Shares in Plant Impact slumped by more than one-quarter to a 15-month low after the alternative agrichemicals group shelved plans for expanding in the US and slashed its forecast for full-year results.

The company, in which Japan-based farm sprays giant Arysta LifeScience bought a 9.1% stake in May, said that its sales and operating results for the year to the end of March would fall "materially below" management guidance and market forecasts.

Sales, which had been pegged at about £2.8m, would come in at £1.8m-2.2m, said John Brubaker, a former Arysta executive who was in August installed as chief executive, replacing Peter Blezard, who helped found Plant Impact.

The downgrade reflected a decision to delay plans to launch a US subsidiary "until resources permit and launched can be planned in detail to ensure a good likelihood of success", Mr Brubaker said.

Mr Blezard in July, in his last statement at the helm, acknowledged that sales in the US had been "disappointing", citing setbacks including a "lack of support from Plant Impact's distributor".

'Realistic and sustainable'

Mr Brubaker said that the move, coupled with a measures such as scrapping public relations advisers and reducing research and development  and travel expenses, had cut the group's annual operating expenses to about £2.5m, from £3.24m at the start of the financial year.

"Our actions to improve the company's expense position have re-aligned the company's operating structure to a more realistic and sustainable level," he said, adding that he saw "significant potential" for the group in the key markets, such as Brazil, France, Mexico and the UK, in which it was now focusing on.

"I am enthusiastic about the possibilities for our business over the next 12 months."

However, the comments failed to reassure investors, who initially sent Plant Impact shares to 15.5p in London, their lowest since September last year, before recovering some ground to close at 16.25p, down 24% on the day.

Arysta bought its shares at 45p.

Larger losses

Plant Impact also revealed that it fell deeper into the red in the April-to-September half, reporting an after-tax loss of £1.38m compared with £1.05m a year before.

Revenues fell 4.4% to £610,000, reflecting a timing issue on Dutch orders.