PuriCore Trading Update
Published: Feb 18, 2014
18 February 2014 -- PuriCore plc (LSE: PURI), a global company focused on safe and effective protection against the spread of infectious pathogens, today announces a trading update for the year ended 31 December 2013. Full year results of the Group are expected to be announced the week of 21 April 2014. All financial information is unaudited.
Group revenue increased 15.6% (16.3% at constant currency) to $54.8 million for the period (2012: $47.4 million), resulting primarily from significant growth in the Supermarket Retail business driven by a $14.0 million Sterilox® Fresh capital equipment sale, the growth of the concentrate products, and a change in equipment lease revenue recognition.
EBITDA* significantly increased to $2.5 million (2012: $1.3 million), which was above market expectations. Gross profit margin decreased slightly to 32.5% (2012: 32.7%) due to a one-off write-off of inventory deemed incompatible with the new produce and floral concentrate platforms and new distribution agreements. Operating expenses increased 5.6% to $18.5 million (2012: $17.5 million) due to planned investments in marketing and sales, the intellectual property portfolio, and resources to support growth as well as a one-off charge related to the termination of the Misonix distribution arrangement.
Based on the trends in Supermarket equipment lease transactions and the consumables-focused business strategy, the Company adopted a change in accounting estimate and treatment of equipment leases. These changes resulted in the majority of revenue and costs related to these leases being recorded in 2013 as opposed to over the life of these leases and accelerated depreciation expense in 2013.
Cash and cash equivalents were $3.4 million as at 31 December 2013.
Supermarket Retail: Fresh Produce and Floral
Supermarket Retail revenue increased significantly with a jump of 30.2% to $28.9 million (2012: $22.2 million), driven by a $14.0 million capital equipment sale and change in equipment lease revenue recognition. In addition, growth of the new ProduceFresh™ and FloraFresh® concentrate products, with the implementation of three multi-year recurring revenue deals totaling $24.0 million, contributed to the revenue growth of this business.
Revenue for the Endoscopy business (including Surgical and Scientific) was $23.2 million (2012: $23.5 million), which represents a 0.1% increase at constant currency, and recurring revenue increased, consistent with strategy, to 79% of divisional revenue (2012: 78%).
Wound Care and Dermatology
Revenue in the Wound Care and Dermatology business (including Animal Health and Dental) increased by 58.7% to $2.7 million (2012: $1.7 million) through two new marketing partnership successes, including milestone payments. During the year, PuriCore also received FDA regulatory clearance for itch and entered the Animal Health market, and this month, signed a Middle East marketing partnership for Wound Care with Ueno Corporation.
The Company remains focused on its stated strategy of delivering more predictable recurring revenue and improving margins. In the Supermarket Retail sector, PuriCore plans to invest strategically in the business to expand the sales force and drive growth in revenue and product usage of ProduceFresh and FloraFresh. Consistent with market expectations, revenue is expected to decrease in the short term as PuriCore transitions away from a capital equipment model and grows consumables and other recurring revenue. In the UK, the business remains focused on growing recurring revenue and on marketing its new Storage and Drying Cabinets and AER products, which open the door for international expansion. The new US and Middle Eastern partnerships in Health Sciences, plus other international partnerships being pursued, offer PuriCore the opportunity to leverage greater marketing resources with targeted investment whilst delivering increased licensing and product revenue. These activities look to create a strong foundation from which to grow the business and create a sustainably profitable company.
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 well-established core businesses and emerging sectors of two broad markets: Health Sciences and Food & Agriculture. In the Health Sciences market, PuriCore is the leading full provider of all products and services required for a safe, efficient, and compliant endoscope decontamination to protect patients and staff in UK hospitals. PuriCore’s breakthrough wound care technology is used worldwide 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. In the Food & Agriculture market, PuriCore is a leading provider to thousands of supermarket produce departments, including three of the top-five US chains, to improve food safety, extend shelf life, and decrease food wastage. In floral, PuriCore’s products protect against fungal growth and extend the saleable life of cut flowers throughout the distribution chain resulting in significant savings and improved profit for our customers. PuriCore is headquartered in Malvern, Pennsylvania, with operations in Stafford and Clevedon, UK. To receive additional information on PuriCore, visit www.puricore.com.
Simon Conway/Mo Noonan
Victoria Foster Mitchell
+44 (0) 20 7831 3113
Sage Strategic Marketing
*Earnings before interest, tax, depreciation, amortisation, non-cash equity-related charges.
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.
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