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Plant Impact receives Brazil boost - unlike larger ag sector peers

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Plant Impact, unlike larger peers, dodged the bullet of soft Brazilian agricultural input markets to report a near-doubling in half-year earnings, for a period which saw too the launch of a cocoa yield promoter.

The London-listed group - which develops so-called "crop enhancement" products, aimed at lifting productivity through boosting plants' own capabilities, for example, to fight pests or take-up fertilizers – unveiled earnings of £433,000 for the August-to-January half, up from £225,000 a year before.

The increase, on revenues up 61% at £4.03m, contrasts with the weaker results from many other agriculture groups focused on South America, where a weaker Argentine peso and Brazilian real have dented prospects.

Besides making imported goods more expensive for these countries, the weaker currencies cut the value of South American takings for companies reporting in the likes of pounds, or dollars.

Size factors

Plant Impact's growth reflected the group's emergence into the Brazilian market, where it sells its Veritas flowering-enhancement spray through a deal with sector giant Bayer.

"If you are DuPont, Syngenta, it is going to be harder to achieve growth when you already have a big market share," John Brubaker, the Plant Impact chief executive, said.

"For a company just beginning its growth trajectory, there is the possibility to do well," he told

However, he also stressed Plant Impact's "positive" relations with Bayer, saying that tie-ups between a small and large companies can be "hard to manage.

"In partnerships between small and large companies, there are not a lot of success stories," he said, flagging, for example, the differences of priority that can emerge between boards and salespeople at big enterprises.

Cocoa launch

Plant Impact has signed with another large agrichemicals group, Arysta LifeScience, for the marketing of its Banzai product, which the groups says offers a yield uplift of more than 25% for cocoa farmers through cutting stress for plants under pressure from black pod disease.

Plant Impact, which sees a prospect market of some $10m for Banzai, around the turn of the year made its first shipment of the product to West Africa, the world's main cocoa-producing region, where Arysta has a market share of about 25%.

The group highlighted too plans over the next three years over a product aimed at helping wheat crops overcome heat stress, while rolling the Veritas technology out to other soybean-producing countries.

Plant Impact last month revealed the poaching from DuPont's Pioneer business of Mike Eade as commercial head for North America, which includes the US, the top soybean-producing country.

Market reaction

The results were termed "strong" by broker Peel Hunt, which restated a "buy" rating on Plant Impact shares, on which it has a price target of 70p.

"The deals with Bayer and Arysta provide the company with the opportunity to build material revenue streams in two key global crops," said Peel Hunt analyst Charles Hall.

"There is potential for significant additional upside to our target [share] price as the company delivers on new products and markets."

The shares stood 2.7% higher at 58p in lunchtime deals in London.

John Brubaker will be speaking at the Agrimoney Investment Forum. More details on the Agrimoney Investment Forum can be found here.


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