News

The Annual General Meeting (“AGM”) of Biome Technologies, a leading bioplastics and radio frequency technology business, was due to be held today. Whilst the AGM has been delayed due to Covid-19, the Board is pleased to announce the Company’s customary trading update for the three months ended 31 March 2020.

Group revenues achieved for the first three months of the year were £1.3m (Q1 2019: £2.1m), reflecting a very strong revenue performance from the Bioplastics division and subdued demand in the Stanelco RF division.

The impact of Covid-19 on Biome during the first quarter of 2020 was limited, with trading in the quarter being in line with management’s expectations at the time of the Group’s trading update on 30 January 2020. The Group continues its manufacturing and development operations with the upmost consideration for the safety of its staff and in conformance with Government advice.

The Group remained debt free as at 31 March 2020 and had cash of £1.8m (31 December 2019: £2.1m) and had cash of £1.7m as at 14 April 2020 and no debt.

Bioplastics Division

Revenues in the Bioplastics division of £1.1m were up 83% on the same period last year and matched the record quarterly revenues of Q4 2019 (Q1 2019: £0.6m; Q4 2019: £1.1m). The performance in the period was underpinned by increased sales of outer packaging for the US single serve coffee market and by growing revenues for rigid ring materials for the coffee-pod market. There is growing evidence that the ordering of coffee products for home delivery was supporting demand towards the end of the quarter. Progress on other projects, such as the nutraceutical pod, was more limited as Covid-19 began to impact some customers’ developmental activities. For others, developmental work continues with some vigour and the business is well positioned to exploit various opportunities in this growing market as and when conditions allow.

Stanelco RF Technologies Division

Revenues for the first quarter of 2020 in the Stanelco RF division were £0.2m (Q1 2019: £1.5m). The Stanelco RF division’s principal revenues are derived from the production and maintenance of furnaces for the manufacture of fibre optical cable. Market intelligence currently indicates that there is over capacity in the fibre optic cable market. This market position is now exacerbated by the effect of Covid-19 on sentiment towards purchases of capital goods. It is unlikely that this position will change quickly and the Group’s expectations are already set accordingly. The Board expects demand for fibre optic cable for internet capacity and 5G implementation to recover in due course. At present the division’s sales activities are focused on alternative industrial markets in the UK/Europe which the Board believes will support increased revenues in the second half of 2020.

Other matters

In Biome’s announcement on 25 March 2020, it was stated that the Company’s AGM had been deferred to a date in June 2020 due to the Covid-19 crisis. A further announcement will be made when the precise date when the AGM will be held can be confirmed. Outlook The Group’s trading continues in line with the expectations set out in the Company’s Final Result’s announcement released on 16 April 2020. The Final Results announcement also outlined the range of actions the Board is taking as a result of Covid19. The focus of these actions is to maximise Biome’s commercial opportunities whilst managing the Group’s cost base and cash resources with the aim of delivering good medium-term growth for shareholders.

Biome Technologies plc announces its audited Final Results for the year ended 31 December 2019.

Highlights:

Final Results

• A strong year for the Bioplastics division with reported revenue growth of 81% over 2018 and enters 2020 with its strongest pipeline of customer positions and prospects
• Stanelco RF division revenues, as expected, returned to a more normalised revenue level after the exceptional demand levels experienced in 2018
• Reported Group EBITDA loss of £0.5m (2018: EBITDA profit of £0.6m), in line with expectations, with Group operating loss of £1.0m (2018: profit of £0.1m)
• Group cash position at 31 December 2019 was £2.1m (31 December 2018: £2.6m)

Covid-19 Update

• The Group has been monitoring the impact of Covid-19 since the outbreak began and is caring for its staff and customers and adjusting its continuing commercial and manufacturing activities accordingly
• Bioplastics division is in a strong growth phase, with the many market opportunities expected to grow this year in the food and beverage sector, particularly in the USA and with new opportunities continuing to emerge
  • The Group is focussed on taking best advantage of these opportunities although there may be supply chain disruption as well as potential impact in demand for these products in the near future
• Stanelco RF division will be more adversely impacted than the Bioplastics division. The large Stanelco RF customers are based in China and India and there is an economic slowdown in these territories in addition to pre-existing overcapacity in the optical fibre market
  • The Board believes Covid-19 will further delay any upturn in orders for Stanelco RF’s furnaces
• The Board is implementing a number of measures to reduce the Group’s costs and manage its cash-flow. These include:
  • A voluntary 20% reduction in base salary for the Executive Directors and NonExecutive Directors for a period of three months from 1 May 2020
  • Use of the UK Government’s “furlough scheme”
  • Curtailment of any discretionary operational and capital expenditure
• Impact of Covid-19 on Biome during the first quarter of 2020 was limited, with trading in the quarter in line with management’s expectations at the time of the Group’s trading update on 30 January 2020
• As at 14 April 2020 the Group had a cash balance of £1.7m and no debt

Paul Mines, Chief Executive Officer said: “2019 saw an encouraging performance from the Group’s Bioplastics division in terms of revenue growth and a broadening of its customer and product base. The demand for bioplastic packaging from the coffee sector that underpins the division’s revenues is showing resilience in the current crisis. We will continue to work our cash resources to maximise our ability to overcome the challenges posed by Covid-19 and deliver good medium-term growth for shareholders”.

Full results can be read here.

Following input from the Group’s auditors, Grant Thornton UK LLP, the Board is falling in line with the guidance from the FCA and the FRC and is delaying the publication of its final results for the year ended 31 December 2019 and audited annual report, previously scheduled for 26 March 2020, until such time as the FCA and FRC have provided clearer guidance.

The Group’s results for the year ended 31 December 2019 remain in line with the guidance given in the trading statement of 30 January 2020, based on the Company’s unaudited management accounts. The Board will provide further guidance in relation to the outlook for the year ending 31 December 2020 and beyond when the final results are published.

More details can be found here

Biome will be presenting and exhibiting at the popular “Mello London”, investor event on Tuesday 12th November.

Details can be found here.

Come along to hear about Biome and its exciting prospects.

The company has announced a Proposed Placing of £1.3m, Directors’ Placing participations and related party transactions and the Notice of General Meeting and the detail can be found here.

The Group has published its interim results covering the first half of 2019 and the information can be found here.