24th Sep 2007 07:03
Plant Health Care PLC24 September 2007 Embargoed until 7.01 24 September 2007 PLANT HEALTH CARE PLC ("Plant Health Care" or "the Company") Interim results for the six months ended 30 June 2007 Plant Health Care, (AIM: PHC.L), a leading provider of natural products forplants and soil, announces interim results for the six months ended 30 June2007. Highlights * Revenue up 68% to $8.4 million (2006: $5.0 million) * Gross margin remains in line at 46% (2006:46.6%) * In January 2007 Plant Health Care entered into an agreement with Bayer CropScience for the development of Myconate with upfront and milestone payments * The Company is now in discussions with four of the world's largest crop science companies re: further supply agreements for both Myconate and Harpin * The Board is confident of making further significant progress in 2007 and of securing further upfront and milestone payments in connection with Myconate and Harpin supply agreements within the next six months * In February 2007, the Company acquired the business assets of Eden Bioscience Corporation and with it the rights to the Harpin technology * Very encouraging Myconate test results in Mexico on a variety of crops demonstrating yield improvements ranging from 16% to 23% Commenting on the results, Chief Executive John Brady said: "We believe that we are exceptionally well positioned today to take advantageof the continuing worldwide demands for both improved agricultural efficiencyand greater environmental care. The inevitable global demand for 'energy crops'will further underpin the Company's commercial position and further drive demandfor natural, yield enhancing products. The drivers of our business are strongerthan ever and the future for Plant Health Care remains very exciting. We lookforward to the future with confidence." Plant Heath Care plcJohn Brady, Chief Executive26-28 September Tel: 020 7920 3150Therafter: 001 603 525 3702 Evolution Securities LimitedTim Worlledge/ Tim RedfernTel: 020 7071 4300 Tavistock Communications Jeremy Carey/Matt RidsdaleTel: 020 7920 3150 Notes to editors Plant Heath Care was established in 1995 in Pittsburgh (Pennsylvania) in theUnited States. Its products are aimed at the agriculture, commerciallandscaping and land reclamation industries, through both direct sales andsupply and distribution agreements with major agrichemical industry partners.Plant Health Care's products create both environmental and economic benefitsfor our customers and capitalise upon long-term trends towards natural systemsand biological products to provide plant health and growth. Interim results for the six months ended 30 June 2007 Chairman and Chief Executive's Statement Introduction The first half of 2007 saw growing demand for our natural products with, inparticular, strong sales in our newly formed US agriculture business. Thisresulted in a 68% increase in revenue compared with the first half of 2006.We have also invested heavily in the development and marketing of Myconateand Harpin, as we seek to achieve market momentum for these products. In January 2007, we signed our first major development and commercialisationagreement for Myconate with Bayer CropScience AG, one of the world's leadinginnovative crop science companies. This validates the Board's belief inMyconate's potential and represents a key milestone in the development ofPlant Health Care. The agreement, for the use of Myconate for application as aseed treatment on corn, soybean, cotton and sunflower, will extend for up toten years. The acquisition of the business assets of Eden Bioscience Corporation ("Eden")was completed on 26 February 2007, following the approval of the sale by Eden'sshareholders. This acquisition brought with it, products to aid the developmentof our newly formed US Agriculture division and the exclusive rights to Harpin,a patented natural technology that presents an exciting commercial opportunityboth on a standalone basis and for supply in conjunction with Myconate. Theaddition of the Harpin line of products including N-Hibit and ProAct, isexpected to contribute approximately $2.4 million of product sales during 2007. For both Myconate and Harpin, Plant Health Care is now in discussions regardingfurther supply agreements with four of the world's largest crop sciencecompanies, so as to respond to their demand for sustainable solutions to cropyield enhancement. Summary of Financial Results Revenue for the six months ended 30 June 2007 was $8.4 million(2006: $5.0 million), producing a gross profit of $3.8 million(2006: $2.3 million) and a loss before tax of $2.9 million(2006: loss of $2.3 million). The 68% increase in revenue includes a modest amount of fees from partnershipagreements but the growth in sales was primarily due to the newly formed USAgriculture division. There was also strong growth in our Mexican (+48%) andEuropean (+27%) businesses. Gross margins for the period were flat at 46% (2006: 46.6%). In the USAgriculture division, the new N-Hibit product acquired from Eden generatedhealthy margins of more than 60% but logistical teething problems on initialshipments of Organic Plant Food ("OPF") from Europe resulted in a significantreduction in margins. The administrative expenses of $6.7 million (2006: $4.5 million) included$1.6 million spent on the development, sales and marketing of Myconate andHarpin, $0.2 million on severance payments and $0.2 million on providing infull against the Company's rental exposure on its former manufacturing facilitynear Pittsburgh. This resulted in a net operating loss of $2.8 million (2006: $2.1 million). The net cash position (cash and short term investments less borrowings on ourworking capital credit facility) at the end of June 2007 was $1.2 million,with trade receivables standing at $7.6 million. Since the period end, the cashbalance has increased to $2.0 million and trade receivables have reduced to$5.2 million. The early order programmes undertaken at the end of 2006 andearly in 2007 were extremely successful in generating sales but did createhigh levels of receivables for the first half of the year. The Board believesthat this programme played a significant part in getting the Company's productsinto the market. The Company intends to repeat the programme this year andalready has in place credit facilities to fund the programme. Operational Review Agriculture Division Sales in our newly formed US Agriculture division were $2.4 million (2006: nil),driven by our new sales team, a number of whom came across from Eden Bioscience.The extreme drought conditions in part of the southeast prevented us reachingour target sales for the period, but nevertheless we were pleased with our firstSpring season in the market. The sales team provides us with an important foothold in the US agriculturemarket and we expect the acquisition of Eden to deliver value in 2008 and in thefuture not only through Harpin but also increasing sales in the US agriculturemarket. Sales in Europe were up by 27% to $0.9 million (2006: $0.7 million), withHolland performing particularly strongly. Our Mexican operation continued to develop, with sales up 48% on the back ofextending our distributor network in previously under-exploited areas of thecountry. Landscaping and Turf Division In our preliminary results statement for 2006, we anticipated that ourLandscaping and Turf division would move from reporting losses to delivering asmall earnings contribution in 2007. We are pleased to say that, as a result ofstringent cost control, the division remains on course to achieve this for thefull year. In view of the maturity of this market and trading conditions currently beingexperienced, we continue to believe that the Landscaping and Turf business willgrow at a slower rate than other areas of our business. Technology Partnerships Securing our first contract for the commercialisation of Myconate has been akey objective of Plant Health Care and in January an agreement was signed withBayer CropScience for the development of Myconate as a new seed treatmentsolution for application worldwide on corn, soybean, cotton and sunflower crops.This agreement provides Bayer CropScience with exclusive rights, for aten-year period, to combine Myconate with its market leading products on theaforementioned crops only. The Board expects these products to be launchedlate in 2009, to be applied in time for the 2010 US crop season. As previously announced, further tests have been carried out by the Company,our partners and potential partners on Myconate during this year. We have now received, and reported separately on, the results of tests carriedout in Mexico earlier this year. On a variety of crops there were veryencouraging results, demonstrating yield improvements ranging from 16% to 21%in Baja and 23% in Sonora. As announced today, Myconate trials in the US demonstrated strong results. Twotrials on carrots, undertaken by a major Wisconsin vegetable grower, weresuccessful in producing a resultant yield improvement in excess of 30% in bothtrials. In addition, celery and onion trials in Wisconsin demonstrated a 14%and 13% harvestable yield increase respectively when Myconate was applied as apre-plant, transplant spray. The results of trials on grain and straw production in winter wheat, testedusing a variety of applications produced particularly pleasing yieldimprovements. When applied as a seed treatment yield increased as much as 5.4%and when applied as a ground spray the improvement was up to 7.4%. Additionally,Myconate's application as both a seed treatment and a ground spray deliveredyield increases of up to 9.4%. Two successful trials of Harpin-based N-Hibit on soybeans were undertaken bySouthern Illinois University and the American Soybean Association ("ASA"). Both trial results demonstrated successful suppression of cyst nematodes and aresultant improvement in soybean yield, a crop which is planted onapproximately 150 million acres each year in the US and Brazil alone. The testresults from the ASA, which has in excess of 20,000 members, have exceeded ourexpectations with a broad range of samples demonstrating significant biomassincreases and root elongation over the control. The Company will continue to invest in developing and marketing Myconate andHarpin at similar levels to the first half. Following an evaluation of Harpin'sperformance in its most recent tests, its suitability for application inconjunction with Myconate and the lack of suitable alternatives on the market,we now believe that its commercial potential is substantially greater thanpreviously thought. Given the quest for environmentally sustainable and economically beneficialproducts, interest from major potential partners is considerable and we arenow in negotiations with a four of the world's largest crop science companiesfor further supply and partnership agreements for both Myconate and Harpin. Weremain confident of securing further upfront and milestone payments in relationto other partner deals in the coming months. Outlook The prospects for Plant Health Care are very exciting. Signing our firstmanufacture and supply agreement for Myconate with Bayer CropScience is asignificant milestone in the development of Plant Health Care. Awareness,interest and demand for our natural products continues to grow and, inparticular, Myconate and Harpin present very exciting opportunities in the nearfuture. We are in varying stages of negotiations with some of the world'slargest crop science companies regarding potential supply and/or partnershipagreements for Myconate and Harpin. We are confident of making furthersignificant progress in 2007 and finalising one or more of these agreementswithin the next six months. Our sales continue to grow strongly and, but for the adverse weather conditions,would have been greater in the first half. This shortfall in sales andcontinuing significant investment in our new technologies is likely to mean thatthe sought after break-even is not now likely for at least 12 months, albeitthat we expect all our trading activities (excluding investment in Myconate andHarpin) to be profitable at the operating level sooner. However, if negotiations for Harpin and/or Myconate supply agreements areconcluded before the year-end then up-front payment could enhance performancefor the year. We believe that we are exceptionally well positioned today to take advantageof the continuing worldwide demands for both improved agricultural efficiencyand greater environmental care. The inevitable global demand for 'energy crops'will further underpin the Company's commercial position and further drive demandfor natural, yield enhancing products. The drivers of our business are strongerthan ever and the future for Plant Health Care remains very exciting. We lookforward to the future with confidence. I would like to thank the Plant Health Care staff for their effort andcommitment to our Company and our shareholders for their continuing support. DR ALBERT FISCHERCHAIRMAN24 September 2007 Plant Health Care plc Unaudited Consolidated Income Statement For the Six Months Ended 30 June 2007 Note Six months Six months Year to 30 June to 30 June ended 2007 2006 31 December 2006 as restated as restated $,000 $,000 $,000 Revenue 8,374 4,975 13,679 Cost of sales (4,526) (2,656) (7,565) ----------------------------------Gross profit 3,848 2,319 6,114 Administrative expenses (6,664) (4,462) (8,980) ----------------------------------Operating loss 6 (2,816) (2,143) (2,866) Finance revenue 53 78 275Finance costs (136) (254) (335) ---------------------------------- Loss before taxation (2,899) (2,319) (2,926) Taxation - - (72) ----------------------------------Loss for the period (2,899) (2,319) (2,998) ==================================Attributable to:Equity holders of the parent (2,896) (2,323) (3,028) Minority interest (3) 4 30 ---------------------------------- (2,899) (2,319) (2,998) ==================================Basic and diluted loss per 4 (7.0)c (7.0)c (8.2)cshare ================================== All amounts relate to continuing activities. Plant Health Care plc Unaudited Consolidated Statement of Recognised Income and Expense For the Six Months Ended 30 June 2007 Six months Six months Year to 30 June to 30 June ended 2007 2006 31 December 2006 as restated as restated $,000 $,000 $,000 Loss for the period (2,899) (2,319) (2,998) Exchange differences on translation of foreign operations 42 85 219 ------------------------------------Total recognised income and expensefor the period (2,857) (2,234) (2,779) ====================================Attributable to:Equity holders of the parent (2,854) (2,238) (2,809) Minority interest (3) 4 30 ------------------------------------ (2,857) (2,234) (2,779) ==================================== Plant Health Care plc Unaudited Consolidated Balance Sheet At 30 June 2007 Note 30 June 30 June 31 December 2007 2006 2006 $,000 $,000 $,000 as restated as restatedAssetsNon-current assets Intangible assets 4,324 2,759 2,737 Property, plant and equipment 973 812 1,008 ------------------------------------Total non-current assets 5,297 3,571 3,745 ------------------------------------Current assets Inventories 3,623 2,476 2,468 Trade and other receivables 8,208 2,613 6,942 Short term investments 721 258 436 Cash and cash equivalents 585 10,563 4,446 ------------------------------------Total current assets 13,137 15,910 14,292 ------------------------------------Total assets 18,434 19,481 18,037 ------------------------------------LiabilitiesCurrent liabilities Trade and other payables 3,875 2,922 3,222 Short term borrowings 659 1,576 314 Provisions 419 227 282 ------------------------------------Total current liabilities 4,953 4,725 3,818 ------------------------------------Non-current liabilities Long-term borrowings 453 506 414 Provisions 578 - - ------------------------------------Total non-current liabilities 1,031 506 414 ------------------------------------Total liabilities 5,984 5,231 4,232 ------------------------------------Total net assets 12,450 14,250 13,805 ====================================Capital and reserves attributable toequity holders of the company Share capital 763 730 731 Share premium 23,455 21,761 21,826 Merger reserve 10,994 11,181 11,174 Share option reserve 139 76 118 Retained earnings (23,118) (19,692) (20,264) ------------------------------------ 8 12,233 14,056 13,585 Minority interest 217 194 220 ------------------------------------Total equity 12,450 14,250 13,805 ==================================== Plant Health Care plc Unaudited Consolidated Cash Flow Statement For the Six Months Ended 30 June 2007 Note Six months Six months Year ended to 30 June to 30 June 31 December 2007 2006 2006 $,000 $,000 $,000Cash flows from operatingactivitiesLoss before taxation (2,899) (2,319) (2,926)Adjustments for:Depreciation 145 123 248Amortisation of intangibles 108 32 2Share based payment expense 20 25 68Gain/(loss) on sale of fixed assets - (2) 10Impairment charge - - 30Minority interest (3) 4 30(Increase) in inventories (252) (894) (887)(Increase)/decrease in trade and (1,251) 394 (3,952)other receivablesIncrease in trade and other payables 849 408 813 ------------------------------------Cash outflow from operations (3,283) (2,229) (6,564) Interest paid (145) (252) (338)Interest received 53 78 275Income taxes paid (46) (84) (79) ------------------------------------Net cash outflow from operatingactivities (3,421) (2,487) (6,706) Investing ActivitiesPurchase of business net assets 7 (2,251) - -Purchase of tangible fixed assets (99) (149) (497)Proceeds on sale of assets heldfor sale 675 - -Proceeds on sale of fixed assets - 6 20Purchase of short term investments (284) (6) (184) ------------------------------------Net cash used in investing (1,959) (149) (661)activities ------------------------------------ Financing activitiesIssuing of ordinary share capital 353 11,049 11,053Exercise of options and warrants 1,200 1 64Issue of new borrowings 181 1,301 101Repayment of borrowings (82) (26) (180)Repurchase of minority interest'sshares by subsidiary (133) (20) (119) ------------------------------------Net cash used in financing 1,519 12,305 10,919activities ------------------------------------Net (decrease)/increase in cash (3,861) 9,669 3,552 ==================================== Plant Health Care Notes to Unaudited Financial Information 30 June 2007 1 Accounting policies Basis of preparationThe financial information set out in this report does not constitute fullaccounts for the purposes of Section 240 of the Companies Act 1985. The interimaccounts for the six months ended 30 June 2007 and 30 June 2006 are unaudited.The comparative figures for the financial year ended 31 December 2006 are notthe Company's statutory accounts for the financial year but are abridged fromthose accounts which have been reported on by the Company's auditors, whosereport was unqualified. The interim accounts were approved by the Directors on24 September 2007. The group is required to report its consolidated financial statements underInternational Financial Reporting Standards ('IFRS'), as adopted by the EuropeanUnion, for all accounting periods beginning on or after 1 January 2007.Comparative information for 2006, previously reported under UK GAAP, has beenrestated under IFRS. The financial effects of the transition from reporting under UK GAAP to IFRS areshown in Note 3. The presentation of the Group's financial statements has alsochanged, in accordance with IAS 1 'Presentation of Financial Statements' and IAS7 'Cash Flow Statements'. There is a possibility that the directors may determine that some changes tothose policies are required when preparing the full annual financial statements,since the IFRS interpretations that will be applicable and adopted for use inthe European Union at 31 December 2007 are not known with certainty at the timeof preparing this interim financial information. The policies have been appliedconsistently to all the periods presented, and on the going concern basis. The preparation of the condensed consolidated financial information inaccordance with IFRS has resulted in changes to the accounting policies ascompared with the most recent annual financial statements prepared under UKGAAP. The accounting policies set out below have been applied consistently toall periods presented in these consolidated interim financial statements andhave been applied in preparing an opening IFRS balance sheet at 1 January 2006for the purposes of transition to IFRS, as required by IFRS 1. Transition to International Financial Reporting StandardsIFRS 1 "First-time adoption of International Financial Reporting Standards" setsout the rules for first time adoption of IFRS and the optional exemptions whichmay be used in applying the standards retrospectively to comparative periods.The Group has used the following exemption in adopting IFRS. IFRS 3 'Business Combinations" has only been applied to acquisitions completedafter the date of transition, 1 January 2006. As a result, the carrying value ofgoodwill in the UK GAAP balance sheet at 31 December 2005 is brought forward tothe IFRS opening balance sheet without adjustment. RevenueRevenue represents sales to external customers and fee income. Sales to externalcustomers are at invoiced amount less value added tax or local taxes on salesand are recognized at the point that the customer takes legal title to the goodssold. Fee income is recognized when the company has no remaining obligations toperform under a non-cancellable contract which permits the user to act freelyunder the terms of the agreement. GoodwillGoodwill is measured as the excess of the cost of the acquisition over the netfair value of the identifiable assets, liabilities and contingent liabilities,plus any direct costs of acquisition. Goodwill is capitalised as an intangibleasset. Other intangible assetsIntangible assets are stated at cost less accumulated amortisation and consistof licenses and developed technology, customer lists and trade names. The costof the intangible assets, which were acquired through business combinations, wasmeasured at the fair value allocated in the acquisition accounting. Theintangible assets are amortised over their estimated useful lives of twelve tofifteen years. Impairment of Goodwill and other intangible assetsImpairment tests on the carrying value of goodwill and other intangible assetsare undertaken at each annual reporting date and in other periods if events orchanges in circumstances indicate that the carrying value may not berecoverable. Employee benefitsThe Group maintains a number of defined contribution pension schemes for certainof its employees; the Group does not contribute to any defined benefit pensionschemes. The amount charged to the income statement represents the employercontributions payable to the schemes for the financial period. The expected cost of all short term employee benefits, including short-termcompensated absences, are recognised during the period the employee service isrendered. 2 Segmental Analysis Six Six Year months months ended to 30 to 30 31 Dec June June 2006 2007 2006 as as restated restated $'000s $'000s $'000s Revenue External sales USA 6,076 3,318 8,791 Mexico 1,379 933 2,536 Europe 919 724 2,352 Inter-segment sales USA 274 295 717 Mexico - - - Europe 444 42 742 Elimination (718) (337) (1,459) Total revenue USA 6,350 3,613 9,508 Mexico 1,379 933 2,536 Europe 1,363 766 3,094 Elimination (718) (337) (1,459) --------------------------- Consolidation 8,374 4,975 13,679 Segment operating (loss) profit USA (1,184) (1,203) (1,462) Mexico 102 29 256 Europe (81) (95) (12) --------------------------- (1,163) (1,269) (1,218) Unallocated corporate expenses (1,653) (874) (1,648) --------------------------- Consolidated operating loss (2,816) (2,143) (2,866) =========================== 3 First-time Adoption of International Financial Reporting Standards (IFRS) Reconciliations and explanatory notes on how the transition to IFRS has affectedprofit and net assets previously reported under UK Generally Accepted AccountingPrinciples (UK GAAP) are given below: Income statement reconciliation for the six months ended 30 June 2006 Note UK GAAP Adjustments IFRS $,000 $,000 $,000 Revenue 4,975 4,975Cost of sales (2,656) (2,656) -----------------------------------Gross profit 2,319 - 2,319 Goodwill amortisation (i) (18) 18 -Other administrative expenses (ii) (4,450) (12) (4,462) -----------------------------------Operating loss (2,149) 6 (2,143)Finance revenue and similarincome 78 78Finance costs and similar charges (254) (254) -----------------------------------Loss before taxation (2,325) 6 (2,319)Taxation - - - -----------------------------------Loss for the period (2,325) 6 (2,319) =================================== Attributable to:Equity holders of the parent (2,329) 6 (2,323)Minority interest 4 4 ----------------------------------- (2,325) 6 (2,319) ===================================All amounts relate to continuing activities. Income statement reconciliation for the year ended 31 December 2006 Note UK GAAP Adjustments IFRS $,000 $,000 $,000 Revenue 13,679 13,679Cost of sales (7,565) (7,565) -----------------------------------Gross profit 6,114 - 6,114 Goodwill amortisation (i) (36) 36 -Administrative expenses (ii) (8,976) (4) (8,980) -----------------------------------Operating loss (2,898) 32 (2,866)Finance revenue and similar income 275 275Finance costs and similar costs (335) (335) -----------------------------------Loss before taxation (2,958) 32 (2,926)(Taxation (72) (72) -----------------------------------Loss for the period (3,030) 32 (2,998) ===================================Attributable to:Equity holders of the parent (3,060) 32 (3,028)Minority interest 30 30 ----------------------------------- (3,030) 32 (2,998) ===================================All amounts relate to continuing activities. Balance sheet reconciliation at 1 January 2006 Note UK GAAP Adjustments IFRS $,000 $,000 $,000Assets Non-current assetsIntangible assets 2,769 2,769Tangible assets 790 790 -----------------------------------Total non-current assets 3,559 - 3,559 ----------------------------------- Current assetsInventories 1,582 1,582Trade and other receivables 2,989 2,989Short term investments 252 252Cash and cash equivalents 894 894 -----------------------------------Total current assets 5,717 - 5,717 -----------------------------------Total assets 9,276 - 9,276 ----------------------------------- Liabilities Current liabilitiesTrade and other payables (ii) 2,813 51 2,864Short term borrowings 285 285Provisions 234 234 -----------------------------------Total current liabilities 3,332 51 3,383 ----------------------------------- Non-current liabilitiesLong-term borrowings 523 523Provisions - -----------------------------------Total non-current liabilities 523 523 -----------------------------------Total liabilities 3,855 51 3,906 -----------------------------------Total net assets 5,421 (51) 5,370 =================================== Capital and reserves attributableto equity holders of the companyShare capital 542 542Share premium 10,847 10,847Merger reserve 11,195 11,195Share option reserve 51 51Retained earnings (17,404) (51) (17,455) ----------------------------------- 5,231 (51) 5,180 Minority interest 190 190 -----------------------------------Total equity 5,421 (51) 5,370 =================================== Balance sheet reconciliation at 30 June 2006 Note UK GAAP Adjustments IFRS $,000 $,000 $,000Assets Non-current assetsIntangible assets (i) 2,741 18 2,759Tangible assets 812 812 -----------------------------------Total non-current assets 3,553 18 3,571 ----------------------------------- Current assetsInventories 2,476 2,476Trade and other receivables 2,613 2,613Short term investments 258 258Cash and cash equivalents 10,563 10,563 -----------------------------------Total current assets 15,910 - 15,910 -----------------------------------Total assets 19,463 18 19,481 ----------------------------------- Liabilities Current liabilitiesTrade and other payables (ii) 2,859 63 2,922Short term borrowings 1,576 1,576Provisions 227 227 -----------------------------------Total current liabilities 4,662 63 4,725 ----------------------------------- Non-current liabilitiesLong-term borrowings 506 506Provisions - - -----------------------------------Total non-current liabilities 506 506 -----------------------------------Total liabilities 5,168 63 5,231 -----------------------------------Total net assets 14,295 (45) 14,250 =================================== Capital and reservesattributable to equity holdersof the companyShare capital 730 730Share premium 21,761 21,761Merger reserve 11,181 11,181Share option reserve 76 76Retained earnings (19,647) (45) (19,692) ----------------------------------- 14,101 (45) 14,056 Minority interest 194 194 ----------------------------------- Total equity 14,295 (45) 14,250 =================================== Balance sheet reconciliation at 31 December 2006 Note UK GAAP Adjustments IFRS $,000 $,000 $,000Assets Non-current assetsIntangible assets (i) 2,701 36 2,737Tangible assets 1,008 1,008 -----------------------------------Total non-current assets 3,709 36 3,745 ----------------------------------- Current assetsInventories 2,468 2,468Trade and other receivables 6,942 6,942Short term investments 436 436Cash and cash equivalents 4,446 4,446 -----------------------------------Total current assets 14,292 - 14,292 -----------------------------------Total assets 18,001 36 18,037 -----------------------------------Liabilities Current liabilitiesTrade and other payables (ii) 3,166 56 3,222Short term borrowings 314 314Provisions 282 282 -----------------------------------Total current liabilities 3,762 56 3,818 ----------------------------------- Non-current liabilitiesLong-term borrowings 414 414Provisions - - -----------------------------------Total non-current liabilities 414 414 -----------------------------------Total liabilities 4,176 56 4,232 -----------------------------------Total net assets 13,825 (20) 13,805 =================================== Capital and reservesattributable to equity holdersof the company Share capital 731 731Share premium 21,826 21,826Merger reserve 11,174 11,174Share option reserve 118 118Retained earnings (20,244) (20) (20,264) ----------------------------------- 13,605 (20) 13,585 Minority interest 220 220 -----------------------------------Total equity 13,825 (20) 13,805 =================================== AdjustmentsExplanations of the adjustments made to the UK GAAP income statement and balancesheets are as follows: Note(i) IFRS 3 'Business Combinations" has been applied to acquisitions completed after the date of transition, 1 January 2006. As a result, the carrying value of goodwill in the UK GAAP balance sheet at 31 December 2005 is brought forward to the IFRS opening balance sheet. The effect of IFRS has been to reverse the goodwill amortisation charge for the June 2006 and December 2006 reporting periods. (ii) In accordance with IAS 19 administrative expenses have been adjusted to reflect accrued entitlement to short-term compensated absences. 4 Basic and Diluted Loss per Share Basic loss per ordinary share has been calculated on the basis of the lossattributable to equity holders of the parent of $2,896,000 (loss for the sixmonths ended 30 June 2006 - $2,323,000 and loss for the year ended 31 December2006 - $3,028,000) and the weighted average number of shares in issue during theperiod of 41,394,679 (six months ended 30 June 2006 - 33,327,537 and year ended31 December 2006 - 36,838,918). Instruments that could potentially dilute basicearnings per share in the future have been considered, but were not included inthe calculation of diluted earnings per share because they are anti-dilutive forthe periods presented. 5 Financial Instruments On 12 April 2007, the Company entered into a revolving credit agreement thatprovides for up to $2,000,000 in borrowings. The agreement matures one year fromthe date it was entered into. Interest is at prime plus 8 percent. A facilityfee of 4% was payable upon closing. As of 30 June 2007 $139,000 in borrowingswas outstanding under the agreement. As of the date of this report, there wereno borrowings outstanding under the agreement. Borrowings under the agreementare based on the eligible accounts receivable and inventory of certain of theGroup's US subsidiaries. They are secured by substantially all of the assets ofthose subsidiaries and are guaranteed by Plant Health Care, Inc. 6 Operating Loss Six months to Six months to Year ended 30 June 30 June 31 December 2007 2006 2006 as restated as restated $,000 $,000 $,000Operating loss is arrived at aftercharging:Depreciation 145 123 248Amortisation 108 32 2 ==================================== Exceptional costs- Share based payment expense 20 25 68- Employee termination costs 171 - -- Placement costs - 63 63- Provision for plant relocation 175 100 250 ------------------------------------ 366 188 381 ==================================== 7 Asset Purchase Agreement On 28 February 2007, the Company acquired certain of the assets of EdenBioscience Corporation for a total consideration of $2,200,000 plus theassumption of certain liabilities associated with these assets. $1,500,000 waspaid at closing and $700,000 was due under a secured promissory note bearinginterest at a rate of 5 percent per annum. $506,000 was paid on the note duringthe period. The balance outstanding at 30 June 2007 was $194,000 and is due on31 December 2007. Costs attributable to the purchase were $245,000. Details of the fair value of the assets acquired and liabilities assumed were asfollows: Provisional fair value of assets acquired $,000 Inventories 902Tangible assets 686Intangible assets 448Accrued expenses (102)Onerous lease provision (736) ------ 1,198 Goodwill 1,247 ------ Cost of acquisition 2,445 ====== The Company assumed the obligations under an Exclusive License Agreementrelating to the licensing of technology from Cornell University. Payments dueunder the agreement with Cornell are the greater of 2% of sales or $200,000 perannum. 8 Changes in shareholders' equity Six months to Six months to Year ended 30 June 30 June 31 December 2007 2006 2006 as restated as restated $,000 $,000 $,000 Total recognised income and expense (2,854) (2,238) (2,809) Exercise of options and warrants 1,200 1 64Repurchase of minority interest's (180) - (8)shares by subsidiaryShare based payments 20 25 67Share issues for services 109 38 38Share placement - 12,066 12,066Placement costs - (1,016) (1,013)Sale of shares 353 - -- Provision for plant relocation 175 100 250 -------------------------------------- (1,352) 8,876 8,405 Capital and reserves attributable to equity holders of the parent atthe beginning of the period 13,585 5,180 5,180 --------------------------------------Capital and reserves attributable to equity holders of the parent atthe end of the period 12,233 14,056 13,585 ====================================== -ends- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PHC.L