31 March 2014
Provexis plc
PRE-CLOSE UPDATE
Provexis plc ("Provexis" or the "Company"), the business that develops and licenses the proprietary, scientifically-proven Fruitflow® heart-health functional food ingredient, announces a pre-close update for the year ended 31 March 2014.
In its preliminary results statement expected in July, the Company expects to report on a year of substantial change, and progress. During the year the Science in Sport business was demerged from Provexis, and the cost base of the legacy Provexis business was significantly reduced. The Company's Alliance partner DSM Nutritional Products has continued to develop the market actively for the Company's novel, patented Fruitflow® heart-health ingredient in all global markets.
Fruitflow®
The Company's Alliance partner DSM Nutritional Products has continued to make good progress marketing Fruitflow®, with over 24 regional consumer brands worldwide containing our novel, patented technology having been launched. An increasing number of further commercial projects have been initiated by DSM with prospective customers, with good prospects for these projects to be launched as consumer products. Interest in the technology exists in all major global markets.
DSM has invested substantial resource into establishing a commercial scale supply chain for powder manufacturing, which is required for a wide range of tablet, gel capsule and dietary supplement products. Cost of goods has been high in this start-up phase, on a low volume base, which is typical for a new ingredient launch, and it has resulted in the Company's share of profits for the year being negated. Under the terms of the Alliance Agreement cost of goods is deducted ahead of any profit distribution to either Provexis or DSM. DSM's manufacturing and technical teams remain highly focused on reducing Fruitflow® production costs, and as manufacturing volume increases unit costs will decrease, enabling more positive margins and thus profit distributions.
Dawson Buck, Chairman of Provexis, commented:
"The year has seen substantial change, as Science in Sport was demerged from the business during the first half of the year. We have continued to reduce costs in the Provexis business and in parallel, our Alliance partner DSM continues to make good progress marketing Fruitflow, with over 24 regional consumer brands worldwide containing our novel, patented technology having been launched, and an increasing number of further commercial projects having been initiated with prospective customers.
While DSM's high scale-up related costs of powder manufacturing negated our share of profits in the year, having capacity in place for this format is a strategically important milestone, and it remains our belief that products addressing blood flow and circulation issues represent a long-term opportunity in the functional food sector. With DSM making good progress in the marketplace and the Company having very low operational costs, we remain positive about the outlook for the Fruitflow business."
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For further information please contact:
Provexis plc Tel: 07917 670260
Dawson Buck, Chairman [email protected]
Ian Ford, Finance Director
Cenkos Securities plc Tel: 020 7397 8900
Bobbie Hilliam
