Full-year results from crop enhancement specialists Plant Impact (PIM:AIM) on 26 October mark a crucial milestone for the group as it makes the all-important move into commercial profitability on the back of its soy offering and the markets respond by sending share price 11% higher to 60p.
The Harpenden-headquartered specialty chemicals outfit posted an operating loss of £0.2 million in the year to the end of July compared to the previous year's £0.9 million losss but net income for the year came in at £0.1 million compared to a loss of £0.7 million 12 months earlier.
The hard work of four years of soy field trials in Brazil is finally paying off and Plant Impact's Veritas product enjoyed its first commercial season as a product in Bayer's CropScience stable. The relationship with Bayer is also likely to bear fruit as the group's promising soy R&D portfolio formed the basis of a product development and commercialisation agreement concluded between the Company and with Bayer CropScience's central strategy and R&D team.
Plant Impact continues to devote up to a third of revenue to R&D and chief executive John Brubaker stresses that the group's stated aim going forward is target to new crops and geographies. This strategy is exemplified by Plant Impact's partnership with Arysta LifeScience, the top company in West African crop protection. Arysta is working with Plant Impact to bring crop enhancement products to cocoa growers in West Africa. Cocoa is one of the few high value crops for which Africa is the essential global supplier.
Peel Hunt sees the group as a buy with a 70p target price. 'Plant Impact’s technology has demonstrated material improvement to crop production and the deals with Bayer and Arysta provide the company with the opportunity to build material revenue streams in two key global crops. The company has significantly enhanced its internal resources, which should accelerate the ability to commercialise the existing products as well as develop the pipeline.'