LONDON (Alliance News) - Puricore PLC Friday reported a wider operating loss for the first half of the year as revenue slid by 31%, hit by a lack of milestone payments that had buoyed its wound care and dermatology revenue a year earlier, and as the company continued to revamp its offering to supermarket retailers.
The company makes products that protect against the spread of pathogens. Its main customers are US supermarkets, who use the products to protect fresh produce and flowers from pathogens, and the health market, where its wound care treatments are used on chronic and acute wounds including diabetic ulcers and burns, as well as in animal care.
It had warned last month that it was set to post a loss before interest, tax, depreciation and amortisation for the first half to end-June, causing its share price to drop sharply. It said that it had seen lower revenue from its supermarket retail concentrate products, as its customers transition to consumable products and away from capital equipment. It expects to earn more recurring revenue by shifting to consumable products.
In its earnings statement Friday, the company said its loss before interest, tax, depreciation and amortisation was USD2.2 million in the half, double the USD1.1 million loss it booked a year earlier, as revenue declined to USD8.6 million, from USD12.3 million.
"As we enter a new era for PuriCore, we continue to see strong market opportunities for our products and significant prospects for sustainable growth within and around our refocused businesses," Chief Executive Michael Ashton said. "Meeting the increased demand for our new Supermarket Retail business model emphasising recurring revenue through new concentrate products at such a rapid pace presented some challenges that we are addressing."
It said it was working closely with its supermarket customers on training their staff to use the new concentrate delivery systems efficiently. It said meeting the high demand for the new systems in a short time frame had also weighed on its margins, but it was dealing with the issues and is confident its investments in sales and marketing will accelerate market share gains.
Its gross margin in the first half was 28.2%, down from 33.1% a year earlier, with the lack of wound care and dermatology milestone payments also weighing.
Puricore said that based on ongoing management analysis, the company's produce market share was 26% of the supermarket retail addressable market as of June 30, up from 24% at the end of calendar 2013. It said its new product, ProduceFresh, represented 4% of the current market share. Its market share for the floral market rose to 13% of the supermarket retail addressable market, up from 8% at the end of December, all of which is consumable product.
The company last month also announced a strategic and operational review to decide how to use the proceeds from the sale of its former Endoscopy business for net proceeds of about USD25.7 million. It said Friday that it will communicate the results of the review in the fourth quarter.
"The sale of the Endoscopy business provides the resources to enable us to capitalise on strategic opportunities to grow the company in a targeted and disciplined manner. Our planning process is underway, and we look forward to reporting the outcome to the market later this year," Ashton said.
Puricore shares were down 5.5% at 34.25 pence early Friday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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