TIDMBIOM
RNS Number : 4418X
Biome Technologies PLC
26 April 2023
The information contained within this announcement is deemed by
the Company to constitute inside information pursuant to Article 7
of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended.
26 April 2023
Biome Technologies plc
("Biome", the "Company" or the "Group")
Final Results 2022
Biome Technologies plc announces its audited Final Results for
the year ended 31 December 2022.
Highlights:
Final Results
-- Group revenues increased by 7.9%.
-- A mixed year for the Bioplastics division with revenues
declining by 8.4% in the year. This was caused by a significant
reduction in demand from a long established customer for filmic
material, which was partly offset by growth with other customers
and strengthening in the pipeline of commercial opportunities.
-- RF Technologies division revenues increased by 91.6% to
GBP1.8m (2021: GBP0.9m) (after elimination of intra-group trade) as
the division continues to diversify its application base.
-- Reported Group loss before interest, depreciation, taxation
and amortisation (LBITDA) of GBP0.4m (2021: LBITDA of GBP0.6m),
better than market expectations, with Group operating loss of
GBP0.7m (2021: loss of GBP1.1m).
-- Group cash position as at 31 December 2022 was GBP0.8m (31
December 2021: GBP1.0m) with no bank borrowings.
Paul Mines, Chief Executive Officer said : "The Group grew less
than we had originally anticipated in 2022 due to a sharp decline
in demand from one of our long standing customers in the
Bioplastics division. The greatly increased revenue from RF
Technologies division resulted in improved gross margins and
reduced LBITDA and operating loss for the Group. Demand from
customers in the Bioplastics division improved in the final quarter
of 2022 and this improvement has continued into the first quarter
of 2023."
- 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/Tony Quirke (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
Group revenues grew 7.9% in the year to GBP6.2m (2021: GBP5.7m)
whilst the loss before interest, taxation, depreciation and
amortisation ("LBITDA") improved to GBP0.4m (2021: GBP0.6m LBITDA).
An increased focus on working capital management, particularly
around the size of manufacturing campaigns and timing, ensured that
the year-end cash position was better than anticipated at GBP0.8m
(2021: GBP1.0m).
The Group, however, grew less than we had originally anticipated
in 2022, consequently we reduced our expectations during the year
for a second year in a row. Following this, the Board decided to
adjust its forecasting methodology (particularly for the
Bioplastics division) such that new customer prospects are now only
included in management's expectations when large scale
commercialisation is proven.
We are delighted by the support received in the recent
Convertible Loan Note fundraising, including from a number of our
major shareholders, and by the support of shareholders as a whole
at the General Meeting held on 17 April 2023. The aggregate net
proceeds from the Convertible Loan Note issue will be used to
support the growth of the Group's Bioplastics and RF Technologies
divisions towards a position of Group operating cash flow
sustainability over time.
Bioplastics division
The Bioplastics division's revenues for the year to 31 December
2022 were GBP4.4m (2021: GBP4.8m) due mainly to a combination of
two factors. The first was a large reduction in demand from a
long-standing end-customer of Biome's materials which are used in
compostable packaging films. This reduction was offset
substantially by orders from new end-customers in both North
America and Europe, primarily related to materials for compostable
packaging films.
An increase in the number of orders for our compostable coffee
filtration mesh were received for delivery in the final quarter of
the year accompanied by encouraging signs of a sustained commitment
for 2023.
Market demand is building strongly for products that are
certified for 'home composting', rather than 'industrial
composting'. The technical requirements of 'home' vs 'industrial'
compostable material require that those designated as 'home' must
compost more quickly in temperatures akin to home/garden
temperature conditions. The division's scientists have made great
strides in delivering this technical performance at a competitive
price point and a patent for a new family of materials has been
filed. The first products exploiting this technology are expected
to enter the market during the course of 2023, following the
extensive development and testing required.
A number of important end-customer opportunities of scale are
being pursued by the division. These opportunities are at various
stages of progress and, whilst encouraging , can be subject to
technical, operational and commercial delays until they reach full
commercialisation. A selected few of these opportunities have been
outlined in previous statements and further details may be found in
the Strategic Report. Following the change in our forecasting
methodology, as mentioned above, this year, they are not included
in management's expectations for the financial outturn for
2023.
Over the last eight years, the Bioplastics division has
coordinated significant research and development funding in
conjunction with leading universities, in pursuit of bringing new
novel and patent protectable, and where possible, bio-based and
biodegradable polyesters to market. In November 2022, the division
was awarded a further GBP0.3m in funding from Innovate UK, the UK
Government's innovation agency, to support the scale-up of one such
polyester polymer ("PBAF"). This work is being carried out in
collaboration with Thomas Swan (www.thomasswan.co.uk) and the
University of Nottingham, both of whom we have worked with
previously. This polyester polymer is based on furan dicarboxylic
acid (FDCA), an important new bio-based chemical. The scale-up will
allow the performance and production process of this polymer to be
evaluated at an industrially relevant scale and will help map out
the pathway to full commercialisation.
We believe that the progress described above highlights the
growing reputation of the Bioplastics division for innovative
materials and demonstrates how it will lead to market success,
particularly in North America. Our ability to deliver growth from
the North America market was enhanced in 2022 by the relocation of
a senior Biome employee, responsible for business development in
Canada and the start-up of legal entities and associated
back-office services in both the USA and Canada. It is our
intention to build on this local presence as growth continues.
RF Technologies division
Revenues in the RF Technologies division in 2022 were GBP1.8m
(2021: GBP0.9m). The RF Technologies division's efforts to
diversify its revenue stream gained traction in 2022. Substantive
orders for the medical sector in the UK and for food packaging
sector in Continental Europe were delivered during the year. These
are important steps for the division as it refines and demonstrates
its capability on a wider stage.
The downturn in demand for capital goods in the fibre optic
cable manufacturing sector which was first seen during 2019
continued through 2022. Whilst spares and service orders for the
fibre optic sector remain robust and provide some indication that
current capacity is being well utilised, we are yet to see a
pipeline of further large-scale capacity increases emerge from this
area of the market.
The diversification strategy has delivered an encouraging
pipeline of enquiries for 2023 and beyond. Negotiations to convert
a number of these enquiries into contracts continue and these
underpin our expectations for 2023.
Covid-19 and economic instability
In the western economies, the direct impacts of the Covid-19
pandemic receded significantly in 2022 and local precautions were
largely removed in line with government guidance on these
matters.
Supply chain issues remained prevalent for the Bioplastics
division and whilst this turbulence is expected to continue through
2023, we are improving our capability to foresee and manage such
issues. We have seen and continue to see an increase in input
costs, including in relation to raw materials, shipping, energy and
staff. We have, in the main, been able to pass these costs on to
customers and we are continually working to mitigate the effects of
inflation on our business.
The RF Technologies division continued to experience the
disruptions to supply lines that other manufacturers have had to
contend with in the period. The widespread long lead times for
electronic components did abate in the year but some individual
items remained difficult to procure.
Results
The Group's results were in line with the expectations announced
in January for the year ended 31 December 2022, although with the
level of Group loss being better than market expectations.
Consolidated Group revenue for the year was GBP6.2m (2021:
GBP5.7m) reflecting the decrease in Bioplastics sales offset by a
healthy increase in those from the RF Technologies division. Group
gross margins for the year were 37.7% (2021: 33.8%) reflecting an
improved mix of sales during the year.
The Group loss before taxation decreased to GBP0.8m (2021:
GBP1.2m) whilst the non-GAAP measure of LBITDA was better than
January's guidance regarding market expectations at GBP0.4m (2021:
GBP0.6m LBITDA). A Group operating loss of GBP0.8m for the year was
incurred (2021: GBP1.1m loss).
The Bioplastics division saw a decrease in sales to GBP4.4m
(2021: GBP4.8m) representing an 8.4% decline and loss before
taxation of GBP0.7m (2021: GBP0.6m loss). The division recorded a
higher LBITDA of GBP0.4m (2021: GBP0.2m LBITDA) as sales
decreased.
The RF Technologies division's revenues, after elimination of
intercompany sales, were up 91.6% to GBP1.8m (2021: GBP0.9m)
reflecting the recovery in demand for the division's products.
Profit before taxation increased to GBP0.2m (2021: GBP0.1m lLoss
before taxation). The division reported an EBITDA of GBP0.2m for
the year (2021: GBPnil) and an operating profit of GBP0.2m (2021:
GBP0.1m operating loss).
Cash and debt
The Group's cash balances as at 31 December 2022 were GBP0.8m
(31 December 2021: GBP1.0m) reflecting trading losses for the year
offset by lower working capital. The Group had no debt, other than
leases in respect of right of use assets as at 31 December 2022
(2021: GBPnil). Capitalised product development in the Bioplastics
division was GBP0.4m (2021: GBP0.3m).
On 31 March 2023, the Company announced a proposed issue of
Convertible Loan Notes to raise GBP850,000 (before expenses) which
completed on 18 April 2023. The Board had for several months been
reviewing potential funding options for the Company to support the
medium-term funding needs of the Group and its businesses and
concluded that the issue of the Convertible Loan Notes was the best
available option in the circumstances. The Board is hopeful that
this funding will support the growth of the Group towards a
position of operating cash flow sustainability over time.
Following the recent fundraise the Group's gross cash balances
as at 18 April 2023 were GBP1.3m, post receipt of funds from
Convertible Loan Notes.
Strategy
The Group's strategy is set out in the strategic report on pages
6 to 14 of the report and accounts for the year ended 31 December
2022.
Economic conditions around the world including higher interest
rates and energy costs have led us to anticipate lower growth rates
generally than previously. Accordingly, we are altering our
medium-term growth aspirations for the Bioplastics division to 25%
per annum from 40%. We believe that this is a more realistic target
for our business in the current macro-economic circumstances and is
consistent with market expectations.
The following actions/undertakings have been specifically set by
the Bioplastics division to drive the overall growth target:
1. grow sales to existing customers where we have built substantial positions;
2. successfully introduce the 'home' compostable material to our end-customers;
3. expand the number of end-customers using our filtration mesh
material primarily within the beverage industry;
4. convert new customers to the use of our materials in
compostable film in the packaging segment; and
5. expand the number of customers using our rigid materials in
defined performance applications (e.g. coffee pods, tree
shelters).
The RF Technologies division is expanding into new sectors by
further exploiting its thermal process solutions knowhow based on
induction, dielectric and resistance heating technologies with the
objective of growing its sales by more than 25% per annum and with
more than 50% of its sales coming from sectors other than its
historic core fibre-optic market over the long-term.
Board
As noted in the circular to shareholders dated 31 March 2023,
the Board is in discussions with a view to Martin Rushton-Turner
joining the Board as a non-executive director following the
Company's 2023 annual general meeting.
Race to Zero
Biome Technologies 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. Our reporting of actual
greenhouse gas emissions and medium-term targets commences in these
Statements and demonstrate good initial reductions of Scope 1 and 2
emissions (direct energy use) against the recent baseline. Plans
have been developed to drive progress towards both 2030 and 2050
targets.
Our Bioplastics division's products are, where appropriate,
subject to individual Life Cycle Analysis (LCA) that encompass the
Group's full supply chain. This allows decision making for Biome
and its customers on how to minimise climate impact. In due course,
we will look to extend our broader Group reporting beyond Biome's
boundary, to include Scope 3 emissions (those from toll
manufacture, growing, extraction, manufacture, and processing of
the raw materials used) as robust data becomes available.
Outlook
We believe the Group is positioned well for further growth in
the current and for future years.
The Bioplastics division will continue to benefit from the
global move to more sustainable materials as it continues to
broaden its product and customer portfolio particularly in the area
of 'home composting'. The product development and commercial
foundations laid previously provide a base from which to accelerate
a number of opportunities during 2023 and beyond.
The RF Technologies division has a good pipeline of
opportunities for 2023 that are diversified beyond the historical
fibre optic focus and we are confident that these will convert to
important new orders with deliveries expected during the second
half of the year.
As stated in the Company's announcement of 31 March 2023,
trading in the first quarter of 2023 was in line with the previous
guidance, with some improvement in sales mix, but there is much to
do yet to achieve our ambitions for the year. We remain cautious in
these difficult economic times and our outlook for the year
consequently remains unchanged relative to current market
expectations.
John Standen
Chairman
25 April 2023
Strategic Report
Biome Technologies plc aims to be a growth orientated,
commercially driven technology group. Its strategy is founded on
building market-leading positions based on its technology,
intellectual property and serving international customers in the
bioplastics and radio frequency heating sectors.
We pursue this ambition 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.
Bioplastics division
The Bioplastics division achieved sales revenue of GBP4.4m
(2021: GBP4.8m), a decrease of 8.4%. This decrease in reported
revenues, compared to the performance in 2021, was attributable to
lower demand from a long-standing customer as they reduced their
inventory holding ahead of an anticipated switch from industrially
to home compostable packaging and as other demand factors impacted
their own business. Additionally, an expected ramp-up in production
at one of our end-customers for filtration mesh was delayed and
only commenced in the final quarter of 2022. Whilst the delay was
disappointing, the ramp-up in offtake went well and we can confirm
that this end-customer has continued to purchase from the division
via its distributor, in line with our expectations through the
first quarter of 2023.
The industry-wide logistics challenges which were encountered
throughout 2021 eased to some extent during 2022 and whilst not
back to pre-pandemic levels of performance, lead-times for both
sea-freight and road logistics have become more predictable.
However, many of the division's customers continued to suffer
logistics, macro-economic disruption and labour issues during 2022
as the world adjusted to post-pandemic demand and inflationary
pressure.
The division's operating loss for the year was GBP0.7m (2021:
GBP0.6m loss), with the lower sales volume being offset somewhat by
a more profitable mix.
Markets
Plastics and their use or misuse by humanity remains a key
environmental topic of focus around the world. 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 consequences of fugitive release to the
environment. In addition, with rising concerns regarding climate
change and the pursuit of "Net Zero" strategies by governments,
there is greater interest in how such materials might also be
manufactured with lower carbon footprints.
The compelling case for compostable (biodegradable) bioplastics
often 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 finally spread to soils. This case is driving
the growth of the compostable packaging market around the world 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 often
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 for "Industrially compostable" materials
varies considerably by geographic territory and often within
countries. There is, in general, a move to improve and scale-up
such activities to prevent food waste reaching landfill with its
resultant release of methane (a significant Green House Gas).
The consumer desire to change the plastic landscape is pulling
through increased demand for compostable plastics at a rate that is
faster than (often government controlled) collection and disposal
supply chains are able to adapt. As a result, there is increased
demand from the market for bioplastics that can be composted at
home - known as "Home Compostable" products. 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 can, are
often highly motivated to treat such waste in their gardens. This
adoption by enthusiasts is driving the compostable plastics market
towards the production and certification of 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. Home
Compostable bioplastics have the added benefit of degrading faster
than Industrially Compostable bioplastics in industrial
facilities.
Compostable (biodegradable) bioplastics do not provide a panacea
for the plastics litter problem. They are not (in general) designed
to biodegrade in the open environment such as water courses or
soils and so are not the answer to such pollution. However, in
certain application areas it makes sense to tailor bioplastic
materials for such fates to prevent the accumulation of
micro-plastics in the environment. Specific end-uses are in
agriculture and forestry where plastic can be compelling for
productivity but is often not collected or collectable.
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 rank behind the desire for compostable
functionality.
The division's main market of focus is North America where the
scale of adoption of compostable bioplastics has accelerated in
recent years. This has been driven by environmental awareness and
facilitated by the deployment of end-of-life composting capability.
The mid-size food and beverage providers have led the move away
from conventional plastics as they seek to differentiate their
products from those of the major brands. The division has
undertaken manufacturing at two locations in North America for some
years and has provided technical support from both local and
travelling personnel. In 2022 this market presence has been
reinforced by the location of a Business Development Manager in
Canada and the establishment of legal entities (Biome Bioplastics
Inc.) in both Canada and the USA with supporting back-office
capability. It is intended that these changes will provide the
division's customers with a more "local" experience and help drive
further revenue growth.
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 this 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 in the latter half of this decade
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 Group's
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
A number of important end-customer opportunities of scale are
being pursued by the Bioplastics division. These opportunities are
at various stages of progress and, whilst encouraging, can be
subject to technical, operational and commercial delays until they
reach full commercialisation. A selected few of these opportunities
have been outlined in Regulatory News Service announcements made by
the Company and are updated below. They are not included in
management's expectations for the financial outturn of 2023:
Filtration mesh Rigid parts Filmic (packaging)
materials
Name : Alternate Name : Second pod Name : Labels
coffee format opportunity Market : North America,
Market : USA commercial Market : North America global
coffee consumer pods Supply : Manufacturing
Supply : Materials Supply : Materials envisaged in North
and manufacturing (in part) from Asia. America and Europe
in USA Manufacturing in North Comment : Initial
Comment : Customer America technical validation
paid development; Comment : Technical completed; relies
success rests on Biome's challenges overcome on Biome's Home Compostable
Home Compostable technology; at small scale; larger technology (in part);
launch has been delayed scale operational engagement at brand
previously testing completed and converter level
Progress Q1 2023: Progress Q1 2023: Progress Q1 2023
Further samples manufactured Commercial discussions : Technical and commercial
in two separate trials, continue but without engagement continues,
further certification firm commitments to parties in supply
testing required - launch timelines chains becoming more
customer now auditing defined
production site for
quality compliance
------------------------------ ------------------------------
Name : Third pod Name : Treeguards Name : UK packaging
opportunity Market : UK, global Market : North America,
Market : North America Supply : Multi-stage Australia fresh food
consumer pods manufacturing process packaging
Supply : Materials Comment : Main technical Supply : European
and manufacturing challenges overcome; supply chain with
in USA performance in field some materials from
Comment: Early stage being validated; operational Asia
Progress Q1 2023: ramp-up phase Comment : Initial
Engagement increased Progress Q1 2023: quantities for validation
and early lab-based Larger scale production shipped; validation
trials undertaken campaign completed, for Australian certification
with good customer further operability required
interest improvements planned Progress Q1 2023:
Further application
testing complete and
Australian validation
commenced
------------------------------ ------------------------------
Technical Development
The Bioplastics division'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 functional
and environmental attributes. During 2022, the development team
worked on a variety of technical challenges that included the
development of a range of home compostable materials for different
applications, the improvement of oxygen and vapour barrier
performance, the soil degradability of materials to be used in tree
protectors and the improvement of temperature performance for a
variety of end-uses. The home compostable work gained traction in
the year, an important patent filing was made in this area and
deployment of this technology in a variety of customer applications
moved into the Initial Manufacturing Phase.
The Bioplastics division also continued its work in utilising
advanced Industrial Biotechnology. This research focuses on the
transformation of lignocellulose (often sourced from agricultural
waste) into bioplastics using microbial and enzymatic routes. These
routes are enabled using cutting edge synthetic biology techniques.
If successful, it is anticipated that this work will result in
bioplastics with improved functionality at a cost comparable to
current petroleum-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. The scale
at which the polymerisation activities have been carried out has
been increased over the last twelve months and the differentiated
performance of materials is better understood. An important 18
month sub-project (supported by Government funding) started in the
year with Thomas Swan and the University of Nottingham. This work
will explore the production of novel polymers at pilot scale in
facilities with the capability to manufacture at commercial scale
in due course.
RF Technologies division
The RF Technologies division, through the use of radio frequency
technology, creates innovative solutions for thermal process
applications. The division's products are renowned for their
quality and durability. The division's systems are designed and
manufactured to provide exceptional sealing, welding and heating
process solutions to a wide variety of commercial sectors.
The division's traditional core offering has been the supply of
fibre optic furnaces. This market has been suppressed since 2018
with little sign of a return to the levels seen previously. The
focus for the RF Technologies division since 2018 has been to
develop alternative markets for its technology. This has been
challenging but we are pleased to report that 2022 saw a strong
improvement in both order intake and sales. Significant orders were
for food packaging and medical equipment markets as well as a good
base level of activity in aerospace and nuclear waste management
sectors. Total division revenues in 2022, after the elimination of
intercompany sales, were GBP1.8m (2021: GBP0.9m) representing an
91.6% improvement. As a consequence of the improved sales the
division achieved an operating profit for the period of GBP0.2m
(2021: GBP0.1m loss).
The business currently focuses on four main revenue streams:
Induction Heating Equipment
The division sells bespoke induction heating equipment into a
variety of application areas. These systems are destined mainly for
the UK and Continental European market but in recent years some
have been shipped to North America. Whilst this has been a small
part of the division's sales it is a strategic aim to increase the
product offering and expand sales of this type of equipment.
Speciality focus areas include medical, food and industrial heating
where RF technology can provide both control and efficiency
benefits. The division works both with end-customers and "system
integrators" providing complete factory solutions.
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 has
been a sustained period of overcapacity in the fibre-optic
manufacturing industry but investment in maintenance and upgrades
of existing equipment is now at normal levels. It is expected that
as demand for fibre optic cable grows further furnace systems will
be ordered but it is not possible to predict the timing and scale
of further orders.
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.
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. This provides an underlying
base load of revenues for the division.
Race to Zero
Biome Technologies is 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. Our reporting of
actual greenhouse gas emissions and medium-term targets continues
in these Statements. Plans have been developed to drive progress
towards both 2030 and 2050 targets.
Our Bioplastics division's products are subject to individual
Life Cycle Analysis (LCA) that encompass the full supply chain
where appropriate, and we will look to extend our broader Group
reporting to include Scope 3 emissions (those from toll
manufacture, growing, extraction, manufacture, and processing of
the raw materials used) as robust data becomes available.
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.
Risk Nature Mitigation Change in
strategies year
Customers The Group's ability The Group works One of the
and customer to generate revenues closely customers
concentration for a number of its with its customers accounting
products is reliant with the aim of for more than
on a small number ensuring 15% of sales
of customers. If that its products in 2021 had
one of these customers evolve in line a significant
was to significantly with decline in
reduce its orders, their activity. This
then this could have requirements. resulted in
a significant impact In addition, the an overall
on the Group's results. Group is reduction in
continually sales in the
seeking to add to Bioplastics
its customer base division. This
and, as its was offset
revenues by increased
grow, seeks to activity to
become other
less dependent on end-customers
any single but with
customer. increased
dependency
on our largest
customer.
============================================================ =================== ===============
Suppliers The Group's products To mitigate this Supply chains,
and Raw and manufacturing risk the division overall,
Materials processes utilise is seeking to became
a number of raw materials validate more stable
and other commodities. new materials in 2022 and
In particular the coming the mitigating
Bioplastics division onto the market steps taken
requires several which by both
key raw materials may be used in divisions
to manufacture its substitution. were, on the
biodegradable polymer To mitigate whole,
resins. There are increased effective.
very few suppliers shipping
of these key raw lead-times
materials and with the Bioplastics
the current increased division
demand for biodegradable is working closely
products there is with customers to
a risk that the division improve visibility
may not be able to and forecast
purchase the required accuracy
volumes of materials to ensure
to meet customer materials
demand or that prices are ordered
may be increased sufficiently
at short notice. far in advance to
The Bioplastics division ensure that they
sources raw materials are available to
internationally, meet demand.
some of which are The RF
bulk shipped via Technologies
sea freight mainly division has
to the US. adopted
Within the RF Technologies an agile design
division we are reliant and
on electronic subsystems sourcing strategy
that have extended to overcome the
global supply chains. long
Lead-times increased lead-times for
during 2022 due to electronic
semiconductor shortages products.
and various Covid-19
lockdowns in China.
============================================================ =================== ===============
Intellectual Although the Group The Group takes The Group
Property attempts to protect professional continues to
its intellectual advice from develop its
property, there is experienced intellectual
a risk that patents patent attorneys property and
will not be issued and works hard to has made good
with respect to applications win patents progress with
now pending. Furthermore, applied home
there is a risk that for and to ensure compostable
patents granted or that the scope is innovation
licensed to Group sufficiently which resulted
companies may not broad. in a patent
be sufficiently broad The Group keeps up application
in their scope to to date with its being made
provide protection competitors' in early 2022.
against other third-party product Our growing
technologies. developments and knowledge in
Other companies are patent portfolios home
actively engaged and aims to ensure compostable
in the development that no technology
of bioplastics. There infringements and know-how
is a risk that these occur. is
companies may have Professional increasingly
applied for (or been advice is sought important as
granted) patents from experienced this is a key
which impinge on patent attorneys driver for
the areas of activity if there are any the
of the Group. This concerns. compostable
could prevent the materials
Group from carrying market.
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.
============================================================ =================== ===============
Commercialisation There is a risk that The Directors The Group
of New Products the Group will not ensure has
be successful in that regular consistently
the commercialisation reviews achieved
of its products from of product revenues
early-stage research development from new
and development to are undertaken so product
full-scale commercial that unsuccessful introductions
sales. The Group developments can and continues
develops a number be terminated to focus on
of products, and early market
some may not prove in their life opportunities
to be successful. cycle. and customers
Specifically, the Impairment testing that value
risks associated of the capitalised our products
with the product costs is performed and
life cycle are as twice a year with technology.
follows: any impaired
* Research and Development phase - the development of capitalised
the products may prove not to be technically feasible costs written off.
or do not exactly match the perceived customer need The Group seeks
Innovate
UK grants to
* Initial manufacturing phase - whilst the product mitigate
matches the customer needs it may not be able to be the cost of
produced at the required commercial speeds and/or at earlier
the required efficiency and quality stage research
that
carries the
* Commercialisation phase - the product may be greatest
superseded either through price or a competitor risk.
product being more advanced The Group works
closely
with customers to
identify
applications
that are most
likely
to progress
through
to
commercialisation.
This process
involves
a multifunctional
approach including
sales, technical,
operational and
finance
personnel to test
commercial and
technical
viability to the
greatest extent
possible
before investments
are made.
============================================================ =================== ===============
In addition to the principal risks the Group is subject to a
range of other risks and uncertainties. The Board maintains a risk
register and reviews this biannually to ensure that the Group's
operations management identifies actual and potential risks and
develops appropriate mitigating activities to ensure that these
risks are managed.
These risks, which also apply to many other industries and
businesses, include:
-- Financial
-- Political, Economic and Regulatory Environment
-- Exchange rate fluctuations
-- Competition
-- Brexit
-- Health and Safety (including Covid-19)
-- Cyber Security
-- Ongoing geo-political insecurity (including the Russian invasion of Ukraine)
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 2022 2021 Growth
GBP'm GBP'm
Revenues
Bioplastics 4.4 4.8 (8.4%)
RF Technologies 1.8 0.9 91.6%
Reported Group revenues 6.2 5.7 7.9%
------------------------------------ --------------------- --------------------- -------
(L)/EBITDA
Bioplastics (0.4) (0.2)
RF Technologies 0.2 -
Central Costs (0.2) (0.4)
Reported (L)/EBITDA (0.4) (0.6)
------------------------------------ --------------------- --------------------- -------
less depreciation, amortisation
and equity share option charges:
Bioplastics (0.3) (0.4)
RF Technologies - (0.1)
Central Costs (0.1) -
(0.4) (0.5)
(Loss)/Profit from Operations
Bioplastics (0.7) (0.6)
RF Technologies 0.2 (0.1)
Central Costs (0.3) (0.4)
Operating Loss (0.8) (1.1)
------------------------------------ --------------------- --------------------- -------
Net Assets
Non-current assets 1.3 1.2
Inventories 0.7 0.9
Trade and other receivables 0.6 1.4
Tax receivable 0.1 0.1
Cash 0.8 1.0
Trade and other payables (0.9) (1.3)
Long term lease commitments (0.3) (0.4)
Net assets 2.3 2.9
------------------------------------ --------------------- --------------------- -------
Revenues
Reported Group revenues for 2022 were GBP6.2m (2021: GBP5.7m)
reflecting the increased sales in the RF Technologies division
partly offset by lower sales of Bioplastics division products. Good
order intake in the final quarter of 2022 and first quarter of 2023
for the Bioplastics division and continuing growth in the
opportunity pipeline for the RF Technology division indicates that
positive momentum will be maintained over the longer-term.
(L)/EBITDA
Reported (Loss) / Earnings Before Interest, Taxation,
Depreciation and Amortisation ((L)/EBITDA) for the year was a loss
of GBP0.4m (2021: GBP0.6m loss). The improved LBITDA is a direct
result of the higher revenues in the RF Technologies division.
Operating Profits/(Losses)
The Group recorded an operating loss for the year of GBP0.8m
compared to an operating loss of GBP1.1m in the prior year.
Administrative expenses across the Group in 2022 were GBP3.3m
(2021: GBP3.4m). When the non-cash effects of depreciation,
amortisation and equity settled share option charges are removed,
the cash administrative expenses in 2022 marginally increased to
GBP3.0m (2021: GBP2.9m).
Investment in product research and development was GBP1.0m in
the year (2021: GBP1.0m), which includes the research work in grant
backed Industrial Biotechnology, of which GBP0.4m (2021: GBP0.3m)
was capitalised in the year. Tax R&D claims resulted in a
credit being recognised in the year of GBP131,000 (2021: credit of
GBP29,000) and other income from the Research and Development
Expenditure Credit scheme of GBP6,000 (2021: GBP50,000).
The Group recorded a loss after tax for the year of GBP0.7m
(2021: GBP1.1m loss), giving a basic and diluted loss per share of
18p (2021: loss per share of 30p).
Statement of Financial Position
The carrying value of intangible assets relates to capitalised
development costs predominantly within the Bioplastics division for
development of the Group's own intellectual property and product
range.
As at 31 December 2022, there was GBP0.8m of capitalised
development costs (2021: GBP0.7m) within the Group's statement of
financial position, of which GBP0.5m relates to Biome Mesh. An
assessment is made at least annually which assumes future potential
market take up of the products and the margins achievable.
Cashflow
2022 2021
GBP'000 GBP'000
Loss from operations (767) (1,135)
Adjustment for non-cash items 339 489
Movement in working capital 607 69
Cash generated/(utilised) by
operations 179 (577)
Investment activities (392) (266)
R&D Tax credit 79 239
Interest paid (35) (34)
Financing activities (50) (44)
Net decrease in cash (219) (682)
Opening cash balance 996 1,678
Exchange differences on cash and 2 -
cash equivalents
Closing cash balance 779 996
------------------------------------ --------------------- ----------------------
The cash utilised in operations, before working capital
movements, was GBP0.4m (2021: cash utilisation of GBP0.6m). Working
capital movements generated GBP0.6m cash in the year (2021: GBP0.1m
generation).
Investment in the year in capitalised product development and
capex was GBP0.4m (2021: GBP0.3m). Financing activities in the year
represented repayments of obligations under finance leases and
rounded to a net GBP0.1m (2021: net GBPnil). R&D tax credits of
GBP0.1m were received during 2022 (2021: GBP0.2m).
The resultant closing cash position was GBP0.8m (2021:
GBP1.0m).
Going Concern
The financial statements have been prepared on a going concern
basis as the directors believe that the Group has access to
sufficient resources to continue in business for the foreseeable
future. This is discussed more fully in the Directors' Report on
pages 15 to 18 of the 2022 annual report and accounts.
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 was modelled over a
24-month period commencing 1 January 2023 and was based on budgeted
trading that took into account contracted orderbook, existing
revenue streams from current customers / products, expected revenue
based on management's judgement of the likelihood of converting
current sales opportunities and the net proceeds from the
Convertible Loan Notes announced on 31 March 2023. The sales
revenue in the budgeted model was reduced evenly across the Group
to the point where the projected month-end cash was equal to zero
at any point during the 24-month cycle. In the model, zero
month-end cash was reached in May 2024 when projected sales revenue
was reduced to 87.1% of budget. Since the guidance for going
concern is usually based on a period of 12-months from the date of
signing the accounts, a further reverse stress test was conducted
over a period to 30 April 2024. In this test reducing sales to
85.4% of budgeted level resulted in a zero month-end cash position
at 31 March 2024. 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 in the Bioplastics or RF Technology
divisions. This most severe scenario also excludes any mitigating
reduction in the cost base that the Board would clearly undertake
in this event or utilisation of the Group's invoice discounting
facility. 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 2022, the Group had a net cash balance of GBP0.8m
and as at 18 April 2023 a balance of GBP1.3m, post receipt of funds
from Convertible Loan Notes. 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.
Consolidated statement of comprehensive income
For the year ended 31 December 2022
Note 2022 2021
GBP'000 GBP'000
REVENUE 5 6,188 5,734
Cost of goods sold (3,857) (3,794)
GROSS PROFIT 2,331 1,940
Other operating income 211 364
Administrative expenses (3,309) (3,439)
LOSS FROM OPERATIONS (767) (1,135)
Finance charges (35) (34)
LOSS BEFORE TAXATION (802) (1,169)
Taxation 8 131 29
LOSS AND TOTAL COMPREHENSIVE LOSS FOR
THE YEAR (671) (1,140)
------------------------------------------- ----- ----------------- ------------------
Basic loss per share - pence (18)p (30)p
Diluted loss per share - pence (18)p (30)p
------------------------------------------- ----- ----------------- ------------------
Consolidated statement of financial position
as at 31 December 2022
2022 2022 2021 2021
GBP'000 GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Other intangible assets 841 726
Property, plant and
equipment 498 502
1,339 1,228
CURRENT ASSETS
Inventories 736 920
Trade and other
receivables 605 1,377
Tax receivable 141 79
Cash and cash
equivalents 779 996
2,261 3,372
TOTAL ASSETS 3,600 4,600
------------------------ -------------------- ---------------------- -------------------- ----------------------
CURRENT LIABILITIES
Trade and other
payables 933 1,298
Lease liabilities 55 40
988 1,338
NON-CURRENT
LIABILITIES
Lease liabilities 354 361
------------------------ -------------------- ---------------------- -------------------- ----------------------
354 361
TOTAL LIABILITIES 1,342 1,699
------------------------ -------------------- ---------------------- -------------------- ----------------------
NET ASSETS 2,258 2,901
------------------------ -------------------- ---------------------- -------------------- ----------------------
EQUITY
Share capital 189 189
Share premium account 2,282 2,282
Capital redemption
reserve 4 4
Share options reserve 102 487
Translation reserves (83) (85)
Treasury shares reserve (55) (55)
Retained earnings (181) 79
TOTAL EQUITY 2,258 2,901
------------------------ -------------------- ---------------------- -------------------- ----------------------
Consolidated statement of changes in equity
as at 31
December
2022
Share capital Share Capital Share Translation Treasury Retained TOTAL
premium redemption options reserve Shares earnings EQUITY
account reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2022 189 2,282 4 487 (85) (55) 79 2,901
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Currency
translation
movement
arising
on
consolidation - - - - 2 - - 2
Other
movements - - - - - - 26 26
Lapsed options - - - (385) - - 385 -
Transactions
with
owners - - - (385) 2 - 411 28
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
year - - - - - - (671) (671)
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Total
comprehensive
loss for the
year - - - - - - (671) (671)
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 31
December
2022 189 2,282 4 102 (83) (55) (181) 2,258
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 1
January
2021 186 2,200 4 617 (85) - 1,062 3,984
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Share options
issued
in
share-based
payments - - - 48 - - - 48
Issue of share
capital 3 82 - - - - - 85
Purchase of
own
shares - - - - - (122) - (122)
Sale of
treasury
shares - - - - - 67 (21) 46
Exercise of
share
options - - - (170) - - 170 -
Lapsed options - - - (8) - - 8 -
Transactions
with
owners 3 82 - (130) - (55) 157 57
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
year - - - - - - (1,140) (1,140)
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Total
comprehensive
loss for the
year - - - - - - (1,140) (1,140)
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 31
December
2021 189 2,282 4 487 (85) (55) 79 2,901
--------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Consolidated statement of cash flows
For the year ended 31 December 2022
2022 2021
GBP'000 GBP'000
Loss after taxation (671) (1,140)
Adjustments for: -
Taxation (131) (29)
Finance charges 35 34
Loss from operations (767) (1,135)
Adjustments for: -
Amortisation and impairment of intangible
assets 250 353
Depreciation of property, plant and equipment 89 88
Share based payments - equity settled - 48
Operating cash flows before movement in
working capital (428) (646)
Decrease/(increase) in inventories 184 (174)
Decrease in receivables 762 13
(Decrease)/increase in payables (339) 230
Cash generated from / utilised in operations 179 (577)
Corporate tax received 79 239
Interest paid (35) (34)
Net cash inflow / (outflow) from operating
activities 223 (372)
--------------------------------------------------- ---------------------- ----------------------
Investing activities
Investment in intangible assets (365) (258)
Purchase of property, plant and equipment (27) (8)
Net cash used in investing activities (392) (266)
--------------------------------------------------- ---------------------- ----------------------
Financing activities
Proceeds from issue of share capital - 1
Repayment of obligations under leasing activities (50) (45)
Net cash used in financing activities (50) (44)
--------------------------------------------------- ---------------------- ----------------------
Net decrease in cash and cash equivalents (219) (682)
Cash and cash equivalents at the beginning
of the year 996 1,678
Exchange differences on cash and cash equivalents 2 -
Cash and cash equivalents at the end of
the year 779 996
--------------------------------------------------- ---------------------- ----------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2022
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 2022 or 2021 but is
derived from those financial statements. Statutory financial
statements for 2021 have been delivered to the Registrar of
Companies. Those for 2022 will be delivered following the Company's
Annual General Meeting on 25 May 2023. 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 2022 were authorised for issue
by the Board of Directors on 25 April 2023 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 UK-adopted international accounting standards.
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 2022. 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 2022 the subsidiary
undertakings were Biome Bioplastics Limited, Biome Bioplastics Inc.
(USA), Biome Bioplastics Inc. (Canada), Stanelco RF Technologies
Limited, Aquasol Limited, and InGel Technologies Limited
(dormant).
4. GOING CONCERN
The financial statements have been prepared on a going concern
basis as the directors believe that the Group has access to
sufficient resources to continue in business for the foreseeable
future. This is discussed more fully in the Directors' Report on
pages 15 to 18 of the report and accounts for the year ended 31
December 2023.
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 was modelled over a
24-month period commencing 1 January 2023 and was based on budgeted
trading that took into account contracted orderbook, existing
revenue streams from current customers / products, expected revenue
based on management's judgement of the likelihood of converting
current sales opportunities and the net proceeds from the
Convertible Loan Notes announced on 31 March 2023. The sales
revenue in the budgeted model was reduced evenly across the Group
to the point where the projected month-end cash was equal to zero
at any point during the 24-month cycle. In the model, zero
month-end cash was reached in May 2024 when projected sales revenue
was reduced to 87.1% of budget. Since the guidance for going
concern is usually based on a period of 12-months from the date of
signing the accounts, a further reverse stress test was conducted
over a period to 30 April 2024. In this test reducing sales to
85.4% of budgeted level resulted in a zero month-end cash position
at 31 March 2024. 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 in the Bioplastics or RF Technology
divisions. This most severe scenario also excludes any mitigating
reduction in the cost base that the Board would clearly undertake
in this event or utilisation of the Group's invoice discounting
facility. 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 2022, the Group had a net cash balance of GBP0.8m
and as at 18 April 2023 a balance of GBP1.3m, post receipt of funds
from Convertible Loan Notes. 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.
5. SEGMENTAL INFORMATION FOR YEARED 31 DECEMBER 2021
2022 2021
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 4,393 1,809 - 6,202 4,797 1,140 - 5,937
Removal of inter-segment
sales - (14) - (14) - (203) - (203)
Total external
sales 4,393 1,795 - 6,188 4,797 937 - 5,734
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(Loss)/profit
from operations (734) 176 (209) (767) (601) (59) (475) (1,135)
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Interest received - - - - - - - -
Finance charges - - (35) (35) - - (34) (34)
Loss before
taxation (734) 176 (244) (802) (601) (59) (509) (1,169)
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Taxation 131 - - 131 29 - - 29
Loss for the
year (603) 176 (244) (671) (572) (59) (509) (1,140)
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Reconciliation to Loss Before Interest Tax Depreciation and Amortisation
(LBITDA)
(Loss)/profit
from operations (734) 176 (209) (767) (601) (59) (475) (1,135)
Depreciation/amortisation 292 43 4 339 395 41 5 441
Share based payments - - - - 13 7 28 48
(L)/EBITDA (442) 219 (205) (428) (193) (11) (442) (646)
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Other segmental information
Capital Expenditure
Property, plant
and equipment 15 69 1 85 3 12 1 16
Intangible assets 365 - - 365 258 - - 258
Total Capital
Expenditure 380 69 1 450 261 12 1 274
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Total Assets 2,632 920 48 3,600 3,408 1,156 36 4,600
--------------------------- ----------------- ------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
The Bioplastics division comprises of Biome Bioplastics Limited,
Biome Bioplastics Inc. (USA) and Biome Bioplastics Inc.
(Canada).
6. ALTERNATIVE PROFIT MEASURE
The Group, and divisions, define loss before interest, taxation,
depreciation and amortisation ("LBITDA") as the operating loss
adjusted for share option charges, depreciation, and amortisation.
The Group LBITDA is reconciled as follows:
2022 2021
GBP'000 GBP'000
Loss from operations per consolidated
statement
of comprehensive income (767) (1,135)
Amortisation 250 353
Depreciation 89 88
Share option charges - equity
settled - 48
(428) (646)
--------------------------------------- ---------------------- --------------------
7. LOSS 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
GBP671,000 (2021: GBP1,140,000 loss) and a weighted average of
3,742,655 (2021: 3,742,655) ordinary shares carrying voting rights
for basic loss per share and a weighted average of 3,742,655 (2021:
3,742,655) ordinary shares carrying voting rights for diluted loss
per share.
8. TAXATION
In the current year, other income includes GBP6,000 (2021:
GBP50,000) arising from Research and Development Expenditure Credit
scheme (RDEC) that is accounted for as a government grant.
The Group has estimated trading losses of GBP32.9m (2021:
GBP32.0m) available indefinitely for carry forward against future
trading profits. The Group had capital losses of GBP1.5m (2021:
GBP1.5m). Deferred tax assets have not been recognised in respect
of these losses as there is insufficient certainty of future
taxable profits against which to utilise them.
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FR BLGDSCSDDGXU
(END) Dow Jones Newswires
April 26, 2023 02:00 ET (06:00 GMT)
Biome Technologies (AQSE:BIOM.GB)
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