23rd Jun 2014 14:46
LONDON (Alliance News) - Shares in Sorbic International PLC fell Monday after the Chinese sorbates producer reported a drop in its pretax profit for the first-half of the year, but higher revenues, although it said the need to increase capacity has become even more crucial.
For the six months ended March 31, Sorbic International posted a pretax profit of GBP34,323, compared with a pretax profit of GBP423,812 a year earlier.
The company said the drop in profits was as a result of an unrealised foreign exchange loss in the period of GBP237,124, compared with a unrealised foreign exchange gain of GBP328,314 the prior year.
Sorbic International shares were down 11.4% at 6.2 pence Monday afternoon.
"As food safety in China becomes ever more important, coupled with the advent of increased numbers of supermarkets, more consumers and a greater range of products, the Board expect the company's products to become increasingly in demand," said Chairman John McLean in a statement.
The company, which produces and sells the food preservatives Sorbic Acid and Potassium Sorbate in China, said that revenues in the first-half rose 7% to GBP7.5 million, up from GBP7.0 million the prior year, boosted by the combination of improved selling prices and reduced cost of sales.
However, Sorbic International said that the need to expand its production capacity has become even more critical, while the discussions to expand production in Linyi have slowed.
In a separate statement Monday, the company said it intends to raise GBP0.25 million before expenses, through the issue of GBP125,000 of convertible loan notes, and 2.5 million new shares at 5 pence each.
It said it will used the proceeds raised to meet ongoing costs at the company.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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