Proactive Investors - Run By Investors For Investors

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.

View full PURE profile View Profile

PureCircle Limited Timeline

September 21 2016
July 12 2016

Related Articles

April 17 2018
The group's major shareholders have staunchly supported the business while the AIM-listed group sorts out its financial position

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use