10th Sep 2014 10:36
LONDON (Alliance News) - PureCircle Ltd, a producer of natural sweetener stevia, Wednesday said it swung to a pretax profit in its last financial year, as increased takeup of the sugar substitute, notably among Cola makers, drove up sales.
In a statement, PureCircle said it swung to a USD2.6 million pretax profit in the year to June 30, from a USD9.3 million pretax loss a year earlier, as revenue rose to USD101.0 million, from USD70.2 million, and its gross margin improved by 11 percentage points due to improved sales volumes, higher sales of more profitable products, and lower production unit costs.
It said sales volumes rose by 37% due to "accelerating usage" of stevia by food and beverages companies. It saw sales rise across its products and regions.
"Our strategy of introducing new and innovative ingredients and customizable ingredient combinations to meet growing market needs is winning business for PureCircle. We are generating revenues from a well-balanced range of natural sweetener and flavour products and from a wide range of customers and regions directly and through our business partners," Chairman Paul Selway-Swift said.
PureCircle said its gross margin should improve further as sales volumes increase, because "sales volume utilisation of capacity remains modest."
It said that developments in its markets "clearly confirmed" the first tangible indications that stevia is developing into a mainstream ingredient and adoption is accelerating. It was particularly encouraged by take-up by carbonated soft drinks makers, saying its ingredients had been included in recent drinks launches, notably reformulated Cola drinks by major soft drink companies into large markets.
It said that was giving it greater confidence in sustainable sizeable growth for its business.
PureCircle also said it has sufficient funding for its current expansion plans, after an early USD34.0 million gross debt repayment and the acceptance of an offer of a new five year USD71.0 million facility to renew and extend its principal debt facilities that had been due to expire in June 2015. PureCircle said it expects the new facility to be completed in September at a lower interest rate than the one it is replacing.
PureCircle shares up 0.1% at 618.00 pence Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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