PuriCore : Strategic and Operational Review Update

25 November 2014-PuriCore plc(LSE: PURI), a global company focused on safe and effective protection against the spread of infectious pathogens, today announces preliminary decisions and actions from the comprehensive strategic and operational review, which is on-going within the Company. 

The aim of the review is to determine the optimal use of proceeds from the sale of PuriCore International Limited, which was completed in June 2014 and raised approximately $25.7 million, net of expenses.  The scope of the review includes evaluating growth investment strategies, operational efficiency initiatives, R&D programmes, potential strategic acquisitions and/or a potential return to shareholders.

The overall strategy of the Company remains focused on commercially leveraging its proprietary hypochlorous acid platform technology, particularly in markets and applications for which its unique properties provide a competitive advantage.  The Board believes that sustainable growth can be driven by increasing recurring revenues in its existing business segments through prudent and measured investments.  The focus of these investments will bein activities that reasonably can be expected to deliver top line and margin growth over time. 

A potential return to shareholders has been evaluated.  The Board believes that better total returns can ultimately be achieved for shareholders by investment in growth initiatives to drive share value.  Funding of these investments out of the sale proceeds is considered the most cost-effective and non-dilutive approach.  As such, a return to shareholders is not contemplated at this time. However, the Board will continue to re-evaluate this position as strategic initiatives are implemented and progress toward strategic goals is measured.

Supermarket Retail

In the Supermarket Retail segment, the Company remains focused on its growth strategy of delivering more predictable recurring revenue and improving margins.  The rebalancing of product mix from capital equipment to consumable products which create recurring revenue is, as expected, resulting in reduced revenues in the near-term.  However, as growing market share with a goal of securing a larger recurring revenue base remains the strategic intent, the Company continues to identify new and converting customers for its concentrate products and invests in placement of concentrate delivery systems at these customer locations. 

Further, as previously announced the Company is investing in sales and marketing initiatives to drive more rapid but prudently paced market share growth.  Other elements of the marketing plan include investing in regulatory approvals and academic studies to independently validate product claims and efficacy and ultimately drive increased demand for product.  The Company is also evaluating new product offerings, which will similarly deliver food safety and produce and floral quality enhancement, to expand placements in existing and new customer operations.  

While the Company focuses on top-line growth within Supermarket Retail, there is also a focused effort to improve gross margins by reducing service costs, improving operational efficiencies and leveraging higher demand in the supply chain, as demand increases. 

Health Sciences

In the Health Sciences segment , the Company's evolving strategy includes developing new products and seeking new regulatory clearances to permit entry into new geographies and markets, primarily through partnerships.  New regulatory clearances facilitate both entry into new geographies with existing products as well as expansion of product claims to enable broader marketing initiatives.  The Board remains confident in the growth potential within Wound Care and Dermatology - two segments with existing commercial products.  The Board also believes developing products in naturally complementary areas, such as infection control within the hospital market, will broaden the scope and diversity of the product portfolio and address a market need for new solutions to fight germs, particularly those which are antibiotic resistant.

Investment will be required to support the research and development, regulatory and commercialisation strategies.  Investment requirements and regulatory and development timelines are being considered.  The Board has implemented a staged approach to approving investments in these newer markets to ensure continued investment is supported by milestones achieved. The Company is currently assessing existing and potential new partnerships to determine the best approach to leverage distribution relationships and manage new product launches. 

The Board remains confident in PuriCore's ability to deliver value to shareholders by leveraging its unique hypochlorous acid technology in markets and applications for which it delivers a competitive advantage.

Charles Spicer, Non-Executive Chairman of PuriCore, said:

"The preliminary findings of the strategic and operational review support a focus on leveraging the Company's proprietary hypochlorous acid platform technology in our Supermarket Retail and Health Sciences business segments.  The strategy is supported by a focus on increasing recurring revenues and improving margin in these business segments, over time, through suitable investments.  Management's attention will focus on tactics to deliver these strategic imperatives.  Further updates will be provided in 2015 as the strategic planning process evolves.

" We are pleased that shareholders approved the proposal to move the Company's listing to AIM, which is expected to be completed by year-end."

Enquiries:

About PuriCore

PuriCore plc (LSE: PURI) is a global company focused on safe and effective protection against the spread of infectious pathogens without causing harm to human or animal health or to the environment. PuriCore's antimicrobial technology and complementary products are used in a well-established core business and emerging sectors of two broad markets: Food & Agriculture and Health Sciences. In the Food & Agriculture market, PuriCore's portfolio is used by thousands of US supermarket retailers, including three of the top-five, to provide savings in labour costs and improvements in inventory loss and to address cross contamination of pathogens on fresh produce and floral products. In the Health Sciences market, PuriCore's breakthrough wound care technology is used to treat chronic and acute wounds including diabetic ulcers and burns in humans, for atopic dermatitis as private-labelled dermatologic treatments for humans, and to manage wounds in all species of companion and farm animals in the animal health segment. PuriCore is headquartered in Malvern, Pennsylvania. To receive additional information on PuriCore, visit www.puricore.com.