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Profit plus after shrewd aquisition


UK - Nutritional health and natural feed additives specialist Kiotech International reports interim pre-tax profits of 251,602 for six months to 30 June 2007.

Its a massive improvement on the previous years reported loss of 111,367 and confirmation that its acquisition of Agil, last November, has proved a shrewd and lucrative investment.

Sales are up to 2,806,470, compared with 33,447 for the same period last year - a boost that reflects the positive integration of Agil into trading operations, says the company. The interim accounts include a full six months contribution from Agil.

Gross margins for the Agil division have improved substantially, a commendable achievement given the weak US$ and unprecedented grain price increases that have placed pig and poultry producers under significant cost pressures. Also, the appointment of a new distributor in Vietnam, the development of number of new products and investment in the divisions account management and distribution processes is primed to boost market share in the agriculture and fish farming sectors.

Aquaculture buoyant

Kiotech says that there have also been significant developments with its breakthrough product Aquatice - a chemosensory stimulant for fish feeding.

Registration for the pheromone-based feed additive is currently being pursued in China and Thailand following successful trials at research and commercial level. Further trials in new species in the Far East are also underway and as are discussions with major shrimp producers in Central and South America to introduce Aquatice into feeding regimes.

The company retains a strong market share for Ultrabite, its fish attractant for the sport fish sector. This product is supplied exclusively to Rapala VMC, which has been developing a range of baits, sprays, gels and soft lures incorporating the additive. A number of new product launches are expected during the next 12 months.

Richard Rose, Kiotechs International Chairman is delighted with the interim finances. He said it is the first profitable period for Kiotech since it became a public company 10 years ago. And, he believes it is due to the to the exceptional progress Kiotech has made in its aquaculture programme and Agil's business.

We are now taking the steps needed for commercialisation of Aquatice. We have set up further commercial pond trials China and Thailand that will prove the efficacy of the product with other species, he said. We are encouraged by the worldwide interest in the product and are optimistic about gaining registrations and setting up commercial ventures, he added.

Kiotech plans considerable investment in the Agil management and distribution sectors with the primary goal of increasing global market share. Mr Rose said the company was well placed to take advantage of the numerous opportunities that exist in the global aquaculture industry and is focusing on developing new products and territories.

The balance sheet is strong it says it is well placed to finance the major product and market development programmes of our Agil and Kiotech businesses, he added.

Livestock challenges

Rising feed costs are currently hammering profitability for livestock farmers, but Agils natural feed additives are holding their own in a very pressured market. The ability to improve the feed conversion ratio in livestock is a bonus and the company says that its product range is proving particularly valuable to farmers - offering them potential cost savings.