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.
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.
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.