REG - Ocean Harvest Tech. - Trading Update, Board Changes and New Hires

Ocean Harvest TechnologyAnnouncement

23/01/2024 07:00

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RNS Number : 5325A  Ocean Harvest Technology Group PLC  23 January 2024

23 January 2024

 

Ocean Harvest Technology Group plc

 

("OHT", the "Company", or the "Group")

 

Trading Update, Board Changes and New Hires

 

 

Ocean Harvest Technology Group Plc (AIM: OHT), a leading researcher, developer
and supplier of proprietary blended seaweed products as functional additives
for the global animal feed industry, gives a trading update for the year to 31
December 2023 and announces new hires and changes to the Board of Directors.

 

Highlights

·      The Company continues to lead the way in the commercialisation of
highly functional blended seaweed ingredients in the global animal nutrition
sector

·      OHT expects to report results in line with expectations for the
year ended 31 December 2023, with reported revenues of €3.4m (2022:
€3.0m). The sales of OHT's proprietary blended seaweed ingredient,
OceanFeed(TM), is expected to grow circa 29% year on year.

·      Continued improvement in gross margins in H2 with full year gross
margin expected to be over 37% (2022:31%).

·      Continued high value customer wins in H2 with first penetration
into the Indian market and product registration in Brazil

·      The outlook for 2024 remains strong with significant sales growth
expected from a number of channels

 

Trading Update

 

We are pleased to report that OHT's trading was in line with expectations for
the second half of 2023. The Company made good progress in H2, delivering
first time sales to the very substantial market of India and achieved
successful product registration in Brazil, which opens further growth
opportunities for 2024.

 

The Company expects to report total revenue in line with expectations of
€3.4m.  Of this we expect product revenue to be circa €3.0m, with the
sales of OHT's proprietary and higher margin OceanFeed(TM) blended seaweed
products growing almost 30% year on year and the sales of single seaweed
species being roughly flat.  As a result, the Company saw a continued
improvement in gross margins in H2.  Whilst our focus is on maximizing
revenue from the sales of OceanFeed(TM), which our trial data shows delivers
superior performance for our customers, single seaweed sales are helpful in
enabling the company to scale its seaweed supply chain and can be useful in
gaining access to new customers for future blended product sales.

 

The full year numbers are still subject to audit and the Company expects to
announce its audited full year results in late March.

 

Outlook

The Company reiterates its strong outlook for 2024 with revenue growth to be
driven from a number of channels:

·      the solid revenue base provided by long standing, repeat
OceanFeed(TM) customers. The Company is yet to lose a material OceanFeed(TM)
customer due to strength of its product offering

·      growth from 15 customers won in 2023 that are increasing their
usage of OceanFeed(TM) and are expected to use the product for the full year
in 2024

·      growth from existing customers who have trialled or are trialling
OceanFeed(TM) products for additional applications within their business

·      growth from new customers trialling the product for applications
for which OHT has already demonstrated efficacy.

·      ongoing demand from customers demanding single seaweed products

 

OHT expects approximately three quarters of 2024 revenue to come from
customers already using its products and that the balance will come primarily
from sales to new customers focused on the swine and poultry markets where
OceanFeed(TM) is most widely used and where our trial data is strongest.
Through its R&D program the Company is seeking additional data that can
help further penetrate its other markets such as bovine, aqua and pet, but we
expect the growth in these areas to come in 2025 and beyond.

 

The Company has observed some impacts in shipping schedules and pricing as a
result of the widely reported Red Sea disruption.  However, there was no
material impact from this on 2023 trading and, with under 10% of our raw
materials and under 25% of our finished products usually travelling through
the Red Sea, it does not impact OHT's current outlook for 2024.

 

With an improved outlook for its seaweed supply chain and more efficient
capacity expansion options, the Company has an improved outlook for working
capital and cash usage which it will detail with the full year results.

 

New Hires and Management Changes

Hadden Graham, the group's Chief Commercial Officer, has communicated his
desire to retire during 2024.  Hadden will remain employed by OHT until the
end of June to assist with transition arrangements and will then become a
consultant to OHT on an ongoing basis. Given he will be leaving his full-time
executive position he will not seek re-election as a Director at the next
AGM.  Hadden has enjoyed a distinguished career in the animal feed sector for
over 30 years and has brought his considerable experience and contacts to OHT
and will continue to help the Company with its development during the
transition period through 2024.  We are very grateful for Hadden's
contribution, wish him well in his retirement and thank him for his ongoing
support of OHT.

 

Nico Stein has been appointed as the Chief Commercial Officer from 1
February.  Nico has over 20 years of experience in sales, commercial and
operational management experience in animal nutrition, feed & food
additives and pet food.  He has held senior commercial roles in leading
companies in the industry including Anpario, Biomin and Nestle.

 

Chris Scott has, as previously announced, been appointed as CFO and commenced
employment with OHT on 15 January. He joins OHT from FrieslandCampina, a dairy
co-operative and consumer food manufacturer, where he was the Finance Director
for UK & Ireland. Prior to that he held various senior finance positions
including at the leading multinational Kimberly-Clark UK. Chris has been
appointed as a Director of the Company on 19 January.

 

Tom Onions, who has been a Non Executive Director of OHT since 2015, will not
stand for re-election at the next AGM. Tom has played a valuable role for OHT
as a Director whilst it was a private company, through the IPO process and
during its inaugural year as a publicly listed company. The Company wishes to
thank him for his contribution to the business and wish him all the best with
his future business endeavours.

 

Mark Williams, CEO of OHT, commented:

 

"We are pleased with the resilient trading performance of the Company in late
2023, in particular that the sales of our proprietary blended OceanFeed(TM)
product grew almost 30%. This has helped us to grow our gross margin to over
37% for the year.

 

OHT is well placed for the year ahead and will continue to deliver on growing
its customer base, investing in R&D and building its supply chain to
extend our position as the leading provider of blended seaweed additives to
the animal feed industry.  We look forward to significant progress in 2024
and will provide a further update with our full year results"

 

For more information please contact:

 Ocean Harvest Technology Group plc                                     Tel: +44 (0) 1737 735018

 Mark Williams, CEO

 Cavendish Capital Markets Limited (Nominated Adviser and Sole Broker)  Tel: +44 020 7220 0500
 Geoff Nash / Seamus Fricker / George Dollemore (Corporate Finance)

 Tim Redfern / Harriet Ward (ECM)

 Camarco (Financial PR Adviser)                                         Tel: +44 (0) 203 757 4991
 Tom Huddart / Rosie Driscoll / Letaba Rimell                           oht@camarco.co.uk (about%3Ablank)

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU No.
596/2014) which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

 

 

 

Notes to Editors

 

Ocean Harvest Technology Group plc is a global leader in the development and
commercialisation of value adding proprietary products from blending multiple
species of seaweed. The Company provides a range of natural additives focused
on improving animal performance and the sustainability of the feed chain,
through its unique and proven proprietary seaweed blends. The Company sources
its seaweed globally, utilising sustainable and socially responsible
harvesting of largely wild blooming seaweed species.  Its products are
produced in its facility in Vietnam and sold into the $40bn animal feed
additive sector in multiple markets across the world.

For more information, please visit www.oceanharvesttechnology.com
(about%3Ablank) .

 

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