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.
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
"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.
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
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".
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