Plant Health Care concentrates on IP

21st Feb 2011 08:27

AIM-quoted Plant Health Care (PHC) has strengthened its balance sheet and increased its focus on the Harpin and Myconate natural plant growth products, where it owns the intellectual property. By partnering with the likes of Monsanto, Syngenta, Legacy Seeds and ABF-owned Germains Seed Technology, PHC does not have to build a brand and the partners bring expertise in their core crop areas. The prices of agricultural products are rising and that is good news for PHC as improving production levels will make its customers more money. PHC also benefits from the weak dollar. Last year, the reclamation business was sold for $400,000. PHC sold its US landscape and retail business for $4.65m after the year end. The cash from the sale was received in February 2011. That means that there is $18.2m in the bank in February. PHC says that it has three years of cash even if trading does not improve. Revenue from continuing operations slumped from $16.7m to $7.09m in 2010. That was because Monsanto bought Harpin product ahead of the 2010 season and did not sell as much as hoped. It was trying to change the way the market works and this proved difficult. This stock overhang has been sold to Direct Enterprises, which will effectively provide the sales force to sell the product. Group overheads are being cut but more is being spent on R&D. That includes developing a liquid version of the Harpin treatment. Admin expenses fell by around $1.5m to $11.5m. The group loss increased from $679,000 to $7.65m. That excludes a small profit contribution from the businesses sold. A working capital inflow minimised the cash outflow in the period.