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PureCircle (PURE), the world’s largest producer of Stevia, has predicted a 26% rise in full year revenues, but warned over tightening margins.
Issuing a trading update for the year ended 30 June, PureCircle said it shrugged off negative exchange rates to record US$84m is sales in the second half, taking its full-year sales to US$127m. That would represent a 26% increase year-on-year and would have been 31% higher but for the weakening of currencies including the Mexican Peso and Euro.
It has seen growth in sales across all geographic regions driven by accelerating market adoption of stevia.
However, there has been a tightening of leaf supply in China which will impact its full-year margins, with the firm looking to increase production from South America and Africa to better balance its future leaf supply.
Despite this, it expects to record a gross margin of 9%, EBITDA 1of 6% and net profit 73% higher than at $4m.
PureCircle CEO Magomet Malsagov said: “In FY2015 the global stevia market has again grown with more than 6,500 products across all categories now launched using stevia ingredients.
“The size and range of products now in market and of customers using stevia as a core part of their ingredient mix gives us confidence in the increased future demand for PureCircle stevia ingredients.
“Stevia products are still in the roll-out phase in many important markets and until market consumption smooths out, growth will come with a lumpy sales profile and therefore some volatility: this adds some complexity to our ability to provide guidance in the short term. However we are confident of the company’s future prospects and of continued long term sales growth and profitability.”
Morning update
In wider economic news, all eyes are once again on Greece after the people voted ‘no’ in a referendum on the debt deal. Now this morning finance minister Yanis Varoufakis has resigned despite the government’s victory in the poll as Greece seeks a new agreement with its EU creditors.
The fallout from the vote will take some time to become clear, but there is little doubt Greece has moved closer to an exit from the Eurozone.
The euro itself edged up against the dollar this morning as investors attempted to weight up the implications of the vote, but the currency is expected to come under pressure in the longer-term.
The equity markets are suffering this morning though, with the FTSE 100 dropped 1.2% on opening this morning, but improved to 0.7% down soon afterwards at 6,538.7pts.
The supermarkets had a poor end to a difficult week on Friday, with Morrisons (MRW) down 2% to 176.6p, Sainsbury’s (SBRY) down 1.2% to 263.3p and Tesco (TSCO) down 1% to 207.4p.
Most stocks have opened down this morning, but the falls look far from apocalyptic so far. Sainsbury’s and Tesco are 0.5% down (at 262.1 and 206.4p respectively), while Morrisons has opened 0.3% down at 176p.
The biggest grocery FTSE 100 faller is, perhaps unsurprisingly, Athens-based Coca-Cola HBC (CCH), which is 0.7% down at 1,333p.
The week in the City
This week’s AGMs at Marks & Spencer (MKS) and Sainsbury’s look to be feisty affairs, with shareholder group Pirc encouraging shareholders to vote against the companies’ executive pay policies.
First up is M&S tomorrow with an accompanying Q1 trading update, while Sainsbury’s coming on Wednesday.
There is also a Q1 update and AGM for Booker on Wednesday, while Associated British Foods (ABF), Walgreens and PepsiCo (PEP) will issue trading updates on Thursday.
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