PureCircle, which produces sweetener products derived from stevia, saw sales dip and losses deepen last year as it moved away from a 'take or pay' contracted sales model.
Sales in the year to the end of June eased to $45.41m from $52.26m the year before, with the company at pains to point out that last year's top line included $22m of committed 'take or pay' sales, where a customer either takes the product or pays the supplier a penalty.
Sales which are not under a 'take or pay' arrangement have risen from $6m two years ago to $39m in the fiscal year just ended, the company pointed out.
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Some 85% of sales comprised demand that did not exist three years ago, Chairman Paul Selway-Swift noted. "This augurs well for future sales growth," he suggested.
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Loss before tax widened to $26.66m from $19.54m a year earlier. Net debt at the end of the reporting period had grown to $78.06m from $70.87m a year earlier.
Total volumes of high purity stevia increased by 26% year-on-year. Volume increases were led by sales of the portfolio of proprietary new ingredients introduced over the past eighteen months (Alpha, SG95, Natural Flavor range), each of which increased by more than 100%.
"Despite the volume increase, FY 2012 [fiscal 2012] sales levels remained sub-scale and did not reflect the strong growth in end market usage of high purity stevia. This is principally due to the continued impact of inventory at Beverage Global Key Accounts (BGKAs)," the company said.
At $74m, inventories were $23m lower than at June 2011 and $40m lower than their peak at December 2010. Further reductions are expected as sales volumes increase before they stabilise at a consistent proportion of sales demand.
"Our recent results have been impacted by the tough decisions we made in 2011 to slowdown Reb A production temporarily to better align inventories to current market demand. Results should improve as the evident growth in market usage of our products starts to translate into higher sales," Selway-Swift declared.
"We remain confident of the future of our high purity stevia business but continue our guidance that this should be seen as a mid to long term opportunity," he added.
The market took that guidance on board, selling the shares in the short-term, pushing the price down 10.5p to 165.5p.
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