PURECIRCLE LIMITED ( PureCircle or the Company ) FY14 RESULTS

Transcription

1 PURECIRCLE LIMITED ( PureCircle or the Company ) FY14 RESULTS PureCircle ( the world s leading producer and marketer of high purity stevia ingredients announces its audited results for the financial year to 30 June 2014 (FY14) together with audited comparatives for the year ended 30 June 2013 (FY13). HIGHLIGHTS FOR THE YEAR Financial Highlights Summary financials FY14 FY13 Change (Restated)* % or Financial year ended 30 June USD m USD m USD Sales % Gross margin % Operating profit $16.2m EBITDA** $13.8m Net profit/(loss) after tax 2.3 (9.4) +$11.7m Operating cashflow before financing 15.5 (9.6) +$25.1m Net debt (79.9) (75.2) ($4.7m) Net assets $5.7m Net assets per share (US cents) *FY13 results are restated for adoption of IFRS 11 Joint Arrangements (i.e.:- accounting for Joint Ventures) that the Group implemented from 1 July The impact is to reduce FY13 sales by $1m) **Gross margin, operating profit and EBITDA are as per management segmental reporting in the Group Financial Review note set out below. The full consolidated statement of income is set out in Appendix 1 of this results announcement Sales: FY14 sales increased $31m (44%) to $101m. The Group now has twelve products in market under our proprietary Stevia 3.0 TM portfolio (FY13 six). The whole portfolio showed growth in FY14, most notably new innovations and our natural flavour range. All sales regions grew compared with FY13. Average pricing increased 5% in FY14 principally due to product mix including some increases in Reb A volumes against FY13 and continued reduction in lower value co-product sales in line with our strategy of focusing on our Stevia 3.0 TM portfolio. Sales to our Global Key Accounts grew slightly faster than sales to smaller regional customers. FY14 sales do not include sales by our Joint Ventures as these are now equity accounted. FY13 sales have been restated on the same basis which has the effect of reducing FY13 sales by $1m.

2 Sales volumes: Volumes increased 37% led by sales of new ingredients from our Stevia 3.0 TM portfolio. Overall volumes of new innovations showed strong year on year growth, offset by lower coproduct volumes. Growing use by customers of blends of our proprietary Stevia 3.0 TM portfolio to formulate great tasting consumer products. The use of blends increases market usage, provides PureCircle with a balanced revenue portfolio and enhances our market share. Gross margin: $37m, an increase of 106% (FY13: $18m) reflecting increased volumes and improved sales mix, with a continued higher proportion of Stevia 3.0 TM products. The FY14 gross margin percentage of 36% was an 11 percentage point improvement against FY13. Capacity utilisation remains modest and we expect further improvements in gross margin as sales volumes increase further. Operating profit and EBITDA: Operating profit improved $16m to $17m and EBITDA increased $14m (152%) to $23m compared with FY13 reflecting growth in sales volumes and improving gross margin percentage, partially offset by increased investment in our market application capacity. The Group has an operationally geared business model. Higher sales volumes translate to higher operating profit and EBITDA due to the high fixed costs of the Group s global sales, marketing and production capacity. Net profit after tax: $2m net profit in FY14, an $11m improvement on FY13. This reflects the $14m EBITDA improvement partially offset by higher interest charge. Net cash from operations before financing: $16m of cash from operations before financing, an improvement of $25m against FY13 reflecting stronger EBITDA and a levelling of inventory. Further improvements are expected as sales volumes increase. Inventories: FY14 inventories of $86m steady against FY13 $86m. In FY13 the Group built inventory volumes of new innovation products in anticipation of higher and sustained sales growth in FY14 and FY15 in line with accelerating market demand. Higher inventory volumes have been sustained again in anticipation of higher sustained future sales volume growth. Financing and funding headroom: The Group ended FY14 with cash and facility headroom of $60m and net debt of $80m. Since the FY14 year end the Group has repaid early $34m of gross debt and has accepted an offer of a new five year $71m facility with its existing bankers to replace its principal debt facilities that were due to expire in June The new facility is expected to complete in September 2014 with a lower interest rate. The Group is sufficiently funded for its current expansion plans.

3 Business developments Overview Market adoption of PureCircle Stevia 3.0 TM ingredients has accelerated across all Food and Beverage categories and all regions of the world. The scale, breadth and rapidity of adoption is strong evidence of stevia being accepted as a mainstream ingredient with the real potential to develop further into a mass volume ingredient. At a macro level the health and regulatory pressures to moderate calorific intakes continue to increase with FY14 seeing a series of reports and legislation drafted on this issue. At a product level, Mintel estimates there are now over 5,000 Food and Beverage products in the market using stevia and within these the average size of brand adopting continues to increase. Carbonated Soft Drinks, discussed in more detail below, are a particularly important example of increased market usage. PureCircle s business model is designed to service mass volumes sustainably, underpinned by continued product innovation. With increased market adoption of proprietary blends and with six new products added to our portfolio, FY14 has again confirmed that our innovation unlocks market access thereby increasing sales volumes. Looking ahead our priorities will continue to focus on sustainable sales volumes underpinned by innovation. The December 2013 GRAS approval for Reb M is one indication of the further potential we have in our innovation pipeline. Carbonated Soft Drinks: FY14 was an important year for the development of stevia as a mainstream ingredient in the Carbonated Soft Drink category, which is likely to represent the largest single category by volume for PureCircle s Stevia 3.0 TM. Following its success in Argentina and Chile, The Coca Cola Company announced the roll out of Coca-Cola Life into the USA, Mexico, UK and Sweden in calendar year PepsiCo has also extended Pepsi Next into Canada, Finland and the Netherlands. Dr Pepper has launched a range of products with stevia in the USA. Reformulations of global brands such as Sprite and Fanta are in markets in Europe, Latin America and Asia. Taken together the Carbonated Soft Drink launches in FY14 represent a step change in market adoption of stevia and numerous other Carbonated Soft Drinks using stevia are already in development pipelines for launch. Other F&B product launches: as noted earlier, adoption of PureCircle Stevia 3.0 TM has accelerated across more categories and countries in FY14. Mintel data shows adoption by numbers of product continuing to grow at more than 50% a year. Notable new categories adopting across multiple regions include dairy and confectionery. Again more launches are mainstream reformulations. Customer base: having built a well-diversified customer base of more than 300 clients during FY11 to FY13, in FY14 PureCircle consolidated its customer base with an increased focus on larger accounts. In FY14 our Global Key Accounts contributed approximately 50% of sales and a proportion of smaller clients were serviced by value added ingredient distributors that act as PureCircle extensions into the market. Regulatory: FY14 saw PureCircle secure regulatory approvals for important next generation innovation. GRAS Letter of No Objection from the U.S. FDA for Reb M a new, zero-calorie sweetener from the stevia leaf jointly developed by The Coca-Cola Company and PureCircle is an important

4 milestone for us. It is another example of our ongoing commitment to sweetener innovation and our global commitment to offering solutions to help the food and beverage industry to develop more reduced, low and no-calorie food and beverage options. In FY14 PureCircle also secured approval for an increased range of natural flavours. There are now four approved flavours in market and they provided a significant contribution to FY14 sales growth. PureCircle continues to work with regulatory authorities to widen the range of Stevia 3.0 TM product available to consumers around the world. During FY14 the Indonesian market opened and further regulatory approvals, including India, are in the pipeline for subsequent years. Integrated business model: Our business model is based on proprietary innovation, supported by a fully integrated supply chain. PureCircle is unique as a Stevia producer and marketer in that we 100% control our supply chain from leaf through production to end customer relationship and formulation support. Our in-market application and formulation support with customers enables us to identify developing market needs. Our integrated supply chain enables us to develop and deliver solutions to those market needs at pace. PureCircle Stevia 3.0 TM is the name we use to describe our proprietary portfolio of high purity stevia ingredient solutions. PureCircle Stevia 3.0TM is a range of stevia products that provide customers with formulating flexibility across calorie reduction, specific taste and formulation requirements and price points. Frequently used in blend combinations of products, Stevia 3.0 TM provides unparalleled operational flexibility for our clients. During FY14 our Stevia 3.0 TM portfolio comprised eight sweetener and four natural flavour ingredients. PureCircle product portfolio: PureCircle continued its expansion of proprietary ingredients this year with the launch of six new products that further rounded out the PureCircle Stevia 3.0 TM portfolio of sweeteners and flavours. Each of these innovations played a critical role in enabling major Food and Beverage brands to find a customized stevia solution that surpasses consumer expectations and meets their company goals. An important development in FY14 was the increased use by customers of blends of PureCircle products. Facilitated by our extensive in-market application laboratory support, the growing use of blends further enables great tasting formulations to be created thereby driving market adoption. In addition blended formulations using PureCircle proprietary products further strengthen our market share. Application formulation and technical support: During FY14 in-market application laboratories were opened in Mexico and Malaysia to support the important LATAM and South East Asia Markets. To introduce the newest taste breakthroughs to the market faster, PureCircle expanded its PureCircle University program. Started in 2013, this program allows customers to take advantage of PureCircle s expertise and actively engages in extensive side-by-side development. In FY14, our PureCircle Technical Team hosted more than 100 PureCircle University programs around the globe for Fortune 500 companies across all food and beverage categories. A key output from the FY14 PureCircle University program has been the accelerated use by customers of blends of proprietary PureCircle Stevia 3.0 TM products. Stevia advocacy: The Global Stevia Institute ( GSI ) ( ) has taken stakeholder engagement to a new level this year through partnering with key customers to enhance

5 relationships with health professionals in all areas of the world on events, speaking engagements and seminars. Through advisory board member led activity, the GSI was able to reach more than 6,000 health professionals and influencers in FY14. In addition, the GSI is working in tighter collaboration than ever before with key customers to tailor advocacy support for significant product launches and reformulations. Supply chain: In FY14 the Group supply chain delivered record sales volumes across a wider product portfolio to a wider range of delivery locations than ever before. The supply chain achieved this whilst also supporting the practical aspects of scaling up new innovation and whilst reducing unit costs of production. Overall this provides a sound platform for future profitable growth and confirmation of the scalable nature of the Group s business model. Within the supply chain, investment in leaf supply was increased sharply in anticipation of sustained growth in market demand. Our leaf businesses in Africa and South America increased supply and looking ahead we expect these regions to significantly contribute in overall supply. Organisation: In FY14 in anticipation of sustained sales growth, the Group further strengthened its senior management team. Jordi Ferre, previously President of our Commercial division, was appointed Chief Operating Officer (COO) and effective 1 July 2014 relocated to Kuala Lumpur. Jordi Ferre was replaced as President of Commercial Division by Jason Hecker, formerly Group Head of Marketing who has been with PureCircle since 2009 and is based in our Global Sales and Marketing headquarters in Oakbrook, Illinois. A new Operating Committee reporting to the COO has been implemented including new senior hires in key areas of Leaf Development and Supply, Quality Control, Operational Finance and Human Resources. The Group will continue to invest in management to support growth effectively in a sustained manner. The audited results for the year to 30 June 2014 comprising the Group s Consolidated Statement of Comprehensive Income, Statement of Financial Position and Statement of Cashflows are set out in Appendix 1 in pages 11 to 15. The Group s full Annual Report and accounts will be posted to shareholders in November Commenting on the FY14 performance and outlook, the Chairman Paul Selway-Swift said: Our strategy of introducing new and innovative ingredients and customizable ingredient combinations to meet growing market needs is winning business for PureCircle. We are generating revenues from a well-balanced range of natural sweetener and flavour products and from a wide range of customers and regions directly and through our business partners. I commented in our FY13 results statement that FY13 had seen the first tangible market indications of stevia developing into a mainstream ingredient. Developments in all our markets during FY14 have clearly confirmed this and adoption is accelerating. In particular, recent Carbonated Soft Drinks launches with PureCircle s natural ingredients, most notably reformulated Cola drinks by major soft drink companies into large markets, provide enhanced confidence of sustainable sizeable growth for our business. Our operationally geared business model means that larger sales volumes translate directly into improved profitability. FY14 has again confirmed this and has endorsed our earlier decision to invest in production facilities capable of delivering stevia in the volume we anticipated the market would

6 demand. Since 1 July 2012 we have achieved a $56m (124%) increase in annual sales which has led to a $25m improvement in annual net profit. We remain confident in the future growth of the PureCircle Stevia 3.0 TM enabled market and that it will generate sustained sales growth for our business. Once delivered we expect the increased sales volumes to generate further improved profitability. Enquiries: PureCircle Limited ( Magomet Malsagov, CEO William Mitchell, CFO RFC Ambrian Ltd (NOMAD) Stephen Allen NOTES TO EDITORS PureCircle is the global leader in production and marketing of stevia ingredients. PureCircle leads the industry with development of a vertically integrated, sustainable and natural supply chain. Stevia is grown for PureCircle across South America, Africa, Asia and the United States where it provides a sustainable cash crop for farming communities. As part of the company s proprietary Stevia 3.0 TM portfolio, PureCircle has developed a broad range of ingredient solutions and has pioneered such ingredients as Reb A, SG95, and breakthrough ingredients such as PureCircle Alpha, Reb D, Reb M as well as PureCircle Flavors. PureCircle also established joint venture partnerships with sugar industry leaders to innovatively combine stevia and sugar for natural sweetening solutions and locally support customers. These global partnerships include Tereos PureCircle Solutions, with Tereos and NPSweet A/S with Nordzucker, in Europe. As part of its industry leadership, PureCircle pioneered the trust mark Stevia PureCircle, which educates consumers about the benefits of stevia and provides a strong base of trust for both consumers and food and beverage companies alike. The company also founded The Global Stevia Institute, ( ) the leading resource for accurate, science-based information on stevia led by a global advisory board of internationally recognized health professionals. PureCircle s global headquarters are in Kuala Lumpur, Malaysia. PureCircle is listed on the London Stock Exchange AiM market under the ticker symbol: PURE. For more information on PureCircle, visit: BUSINESS REVIEW CHAIRMAN S STATEMENT FY14 saw strong evidence of stevia becoming established as a sustainable mainstream ingredient of choice for the world s leading Food and Beverage brands. The range of categories and regions using stevia is now truly global and continues to accelerate. The combination of product successes enabled by PureCircle s Stevia 3.0 TM and the continued pressures to moderate calorific content in Food and Beverage suggest stevia adoption will continue to grow. In this context the FY14 developments in Carbonated Soft Drink use of proprietary PureCircle stevia blends warrant particular mention. At a Company level FY13 and FY14 demonstrated the robustness and scalability of our business model. Our proprietary innovation unlocks additional market and leads to improved sales volumes which in turn improve margins and profitability. Encouragingly, in FY14 we again broadened our Stevia 3.0 TM portfolio and further increased our innovation pipeline which gives further confidence about future sustainable sales growth. We remain confident about the long term future of the high purity stevia market and of the opportunity for PureCircle to play the leading role in it. Sustainable mainstream usage of PureCircle stevia will lead to increased sales which, when realised, will drive future profitability.

7 CEO REVIEW Market: In FY14 the stevia market continued to accelerate. Mintel data indicates that more than 2,200 Food and Beverage products using Stevia were launched in FY14 alone, a cumulative annual increase of over 55% a year since FY09. Importantly, in FY14 adoption included larger brands in larger categories, as well as continued penetration of new categories and new regions. In this context, the accelerated adoption of stevia by the important Carbonated Soft Drink category warrants particular note. Currently over 4.1 billion people across 68 countries have access to products with PureCircle ingredients, helping to cut an estimated 500 billion calories a year. With increased product usage, consumer awareness and positive sentiment for stevia continues to grow across all major markets. In all of the key markets we have been tracking, awareness levels have jumped significantly in just a few short years. For example, US awareness levels are now over 60%, up from only 23% in In both the UK and Mexico, CY2013 awareness levels jumped to over 20% from only 8% in The consumer and brand trends indicate a growing mainstream adoption of stevia and a strong platform for sustainable sales growth. Regulatory: Having secured regulatory access for more than a billion new consumers in FY13, new regulatory approvals have continued in FY14. Product approvals have included new flavour ingredients and in December 2013 FDA GRAS approval for Reb M, (formerly Reb X) a new zerocalorie sweetener from the stevia leaf jointly developed by The Coca-Cola Company and PureCircle, was granted. Regional approvals achieved have included Indonesia with India, Bangladesh and Sri Lanka in final stages of approval. Marketing and technical support: As the Everything Stevia company, PureCircle s marketing strategy is to offer our customers a unique combination of consumer insights, stevia advocacy support, practical in-region application formulation support and ongoing unparalleled innovation. The improved FY14 results endorse this strategy. The PureCircle Consumer Insights Group continued to strengthen its global expertise with industryleading market and consumer research on the sweeteners category. In FY14 we have expanded our proprietary database of research to include markets such as Russia, Turkey and Sweden, expanding the total number of countries to 15. The Global Stevia Institute ( GSI ) ( ), already recognised as the leader in stevia advocacy, was strengthened with additional Advisory Board members and its reach now extends to cover regularly more than 6,000 health and food professionals. In addition, the GSI works in tight collaboration with key customers, to tailor advocacy support for significant product launches and reformulations. Our in region formulation support was strengthened with the opening of application laboratories in Mexico and Malaysia. Our PureCircle university program was extended to more than 100 customer sessions in FY14. All our marketing activity is underpinned by sustained product innovation.

8 Joint Ventures: The Group goes to market in mainland EU through its two joint ventures NP Sweet and TPCS. FY14 was only the second full year of EU approval for stevia. Both JVs continue to develop their businesses in line with our wider Group innovation led strategy. We increased investment in the EU in market application support in FY14 and this is helping to build market. Supply chain: In FY14 our factories produced record volumes of finished goods including twelve Stevia 3.0 TM products commercially for market against six in FY13 and just two in FY12. At the same time our production team was engaged in scaling production of new innovation to come on stream in FY15. In FY14 our product unit costs were reduced due to the benefits of innovation, higher volumes and process efficiency. We expect further improvements with continued innovation and volume increases. Investment in leaf supply was increased sharply in anticipation of sustained growth in market demand. Our leaf businesses in Africa and South America increased supply and moving forward we expect these regions to contribute significantly in overall supply. R&D: We strengthened our position as the stevia industry innovation leader in significant ways this year. The PureCircle Leaf Research scientists successfully sequenced the entire stevia genome. This proprietary, scientific breakthrough will significantly accelerate the development of naturally sourced, superior-tasting stevia leaf extracts through PureCircle s traditional plant breeding program. In addition, we expanded the Global Innovation Lab based in the US and the created a dedicated Global Innovation Group. The Group evaluated over 100 new items, leading to the successful launch of six new products, each incrementally adding distinct technical advantages and benefits to our portfolio of offerings. We also expanded our pipeline of innovation projects to include more fundamental glycoside research and focused research against still largely untapped segments of the global food and beverage market such as flavour enhancement and geographic specific opportunities. Management: PureCircle continues to invest in management with the skills and experience to drive and support our ambitious growth plans across all aspects of our business. In FY14 our investments have had a particular emphasis on product application development and increased in region sales and marketing including the opening of sales offices in Mexico, India, Malaysia and Turkey and additional investment into the UK and Shanghai. Effective 1 July 2014 Jordi Ferre, previously President of our Commercial division, was appointed Chief Operating Officer (COO) and relocated to Kuala Lumpur. Jason Hecker, formerly Group Head of Marketing, took over as President of Commercial division based in our Global Sales and Marketing headquarters in Oakbrook, Illinois. A new Operating Committee reporting to the COO has been implemented including new senior hires in key areas of Leaf Development and Supply, Quality Control, Operational Finance and Human Resources. Looking forward we will further upgrade our IT systems including the implementation of a global ERP system across FY15 and FY16 and further strengthen our supply chain and customer service organisation to support sustained sales growth.

9 GROUP FINANCIAL REVIEW The Group s FY14 financial year covers the year from 1 July 2013 to 30 June FY13 comparatives are for the year from 1 July 2012 to 30 June Set out below is an extract from the audited FY14 financial statements. The full consolidated statement of comprehensive income, statement of financial position and statement of cash flows follow in pages 11 to 15. Trading FY14 USD 000 FY13 USD 000 (Restated) Revenue 101,045 70,200 Cost of sales (64,403) (52,382) Gross margin 36,642 17,818 Gross margin % 36% 25% Other income Administrative expenses (19,860) (17,260) Adjusted operating profit 17, Other expenses (6,140) (3,917) Foreign exchange gain 1,265 2,381 Finance costs (9,253) (8,416) Share of loss in joint ventures* (503) (355) Taxation (265) (102) Profit/(Loss) for the financial year 2,320 (9,428) Net debt and funding headroom Gross debt 125, ,070 Gross cash (45,865) (48,919) Net debt 79,985 75,151 Financing and funding headroom 60,000 55,000 EBITDA** 22,862 9,062 *Share of loss in joint ventures includes group margin on sales by Joint Ventures to external parties. ** EBITDA is defined as EBITDA with other expenses (principally the charge for the Group s LTIP scheme) added back. Segmental reporting: The Group operates as a single segment company comprising of the integrated production and marketing of PureCircle Stevia 3.0 TM products. Sales: FY14 sales were $31m (44%) higher than FY13, reflecting higher sales across all products and regions, led by our innovation and flavour range in particular. Average prices improved 5% due to sales mix including more Reb A sales and less co-products than FY13. Sales to Global Key Accounts increased slightly faster than sales to Regional and smaller accounts. Sales volumes: FY14 total volumes increased by 37% led by the accelerating usage of stevia by Food and Beverages companies and underpinned by PureCircle s proprietary Stevia 3.0 TM portfolio of innovation which continues to enable market adoption. Our flavour range which now has four

10 products in market showed the highest rate of growth. Volume growth was partially offset by reduced co-product sales. Gross margin: In FY14 gross margin was $37m, an increase of $19m (106%) over FY13 reflecting improved sales volumes, better sales mix and lower production unit costs. At 36%, the FY14 gross margin represents an 11 percentage point improvement over the 25% in FY13. However, sales volume utilisation of capacity remains modest and gross margin percentage should improve further as sales volumes increase. Operating profit and EBITDA: The Group has a highly geared operational business model and increases in sales volumes should flow through to improved profitability due to the high fixed cost nature of the Group s sales, marketing and production capacity. FY14 Operating profit and EBITDA again confirm that this is the case. On a $31m increase in sales FY14, Operating profit was $16m higher than FY13 at $17m and EBITDA was $14m (152%) higher at $23m. Other expenses: FY14 other expenses principally comprise non cash costs of the Group s LTIP scheme and similar discretionary remuneration. Share of loss of Joint Ventures: the Group goes to market in mainland EU through its two joint ventures NP Sweet and TPCS. FY14 was only the second full year of EU approval for stevia and both JVs are developing their businesses in line with PureCircle s innovation led strategy. The FY14 JV share of results reflect the Group s full gross margin realised on sales by the JVs to third parties and increased investment in in-market application support made during the year. Finance costs: As expected the Group has run a higher net debt balance across FY14 reflecting the decision to build inventories in H2 FY13 ahead of anticipated sales growth in FY14 and FY15. The higher average net debt has resulted in an increased interest charge of $9m (FY13 $8m). This will reduce with sustained higher operational cashflow and reduced interest rates on the newly secured principal debt facility. Net profit after tax: The Group moved to a $2m net profit in FY14, an $11m improvement on FY13. This reflects the $14m EBITDA improvement partially offset by higher interest charge and lower tax credit as all entities improved profitability. Net cash from operations before financing: The Group generated $16m of cash from operations before financing, an improvement of $25m against FY13. The improvement reflects stronger EBITDA and a levelling of inventory volumes from historic highs. Further improvements are expected as sales volumes increase. Financing and funding headroom: The Group ended FY14 with cash and facility headroom of $60m and net debt of $80m. Since the FY14 year end the Group has repaid early $34m of gross debt and has accepted an offer of a new five year $71m facility with its existing bankers to renew and extend its principal debt facilities that were due to expire in June The new facility is expected to complete in September 2014 and will attract a lower interest rate than the existing facility. The Group is sufficiently funded for its current expansion plans.

11 Appendix 1 AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CASHFLOWS AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FY14 USD 000 FY13 USD 000 (Restated) Revenue 101,045 70,200 Cost of sales (63,570) (52,167) Gross profit 37,475 18,033 Administrative expenses (24,461) (19,159) Other income 1,426 2,625 Other expenses (1,539) (2,019) Finance income Finance costs (9,253) (8,416) Share of loss in joint ventures (1,336) (570) Profit/(Loss) before taxation 2,585 (9,326) Income tax (265) (102) Profit/(Loss) for the financial year 2,320 (9,428) Other comprehensive income/(loss) (net of tax) Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations (514) (379) Share of other comprehensive income/(loss) of joint ventures 5 (53) Total comprehensive income/(loss) for the financial year (net of tax) 1,811 (9,860) Profit/(Loss) for the financial year Attributable to: Owners of the company 2,316 (9,492) Non-controlling interest ,320 (9,428) Total comprehensive income/(loss) Attributable to: Owners of the company 1,804 (9,928) Non-controlling interest ,811 (9,860) Profit/(Loss) per share (US cents) - Basic 1.41 (5.80) - Diluted 1.37 (5.80)

12 AUDITED STATEMENT OF FINANCIAL POSITION ASSETS FY14 FY13 FY12 USD 000 USD 000 USD 000 (Restated) (Restated) NON-CURRENT ASSETS Investment in joint ventures Intangible assets 38,023 32,280 26,684 Property, plant and equipment 63,715 65,889 66,586 Biological assets 4,237 4,172 6,047 Prepaid land lease payments 2,999 3,181 3,102 Deferred tax assets 5,876 5,661 6,048 Trade receivables 1, Other receivables, deposits and prepayments , , ,638 CURRENT ASSETS Inventories 86,519 86,475 66,315 Trade receivables 37,362 34,779 28,910 Other receivables, deposits and prepayments 4,962 5,924 4,425 Tax recoverable Amount owing by subsidiaries Short-term deposits with licensed banks 10,718 37,599 9,733 Cash and bank balances 35,147 11,320 14, , , ,673 TOTAL ASSETS 292, , ,311 EQUITY AND LIABILITIES EQUITY Share capital 16,472 16,460 15,449 Share premium 163, , ,330 Foreign exchange translation reserve 920 1,432 1,868 Share option reserve 5,076 1, Accumulated losses (38,203) (40,519) (31,027) EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 147, , ,824 NON-CONTROLLING INTEREST TOTAL EQUITY 148, , ,476

13 NON-CURRENT LIABILITIES Deferred tax liabilities Long-term borrowings 2,169 96,581 84,026 Deferred income Other payables and accruals 2,111 1,147 1,069 4,640 98,270 86,237 CURRENT LIABILITIES Trade payables 5,879 11,714 3,572 Other payables and accruals 10,364 7,420 5,923 Income tax liabilities Short-term borrowings 123,681 27,489 17, ,924 46,871 26,598 TOTAL LIABILITIES 144, , ,835 TOTAL EQUITY AND LIABILITIES 292, , ,311 NET ASSETS PER SHARE (USD) AUDITED CONSOLIDATED STATEMENT OF CASHFLOWS CASH FLOWS FROM OPERATING ACTIVITIES USD 000 USD 000 (Restated) Profit/(Loss) before taxation 2,585 (9,326) Adjustments for: Amortisation of prepaid land lease payments Amortisation of deferred income (105) (88) Amortisation of intangible assets Depreciation of property, plant and equipment 6,016 5,793 Interest expense 9,253 8,416 Interest income (273) (181) Loss on disposal of plant and equipment Share based payment (credit)/expense 3,768 1,481 Intangible assets written off Inventories written off Change in fair value of biological asset Unrealised exchange gain (408) (1,234) Share of loss in joint ventures 1,

14 Operating cash flow before working capital 22,677 6,624 changes Decrease/(Increase) in inventories 121 (20,584) Decrease in biological assets - 1,352 Increase in trade and other receivables (4,423) (6,883) (Decrease)/Increase in trade and other payables (2,906) 9,898 NET CASH FROM/(USED IN) OPERATIONS 15,469 (9,593) Interest received Interest paid (9,253) (8,416) Tax paid (1,248) (19) NET CASH FROM/(USED IN) OPERATING ACTIVITIES 5,241 (17,847) CASH FLOWS FOR INVESTING ACTIVITIES Addition of intangible assets (6,200) (5,856) Addition of property, plant and equipment (4,495) (4,299) Proceeds from disposal of property, plant and equipment Increase in investment in joint ventures (684) (613) NET CASH USED IN INVESTING ACTIVITIES (11,349) (10,621) CASH FLOWS FROM FINANCING ACTIVITIES Drawdown of borrowings 34,648 42,768 Repayment of borrowings (31,521) (20,296) Repayment of hire purchase (45) (40) Proceeds from private placement - 31,322 Proceeds from share options exercised Increase in restricted cash (5,537) (1,373) NET CASH FROM FINANCING ACTIVITIES (2,322) 52,483 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (8,430) 24,015 Effects of foreign exchange rate changes on cash and cash equivalents (161) (448) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 46,605 23,038 CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 38,014 46,605