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PureCircle doubles underlying earnings

The force is with the stevia ingredients producer, as sugar supplants fat as the bad guy in the fight against obesity and diabetes
PureCircle doubles underlying earnings
PureCircle is the world's leading producer of high-purity stevia ingredients for the global food and beverage industry.

High-purity stevia ingredients producer PureCircle (LON:PURE) doubled underlying earnings (EBITDA) in the first half of the current financial year.

Adjusted EBITDA in the six months ended 31 December 2015 rose 108% from $6.5mln a year earlier to $13.5mln.

Reported profit before tax was $5.0mln versus a loss the year before of $927,000.

Sales increased 26% from $43.2mln in 2014 to $54.5mln, with the company reporting growth in all regions and across all regions.

The gross margin increased by eight percentage points to 42%, reflecting increased volumes, innovation-led improvements in the sales mix plus a bit of help from foreign exchange tailwinds, which accounted for three percentage points of the gain.

The company saw a $17mln improvement in net cash from operations, which turned positive at $9mln, while the net debt position narrowed 12% to $46mln.

The group closed the first half of its financial year with cash and bank facility headroom of $73mln, compared to $76mln at the same stage of the previous year. PureCircle said it is sufficiently funded for its current expansion plans.

Group chief executive officer (CEO) Magomet Malsagov said the global stevia market continued to develop strongly in the second half of 2015.

“Regulators, politicians and F&B [food & beverage] companies in all regions are being challenged to find solutions to obesity and diabetes. Mintel data shows that stevia is being used increasingly as part of the solution,” Malsagov noted.

The company is expanding its production capacity to support its sustained long-term growth prospects, the CEO said.

“With increased adoption of PureCircle stevia solutions by the global F&B industry the company is confident of significant medium to long term growth in sales and profitability. Growth in profitability is already evident in our 1H FY16 results and we expect more in 2H FY16; however, the trajectory of our sales growth will likely be uneven and is dependent on the pace and extent of customer roll-outs,” Malsagov concuded.

Shares in PureCircle rose 3% to 324.48p in the first half hour of trading.

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PureCircle Limited Timeline

September 21 2016
July 12 2016

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