Plant Health Care – be an opportunist and jump aboard now after the 25% share price fall
This morning Plant Health Care (LON:PHC) has released its results for the year to end December 2022 showing a 40% leap in sales to $11.8m while its pre-tax losses were steady at $4.6m.
The company has decided to evaluate over the coming weeks a range of financing options for the company, including how it might access non-dilutive and strategic capital to support its fast-expanding growth ambitions.
In reaction to that news the global agricultural markets biological products group’s shares have fallen 24% to 8.75p, which in my view now offers investors an immediate opportunity to jump aboard the future progress that this group will enjoy.
Food security continues to become a growing concern, with global events driving the world's ever-increasing need for more access to vital crops. Sustainable agriculture lies at the heart of meeting this need, and this group’s biological products will play a fundamental role in providing better-quality crops that can deliver higher yields.
Farmers face many challenges, including the impacts of climate change, such as drought and the need to work more sustainably. Plant Health Care products provide an environmentally suitable solution to increase regular yields through our pipeline of products for farmers and food/crop suppliers across various markets.
Still in its early stages of development the company’s proprietary products, which are derived from natural proteins, help to protect crops from diseases and stress leading to increased crop yield, quality and financial return for growers globally.
The rise to the top of the global agenda of climate change, food security and sustainability is driving increased demand for the company’s products.
In the last trading year the company recorded strong commercial sales growth of Harpinαβ - the recombinant protein which acts as a powerful bio-stimulant that is used to improve the quality, nutrient use, tolerance to abiotic stress and yield of crops.
The group is gradually gaining success with its PREtec technology, with it its product Saori now launched for use in Brazil for the prevention and treatment of soybean diseases.
Later this year the company is expecting to commercially launch its PHC279 and PHC949 products for use on major crops.
It is now expanding its global reach for its various products and working with major national distributors in doing so.
It is already well represented in North America, South America, Mexico and the EMEAA.
Analyst Opinion – Broker says Buy and ups Target Price to 37p
Analyst John-Marc Bunce at Cenkos Securities rates the group’s shares as a Buy, while upgrading his Target Price from 33p to 37p a share.
He estimates that the current year will see sales increase another 35% to $15.9m with the group’s losses almost at breakeven at just $0.3m negative.
For the year to end December 2024 Bunce goes for $22.0m revenues, $2.7m profits and earnings of 0.8c per share.
Looking into 2025 he predicts $30.1m turnover and a massive $8.4m profits, worth3.4c per share in earnings.
Conclusion – buy them now
On the basis of the group’s broker’s figures the shares, now 8.75p, appear to be a cracking ‘penny stock’ investment in a fast-developing global products company.