RNS Number : 6050S
Biome Technologies PLC
17 November 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.
17 November 2021
Biome Technologies plc
("Biome", the "Group" or the "Company")
Biome Technologies plc, a leading bioplastics and radio
frequency technology business, provides an unaudited trading update
for the nine months ended 30 September 2021.
In the Interim Statement of 15 September 2021, we reported that,
heading into the second half of the year, the order intake for the
Bioplastics Division had been good and we expected to see sales
growth accelerate, particularly in the final quarter of 2021. This
assumed that the previously reported engineering limitations at our
second US customer for filtration mesh would be removed, allowing a
ramp up of their additional manufacturing lines.
These engineering limitations have been resolved and a quarter
of the customer's installed capacity has been equipped to run
Biome's products, with high efficiency production being achieved.
However, Biome now understands that the expected acceleration of
further offtake will not occur until next year as the customer
manages conflicting production priorities.
In the Interim Statement we also reported that logistics
difficulties (which included port congestion and global sea
container freight and road transport constraints), as experienced
by many industries, were hampering the Group's normal delivery
patterns to fulfil existing customers' contracts. These ongoing
logistics difficulties have also now led to some customer delays in
the implementation of new projects as they manage their own supply
Due to these factors, and the resulting revenue slippage into
the 2022 financial year, despite not losing any orders, nor new
projects, the Directors now believe revenues in the final quarter
of the year will be lower than they previously envisaged and that
therefore Group revenues for the year ending 31 December 2021 will
be significantly below current market expectations. However, due to
an anticipated improved mix of sales, higher Other Operating Income
(specifically Grant Income) and lower overhead expenditure, the
impact on Group profitability will be minor, with the Director's
expectation now being that the EBITDA loss for the year ending 31
December 2021 will be only slightly greater than current market
Whilst the issues highlighted above have stretched the Group's
working capital resources in 2021, the Directors believe that
actions underway will improve the efficiency of Biome's working
capital cycle over time in a continuing process to release cash.
The Directors believe this is the optimum manner to reach a cash
positive position from trading, whilst securing growth and building
the Biome business successfully.
Revenues in the Bioplastics division in Q3 at GBP0.8m were well
behind the prior year comparative (Q3 2020: GBP1.6m), as order
deliveries slipped to Q4. The division's revenues in the first nine
months of the financial year stood at GBP3.1m, compared to the
equivalent period last year (2020: GBP3.8m).
As highlighted above, engineering work at our second US
end-customer for filtration mesh is complete and we expect further
scale-up of offtake in due course. Development work with a new
third large customer in North America for filtration mesh and other
materials is proceeding satisfactorily. Commercial scale trials
continue with several large-scale North American customers for
packaging films. Our new business pipeline remains strong.
In Q3, the large-scale UK-wide field testing and initial
commercial sales of biodegradable tree shelters using Biome's
proprietary bioplastics materials began. Extended field testing of
approximately 40,000 shelters at more than 40 sites is being
carried out in close collaboration with Suregreen, a leading UK
manufacturer and supplier of products for the forestry, fencing and
landscaping markets. Significant revenue from this project is
expected to commence in 2022.
Stanelco RF Technologies Division
Revenues in the RF Technologies division in Q3 were GBP0.3m (Q3
2020: GBP0.2m), resulting in revenues in the first nine months of
the financial year of GBP0.6m, in line with the same period in the
prior year (2020: GBP0.6m).
This modest increase in revenues in Q3 reflects both improvement
in demand in the UK industrial sector and the division's continued
efforts to increase its geographic footprint and range of
applications. The business has continued to win smaller projects in
the UK induction heating and welding market.
Encouragingly, the division recently signed a contract worth
GBP247,000 with a UK customer to deliver two fibre optic furnaces
in the first half of 2022. This is the first new capacity order
received since 2018 and, viewed in the context of increasing orders
for spares and requests for quotations from other clients,
represents an encouraging development in this market.
Total Group revenues in Q3 were GBP1.1m (2020: GBP1.8m) taking
Group revenues for the nine months to 30 September 2020 to GBP3.6m
The Group's cash position as at 30 September 2021 was GBP1.0m
(30 June 2021: GBP1.4m) and the Group continued to have no external
In the short term, there are more challenges than we expected
when we last reported to shareholders in September and we now
believe that revenues from certain customers of the Bioplastics
division will be delayed into the first half of 2022.
Despite the difficulties described above, the market for the
Group's products remains positive. In Bioplastics, new business,
materials and opportunities continue to increase our reputation and
revenue potential. In RF, there are early but positive signs that
the market trough is behind us, and that new business generated in
the division will be more broadly based than in the past.
For further information please contact: Biome Technologies
Paul Mines, Chief Executive Officer
Donna Simpson-Strange, Company Secretary
Tel: +44 (0) 2380 867 100
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner (Sales and Corporate Broking)
Tel: +44 (0) 20 3328 5656
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
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
www.biomebioplastics.com and www.thinkbioplastic.com
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