(Reuters) - Sweetener maker PureCircle Ltd (PURE.L) said the detainment of shipments of its low-calorie sweetener stevia in the U.S. would lead to a 14 percent drop in first-half group sales.
In June, U.S. Customs and Border Protection (CBP) had seized shipments of stevia extracts brought into the country by PureCircle from China after it obtained information that they are produced by convict labour.
Shares in the company tumbled more than 18 percent to trade at 205 pence each on the London Stock Exchange at 0810 GMT.
PureCircle said it sees group sales for first half coming in at $47 million, down from $54 million reported last year.
The company said it expects group gross profit for the first half to fall 19 percent to $18 million and a $5 million drop in core earnings to $8 million.
PureCircle had said in June that the detention of stevia in the U.S. could impact sales and profit. The U.S. market accounts for one-third of the company’s sales.
PureCircle said it expects first-half gross margin to be lower than last year, but added that margins would be restored to previous levels once the CBP issue is resolved.
Liberum, in a client note, said “...no doubt that the CBP issue has cost PureCircle considerable time and management resources. We do not expect it will be able to receive recompense for this diversion.”
Reporting by Rahul B in Bengaluru; Editing by Sunil Nair