Plant Impact poised for push into US market via Arysta partnership

Plant Impact PLC (LON:PIM) said apart from its continued focus in the "near" markets of the UK, Netherlands, France and Germany,  it also expects to grow its business in the 2012 calendar year into the US turf market via its strategic partnership with Arysta LifeScience, targeting the golf course market there.

The comments came as the company, which develops and markets crop yield enhancing products, reported its results for the six months to September 30 2011.

During the period, in May, Arysta took a 9.1 percent stake in the company at a significant premium to the share price and in August, Arysta veteran John Brubaker took over the helm as Plant Impact chief executive.

Arysta injected £2.1 million into the group through the share subscription, of which £1 million was earmarked for development work on its turf and ornamental market in the US and the horticultural market in Brazil.

Gardens, golf courses and outfield turf management represent major potential markets for PiNT, a nitrogen product that is eco-friendly and improves plant growth by helping turf grass retain nitrogen for longer.

Turnover in the first half dipped to £610,042 from £638,409 a year earlier, primarily due to the seasonality and timing of purchases from customers in the Netherlands.  All other regions of Plant Impact's business showed consistent or improved sales performance year-on-year.

The group widened its operating loss to £1.49 million from £1.16 million a year earlier, mainly due to higher research and development costs in relation to the planned push into the US and Brazil markets.

Since early September, the board has examined the operating expense base carefully and has identified many activities that were consuming cash but not serving to accelerate the new measured-growth strategy. 

These activities and associated costs have been eliminated and include public relations expenses, travel expenses - reduced significantly due to the focus on "near" markets -, certain R&D costs, general office expenses and various legal and professional costs.

Plant Oil also eliminated some staffing costs through combining several positions and roles, at the same time identifying the need to strengthen certain areas.  “As a result, we are now actively recruiting for new staff in marketing, supply chain, and finance.” 

“We expect the financial, operational and strategic benefits from the actions described above to arise in 2012 and beyond,” the company added.

The roll-out of products in the US market will be slightly later than planned.  Management decided to delay entry into that market until resources permit and launches can be planned in detail to ensure a good likelihood of success.

This means that previosuly expected revenues from the US may not be achieved prior to the end of the financial year to March 31 2012.  Plant Impact is therefore lowering its revenue forecast for the full year to between £1.8 million and £2.2 million from around £2.8 million expected previously.