Shares in PureCircle dipped 4% after the manufacturer of sweeteners based on the stevia plant, a sunflower relative, unveiled a widening in full-year losses, reflecting lower sales as well as a foreign exchange hit.

The group highlighted a booming market for stevia-based sweeteners, with the number of new food and drinks products to contain the low-calorie product running at an annual rate of 1,000 so far in 2012, a 65% increase on last year's pace.

Carbonated drinks are a particularly popular market, with stevia sweeteners adopted by products including Sprite in France and Fanta in China so far this year.

But "encouragingly, PureCircle stevia ingredients are being used across the full range of food and beverage product innovation including reformulations of existing mainstream products, brand extensions and new product launches", the group said.

'Sub-scale sales'

However, the group's own sales in the year to the end of June increased by a relatively-modest 26%, growth PureCircle termed "sub-scale" and which "did not reflect the strong growth in end market usage of high purity stevia".

"This is principally due to the continued impact of inventory" built up at major customers in previous years.

And by revenue, sales fell 14.7% to $45.4m for the year, reflecting a change in sales procedures from the historic "take or pay" system.

'Sufficiently funded'

Paul Selway-Swift, the PureCircle chairman, said that "the year has been a year of considerable progress in the development of the high purity stevia industry and in the establishment of PureCircle… although clearly that progress is not yet evident in our reported financial results.

"We remain confident of the future of our high purity stevia business but continue our guidance that this should be seen as a mid-to-long term opportunity."

The group, which raised £20m ($31m) in August from a placement of shares with Hong Kong-based investment company Wang Tak, added that, it was "sufficiently funded for its current expansion plans".

PureCircle said its net debt, as of the end of June, "has remained constant since December 2010 [at] $77m reflecting the group being operating cash-flow neutral across the period, despite the relatively low sales volumes and the temporary production slowdown".

Market reaction

In the city, analysts at broker Liberum to cut to "hold" their rating on PureCircle shares.

The stock stood 4.3% down at 168p in lunchtime deals in London.