Plant Health Care PLC (AIM:PHC, OTCQB:PLHCF) said it has seen continued growth into 2022 as it scales up by building key distributor relationships on a global basis.
The provider of novel patent-protected biological products to global agriculture markets revealed in a trading update covering last year that revenue in 2021 increased by 28% to US$8.4mln from US$6.6mln in 2020.
Harpin α enjoyed strong revenue growth of 55%, despite sales growth in Mexico (+15%) being held back due to low production in the first half of 2021.
The company's gross margin improved by three percentage points to 59% in 2021 from 56% in 2020.
The group’s commercial business increased its underlying earnings (EBITDA) and was cash positive last year, the AIM-listed company added. Chris Richards, the company’s chief executive officer (CEO) expressed confidence that the business is set to deliver profitable growth over the coming years.
Cash and cash equivalents at the end of 2021 stood at US$9.2mln.
Richards said the launch of the Saori product into Brazil, the world’s largest soya bean market, was well-received, although sales volumes were limited by the availability of the product. The recently announced toll manufacturing agreement has secured ample capacity to supply long-term growth in PHC279 (the active ingredient in Saori) at an attractive cost for all global sales, he added.
“Nutrien, our partner in Brazil, is excited about the potential for ramping up sales of Saori in 2022 and beyond,” the company CEO said.
Plant Health Care said that in the current year Saori is expected to be a significant driver of growth. The product has the potential to deliver disease control and yield increase worth about US$75 per hectare for Brazilian soya bean growers, giving them a return on investment of six times or more while reducing the use of potentially less safe agrochemicals.
Brazilian soya bean farmers spent US$2.85bn on disease control in the 2020/21 season, Plant Health Care noted.
"Strong Harpin α revenue growth, combined with the first of many product launches from the PREtec platform, mark a very strong year for Plant Health Care. The company is now well-positioned to become a leader in sustainable agriculture, as recognised by the award of the LSE's Green Economy Mark,” Richards said.
"Plant Health Care has established core relationships with four of the largest global agricultural distributors, giving us scale in key markets,” the CEO added.
"We plan multiple launches of PREtec products into other large markets over the coming years, following an investment of more than US$25mln over the last eight years. The next launch will be PHC279 for the speciality crop market in the USA, in partnership with Wilbur Ellis, in the second half of this year. The submission of the regulatory filing for PHC949 to the EPA in the USA sets the way for the first launch of that exciting product in 2023. Plans are in place for further major product launches in following years, as we build a large business from the PREtec platform.
"We have good visibility to future revenue growth expectations from our distributors and are confident that the momentum within the business will continue into 2022 and beyond,” Richards concluded.