UK: Stevia maker PureCircle sees shares slide
- 2010 profits to be lower than a year earlier; shares slide
- Sales forecast "in line" with 2009
- Creation of JV with ABF arm British Sugar
Food and beverage firms are turning to stevia to sweeten products
Shares in UK-listed stevia producer PureCircle soured today (27 July) after the business warned profits in 2010 would be lower than a year earlier.
PureCircle's stock was down 16.2% to 229.5p at 09:59 BST this morning in the wake of the company's profit warning.
The company said profits would be "held back" by "significantly increased investment" in production, sales and marketing. The group said it was also running under capacity.
"PureCircle's strategy is to build a large global business and we have invested heavily to do so. The current company infrastructure is designed to support a business with turnover of US$250m or more," the company said.
The firm said it expects sales in 2010 to be "in line" with last year as a contract with a trading partner that accounted for 60% of sales in 2009 had been discontinued. PureCircle said it was working at building its base of "end user" food and beverage customers.
"We now have more than 100 invoicing customers globally: this is the premium customer base in our industry. Most customers are currently conducting trials and testing launches. But those consumer products already launched are performing well and as their volume needs expand, they provide an excellent platform for strong growth in FY 2011 and future years," PureCircle said.
The company also today announced the formation of a venture with British Sugar, the sugar arm of Associated British Foods, to market "sucrose stevia product combinations" in the UK, Ireland, Spain, Portugal, China and Africa.
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