TIDMBIOM
RNS Number : 7810L
Biome Technologies PLC
15 September 2021
This announcement contains inside information for the purposes
of Regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
this information is now considered to be in the public domain.
15 September 2021
Biome Technologies plc
("Biome", "the Company" or "the Group")
Interim Results
Biome Technologies plc announces its unaudited Interim Results
for the six months ended 30 June 2021.
Highlights
-- The Group generated revenues of GBP2.6m (H1 2020: GBP2.5m)
and gross profit of GBP0.9m (H1 2020: GBP0.8m)
-- The Biome Bioplastics division was the principal revenue
generator for the Group, with growth of 7.3% on H1 2020 despite the
logistics disruption caused by ongoing issues in the global
shipping industry
-- Biome Bioplastics continued to grow its end-customer base and
received a contractual commitment to accelerate the
commercialisation of its proprietary compostable filtration mesh
with a US customer. Whilst implementation was constrained by a site
utility issue, an engineering solution is being implemented and we
expect to see the acceleration of offtake during Q4 2021
-- The Stanelco RF Technologies division saw tendering activity
increase, contract wins in induction heating and an improvement in
the leading demand indicators of the cyclical fibre optic
market
-- Current trading continues in line with the Board's
expectations set out in the trading updates of 1 and 29 July
2021
Paul Mines, Chief Executive Officer said:
"We continue to see a healthy level of orders and enquiries for
Biome Bioplastics' products and our opportunity pipeline is
increasing. The ongoing delays in shipping and transportation
constrained the first half and we have been investing in inventory
to mitigate the effects as we progress through H2. Demand for our
biodegradable filtration mesh from our new end-customer is already
encouraging and the further conversion of this customer in Q4 2021
should provide significant long-term benefits. We continue to trade
in line with the Board's expectations set out in the trading
updates of 1 and 29 July 2021."
For further information please contact:
Biome Technologies plc
Paul Mines, Chief Executive Officer
Rob Smith, Chief Financial Officer
Tel: +44 (0) 2380 867 100
info@biometechnologiesplc.co.uk
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner (Sales and Corporate Broking)
Tel: +44 (0) 20 3328 5656
About Biome
Biome Technologies plc (Ticker: BIOM) 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 value-added pricing can be justified and
that 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
#ThinkBioplastic is our digital educational platform, launched
in October 2018 in response to the emerging global plastic
conversation. It speaks to a wide audience, highlighting
bioplastics as a leading solution to reduce the negative impact of
plastic manufacture and disposal. Following the much acclaimed
first series of short videos, the second series was recently
released.
Chairman's Statement
During the first half of 2021, the Group's two divisions saw a
continuance of recent trends. An increase in revenue in the Biome
Bioplastics Division ("Bioplastics"), with a slight decrease in
sales in Stanelco RF Technologies Division ("RF Technologies"),
resulted in Group revenues for the period of GBP2.6m, slightly
ahead of the previous half year (H1 2020: GBP2.5m).
Encouragingly, we have seen a continuance of improving sales
enquiry levels, with a notable customer win for Bioplastics and an
upturn in enquiries and tender activity in RF Technologies.
However, we, like many businesses, have been constrained by the
disruption in the international sea container industry affecting
Bioplastics and to a lesser extent a shortage of electronic
components for RF Technologies. The direct effect of Covid 19 have
been marginal on both divisions.
Gross profit for the Group was GBP0.9m (H1 2020: GBP0.8m)
reflecting the improved revenues. The overall gross margin for the
Group was 33% (H1 2020: 30%) reflecting an improved mix of product
sales in the first half of the year.
Administrative expenses continued to be tightly controlled in
the period and were broadly in line with the first half of 2020 at
GBP1.7m (H1 2020 restated: GBP1.6m). The Group recorded a loss
before interest, depreciation, amortisation and share option
charges for the six months to 30 June 2021 of GBP0.5m (H1 2020
restated: GBP0.4m loss)(1) . The loss after taxation was GBP0.7m
(H1 2020: GBP0.8m loss), which equates to a loss per share of 19
pence on both a basic and diluted basis (H1 2020: loss per share of
29 pence on a basic and diluted basis).
The Group's cash position as at 30 June 2021 was GBP1.4m (31
December 2020: GBP1.7m) reflecting the first half's losses. As at
30 June 2021, the Group continued to have no external bank
borrowings.
(1) Loss before interest, taxation, depreciation and
amortisation is an alternative profit measure as detailed in Note
7.
Biome Bioplastics Division
Revenues in Bioplastics reflected increasing demand for
biodegradable plastics. Sales for H1 2021 of GBP2.3m (H1 2020:
GBP2.1m) represented an increase of 7.3% when compared to the
corresponding period in the prior year.
The performance in the period was underpinned by a continuance
of sales of outer packaging for the US coffee market and by growing
revenues for rigid ring materials for coffee-pod applications.
A major milestone in the period was the receipt of a contractual
commitment from a second US end customer for conversion to our
biodegradable filtration material. This was referred to in our
trading updates of 1 and 29 July 2021, where we reported that this
implementation had been constrained by an issue relating to the
provision of a utility. An engineering solution addressing this
constraint is now underway and our understanding is that the work
required will be completed shortly and that we can expect to see
the acceleration of offtake during Q4 2021.
The division's opportunity pipeline has continued to expand,
with sales to existing customers being supplemented with
development work together with sample and pre-production sales
being made in H1 2021 to a greater number of customers both in
North America and the UK. We anticipate a number of these
opportunities moving into larger scale production during H2 2021
underwriting our growth expectations.
These prospects include:
-- Filtration mesh - implementation is underway with a second
end-use customer in the coffee filtration market
-- Coffee pod material - the Company's heat stable material,
developed for coffee pods, is attracting new customers within the
US market and commercial sales of this product are gaining
momentum
-- 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 and one is in the UK
-- Tree shelters (see below) - favourable market feedback is
leading to accelerated development activity and initial production
is planned for H2 2021.
In H1 2021, the division announced that it had secured
GBP248,000 of further Innovate UK funding to complete the
development phase and reach commercial production of its
biodegradable tree shelter project. Activity on this project
accelerated significantly in the period, in cooperation with
Suregreen, a UK end customer. With further extensive laboratory
testing of materials now completed, UK-wide field trials are
expected to commence later this year.
Stanelco RF Technologies Division
Revenues for the first half of 2021 in RF Technologies were
GBP0.3m (H1 2020: GBP0.4m).
The cyclical downturn in the demand for furnaces used in the
manufacture of fibre optic cable, first seen in 2018, has continued
to limit the opportunities for RF Technologies. However, during the
first half we saw customers increasing orders for spares and some
early signs that the fibre optic market is seeing recovery with
reduced inventory and higher pricing for fibre optic cable being
reported. We have provided quotations to a number of our
long-established clients as they begin to consider further capacity
expansion. We are encouraged by the improvement in these leading
indicators.
The division has made a concerted effort to gain new customers
for induction heating and welding equipment from various end
markets in the UK and continental Europe. Some encouraging new
orders have been received, from large customers, for delivery in H2
2021.
The division continues to keep a tight rein on costs and cash
whilst maintaining its operational capability to meet future
demand.
KPI Targets
The Board restated its ambitious Key Performance Indicators
("KPIs") for the period to 2023 in the 2020 interim report
published on 24 September 2020. These KPIs considered the effects
of the Covid-19 Pandemic to the extent that these were known at
that point in time and the cyclical downturn in the fibre optic
manufacturing industry.
Whilst H1 2021 saw relatively modest gains, we remain committed
to the delivery of these targets and continue to strive to meet
them over the required period. The KPI targets remain: -
-- 40% annual revenue growth in Bioplastics
-- Bioplastics profitable revenue growth to achieve a 10%-12.5%
EBITDA margin by the end of the KPI period
-- 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
-- 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 Board will continue to measure the Group's performance
against these KPIs and report to shareholders annually on
progress.
Outlook
Current trading continues in line with the Board's expectations
referred to in the trading updates of 1 and 29 July 2021.
Positive progress continues in Bioplastics. Order intake has
been good and as the engineering limitations are removed at our
second end customer for filtration mesh and as global sea container
freight normalises, we expect to see sales growth accelerate.
The prospects for RF Technologies in 2021 will remain
constrained, but with a reasonable expectation for an improvement
in order intake in H2 2021 and the potential for an improved
outlook for 2022.
John Standen
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2021
6 Months 6 Months Year
Ended Ended Ended
30 June 30 June 31 December
Note 2021 2020 2020
Restated Restated
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------- ----- -------------------- -------------------- -------------------
Revenue 5 2,589 2,500 5,705
Cost of goods sold (1,731) (1,746) (4,029)
-------------------- -------------------- -------------------
Gross Profit 858 754 1,676
Other operating income 110 87 300
Administrative expenses (1,739) (1,645) (3,639)
-------------------- -------------------- -------------------
Loss from operations (771) (804) (1,663)
Investment income - 2 2
Finance and similar charges (19) (19) (38)
-------------------- -------------------- -------------------
Loss before taxation (790) (821) (1,699)
Taxation 90 - 155
Total comprehensive loss for the
period (700) (821) (1,544)
-------------------- -------------------- -------------------
Basic loss per share - pence (19)p (29)p (51)p
Diluted loss per share - pence (19)p (29)p (51)p
Restatement
The consolidated statement of comprehensive income has been
restated to include foreign exchange gains and losses as part
of administrative expenses.
-----------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
At At At
30 June 30 June 31 December
2021 2020 2020
Restated
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------- --------------------- --------------------- ---------------------
NON-CURRENT ASSETS
Other intangible assets 797 778 821
Property, plant and equipment 541 611 574
--------------------- --------------------- ---------------------
1,338 1,389 1,395
CURRENT ASSETS
Inventories 1,205 997 746
Trade and other receivables 1,228 1,781 1,439
Taxation receivable 90 - 155
Cash and cash equivalents 1,390 1,074 1,678
--------------------- --------------------- ---------------------
3,913 3,852 4,018
TOTAL ASSETS 5,251 5,241 5,413
--------------------- --------------------- ---------------------
CURRENT LIABILITIES
Trade and other payables (1,587) (1,245) (1,076)
Lease liabilities (43) (35) (38)
--------------------- --------------------- ---------------------
(1,630) (1,280) (1,114)
NON-CURRENT LIABILITIES
Lease liabilities (381) (401) (400)
--------------------- --------------------- ---------------------
(381) (401) (400)
TOTAL LIABILITIES (2,011) (1,681) (1,514)
--------------------- --------------------- ---------------------
NET ASSETS 3,240 3,560 3,899
--------------------- --------------------- ---------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION continued
As at 30 June 2021
At At At
30 June 30 June 31 December
2021 2020 2020
Restated
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------ --------------------- -------------------- -----------------------
EQUITY
Share capital 189 140 186
Share premium 2,283 1,250 2,200
Capital redemption reserve 4 4 4
Share options reserve 647 548 617
Translation reserve (85) (85) (85)
Treasury shares reserve (55) - -
Retained earnings 257 1,703 977
TOTAL EQUITY 3,240 3,560 3,899
--------------------- -------------------- -----------------------
Restatement
The consolidated statement of financial position has been
restated to disclose taxation receivable as a separate amount
in the position as at 31 December 2020, previously it was
included within trade and other receivables.
----------------------------------------------------------------------------------------------------
The interim statements were approved by the Board on 14
September 2021.
Signed on behalf of the Board of Directors
Paul R Mines
Chief Executive
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 June 2021
At At At
30 June 30 June 31 December
2021 2020 2020
Restated Restated
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------- --------------------- --------------------- ----------------------
Loss after taxation: (700) (821) (1,544)
Adjustments for: -
Taxation (90) - (155)
Finance charges 19 19 38
Investment income - (2) (2)
--------------------- --------------------- ----------------------
Loss from operations (771) (804) (1,663)
Adjustments for: -
Amortisation and impairment of
intangible assets 169 142 320
Depreciation of property, plant
and equipment 44 44 98
Share based payments - equity settled 38 170 240
--------------------- --------------------- ----------------------
Operating cash flows before movement
in working capital (520) (448) (1,005)
(Increase)/decrease in inventories (459) (442) (191)
Decrease in receivables 211 104 293
Increase/(decrease) in payables 538 (214) (152)
---------------------
Cash utilised in operations (230) (1,000) (1,055)
Taxation received 155 - -
Interest paid (19) - (38)
--------------------- ----------------------
Net cashflow from operating activities (94) (1,000) (1,093)
--------------------- --------------------- ----------------------
Investing activities
Interest received - 2 2
Investment in intangible assets (145) (37) (258)
Purchase of property, plant and
equipment (10) (2) (19)
Net cash used in investing activities (155) (37) (275)
--------------------- --------------------- ----------------------
Financing activities
Proceeds from issue of share capital 1 - 1,100
Costs of issue of ordinary share
capital - - (104)
Repayment of obligations under
leasing activities (40) (15) (76)
Net cash from financing activities (39) (15) 920
--------------------- --------------------- ----------------------
Net decrease in cash and cash equivalents (288) (1,052) (448)
Cash and cash equivalents at the
beginning of the period 1,678 2,126 2,126
Cash and cash equivalents at the
end of the period 1,390 1,074 1,678
--------------------- --------------------- ----------------------
Restatement
The consolidated statement of cash flows has been restated
to reflect the inclusion of foreign exchange gains and losses
as part of administrative expenses.
-----------------------------------------------------------------------------------------------------------------
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 30 June 2021
1. CORPORATE INFORMATION
The financial information for the year ended 31 December 2020
set out in this interim report does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31
December 2020 have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and
did not contain statements under Section 498 of the Companies Act
2006. The interim results are unaudited. Biome Technologies plc is
a public limited company incorporated and domiciled in England
& Wales. The Company's ordinary shares are publicly traded on
the AIM market of the London Stock Exchange.
2. BASIS OF PREPARATION
These interim consolidated financial statements (the interim
financial statements) are for the six months ended 30 June 2021.
They have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006. They do not include all of the information required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements of the Group for the year
ended 31 December 2020.
These interim financial statements have been prepared in
accordance with the accounting policies adopted in the last annual
financial statements for the year to 31 December 2020, save that:
-
-- The consolidated statement of comprehensive income has been
restated to include foreign exchange gains and losses as part of
administrative expenses for the period ending 30 June 2020 and the
year ending 31 December 2020, and
-- The consolidated statement of financial position has been
restated to disclose taxation receivable as a separate amount as at
31 December 2020, previously it was included within trade and other
receivables.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of the interim
financial statements.
3. BASIS OF CONSOLIDATION
The Group's interim financial statements consolidate the results
of the Company and all of its subsidiary undertakings drawn up to
30 June 2021. As at 30 June 2021, the subsidiary undertakings were
Biome Bioplastics Limited, Stanelco RF Technologies Limited,
Aquasol Limited and InGel Technologies Limited.
4. GOING CONCERN
The Directors have reviewed forecasts for the period to December
2022. These have been prepared with appropriate regard for the
current macroeconomic environment including the ongoing impact of
Covid-19 and the circumstances in which the Group operates. In
particular, the Directors have considered the continuing growth of
the Bioplastics Division, its need for continued investment in
development resource and working capital, the steps they can take
to improve the efficiency of the working capital deployed and the
availability of future funding.
The model has assumed growth in the period from the Stanelco RF
Division and the Directors have already taken steps to ensure
resources meet current demand.
The Directors are satisfied that the Group has sufficient
resources to continue in operational existence for at least one
year from the date of approval of these Interim Results.
5. SEGMENTAL INFORMATION
Revenue from external customers
6 Months 6 Months Year
Ended Ended Ended
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------------- ----------------------- ----------------------- -----------------------
Biome Bioplastics Division 2,271 2,117 4,946
Stanelco RF Technologies Division 318 383 759
----------------------- ----------------------- -----------------------
Total Revenue 2,589 2,500 5,705
----------------------- ----------------------- -----------------------
6. LOSS PER SHARE
The calculation of basic earnings per share is based on the loss
attributable to the equity holders of the parent for the period of
GBP700,000 (H1 2020: loss of GBP821,000, FY 2020: loss of
GBP1,544,000) and a weighted average of 3,729,257 ordinary shares
in issue (H1 2020: 2,798,525, FY 2020: 3,035,740). The calculation
uses the same weighted average number of shares under the basic and
diluted basis in the current and comparative periods due to a loss
being made.
7. ALTERNATIVE PROFIT MEASURE
The Group measures and reports on Earnings (Loss) Before
Interest, Taxation, Amortisation and Depreciation (E(L)BITDA). The
following table sets out the calculation of E(L)BITDA.
6 Months 6 Months Year
Ended Ended Ended
30 June 30 June 31 December
2021 2020 2020
GBP'000s GBP'000s GBP'000s
Loss from operations (771) (804) (1,663)
Depreciation 44 44 98
Amortisation 169 142 320
Share based payments 38 170 240
Loss Before Interest, Taxation,
Depreciation and Amortisation (520) (448) (1,005)
-------------------- -------------------- ------------------------
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