.5 million). PuriCore achieved a 6.2% (7.5% at constant currency) increase in recurring revenues, which now account for 78% of division revenue. This increase was achieved by driving additional revenues from new service contracts with existing customers, offering of private-labeled chemistries, service contract updates, and the new catalogue of surgical consumables made available through the acquisition of Monmouth Surgical.
In the Wound Care business, revenue increased by 160% to $1.7 million (2011: $0.7 million). In addition, the Company continued to maintain focus on business development opportunities in new geographies and a variety of Health Sciences market segments.
The Company is focused on continuing to increase revenues and control costs. In the Supermarket Retail sector, existing Sterilox Fresh opportunities and the new FloraFresh formulation is expected to deliver market share expansion. In the UK, the business remains focused on growing recurring revenue, capitalising on new customer opportunities, and controlling costs.
In addition, PuriCore also continues to pursue partnership opportunities in new and existing markets to expand the reach of its current products and to commercialise new formulations. In February 2013, PuriCore announced that it had received US FDA regulatory clearance for Vashe Skin and Wound Hydrogel formulation for the management and relief of pain, burning, and itching experienced with various dermatoses including atopic dermatitis. The Company intends to use this hydrogel clearance to advance new product development and partnering opportunities in dermatology, wound care, and animal health. One such opportunity is PuriCore’s partnership with Onset Dermatologics, a leader in the development and commercialization of prescription dermatology products, for Vashe-based dermatology products, which was recently announced. Onset Dermatologics will market and distribute this new Vashe-based formulation as 3 Aurstat Anti-Itch Hydrogel and as a component of Aurstat Kit exclusively in the US beginning April 2013. Other partnering discussions are advancing and will be announced in due course.
PuriCore plc (LSE: PURI) is a water-based clean technology company focused on developing and commercialising proprietary solutions that protect people from the spread of infectious pathogens without causing harm to human health or the environment. The Company’s products are used in a broad range of markets that depend upon effective pathogen control. PuriCore is the leading full provider of all products and services required for a safe, efficient, and compliant endoscope decontamination to protect patients in UK hospitals. The Company’s products are the standard for food safety and are used for floral care in leading US supermarket chains. PuriCore also offers a breakthrough wound therapy solution to treat chronic and acute wounds including diabetic ulcers and burns. PuriCore is headquartered in Malvern, Pennsylvania, with operations in Stafford and Clevedon, UK. To receive additional information on PuriCore, visit www.puricore.com, which does not form part of this announcement.
Susan Stuart/Simon Conway
Victoria Foster Mitchell
+44 (0) 20 7831 3113
Sage Strategic Marketing
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.