Revenues rose from $5 million to $5.6 million in the six months to June 2010, while the loss from continuing operations increased from $3.9 million to $4.7 million. A land reclamation business has been sold for $385,000, which represented a small loss.
Sales of Monsanto’s soybean seeds treated with PHC’s Harpin technology were disappointing because the price being charged was too high, which meant that Monsanto did not need to reorder Harpin this year. Monsanto has adjusted its marketing strategy and PHC is hopeful that this deal will start to generate revenues again.
PHC has secured a non-exclusive agreement with Syngenta for the supply of Harpin for use in its weed killing sprays for glyphosate-resistant crops. This is a market that PHC has been keen to enter and there is nothing to stop PHC doing deals with Syngenta’s rivals.
The next step is a deal with a fungicide manufacturer. Legacy Seeds is developing a combination of Harpin and Myconate for its alfalfa seeds: the deal could provide milestone payments for PHC.
In April, PHC bought all the outstanding intellectual property rights relating to Myconate from Bayer. The conclusion of this partnership left PHC free to get involved in field trials for the evaluation of the efficacy and economic feasibility of Myconate.
Brazil produces more than one-third of the world’s soybeans and is an important market for PHC to penetrate.
Although the second half of the year is always stronger than the first, house broker Evolution still forecasts an increased loss for 2010 – but predicts it will be lower than the loss in the first half of 2010. With $13.5 million in cash and investments, PHC has enough cash for its immediate needs.
Market: AIM
Symbol: PHC
Price: 119p
Market Cap: £63m
12 month high/low: 277p/89p
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