Biome Technologies PLC Trading Update (7531D)
July 01 2021 - 1:00AM
UK Regulatory
TIDMBIOM
RNS Number : 7531D
Biome Technologies PLC
01 July 2021
This announcement contains inside information for the purposes
of Regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310.
1 July 2021
Biome Technologies plc
("Biome", "the Company" or "the Group")
Trading Update
Biome Technologies plc, a leading bioplastics and radio
frequency technology business, today provides a Trading Update.
Bioplastics Division
On 23 March 2021, the Company announced that it had secured an
anticipated contractual commitment with a second US end-customer to
accelerate the commercialisation of its proprietary compostable
coffee-pod filtration material and that this important customer's
business would support a significant portion of the Group's
expected revenue growth in 2021 and beyond. At that time the
customer also ordered equipment from the Group to enable the
deployment of Biome's filtration material on a significant portion
of their production capacity. The initial installation of this
equipment proceeded rapidly and an uplift of filtration material
purchases began in the second quarter of 2021. Recently, however,
the customer has discovered an unexpected constraint within its
factory services that is currently limiting the scale of
deployment. Whilst the customer has already identified an
engineering solution to remove this constraint, it has become clear
to Biome that it will now take some months for the customer to
design and install the necessary modifications. The Board of Biome
(the "Board") now believes that this single delay will have a
significant impact on the Group's expected growth in the nearer
term.
The overwhelming majority of the revenues and development
opportunities for Biome's Bioplastics division lie in the United
States. The division's final products are manufactured both in
Europe and the USA with raw materials sourced from around the
world, which means that the business has a significant reliance on
containerised ocean shipping. The COVID-19 pandemic has resulted in
very significant disruption to the global shipping industry, with
significant ongoing delays and cancellations now occurring more
frequently. Biome is not immune to these forces, and the delays are
now proving a significant constraint on the division's ability to
quickly undertake the multiple development iterations that are
required to support growth with new customers. There is no sign
that the current severe level of disruption with shipping and ports
will be resolved soon and the Board believes that a more
conservative view is now required in relation to the rate of
commercialisation of a number of these opportunities under the
current circumstances.
It is pleasing that the demand for the division's products
remains robust and there have been important additions to the
customer list and the division's pipeline of development
opportunities in the first half of 2021. Whilst the division's rate
of growth will be constrained by the factors described above in the
shorter-term, the Board expects a return to the higher rates of
growth indicated in its Key Performance Indicators (KPIs) in due
course.
Stanelco RF Technologies Division
The encouraging signs of a modest pick-up of activity within
this division's core fibre optic furnace market continue and the
Board's expectations of its trading for the current year are
unchanged.
Group Outlook
As a consequence of the factors described above in relation to
the Bioplastics division coupled with the adverse impact of
exchange rates on this division's US Dollar revenues, the Board now
believes that Group revenues for the years ending 31 December 2021
and 2022 will be materially below current market expectations.
The Board also believes that Group losses before interest,
taxation, depreciation, amortisation and share option charges
("Underlying LBITDA") for the year ending 31 December 2021 will be
greater than current market expectations and that the Group will
make an Underlying LBITDA for the year ending 31 December 2022. The
Board believes that the anticipated year-end cash position as at 31
December 2021 will remain materially unchanged relative to current
market expectations, with the increased Underlying LBITDA being
offset by reduced administrative costs and less intensive working
capital utilisation. As at 30 June 2021, the Group had an unaudited
cash balance of GBP1.3 million and no debt.
The Board believes that Biome will continue to see growth in
both of its divisions during 2021 and 2022 relative to the year
ended 31 December 2020. Demand for our products remains strong and,
once our customer's factory constraint described above is removed,
the Board believes our high rates of growth will return.
- Ends -
For further information please contact: Biome Technologies
plc
Paul Mines, Chief Executive Officer
Rob Smith, Chief Financial Officer
info@biometechnologiesplc.co.uk
Tel: +44 (0) 2380 867 100
www.biometechnologiesplc.com
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner (Sales and Corporate Broking)
Tel: +44 (0) 20 3328 5656
www.allenbycapital.com
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 and
Stanelco RF Technologies Limited.
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
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