TIDMBIOM
RNS Number : 4152T
Biome Technologies PLC
25 March 2021
The information contained within this announcement is deemed by
the Company to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310.
25 March 2021
Biome Technologies plc
("Biome", "the Company" or "the Group")
Final Results 2020
Biome Technologies plc announces its audited Final Results for
the year ended 31 December 2020.
Highlights:
Final Results
-- Another strong year for the Bioplastics division with revenue
growth of 65% building on the 81% revenue growth achieved in 2019.
The division enters 2021 with a healthy pipeline of customer
positions and prospects.
-- RF Technologies division revenues reduced to GBP0.8m due to
the o ngoing over-capacity in the division's core fibre optics
manufacturing market.
-- Reported Group loss before interest, interest, taxation and
amortisation (LBITDA) of GBP0.9m (2019: LBITDA of GBP0.5m), in line
with market expectations, with Group operating loss of GBP1.6m
(2019: loss of GBP1.0m).
-- Group cash position as at 31 December 2020 was GBP1.7m (31
December 2019: GBP2.1m) with no debt.
Paul Mines, Chief Executive Officer said: "2020 saw further
strong revenue growth from the Group's Bioplastics division
reflecting the conversion of the pipeline of opportunities that it
entered the year with. New opportunities from both existing and new
customers continue to present themselves both for bioplastic
packaging from the coffee sector and other segments of the food and
beverage packaging market. 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".
- Ends -
For further information please contact: Biome
Technologies plc
Paul Mines, Chief Executive Officer
Rob Smith, Chief Financial Officer
www.biometechnologiesplc.com Tel: +44 (0) 2380 867
100
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner (Sales and Corporate Broking)
www.allenbycapital.com Tel: +44 (0) 20 3328
5656
About Biome
Biome Technologies plc is an AIM listed, growth-orientated,
commercially driven technology group. Our strategy is founded on
building market-leading positions based on patented technology and
serving international customers in valuable market sectors. We have
chosen to do this by developing products in application areas where
the value-added pricing can be justified and are not reliant on
government legislation. These products are driven by customer
requirements and are compatible with existing manufacturing
processes. They are market rather than technology-led.
The Group comprises two divisions, Biome Bioplastics Limited
("Bioplastic") and Stanelco RF Technologies Limited ("RF
Technologies").
Biome Bioplastics is a leading developer of highly-functional,
bio-based and biodegradable plastics. The company's mission is to
produce bioplastics that challenge the dominance of oil- based
polymers.
Stanelco RF Technologies designs, builds and services advanced
radio frequency (RF) systems. Dielectric and induction heating
products are at the core of a product offering that ranges from
portable sealing devices to large furnaces for the fibre optics
markets.
www.biometechnologiesplc.com www.biomebioplastics.com and
www.thinkbioplastic.com www.stanelcorftechnologies.com
Chairman's Statement
Business performance
2020 was a pivotal year for the Group with its Bioplastics
division's sales growing to a record GBP4.9m (65% increase over
2019), as we continue to benefit from the momentum in supplying
compostable bioplastics to growing market sectors. By contrast, our
RF Technologies division was, as anticipated, adversely affected by
overcapacity in the fibre optic cable manufacturing sector.
Both businesses operated against the ongoing backdrop of the
Covid-19 pandemic and lockdowns, which, whilst hindering our
efforts to diversify the RF Technologies division's customer base,
demonstrated the resilience of the bioplastics market and the
strength of Biome's offering and relevance to this rapidly
expanding compostable materials market.
As a result of these trends, Bioplastics represented 86% of
Group revenues in the year.
During the year we completed an equity placing and subscription
that raised an additional GBP1.0m, net of costs, to strengthen our
balance sheet to support the continued expectations of growth in
Bioplastics.
Bioplastics division
In our placing circular to shareholders last year, we laid out
four growth drivers which we believed would deliver significant
value for shareholders and maintain our KPI target of 40% revenue
growth in the Bioplastics division through 31 December 2023. I
would like to mention these growth drivers again specifically and
update you on progress in each of them:
1. Continued growth from existing customers with existing
products, especially flexible film in both industrial and
particularly home compostable formats, in the North American
market.
Growth from our existing customers and products remains
positive. We expect growth in flexible film in North America to be
more pronounced in the medium term.
2. Filtration mesh: The Company envisages growth with a second
end-customer with a material that has been proven with an existing
customer over the last three years. Implementation of this project
is underway.
This project is going well, and we confidently expect
implementation to complete later this year. As recently announced,
our second end-customer has placed orders for equipment that
increases their capacity to utilise Biome's filtration mesh on a
significant proportion of their installed capacity. Revenues will
become significant and recurring from H2 2021 and for the whole of
2022, thus delivering a major part of our KPI target.
3. Coffee pod material: The Company launched a project for a
heat stable material for coffee pods within the US at the end of
2019. Commercial sales of this product are gaining momentum.
In addition to continued demand from the lead customer (as
previously announced) this material is now being trialled at
several other end-user organisations. We expect significant
commercial progress in this area in H2 this year and beyond.
4. Packaging film: The Company is working on seven new customer
projects that focus on the conversion of flexible packaging to
compostable formats. Six of these projects are for the North
American Market.
Six of these original projects continue at pace with trials
either taking place in Q1 or expected for Q2 2021. One project with
an end-user in the USA has been suspended due to the pandemic. A
further pipeline of new customer projects of scale has been added
to this growth driver and trial orders have been placed by
customers in Q1 this year. We expect two or three of these to
become commercially meaningful and generate recurring revenue
towards the end of this year.
Over the last seven years, Biome Bioplastics has coordinated
significant research and development funding in conjunction with
leading universities, in pursuit of bringing a new family of novel
bio-based and biodegradable polyesters to market. Exciting new
materials are now emerging, and we have recently announced our
success in partnering with Innovate UK, the UK's innovation agency
and a leading manufacturer to bring a biodegradable tree-guard to
market. This project is still at a relatively early stage and it is
therefore too early to predict the scale or timing of production
orders. However, the Board is encouraged by the support and
reception that this initiative has already gained.
We believe that the progress described above highlights the
growing reputation of our Bioplastics business for innovative
materials and how it is leading to market success and penetration,
particularly in the USA.
RF Technologies division
The downturn in demand for capital goods in the fibre optic
cable manufacturing sector that the division first saw in 2019
continued throughout 2020. The division's efforts to diversify its
revenue stream were hampered by the ongoing Covid-19 pandemic, as
it became difficult to engage with new customers and a number of
potential opportunities were put on hold as our clients deferred
capital expenditure. In the face of the ongoing difficulties in the
fibre optic market and other sectors, it was necessary to implement
a number of cost reduction measures. 2021 has started with some
glimmers of recovery in the fibre optic sector and we have started
receiving more enquiries both for new fibre optic furnaces as well
as spares and service orders, although we do not expect to see a
material pickup in the near future.
Covid-19
The Group continues to monitor the ongoing impact of the
Covid-19 epidemic and places high importance on caring for its
staff and customers. Adjustments made in 2020 to commercial and
manufacturing activities remain in force and are continually
reviewed to ensure they provide a safe operating environment.
With a year's experience of working with the varying
restrictions in both in the UK and overseas, the Group has a better
understanding of the commercial impact of the pandemic and has
adapted accordingly to meet the opportunities and risks
presented.
We have only experienced minor supply chain issues in the
Bioplastics division but continue to be vigilant in case of any
disruption. Business development has been successfully managed
remotely with use of video conferencing to regularly interface with
customers.
The RF Technologies division was more adversely impacted by
Covid-19. The division's ongoing activity to widen the markets that
it sells into has been frustrated by a slowdown in capital
expenditure and restrictions placed on travelling to and meeting
with potential customers.
A number of cost saving actions have been taken to reduce the RF
Technologies division's overhead expenditure including a reduction
in the number of staff and use of the Coronavirus Job Retention
Scheme to maintain operational capabilities.
Whilst we expect to see a continuing impact from Covid-19, the
business has adapted to the challenges that the pandemic has
presented, and we look forward to a more normal environment in the
future.
Results
The Group's results were in line with the market forecast for
the year ended 31 December 2020.
Consolidated Group revenue for the year was GBP5.7m (2019:
GBP7.0m) reflecting the increase in Bioplastics sales offset by the
decline in those from the RF Technologies division. Group gross
margins for the year were 29.4% (2019: 43.5%) reflecting the
changing mix of sales towards volume Bioplastics.
The Group loss before interest, taxation, depreciation and
amortisation (LBITDA) was in line with market expectations at
GBP0.9m (2019: GBP0.5m LBITDA). A Group operating loss of GBP1.6m
for the year was incurred (2019: GBP1.0m loss).
During 2020, the Board concluded that, to gain a more accurate
representation of the costs and profits associated with the
Bioplastics and RF Technologies divisions, certain costs previously
accounted for as part of the Central Costs division would be
allocated, to the operating divisions. These costs include
insurance, accounting, administration, facilities, and executive
management activities attributable to the operating divisions. A
restatement of the segmental information for 2019 has been made to
allow users of this information to compare it on a consistent
basis.
The Bioplastics division achieved an increase in sales to
GBP4.9m (2019: GBP3.0m) representing 65.4% growth as the division
grew its sales with both new and existing customers and demand for
compostable products strengthened. The division recorded a LBITDA
of GBP0.1m which was an improvement over the prior year (2019:
GBP0.8m LBITDA restated) as sales revenue increased. The resulting
operating loss also narrowed to GBP0.5m (2019: GBP1.2m loss
restated).
The RF Technologies division's revenues were GBP0.8m (2019:
GBP4.0m) reflecting the hiatus in demand in the fibre optic market
compounded by the effects of the Covid-19 pandemic. The division
reported a LBITDA of GBP0.4m (2019: GBP0.8m EBITDA restated) and an
operating loss of GBP0.5m (2019: GBP0.7m profit restated). These
results reflect management actions to reduce costs where possible
in the light of market conditions and benefiting from the UK
Government's Coronavirus Job Retention scheme.
The Group's cash balances as at 31 December 2020 were GBP1.7m
(31 December 2019: GBP2.1m) reflecting trading losses for the year
offset by the net equity fund raise of GBP1.0m in the year. The
Group had no debt as at 31 December 2020. Capitalised product
investment in the Bioplastics division was GBP0.3m (2019:
GBP0.3m).
Strategy
The Group continues to execute on its strategy to be a leading
player in its chosen markets. In both markets addressed by the
Group our products are developed to meet our customers' demanding
requirements and incorporate a high level of technological knowhow
that differentiates our offerings from the competition.
In the Chairman's statement, made as part of the interim results
for 2020, we updated and restated our high level Key Performance
Indicators (KPIs) to extend the period they cover to 31 December
2023 and to reflect the continued growth in the Bioplastics
division as well as the market headwinds facing the RF Technologies
division. The revised KPIs and the progress made as at 31 December
2020 is set out below: -
-- 40% annual revenue growth in the Bioplastics division.
During the year ended 31 December 2020, the division exceeded
this target with revenue growth of 65.4%.
-- Bioplastics division's profitable revenue growth to achieve
a 10%-12.5% EBITDA margin by the end of the KPI period.
Good progress was made towards this KPI as the Bioplastics division's
LBITDA narrowed to 2.4% for 2020 compared with 27.4% LBITDA
in 2019 (calculated on a like-for-like basis).
-- Continued diversification of the Group's turnover by product
and market to ensure that no single product or end customer
contributes more than 15% of revenues by 2023.
The Group had two customers (2019: two customers) who each accounted
for more than 15% of Group revenues. In 2020, both of these
customers were in the Bioplastics division as their use of Biome
products continued to grow. The two customers referred to are
converters of material for a further number of end customers.
Good progress is being made to diversify the number of end customers
and the variety of products being sold.
-- Continued investment in the Group's next generation of products
by spending significantly more per annum on average than the
GBP0.3m per annum average spend over the previous strategic
objective cycle.
The Group met this target with GBP0.7m R&D investment in the
year.
Board and personnel changes
In October 2020, we were pleased to announce the appointment of
Rob Smith as Chief Financial Officer. Rob is an experienced
'C-level' executive with many years' service with technology-based
AIM listed SMEs both as CFO and CEO and having most recently been
CEO at Filtronic plc.
Post year-end Michael Kayser confirmed his decision to retire
from his role as non-executive director and chairman of both the
Remuneration and Audit Committees. Michael has served Biome
exceedingly well during a very exciting 10 years for the
business.
We are pleased to welcome the appointment of Simon Herrick, as a
non-executive director. He will be a member of the Nominations
Committee and will chair both the Audit and Remuneration
Committees. Simon qualified as a Chartered Accountant with Price
Waterhouse and has held a number of executive director roles with
listed companies including Northern Foods plc, Debenhams plc and
Blancco Technology Group plc. Simon is currently NED and chair of
Audit and Remuneration Committees at both Ramsdens Holdings PLC and
FireAngel Safety Technology Group plc.
Race to Zero
As recently announced, Biome Technologies has signed up to the
United Nations Race to Zero Climate Campaign and is committed to
reducing its carbon emissions in line with publicly disclosed
targets. We will commence reporting on our progress on this vital
subject in our results for the year ending 31 December 2021.
Outlook
We believe that the growth phase that the Bioplastics division
has entered represents a permanent move to more sustainable
materials and confirmation that our strategy is working. We expect
that the opportunities we have secured, and that are starting to
turn into repeat business, are only the beginning of a market shift
to more sustainable products. The RF Technologies division remains
susceptible to market disruption caused by Covid-19 but we are
encouraged by a slight improvement in its outlook; we will continue
to closely monitor the ongoing progress of the division.
Trading in the first quarter of 2021 was in line with our
expectations and the outlook for the year remains unchanged. We
continue to manage our cash resources to ensure that we are able to
achieve sustainability for the Group.
John Standen
Chairman
Strategic Report
Biome Technologies plc is a growth orientated, commercially
driven technology group. Its strategy is founded on building
market-leading positions based on patented technology and serving
international customers in the bioplastics and radio frequency
heating sectors. We have chosen to do this by developing products
in application areas where value-added pricing can be justified and
that are not reliant on government legislation. The growing
portfolio of products is driven by customer requirements and
compatible with existing manufacturing processes. They are market
rather than technology led.
The directors consider its shareholders, employees, customers
and suppliers as its key stakeholders and the divisional analysis
below outlines the strategies that have been adopted to promote the
success of the Group and to meet its objectives.
Biome Bioplastics Division
The Bioplastics division achieved sales revenue of GBP4.9m
(2019: GBP3.0m), an increase of 65.4%. This increase in reported
revenues related to existing products as well as new product
launches and reflects the continuing increased activity and enquiry
levels that currently exist both in the Bioplastics division and
also the wider market. Staffing and resourcing levels were adjusted
accordingly to accommodate this increased activity, which is
anticipated to maintain its upward trajectory over the coming
years. The net effect of the increase in revenues was to decrease
the division's operating loss to GBP0.5m (2019: GBP1.2m loss
restated).
Markets
Plastics and their use or misuse by humanity remains a key
environmental topic for both the UK and overseas markets. There is
sustained pressure from consumers, media and governments to reduce
the environmental impact of plastics. In recent years, the focus of
this pressure has been on the "end-of-life" of such materials, how
they are disposed of and the consequence of fugitive release to the
environment. In addition, with rising concerns regarding climate
change, there is greater interest in how such materials might also
be manufactured with lower carbon footprints.
The compelling case for compostable (biodegradable) bioplastics
lies in their ability to ensure that organic food waste reaches
appropriate treatment (e.g. industrial scale anaerobic digestion
and composting facilities) and that the resulting digestate and
compost does not contain persistent plastic contamination when
spread to soils. This is driving the growth of the compostable
packaging market in sectors such as food waste bags, coffee pods,
tea bags and other food contaminated packaging formats.
The growth of the compostable plastics market is facilitated
when there is a clear route for food waste and food contaminated
packaging to reach appropriate sorting and treatment facilities.
This requires appropriate labelling, user education, collection,
sorting and treatment capacity. The quality of such disposal supply
chains varies considerably by geographic territory and often within
countries although there is, in general, a move to improve and
scale-up such activity.
Arguably, the consumer desire to change the plastic model is
pulling through increased demand for compostable plastics at a rate
that is faster than the disposal supply chains are able to adapt
to. As a result, there is increased demand from the market for
bioplastics that can be composted at home. Whilst it is a minority
of the population that has the access and/or desire to treat
organic waste and packaging at home, those that are are highly
motivated to treat such waste appropriately. This is driving the
compostable plastics market to producing and certifying products
that are suitable for this end-of-life solution. Such products are
required to compost at lower temperatures and in less well managed
conditions than can be expected at industrial facilities.
The case for bio-based bioplastics is driven by the growing
scientific evidence that the use of biogenic inputs reduces the
carbon footprint of such materials and will in time lead to a more
sustainable plastics industry. There are a limited number of
territories that legislatively require bio-based inputs in some
plastics, but it might be expected that this trend is likely to
accelerate. There is some evidence that some consumers will choose
bio-based materials when offered a choice, but this appears, at
present, to sit behind the desire for compostable
functionality.
The UK market has been somewhat slower to embrace compostable
and bio-based materials than some other territories. Whilst there
is considerable focus on plastic waste, there is still a continuing
debate of how best to manage the problem. The local council control
of the disposal supply chain and its wide variability is seen by
some as part of the problem and a move in England towards universal
food waste collection by 2023 presents an opportunity for
compostable plastics. At present, the UK market remains a smaller
part of the Bioplastics division's short-term focus with the more
immediate sales opportunities and growth being in the US
market.
Cost and functionality will remain key hurdles over the
widespread adoption of bioplastics over petro-chemical plastics.
Current adoption is therefore driven by consumer pull, and their
willingness to pay a premium for biodegradability/compostability,
or government legislation. To overcome these hurdles the
Bioplastics division focuses on areas of the market where there is
a high technical performance requirement, the cost of the
biomaterial is a small fraction of the end product price, and where
there is a consumer willingness to convert to a biodegradable
material.
Research and development within the Bioplastics division is
therefore focussed on these three areas and in particular targeted
towards customer requirements for a biodegradable solution. The
commercial lifecycle of our product developments can be categorised
in the following stages of the product lifecycle:
-- Research phase - technology and product development occurring
within Biome's own laboratories or at external support facilities
-- Development phase - the product is being developed and tested
with small scale supplies to customers for end use testing
-- Initial manufacturing phase - the product is signed off by the
customer as suitable for its requirements and is now undergoing
significant long-term testing to ensure the end product can
be run in commercial quantities across the supply chain
-- Commercial phase - the product has been through the above phases
with the customer and is now achieving regular and significant
sales with the end product being purchased and used by the final
consumer
Technical Development
Biome Bioplastic's development work remains focussed on
innovative developments where there is a customer requirement for
the product and a willingness to pay a premium for the
environmental attributes. During 2020, the development team worked
on a variety of technical challenges that included the development
of home compostable materials, the improvement of oxygen and vapour
barrier performance, the soil degradability of materials to be used
in tree shelters and the improvement of temperature performance for
a variety of end-uses.
The Bioplastics division also continued its work in medium term
Industrial Biotechnology research into the transformation of
lignocellulose (often sourced from agricultural waste) into low
cost bioplastics using microbial and enzymatic routes. If
successful, it is anticipated that this work will result in
bioplastics with improved functionality at a cost comparable to
current petro-based plastics. This development work continues to be
supported by research grants and much of the work is undertaken in
collaboration with leading UK universities.
Stanelco RF Technologies division
The RF Technologies division is a specialist engineering
business focused on the design and manufacture of
electrical/electronic systems based on advanced radio frequency
technology.
The division's core offering is the supply of fibre optic
furnaces, although the business is also exploring other markets
where its expertise in induction heating can be utilised. Total
revenues in 2020 were significantly reduced at GBP0.8m (2019:
GBP4.0m). This reduction was caused by the combined effects of the
continued low level of capital goods expenditure in the division's
main telecoms fibre optic market due to the previously reported
excess capacity for fibre optic industry and the Covid-19 pandemic
that has caused delays in capital equipment purchases throughout
the UK industrial sector. As a consequence of the reduced sales,
the division incurred an operating loss for the period of GBP0.5m
(2019: GBP0.7m profit restated).
The business currently focuses on four key revenue streams:
Optical Fibre Furnace Systems
The RF Technologies division is a world leader in the design and
manufacture of induction furnace systems used in the manufacture
and processing of silica glass "preforms" to produce optical fibre.
Each system is bespoke to customers' exact requirements. There is
currently a continuing imbalance in the global demand for optical
fibre compared to the installed capacity base. This overcapacity
affected demand for furnaces in 2020 with no orders being received
during the year. It is expected that as demand for fibre optic
cable grows, the imbalance in manufacturing capacity will reverse
in the mid-term. The Group is receiving enquiries for specific
types of furnaces and spares that suggests that capacity
utilisation is increasing. Nonetheless, we do not expect to see a
significant change in market dynamics during 2021.
Plastic Welding Equipment
These units are used in a multitude of end-user applications
including the nuclear, medical and industrial sectors. The
equipment is provided in either hand-held, mobile or fully
automated static solutions, dependent on customers'
requirements.
Induction Heating Equipment
The division sells bespoke induction heating equipment mainly
into the UK industrial sector. Whilst this is a small part of the
division's sales, it is a strategic aim to increase the equipment
offering and expand sales of this type of equipment.
Service and Spares
The business continues to support its large installed equipment
base through the provision of maintenance support, system upgrades
and specialist spares across the globe.
Principal Risks and Uncertainties
Biome is subject to a number of risks. The Directors have set
out below the principal risks facing the business. The Directors
continually review the risks identified below and, where possible,
processes are in place to monitor or mitigate all of these risks.
Risks and uncertainties associated with the on-going Covid-19
pandemic are considered in a dedicated sub-section to the principal
risks and uncertainties.
Risk Nature Mitigation strategies
Political, The Group is subject to The Directors aim to focus
Economic political, economic and their product range on areas
and Regulatory regulatory factors in where demand is not reliant
Environment the various countries on government regulation.
in which it operates. The Group ensures its staff
There may be a change are well versed in the regulatory
in government regulation environment of its end-use
or policies which materially industries and regularly
and/or adversely affect reviews its product portfolio
the Group's ability to to ensure compliance with
successfully implement relevant regulations.
its strategy.
Some of the Group's products
are employed in the food
and pharmaceutical industries,
both of which are highly
regulated. There is a
risk that the Group may
lose contracts or be subject
to fines or penalties
for any non-compliance
with the relevant industry
regulations.
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Exchange The Group exports the The Directors are informed
Rate Fluctuations majority of its products regularly of the potential
and therefore fluctuations impact of exchange rate
in exchange rates may movements on the business
affect product demand and act to mitigate any
in different regions and adverse movements wherever
may adversely affect the possible. In order to mitigate
profitability of products the medium term impact of
provided by the Group any adverse exchange rate
in foreign markets where movements, the Group will
payment is made for the look to move production
Group's products in local and match the currency of
currency. its input costs with those
of the contractual selling
price thereby reducing the
currency movement risk to
the gross margin of the
product.
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Suppliers The Group's products and To mitigate this risk, the
and Raw manufacturing processes division is seeking to validate
Materials utilise a number of raw new materials coming onto
materials and other commodities. the market which may be
In particular, the Bioplastics used in substitution.
division requires a few,
key raw materials to manufacture
its biodegradable polymer
resins. There are very
few suppliers of these
key raw materials and
with the current increased
demand for biodegradable
products there is a risk
that the division may
not be able to purchase
the required volumes of
materials to meet customer
demand or that prices
may be increased at short
notice.
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Intellectual Although the Group attempts The Group takes professional
Property to protect its intellectual advice from experienced
property, there is a risk patent attorneys and works
that patents will not hard to win patents applied
be issued with respect for and to ensure that the
to applications now pending. scope is sufficiently broad.
Furthermore, there is The Group keeps up-to-date
a risk that patents granted with its competitors' product
or licensed to Group companies developments and patent
may not be sufficiently portfolios and aims to ensure
broad in their scope to that no infringements occur.
provide protection against Professional advice is sought
other third party technologies. from experienced patent
Other companies are actively attorneys if there are any
engaged in the development concerns.
of bioplastics. There
is a risk that these companies
may have applied for (or
been granted) patents
which impinge on the areas
of activity of the Group.
This could prevent the
Group from carrying out
certain activities or,
if the Group manufactures
products which breach
(or may appear to breach)
such patents there is
a risk that the Group
could become involved
in litigation which could
be costly and protracted
and ultimately be liable
for damages if the breach
is proven.
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Competition There is a risk that competitors The Group aims to be ahead
may be able to develop of the competition through
products and services working closely with customers
that are more attractive to produce products that
to customers, either through meet their exact requirements
price or technical performance, rather than offering "off
than the Group's products the shelf" solutions.
and services.
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Commercialisation There is a risk that the The Directors ensure that
of New Products Group will not be successful regular reviews of product
in the commercialisation development are undertaken
of its products from early-stage so that unsuccessful developments
research and development can be terminated early
to full-scale commercial in their life cycle. Impairment
sales. The Group develops testing of the capitalised
a number of products and costs is performed twice
some may not prove to a year with any impaired
be successful. Specifically, capitalised costs written
the risks associated with off.
the product life cycle
are as follows:
* Research and Development phase - the development of
the products may prove not to be technically feasible
or do not exactly match the perceived customer need
* Initial manufacturing phase - whilst the product
matches the customer needs it may not be able to be
produced at the required commercial speeds and/or at
the required efficiency and quality
* Commercialisation phase - the product may be
superseded either through price or a competitor
product being more advanced
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Customers The Group's ability to The Group works closely
and Customer generate revenues for with its customers with
Concentration a number of its products the aim of ensuring that
is reliant on a small its products evolve in line
number of customers. If with their requirements.
one of these customers In addition, the Group is
was to significantly reduce continually seeking to add
its orders, then this to its customer base and,
could have a significant as its revenues grow, seeks
impact on the Group's to become less dependent
results. on any single customer.
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Brexit The UK left the European The Group has worked closely
Union during the year with import and export agents
under review and the transition as well as local advisers
arrangements ended on in Europe to ensure that
31 December 2020. The we are compliant with the
new trade deal entered various new regulations
into between the UK and now in force.
the European Union was The Group will continue
in negotiation until the to monitor local regulations
end of the transition as the new requirements
period and therefore we settle down and will introduce
have had to implement additional, proportionate
new processes with little mitigating policies as required.
forward notice of the
details of trading arrangements.
This has caused some minor
short-term disruption
of both exports to and
imports from countries
in the European Union.
The majority of the Bioplastics
products that are produced
in the European Union
are sold either locally
into the continental European
market or exported directly
to the US market. Whilst
deliveries of these goods
are not therefore transported
through the UK new local
documentation and compliance
procedures have been required
for us to export from
the EU.
============================================================ ===================================
Covid-19
The Covid-19 pandemic continues to significantly impact
individuals, businesses, markets and economies, but despite this
there has been minimal direct impact on the Group's operations. The
Group has continued its manufacturing and development operations in
accordance with Government advice.
New orders for products supplied by the RF Technologies division
have reduced as our customers have reduced their investment
activities. However, this must also be seen in the light of an
overall excess in capacity in our main fibre optic market that had
already seen suppressed sales in 2019.
The Biome Bioplastics division had to conduct some trials
virtually, where physical attendance was not possible or permitted
and it utilised the skills and expertise of a consultant in the US
to assist with some of these trials.
The table below details some of the key risks and the strategies
that we have introduced to mitigate the risks:
Risk Nature Mitigation strategies
Financial Increased market risk and The Group is tightly controlling
reduced revenues heighten overhead spend and actively
the liquidity risk whilst reducing spend where possible
deterioration of the economic and has used the UK Government's
market heightens credit Coronavirus Job Retention
risk. Scheme (Furlough) to offset
Economic disruption may employment costs where staff
also impact financial markets have not been able to work
including currencies, interest due to "lockdown" restrictions
rates, borrowing costs and disruptions to order
and the availability of flows from customers.
debt and equity finance. It was necessary to make
The impact of Covid-19 a number of staff redundant
on our customers and their in the RF division.
ability to continue to Some of the Group's customers
trade and pay invoices have experienced liquidity
on time and the consequential issues during the period
impact on the Group's cashflow. and this has meant that
Impact of going concern we have had to increase
assessment. our provision for slow moving
debts. As a result, the
Group has focussed its activities
on supplying customers with
stronger financial positions.
A thorough going concern
assessment was conducted
that considered a number
of scenarios and included
a reverse stress test. The
directors concluded that
there is sufficient working
capital for the Group to
meet present and future
obligations over the next
12 months.
================================= ====================================
Health and The health and safety of The Group was quick to set
safety our employees is of paramount up a Covid-19 response team
importance. There is a and implement a range of
risk that our colleagues measures to combat the risks
may come into contact with of Covid-19. This included
carriers of Covid-19 and asking all employees to
bring it in to our facilities. work from home that were
In order to manage the able to do so. This worked
risks and adhere to government well as our principal IT
guidelines the Group had systems are cloud based
to change the method of or accessible remotely.
operation and implement A proportion of our employees
measures to mitigate the were not able to work from
risk. home as they need to access
facilities at our Marchwood
facility. To this end, the
Group carried out risk assessments
and put in place a dedicated
`Covid Team', to ensure
compliance of the implemented
positive safety measures
and to undertake a continual
review of the effectiveness
and relevance of such measures.
Further risk assessments
will be carried out if deemed
necessary.
A Covid policy that was
communicated to staff remains
in force. Signage around
the building is displayed;
to inform staff of maximum
occupancy levels within
certain areas of the building,
as well as a reminder of
social distancing and the
frequency of hand washing.
There has been an increase
in the frequency and thoroughness
of the cleaning provided
by external contractors.
All staff have been issued
with a `Covid Pack', consisting
of hand sanitisers, anti-bacterial
wipes and face masks. Staff
are consulted with about
Covid and encouraged to
raise any concerns.
================================= ====================================
Cyber Security Covid-19 has increased Biome has effective cyber
cyber threats from cyber security controls and has
criminals and other malicious increased the focus on addressing
groups who are targeting security alerts as soon
businesses by deploying as they arise. Security
Covid-19 related scams education of employees has
and phishing emails. Employees been increased highlighting
working from home have security threats.
also heightened cyber security
risks.
================================= ====================================
Financial review
The KPIs which the Board uses to assess the performance of the
Group are detailed in the Chairman's Statement. The Chairman's
statement forms part of the Strategic Report.
The summary results for the Group are shown below:
Like-for-like comparisons 2020 2019 Growth
GBP'm GBP'm
Revenues
Bioplastics 4.9 3.0 65.4%
RF Technologies 0.8 4.0 (79.7%)
Reported Group revenues 5.7 7.0 (17.3%)
------------------------------------ --------------- --------------- --------
(L)/EBITDA Restated
Bioplastics (0.1) (0.8)
RF Technologies (0.4) 0.8
Central Costs (0.4) (0.5)
Reported (L)/EBITDA (0.9) (0.5)
------------------------------------ --------------- --------------- --------
less depreciation, amortisation
and equity share option charges: Restated
Bioplastics (0.4) (0.4)
RF Technologies (0.1) (0.1)
Central Costs (0.2) (0.1)
(0.7) (0.5)
(Loss)/Profit from Operations Restated
Bioplastics (0.5) (1.2)
RF Technologies (0.5) 0.7
Central Costs (0.6) (0.6)
Like-for-Like Operating Loss (1.6) (1.0)
------------------------------------ --------------- --------------- --------
Net Assets
Non-current assets 1.4 1.5
Inventories 0.7 0.6
Trade and other receivables 1.6 1.9
Cash 1.7 2.1
Trade and other payables (1.1) (1.5)
long term lease commitments (0.4) (0.4)
Net assets 3.9 4.2
------------------------------------ --------------- --------------- --------
Segmental information has been restated to allocate costs
previously accounted for as Central Costs to Bioplastics and RF
Technologies, see Note 2 for details.
Revenues
Reported Group revenues decreased in the year to GBP5.7m from
GBP7.0m due to the absence of orders for fibre optic furnaces sold
by the RF Technologies division exacerbated by lower demand for
capital goods resulting from the recession caused by Covid-19. The
Bioplastics division continued to see significant increases in
revenues as customers see the benefits of compostable packaging
particularly in the food and beverages sector.
(L)/EBITDA
Reported (Loss) / Earnings Before Interest, Taxation,
Depreciation and Amortisation ((L)/EBITDA) for the year was a loss
of GBP0.9m (2019: (GBP0.5m)). The increase in LBITDA is a direct
result of the lower revenues in the RF Technologies division. This
has been partially offset by increases in revenues in the
Bioplastics division as well as reduced overhead costs.
Operating Profits/(Losses)
The Group recorded an operating loss for the year of GBP1.6m
compared to an operating loss of GBP1.0m in the prior year.
Administrative costs across the Group in 2020 were GBP3.6m
(2019: GBP4.5m). When the non-cash effects of depreciation,
amortisation and equity settled share option charges are removed,
the cash administrative expenses in 2020 decreased to GBP2.9m
compared to prior year (2019: GBP4.0m). This decrease in expenses
is mainly attributable to reductions in expenditure within the RF
Technologies division, as costs were scaled back as a result of the
lower activity levels, and savings made by senior directors /
employees voluntarily accepting lower salaries to help mitigate the
financial impact of Covid-19.
Investment in product research and development was GBP0.7m in
the year (2019: GBP1.1m), which includes the research work in grant
backed Industrial Biotechnology, of which GBP0.3m (2019: GBP0.3m)
was capitalised in the year. The reduced level of research and
development expenditure in the year was attributable to a reduction
in the value of grant funded research activity. Tax R&D claims
resulted in a credit being recognised in the year of GBP0.2m with
cash being received after the year end (2019: credit of
GBP0.1m).
The Group recorded a loss after tax for the year of GBP1.5m
(2019: loss after tax of GBP0.9m), giving a basic loss per share of
51p (2019: loss per share of 35p).
Statement of Financial Position
The carrying value of intangible assets relates to capitalised
development costs predominantly within the Biome Bioplastics
division for development of the Group's own intellectual property
and product range.
As at 31 December 2020, there was GBP0.8m of capitalised
development costs (2019: GBP0.9m) within the Group's statement of
financial position, of which GBP0.4m relates to BiomeMesh. An
assessment is made at least annually which assumes future potential
market take up of the products and the margins achievable.
Cashflow
2020 2019
GBP'000 GBP'000
Loss from operations (1,575) (1,020)
adjustment for non-cash items 658 539
Movement in working capital (138) (1,092)
Cash utilised by operations (1,055) (1,573)
Investment activities (275) (303)
R&D Tax credit - 205
Interest paid (38) (2)
Financing activities 920 1,185
Net decrease in cash (448) (488)
Opening cash balance 2,126 2,614
Closing cash balance 1,678 2,126
--------------------------------- --------------------- ---------------------
The cash utilised in operations, before working capital
movements, was GBP0.9m (2019: cash utilisation of GBP0.5m). Working
capital movements of GBP0.1m utilisation in the year reflected the
increased utilisation in the Bioplastics division offset by a
further unwind of working capital in the RF Technologies
division.
Investment in the year in capitalised product development and
capex was flat at GBP0.3m (2019: GBP0.3m). Financing activities
principally represented the share issues in 2020 and 2019 with new
shares in the Company raising GBP1.0m net of costs (2019: GBP1.2m).
No R&D tax credits were received during 2020 as the claim for
2019 expenditure was not submitted until the end of the year (2019:
GBP0.2m). Post year-end a payment of GBP0.2m was received in
respect of 2019 R&D tax credits.
The resultant closing cash position was GBP1.7m (2019:
GBP2.1m).
Going Concern
The Group has operated for a year under Covid-19 pandemic
conditions and has had time to assess the impact that the pandemic
has had on its business. During 2020, the Group and specifically
the RF Technologies division has reduced its cost base. Further to
that, the Company successfully raised additional funding of GBP1m
(after expenses) by way of a placing and subscription of new equity
completed in the second half of 2020.
The key business risks and conditions that may impact the
Group's ability to continue as a going concern are the utilisation
of existing resources to finance growth, investment and
expenditure; the rates of growth and cash generated by group
revenues, the timing of breakeven and positive cashflow generation
and the ability to secure additional debt or equity financing in
future if this became necessary. The primary area of judgement that
the Board considered, in the going concern assessment, related to
revenue expectations and visibility.
The Board was mindful of the guidance surrounding a severe but
plausible assessment and, accordingly, considered a number of
scenarios in revenue reduction against the original plans. A
reverse stress test was constructed to identify at which point the
Group might run out of its available cash. The test was designed
specifically to understand how far revenue would need to fall short
of the base case forecast and does not represent the directors view
on current and projected trading. The test assumed the unlikely
scenario that (a) demand for RF products would decline to a lower
level than that seen in 2020 and (b) the sales growth achieved by
Bioplastics during the second half of 2020 would not be repeated in
the forecast period. For the reverse stress test, the Board
specifically excluded any significant upsides to this scenario.
This is despite strong incremental demand potential at both
existing and new customers for the Group's Bioplastic products and
excludes the potential of an improvement in the Fibre Optic furnace
market. This most severe scenario also excludes any mitigating
reduction in the cost base that the Board would clearly undertake
in this event. In all scenarios modelled, including the reverse
stress test, the Group has sufficient resources to operate and meet
its liabilities throughout the going concern review period without
the inclusion of the impact of mitigating actions.
At 31 December 2020, the Group had a net cash balance of GBP1.7m
and as at 24 March 2021 a balance of GBP1.7m. The 31 December 2020
balance exceeded market forecast and the 24 March 2021 balance was
better than predicted in all the going concern scenarios tested. On
a revised base case scenario adopted for their assessment, the
Board is comfortable that the Group can continue its operations for
at least a 12-month period following the approval of these
financial statements.
As a result of this review, which incorporated sensitivities and
risk analysis, the Directors believe that the Group has sufficient
resources and working capital to meet their present and foreseeable
obligations for a period of at least 12 months from the approval of
these financial statements.
By order of the Board.
Paul Mines
Chief Executive Officer
Consolidated statement of comprehensive income
For the year ended 31 December 2020
Note 2020 2019
GBP'000 GBP'000
REVENUE 5,705 6,957
Cost of goods sold (4,029) (3,933)
GROSS PROFIT 1,676 3,024
Other operating income 300 436
Administrative expenses (3,551) (4,480)
LOSS FROM OPERATIONS (1,575) (1,020)
Investment income 2 6
Finance charges (38) (9)
Foreign exchange gain/(loss) (88) -
LOSS BEFORE TAXATION (1,699) (1,023)
Taxation 6 155 146
LOSS AND TOTAL COMPREHENSIVE INCOME FOR
THE YEAR (1,544) (877)
------------------------------------------- ----- --------------- ---------------
Basic loss per share - pence 7 (51)p (35)p
Diluted loss per share - pence 7 (51)p (35)p
------------------------------------------- ----- --------------- ---------------
Consolidated statement of financial
position
as at 31 December 2020
Note 2020 2019
GBP'000 GBP'000
NON-CURRENT ASSETS
Other intangible assets 8 821 883
Property, plant and equipment 9 574 653
1,395 1,536
CURRENT ASSETS
Inventories 746 555
Trade and other receivables 10 1,594 1,885
Cash and cash equivalents 1,678 2,126
4,018 4,566
TOTAL ASSETS 5,413 6,102
------------------------------------- ----- ---------------- ---------------
CURRENT LIABILITIES
Trade and other payables 11 1,076 1,381
Lease liabilities 12 38 76
1,114 1,457
NON-CURRENT LIABILITIES
Lease liabilities 12 400 438
------------------------------------- ----- ---------------- ---------------
400 438
TOTAL LIABILITIES 1,514 1,895
------------------------------------- ----- ---------------- ---------------
NET ASSETS 3,899 4,207
------------------------------------- ----- ---------------- ---------------
EQUITY
Share capital 186 140
Share premium account 2,200 1,250
Capital redemption reserve 4 4
Share options reserve 617 377
Translation reserves (85) (85)
Retained earnings 977 2,521
TOTAL EQUITY 3,899 4,207
------------------------------------- ----- ---------------- ---------------
The financial statements were approved by the Board on 25 March
2021.
Signed on behalf of the Board of Directors
Paul Mines (Chief Executive)
Rob Smith (Chief Financial Officer)
25 March 2021
Consolidated statement of changes in
equity
AS AST 31
DECEMBER
2020
Share Capital Share
Share premium redemption options Translation Retained TOTAL
capital account reserve reserve reserve earnings EQUITY
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2020 140 1,250 4 377 (85) 2,521 4,207
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Share options
issued
in share
based
payments - - - 240 - - 240
Issue of share
capital 46 950 - - - - 996
Cancellation
of expired
options - - - - - - -
Transactions
with
owners 186 2,200 4 617 (85) 2,521 5,443
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Loss for the
year - - - - - (1,544) (1,544)
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Total
comprehensive
loss for the
year - - - - - (1,544) (1,544)
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Balance at 31
December
2020 186 2,200 4 617 (85) 977 3,899
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Balance at 1
January
2019 118 77 4 316 (85) 3,323 3,753
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Share options
issued
in share
based
payments - - - 136 - - 136
Issue of share
capital 22 1,173 - - - - 1,195
Cancellation
of expired
options - - - (75) - 75 -
Transactions
with
owners 22 1,173 - 61 - 75 1,331
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Loss for the
year - - - - - (877) (877)
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Total
comprehensive
income for
the year - - - - - (877) (877)
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Balance at 31
December
2019 140 1,250 4 377 (85) 2,521 4,207
--------------- -------------- -------------- --------------- -------------- ------------------ --------------- --------------
Consolidated statement of cash flows
For the year ended 31 December 2020
2020 2019
GBP'000 GBP'000
Loss after taxation (1,544) (877)
Adjustments for: -
Taxation (155) (146)
Foreign exchange loss/(gain) 88 -
Finance charges 38 9
Investment income (2) (6)
--------------------------------------------------- ----------------- -----------------
Loss from operations (1,575) (1,020)
Adjustments for: -
Amortisation and impairment of intangible
assets 320 317
Depreciation of property, plant and equipment 98 77
Share based payments - equity settled 240 136
Foreign exchange gain/(loss) - 9
--------------------------------------------------- ----------------- -----------------
Operating cash flows before movement in working
capital (917) (481)
Decrease/(increase) in inventories (191) 400
Decrease/(increase) in receivables 293 (1,087)
(Decrease)/increase in payables (240) (405)
Cash utilised in operations (1,055) (1,573)
Corporate tax received - 205
Interest paid (38) (2)
Net cash outflow from operating activities (1,093) (1,370)
--------------------------------------------------- ----------------- -----------------
Investing activities
Interest received 2 6
Investment in in intangible assets (258) (282)
Purchase of property, plant and equipment (19) (27)
Net cash used in investing activities (275) (303)
--------------------------------------------------- ----------------- -----------------
Financing activities
Proceeds from issue of share capital 1,100 1,300
Costs of issue of ordinary share capital (104) (104)
Repayment of obligations under leasing activities (76) (11)
Net cash from financing activities 920 1,185
--------------------------------------------------- ----------------- -----------------
Net decrease in cash and cash equivalents (448) (488)
Cash and cash equivalents at the beginning
of the year 2,126 2,614
Cash and cash equivalents at the end of the
year 1,678 2,126
--------------------------------------------------- ----------------- -----------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2020
1. NON-STATUTORY FINANCIAL STATEMENTS
The financial information set out in this preliminary results
announcement does not constitute the Group's statutory financial
statements for the year ended 31 December 2020 or 2019 but is
derived from those financial statements. Statutory financial
statements for 2019 have been delivered to the Registrar of
Companies. Those for 2020 will be delivered following the Company's
Annual General Meeting on 21 April 2021. The auditors have reported
on those accounts: their reports on those financial statements were
unqualified and did not contain statements under Section 498 of the
Companies Act 2006.
The financial statements, and this preliminary statement, of the
Group for the year ended 31 December 2020 were authorised for issue
by the Board of Directors on 24 April 2020 and the statement of
financial position was signed on behalf of the Board by Paul Mines
and Rob Smith.
2. BASIS OF PREPARATION
The Group's financial statements have been prepared in
accordance with International accounting standards in conformity
with the requirements of the Companies Act 2006.
3. BASIS OF CONSOLIDATION
The Group financial statements consolidate the results of the
Company and all of its subsidiary undertakings drawn up to 31
December 2020. Subsidiaries are entities over which the Group has
control. Control comprises an investor having power over the
investee and is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect
those returns through its power. At 31 December 2020 the subsidiary
undertakings were Biome Bioplastics Limited, Stanelco RF
Technologies Limited, Aquasol Limited, and InGel Technologies
Limited (dormant).
The assets and liabilities of the Biome Technologies plc
Employee Benefit Trust ("EBT") are included within the consolidated
statement of financial position on the basis that the Group has the
ability to exercise control over the EBT.
4. SEGMENTAL INFORMATION FOR YEARED 31 DECEMBER 2020
2020 2019 (Restated)*
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Bioplastics RF Central Total Bioplastics RF Central Total
Revenue from sales 4,946 804 - 5,750 2,991 3,966 - 6,957
Removal of inter-segment
sales - (45) - (45) - - - -
Total external sales 4,946 759 - 5,705 2,991 3,966 - 6,957
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
(Loss)/profit from
operations (517) (461) (597) (1,575) (1,176) 748 (592) (1,020)
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
Interest received - - 2 2 - - 6 6
Finance charges - - (38) (38) - - (9) (9)
Foreign exchange loss (88) - - (88) - - - -
Loss before taxation (605) (461) (633) (1,699) (1,176) 748 (595) (1,023)
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
Taxation 155 - - 155 146 - - 146
Loss for the year (450) (461) (633) (1,544) (1,030) 748 (595) (877)
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
Reconciliation to Loss Before Interest Tax Depreciation
and Amortisation (LBITDA)
(Loss)/profit from
operations (517) (461) (597) (1,575) (1,176) 748 (592) (1,020)
Depreciation/amortisation (364) (50) (4) (418) (340) (52) (2) (394)
Share based payments (35) (16) (189) (240) (17) (22) (97) (136)
LBITDA (118) (395) (404) (917) (819) 822 (493) (490)
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
Other segmental
information
Capital Expenditure
Property, plant and
equipment 9 9 1 19 254 265 26 545
Intangible assets 258 - - 258 320 - - 320
Total Capital Expenditure 267 9 1 277 574 265 26 865
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
Total Assets 3,886 1,414 113 5,413 3,291 2,183 628 6,102
--------------------------- ------------------- ------------- ---------------- ------------ ---------------- ------------- ---------------- ---------------
The Bioplastics division comprises of Biome Bioplastics Limited
and Aquasol Limited.
*During 2020 the board concluded that, to gain a more accurate
representation of the costs and profits associated with Bioplastics
and RF Technologies, certain costs previously accounted for as part
of the Central division would be allocated, to the operating
divisions. These costs include insurance, accounting,
administration, facilities, and executive management activities
attributable to the operating divisions. A restatement of segmental
information for 2019 has been made to allow users of these account
to compare information on a consistent basis.
5. (LOSS)/EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION, AND
AMORTISATION
The Group, and divisions, define earnings before interest,
taxation, depreciation and amortisation ("EBITDA") as the operating
profit or loss adjusted for share option charges, depreciation, and
amortisation. The Group (L)/EBITDA is reconciled as follows:
(L)/EBITDA 2020 2019
GBP'000 GBP'000
Loss from operations per consolidated
statement of comprehensive income (1,575) (1,020)
Amortisation 320 317
Depreciation 98 77
Share option charges - equity
settled 240 136
(917) (490)
--------------------------------------- --------------- --------------
6. TAXATION
The Group's normal policy is to recognise tax credits resulting
from tax R&D claims on a cash received basis. However, the
claim in respect of the year ended 31 December 2019 was not
received until after the year-end but was settled prior to the
report date the value has been accrued as if received in 2020. A
tax credit has, therefore, been recognised in the Group's financial
statements in respect of that claim.
7. EARNINGS PER SHARE
The calculation of loss per share is based on the loss
attributable to the equity holders of the parent for the year of
GBP1,544,000 (2019: loss of GBP877,000) and a weighted average of
3,033,457 (2019: 2,472,038) ordinary shares in issue for basic
earnings per share and a weighted average of 3,033,457 (2019:
2,472,038) ordinary shares in issue for diluted earnings per
share.
8. OTHER INTANGIBLE ASSETS
During the year there was a capitalisation of GBP258,000 of
product development costs (2019: GBP282,000). The amortisation
charge for the year was GBP320,000 (2019: GBP317,000).
9. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment of GBP19,000 were acquired in the
year (2019: GBP545,000 of which GBP518,000 was in respect of right
of use assets capitalised in accordance with IFRS 16). The
depreciation charge for the year was GBP98,000 (2019:
GBP77,000).
10. TRADE AND OTHER RECEIVABLES
Trade and other receivables reduced in the year due to lower
sales within the RF Technologies division.
11. TRADE AND OTHER PAYABLES
Trade and other payables decreased in the year due mainly to
lower levels of sales revenue resulting in lower purchases of
materials and reduced customer deposits within the RF Technologies
division compared to the prior year.
12. LEASE LIABILITIES
IFRS 16 was adopted in the year ending 31 December 2019. The
leases have been reflected on the statement of financial position
under property, plant and equipment as right-of-use assets as
follows:
Opening Depreciation Closing
Book Value Additions Charge book value
GBP'000 GBP'000 GBP'000 GBP'000
Premises 483 - (21) 462
Motor vehicles 13 - (12) 1
Total 496 - (33) 463
----------------- ------------------ -------------------- ------------- -------------------
Lease liabilities are presented in the statement of financial
position as follow:
GBP'000
Lease liability as at 1 January
2020 514
New leases entered into during
the year -
Interest charged during the
year 38
Payments made during the
year (114)
Lease liability as at 31
December 2020 438
------------------------------------ ------------------- --------------------
2020 2019
GBP'000 GBP'000
Lease liability payable in
less than a year 38 76
Lease liability payable in
more than one year 400 438
Total 438 514
------------------------------------ ------------------- --------------------
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END
FR DBGDXSSDDGBS
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