Sales mix change dents PuriCore

01/09/2010 Robert Tyerman

'Green' food safety and life sciences group PuriCore targets monthly profits by late 2011 after trimming first-half losses to $5.1 million (£3.3 million).

Headquartered in Pennsylvania and with UK offices in Stafford and Clevedon, the fully-listed company achieved flat overall turnover of $19.1 million in the six months to June, which concealed an 88.6 per cent jump to $11.7 million in sales of endoscopy equipment to probe inside patients' bodies and a 43.2 per cent fall in food safety sales.

Executive chairman Chris Wightman says endoscopy sales reflect the successful integration of endoscope disinfection and air filtration systems concern Labcaire, bought last year for £5.2 million down and another £1.25 million over four years if targets are met. He says endoscopy is generating positive cash flow, with 47 per cent of all the National Health Service's supply chain orders in the first half year, and points out equipment for 'endoscopy on demand' will be rented out to an NHS too cash-strapped to buy outright.

A switch from buying to leasing is one of the causes of the downturn in food safety sales, even though PuriCore began installing its Sterilox Food Safety equipment in the second largest US supermarket chain and has launched its improved Sterilox Model 2300, against the background of a recession-hit US food retail market, unprotected by UK levels of sector concentration. Wightman says that, although PuriCore prefers lease customers because they tend to remain, buying provides more money up-front.

He says the other snag for food safety was a delay on the part of its big new US retail customer to put its order in, although there was, insists Wightman, no competitor for the business. PuriCore now has a 4,400-store order book, though the speed of installations is uncertain in today's climate, and pilot projects in 1,000 stores.

The company says it expects to be making profits month by month in the second half of next year. At 53p, down from a year's high of 175p, the shares value the company at a somewhat grudging £12 million.