Plant Health Care

Fortified by a contract with agrichemical giant Monsanto, agricultural and horticultural treatment specialist Plant Health Care (PHC) enjoyed a ‘dream year’ in 2009 and claims a strong position for securing new deals.

With the global population soaring, the market for products that improve the yields and strength of crops is huge, including for those that are environmentally sustainable. PHC has developed a number of ‘environmentally benign’ products for this market that increase yields and help plants protect themselves or overcome drought or depleted soil nutrients.

Last year Monsanto, a world-leading seller of agricultural seeds and treatments, signed a 15-year license to use PHC’s Harpin product as a seed coating on four products, soy beans, cotton, corn and rape seed. So far, Monsanto has submitted an order for 8-10m soy beans and CEO John Brady says ‘we should have announcements [about the other three crops] in the summer’ and believes there is ‘much further to go’ with this partnership.

He adds that ‘this deal has also helped us with other negotiations’, strengthening PHC's bargaining hand. There are high expectations of licensing its two other potential ‘blockbuster’ products this year, Harpin as a ‘foliar’ spray application and another product, Myconate, as a seed coating, as well as ‘a whole pipeline’ of new generations of Harpin can be licensed again on the same crops.

Last year, despite a weakening in its horticultural markets, revenues were lifted 17% to $23.2m (around 40% of which arose from Monsanto) and net losses were cut by 70% to $1.3m. For 2010, based only on existing agreements, house broker Evolution forecasts $1m profit and 1.4c (0.9p) of earnings.

Due to a new dual-listing on the Channel Islands Stock Exchange, cash-rich PHC will be much more attractive to investors from its homeland and better protected from potential takeovers. The shares, which have topped £4 in the recent past, offer exciting speculative potential.