The information contained within this announcement is deemed
by the Company to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310.
16
August 2024
Biome Technologies
plc
("Biome", the "Company" or
the "Group")
Trading
update
Biome Technologies plc, a leading
bioplastics and radio frequency technology business, today provides
an unaudited trading update for the quarter ended 30 June 2024. The
Company's unaudited interim results for the six months ended 30
June 2024 ("2024 H1") are expected to be announced on 20 September
2024.
Group revenues for 2024 H1 were
£2.3m (2023 H1: £3.6m) a decrease of £1.3m compared to 2023 H1.
This lower level of revenue in 2024 H1 was caused by continued
production and regulatory difficulties at two of the Bioplastics
division's end-customers and the second-half phasing of revenue
from the four significant RF division projects, currently
undergoing design and build.
The Group had a cash balance at 30
June 2024 of £0.6m (30 June 2023: £0.9m) and had an original
principal amount of £1.25 million outstanding pursuant to the
Convertible Loan Instrument and no bank debt.
Bioplastics
The division's revenues for 2024 H1
were £2.0m (2023 H1: £3.0m). This was due to production and
regulatory difficulties at two of the division's end customers that
had subdued revenues in the first half compared to our
expectations. Revenues of greater significance are now expected
from these customers in 2024 H2 as various technical validations
are finalised.
We are continuing the development of
home compostable ("HC") materials (moving away from industrial
compostable) throughout our range of product applications. The
success in development of these materials has generally depended
upon the thickness of the material required for the application.
For example, in the film area, where materials are thinner, success
has been achieved earlier than in thicker materials such as
mesh.
The division operates in three
broader application areas that are described below:
Mesh
encompasses fibres for wovens and non-wovens to
produce a filtration fabric and their underlying bioplastic polymer
compounds. Revenues were subdued in this area in 2024 H1 as one
end-customer (a leading player in the North American coffee market)
encountered production difficulties. Work with this end-customer
throughout 2024 Q2 has established the root cause and we expect a
gradual return to usage of Biome's mesh later in 2024 H2
accompanied by additional use of Biome home compostable rigid
materials. It is anticipated that this will lead to further growth
in 2025.
During 2024 H1, broader demand for
Biome's mesh products was as expected and work with six individual
development prospects is underway as the Company seeks to exploit
its technical advantage. These prospects range across end uses from
food and beverage to horticulture. Most of these prospects are
being co-developed in anticipation of the launch of the division's
home compostable range, which is expected in 2025 but not expected
to provide significant revenues in that year.
Home compostable fibres and
non-wovens remain the division's primary development focus and in
recent months has seen several important milestones reached towards
the achievement of these goals.
Rigids
encompasses bioplastic polymer compounds for
producing rigid parts, often using processes of injection moulding
or extrusion. In this application area, the switch to home
compostable materials has started and the majority of customer
volumes are expected to have switched by the end of 2025. Looking
forward, of note is the anticipated increase in revenues in 2025
from the coffee market end-customer highlighted earlier.
In 2024 H1, revenues in tree guard
applications were below expectations, as Biome's key customer was
delayed in completing its production validation process. The
Company expects modest growth from this area as the product is
promoted more vigorously in the 2024/2025 winter planting
season.
Film
describes end-use applications in which Biome's
bioplastics granules are converted into filmic products primarily
for the food packaging sector. The conversion, in Biome's customer
base, to home compostable products in this application area started
in 2023, and this product type is expected to form the majority of
products sold by end 2024. The expected ramp-up of demand with a
customer that Biome has been working with for two years was delayed
in 2024 H1 by regulatory matters in the end-customer's markets. The
resolution has been progressed and launch is now expected in 2024
H2. Biome continues to diversify its customer set in the filmic
area and a number of new customers are emerging with meaningful
revenues in 2024, with further volume growth expected for
2025.
RF
Technologies
The RF division entered the year
having secured a major contract in 2023 for delivery in 2024 and
secured three further large contract wins in 2024 H1 which are
expected to result in significant revenue being recognised in 2024.
The division's background spares, service and small equipment
revenues have continued as expected in 2024 H1.
The first of these major contracts
for the Scientific Glass application area is nearing completion and
the equipment has been tested successfully by Biome, with customer
acceptance testing expected early in 2024 H2. The second Scientific
Glass contract is expected to be completed in 2024 Q4.
The two significant contracts for
the medical markets are now in their design phase, building on
previous modular units that have been deployed before and
completion is expected in 2024 H2.
Looking ahead to the pipeline of
prospects, the RF Technologies division is in discussions regarding
several large contracts in growth sectors which are expected to
complete in 2025 and which the Company expects will be supported by
similar levels of spares, service and small equipment
activity.
Board
Simon Herrick's resignation from the
Board was announced on 10 July 2024. Whilst a replacement is
sought, John Standen has assumed the additional responsibilities of
Chairman of both the Company's audit and remuneration
committees.
Group outlook
The Board anticipates improved
operational performance during the remainder of this year.
The Bioplastics division should resolve the difficulties
encountered in 2024 H1 and the RF division will be focusing on
delivering the contracts won late last year and in 2024 H1,
widening the customer and technology base.
There remains a strong emphasis in
both divisions on bringing novel technologies through to
commercialisation and widening the customer base to reduce the
impact of the type of disruptions we have seen in 2024. In
particular, the Board believes our gradual deployment of home
compostable materials throughout our range of bioplastic product
areas will increasingly demonstrate the benefits of our products to
our customers and help drive future growth.
As announced on 8 July 2024, the
Group's, revenues for 2024 are anticipated to be significantly
below our previous expectations, albeit still ahead of those in
2023. The second half of 2024 is expected to show a significant
improvement on that performance and the Board expects to see a
continuation of that growth trend in 2025.
In the announcement on 8 July 2024,
the Company also announced that it was examining ways to ensure
that the Group had sufficient working capital going forward.
Against this backdrop, and the need for Biome to secure further
funding, the Company will shortly be announcing proposals in this
regard.
The person responsible for arranging
the release of this Announcement on behalf of the Company is Paul
Mines, Chief Executive Officer of the Company.
-Ends-
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For
further information please contact:
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|
Biome Technologies plc
Paul Mines, Chief Executive
Officer
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Donna Simpson-Strange, Company
Secretary
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www.biometechnologiesplc.com
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Tel: +44 (0) 2380 867 100
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Allenby Capital
|
|
David Hart/Alex Brearley/Lauren
Wright (Nominated Adviser)
Kelly Gardiner/Tony Quirke (Sales
and Corporate Broking)
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www.allenbycapital.com
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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 ("Bioplastics") and Stanelco RF Technologies
Limited ("RF Technologies").
Biome Bioplastics is a leading
developer of highly-functional, bio-based and biodegradable
plastics. The division's mission is to produce bioplastics that
challenge the dominance of oil- based polymers.
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
