TIDMBIOM
RNS Number : 3561B
Biome Technologies PLC
30 January 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR")
30 January 2020
Biome Technologies plc
("Biome", "the Company" or "the Group")
Trading statement
Board change
Biome Technologies plc, a leading bioplastics and radio
frequency technology business, today provides an unaudited
pre-close trading statement for the financial year ended 31
December 2019.
Group revenues for the year ended 31 December 2019 of GBP7.4m
(2018: GBP8.9m) were slightly ahead of market expectations, as were
cash balances of GBP2.1m (31 December 2018: GBP2.6m). The Board
therefore anticipates the Group to generate a slightly reduced loss
before interest, taxation, depreciation, amortisation and share
option charges for the year ended 31 December 2019 compared to
market expectations.
Bioplastics Division
The division's revenues for the full year to 31 December 2019
were GBP3.4m, which were ahead of market expectations and 79%
higher than full year 2018 revenues of GBP1.9m. Revenues in Q4 were
GBP1.1m, representing the fourth consecutive quarter of growth and
were 175% ahead of the prior year comparative (Q4 2018:
GBP0.4m).
Revenues in Q4 again reflected both strong underlying demand for
existing bioplastic materials and growing demand for new materials
being sold into the broader coffee and nutrition sectors.
Turnover in this division is anticipated to grow again
substantially in 2020 as a number of these new bioplastics
applications come on stream.
Stanelco RF Technologies Division
Revenues in the RF Technologies division in Q4 were GBP1.2m (Q4
2018: GBP1.5m), resulting in revenues for the full year to 31
December 2019 of GBP4.0m, which is in line with market expectations
and below the exceptional level of the 2018 comparative of
GBP7.0m.
The division's principal activity is the sale of furnaces for
the production of fibre optic cable. The division undertakes
ongoing analysis of the fibre optic cable market and this indicated
that prices of such cable began to fall in late 2018 and continued
to fall subsequently in the face of global over-capacity. As a
result, and as previously reported, the Board's expectation for the
division's performance during 2019 was reduced in line with that
intelligence. This over-capacity shows no sign of abating and any
recovery in demand is now not anticipated until 2021.
Given the above and the current absence of any large contracts
which generally secure revenues in the division in any given year,
the Board believes it prudent to reduce its expectations for this
division in 2020. The overhead costs within the division have been
and are being addressed appropriately.
Group Performance
Total Group revenues in Q4 were GBP2.3m (2018: GBP1.9m), taking
Group revenues for the full year to 31 December 2019 to GBP7.4m
(2018: GBP8.9m), with the large increases in the Bioplastics
division's revenues not quite offsetting the decrease in revenues
in the RF division.
The Group's cash position as at 31 December 2019 was GBP2.1m (30
September 2019: GBP0.6m). In Q4, the cash position was increased by
the previously announced share placement of GBP1.2m (net of costs),
to support the anticpated rapid growth of the bioplastics division.
The remaining change in the Group cash position was a combination
of positive working capital movements and trading performance in
the quarter.
Board and Management
The Board also announces that Declan Brown, Group Finance
Director, has decided to leave the Company at the end of April for
a new challenge. He has helped the Company enormously over the past
six years, particularly in setting in place the foundations for the
Bioplastics business. The Board wishes him well.
A replacement for the Finance Director post will be sought over
the coming months. In the meantime, the Board will engage a
temporary, experienced executive to ensure that this important role
in the Biome team is adequately resourced.
Group Outlook
The Bioplastics division is anticipated to become the dominant
division of the Group in 2020 and beyond. However, the lowering of
the Board's expectations for revenues in the RF division referred
to above will have a consequential impact on Group EBITDA in the
year to 31 December 2020. As a result, the Board now anticipates
that the Group will continue to be loss making at the EBITDA level
in the 2020 financial year. Cash is anticipated to remain in line
with the current market expectations for the 2020 year end, as
working capital requirements are reduced in RF and working capital
levels in Bioplastics are expected to benefit from the efficiencies
of new product synergies.
The outlook for 2021 is good and the Group is demonstrating the
necessary impetus towards positive earnings before interest,
taxation, depreciation, amortisation and share options charges and
cash generation. We expect the Bioplastics division to continue to
benefit from an increased number of materials and a growing
portfolio of applications, whilst also anticipating the RF division
to show some modest recovery.
- Ends -
For further information please contact: Biome
Technologies plc
Paul Mines, Chief Executive Officer
Declan Brown, Group Finance Director
www.biometechnologiesplc.com Tel: +44 (0) 2380 867
100
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner (Broker)
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 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.
In 2018, the Board has adopted the following three high level
KPIs for the following three years to continue its ambitious
momentum:
-- Compound revenue growth of 25% per annum across the Group and
40% compound revenue growth in the Bioplastics division
-- Diversify the Group's turnover by product and market to
ensure that no one product or end customer contributes more than
15% of revenues by 2020
-- Increase 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
These KPIs were set with attainment at the end of a three year
period in mind.
www.biometechnologiesplc.com
www.biomebioplastics.com and www.thinkbioplastics.com
www.stanelcorftechnologies.com
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END
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