TIDMSYM
RNS Number : 0822B
Symphony Environmental Tech. PLC
29 September 2022
29 September 2022
SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC
("Symphony", the "Company" or the "Group")
Interim Results
Symphony Environmental Technologies Plc (AIM: SYM), a global
specialist that makes plastic and rubber products smarter, safer
and sustainable, is pleased to announce its interim financial
results for the six-month period ended 30 June 2022.
Financial highlights
-- Group revenue of GBP3.0 million (H1-2021: GBP4.9 million)
softer than prior year due to short term logistics, regulatory and
resource issues, which have since resolved, and timing on the
delivery of key contracts, temporary destocking issues and a change
to our glove strategy
-- d2p revenue increased c.200% to GBP0.3 million (H1-2021:
GBP0.1 million) with continued conversion of higher value d2p
anti-insect ("AI") opportunities
-- Gross profit of GBP1.1 million (H1-2021: GBP1.9 million)
-- Loss before tax of GBP1.4 million (H1-2021: GBP0.6 million)
-- Basic loss per share of 0.73 pence (H1-2021: 0.29 pence)
-- Cash used in operations GBP0.8 million (H1-2021: cash generated GBP0.3 million)
Operational highlights
d2p
-- Supply Agreement with Grupo Bimbo, the western world's
largest bread producer for the Group's FDA-approved d2p
anti-microbial ("AM") bread packaging technology
-- Continued progression of our d2p pipeline commercialisation
with positive test results received for d2p AM, d2p AI and d2p
flame retardant ("FR") that are expected to result in orders during
Q4
-- Change in glove strategy - revenues awaiting regulatory approvals
d2w
-- Two-year contract with Better Earth, a US packaging company,
to use d2w in nutritional supplement bottles
-- d2w regulatory confirmation in Peru
-- Positive regulatory progress in several key Central and South American countries
Post period-end highlights
-- Significant increase in sales and activity in India due to
new regulation which allows exemptions for biodegradable
products
-- New d2p AI orders ($340,000) with Rivulis Irrigation Ltd with
further orders anticipated during Q4
-- Middle East - manufacturing agreement for d2w masterbatch,
with volume production expected to commence in October 2022
following successful start-up trials
-- Balance sheet strengthened by GBP1.0 million - Sea Pearl shareholding increased to 17.4%
-- New Mexican biodegradable standard applicable to d2w
-- Expect to achieve a minimum annualised run-rate revenue of
GBP14.0 million between Q4 2022 and H1 2023, through the conversion
of a number of our active near-term pipeline opportunities
Michael Laurier, CEO of Symphony, commented on the results and
business:
"I am very pleased to report that we e xpect to achieve a
minimum annualised run-rate revenue of GBP14.0 million between Q4
2022 and H1 2023, through the conversion of a number of our active
near-term pipeline opportunities.
Excellent progress has been achieved with our d2p antimicrobial
technologies for use in bread and other food packaging for the
North and South American markets as well as for insecticidal
technologies in agricultural applications for Europe and the Middle
East. As a whole, both India and the Middle East are expected to
add significant revenues in the near term as we have strong
partners, proven products, and market readiness after many years of
investment. Beyond this, our medium to long term sales potential is
therefore substantially higher than the above GBP14 million.
This year so far has been one of continued development to which
we are seeing low-cost biodegradable technologies growing in favour
globally, and there is increasing acceptance of, and commercial
interest in, our d2p suite of products. We, together with our
partners, are now moving into a very positive commercial
phase."
Enquiries:
Symphony Environmental Technologies Plc
Michael Laurier, CEO Tel: +44 (0) 20
8207 5900
Ian Bristow, CFO
www.symphonyenvironmental.com
Zeus (Nominated Adviser and Joint Broker)
David Foreman / Kieran Russell (Investment Tel: +44 (0) 161
Banking) 831 1512
Dominic King / Victoria Ayton (Corporate Broking) Tel: +44 (0) 203
829 5000
Hybridan LLP (Joint Broker)
Claire Louise Noyce Tel: +44 (0) 203
764 2341
Houston (Financial Public Relations)
Kay Larsen / Joe Burgess Tel: +44 (0)204
529 0549
Chairman's statement
I am pleased with the progress the Group has made in the first
half of the year as we continued to lay solid foundations from
which to build our commercial success. Although revenues were
softer than the same period last year, we reported on 1 August 2022
that this was primarily down to various logistical, regulatory, and
stocking issues which have now been rectified. Additionally, the
several new contracts and other positive developments achieved
during the period had not yet translated into revenues. These new
contracts and developments significantly underpin many of our
growth initiatives for both d2w and d2p in the near to medium
term.
We were delighted to achieve a significant commercial supply
agreement for d2p antimicrobial ("AM") technology with Grupo Bimbo,
the western world's largest bread manufacturer. This agreement
followed FDA and Health Canada approvals of our d2p AM bread
technology. The size of the US bread market in 2018 was estimated
at $20 billion (source: Global Markets Insights) and, as the only
FDA-approved AM technology for this type of packaging application,
we believe that we are well positioned to capture substantial
market share in the medium to long term. Initiatives are also in
progress with bread manufacturers in Latin America and other parts
of the world. Our strategy is to capture a substantial part of
these new markets that we estimate will result in annualised
revenues of at least GBP2.5 million in the near term with strong
growth over the medium to long term.
Symphony India, our joint venture company in India owned by
Symphony and Indorama Corporation, received a prestigious
sustainability award for our d2w biodegradable technology. As
further set out in the Chief Executive's report, new legislation in
India requiring minimum thickness of certain types of plastic
products unless certified by the Government as biodegradable,
resulted in Symphony India achieving a significant increase in
sales and marketing activity for d2w technology.
d2w revenues are also anticipated to show substantial growth in
other markets in the near term because of several factors,
including: the establishment of local manufacturing in the Middle
East and a reset of regional stock levels; legislative enforcement
in Saudi Arabia which is an ongoing process that started
accelerating in recent weeks; and Latin American legislative and
standards initiatives, which are expected to continue progressing
in the right direction following recent positive developments in
Peru and Mexico. We are also very happy with progress made outside
of regulatory drivers, especially the United States where we signed
a contract earlier in the year for nutritional supplement
bottles.
We have shown a c.200% growth of d2p sales during the period
based on our successful anti-insect ("AI") technology for use in
agricultural applications. Current dialogues indicate that this
will grow and expand globally. In addition to the above, flame
retardant ("FR") and odour absorbent ("OA") technologies are close
to completion on several initiatives. This is all within our
current d2p pipeline of over 60 projects. Revenues for AI are
anticipated to reach GBP600,000 in 2022 and are expected to more
than double during 2023.
Group revenues for H1-2022 of GBP3.0 million (H1-2021: GBP4.9
million) were lower primarily due to a change in protective glove
strategy, moving away from commodity gloves to higher value EU
certified products, with regulatory approvals currently in process,
together with materially lower sales of d2w in the Middle East due
to temporary destocking by our distributor and logistical issues,
which I'm pleased to note most of which have now been resolved.
The near-term annualised revenue run-rate, including the
initiatives described above, which we expect will be achieved
between this year's Q4 through H1 2023, exceeds GBP14 million.
Undoubtedly the Group's opportunities are significant and real, but
the Board and I are acutely aware that these multi-year projects do
not fit neatly into reporting periods. Whilst the returns on these
projects will be highly profitable, the Company's financial
performance in any given reporting period is affected by the timing
of these projects. This financial year is no different, and whilst
the Board remain of the view that full year market expectations are
achievable, if certain projects are delayed, this may impact
results.
Finally, I am pleased that we have been able to strengthen the
Board during the period, with the appointment of The Hon. Alexander
Brennan, and look forward to the coming months with growing
confidence.
Chief Executive's review
The financially slow period during the first half of the year
does not reflect the significant underlying progress being made
across the business on several fronts. We now have a very strong
joint venture partner in India and a highly motivated and growing
team, building an increasing network of strong, high quality and
well-connected hub-distributors, with demand being further driven
by positive regulatory change. In addition to this, the Middle East
is also showing great promise as plastic regulations and compliance
are gaining traction, and there is growing interest in
customer-evaluation trials for our other d2p technologies.
Financial
Revenue for the 6 months ended 30 June 2022 was GBP3.0 million
(H1-2021: GBP4.9 million).
The H1-2022 revenue performance was softer than normal, affected
by short-term logistical and resource issues, slow and complex d2p
regulatory approvals, temporary d2w destocking at our Middle East
distributor, and a change to our glove strategy. The short-term
logistical and resource issues are resolving as anticipated, and we
are seeing restocking at our Middle East distributor.
As previously advised, having focused our glove strategy on
higher value EU certified gloves and moving away from commodity
gloves, near-term revenues were negatively affected by c.GBP1.0
million during the period. We are awaiting regulatory approvals for
our gloves, which is anticipated later this year. Once regulatory
approvals are received, we will recommence the sales and marketing
initiative. Based on feedback from the market through our potential
customers, we anticipate there will be high demand for these
certified gloves and will benefit from greater protection from
competitors, as the regulatory process is time-consuming, costly,
and complex, creating a strong barrier to entry.
Gross margins also softened during the period due to high raw
material and shipping costs which have recently been reduced closer
to historical levels. In particular, distribution costs due to
global vessel and container shortages, are now easing, with c.20%
reductions since the peak during the first half of the year. These
are expected to continue falling throughout the rest of 2022.
As previously advised, we continue to incur costs in relation to
supporting d2w advocacy communications in the UK, Middle East and
Latin American markets. In addition, regulatory and other IP
related costs continued for new d2p products for the EU and US
markets.
The Company continues to invest in its sales and other operating
functions to better manage its strong and growing pipeline and also
in its quality control systems and service-levels as these form the
basis of our brand value.
The Group's share of Symphony India's joint venture start-up
loss for the period was GBP23,000 (H1-2021: GBPnil). The Group's
46.5% interest in the Indian company is recognised as a joint
venture investment in our financial statements using the equity
method.
This additional strategic investment in key resources, together
with the above-described factors resulted in a net loss before tax
of GBP1.4 million (H1-2021: GBP0.6 million).
An R&D tax credit of GBP119,000 was received during the
period (H1-2021: GBP127,000). The Group reports a loss after tax of
GBP1.3 million (H1-2021: GBP0.5 million).
The loss per share for the period was 0.73 pence (H1-2021: 0.29
pence).
Post period-end we were also pleased to see our balance sheet
strengthened following a GBP1.0 million equity fundraise from Sea
Pearl Ventures Limited, increasing their shareholding to 17.4% and
demonstrating their ongoing support and optimism around the
potential of the Group.
d2p "designed-to-protect"
d2p revenues for the period were up c.200% to GBP345,000
compared to GBP111,000 for the same period last year due primarily
to d2p AI growth. Since the period-end Rivulis placed a record
order of $340,000 for new d2p AI product which was shipped in Q3
2022. There were several positive laboratory and field test results
for d2p AM, d2p FR and d2p AI initiatives in several of our
markets, which we believe, following discussions with our
distributors and potential customers, will lead to a number of
material new orders during the second half of 2022 and into 2023.
This is all within our current d2p pipeline of over 60
projects.
Most significant is the d2p AM bread technology where we expect
the sales process with Grupo Bimbo to start in Q4 of this year.
Initiatives are also being undertaken in Latin America and other
parts of the world.
d2w biodegradable technology
Post period-end we signed a manufacturing agreement with
Ecobatch Plastic Factory in the UAE, for the production and supply
of d2w into the Middle East. The manufacturing facility is expected
to start operations in October. This facility, being financed and
operated by our local partners, will reduce reliance on expensive
and unreliable freight from our Far East facility, where most of
our products for supply to this region are currently made. In
preparation for the switch from imports to locally made products in
the Middle East, stocks and orders were temporarily reduced in the
period - which had a short-term but material negative effect on H1
performance. These sales have not been lost, but delayed to
H2-2022. We anticipate improved sales and sales and supply
efficiency, as well as improved Group cashflow and operating
margins, following the switch to this facility.
We continue with advocacy in Latin America, UK, and the EU. The
regulatory clarification in Peru, resulting in a clear distinction
being officially acknowledged between oxo-degradable and
oxo-biodegradable, will help generate revenues in the region.
Further, the Mexican Ministry for the Economy published a new
Mexican Technical Standard with positive commercial implications
for d2w, acknowledging and validating the technology for the
accelerated biodegradation of plastic. We anticipate further
positive news from other Latin American markets during Q4 2022.
We are confident that many of our markets will produce
significant growth as the environmental drive for better
alternatives to non-biodegradable plastics has become an
increasingly urgent issue for Governments and brand-owners to
resolve.
India
As announced in November 2021, Symphony became a 46.5% joint
venture shareholder in Symphony India, with Indorama Corporation
holding 46.5% and the MD, Arjun Aggarwal holding 7%.
Symphony India received a prestigious sustainability award for
our d2w biodegradable technology during the period and sales
traction is gaining rapid momentum. The increase in sales is being
driven by the Plastic Waste Management Rules 2022 (as amended
6.7.22) which permits government-approved biodegradable plastic
products to be exempted from restrictions that would ban most
plastic film products unless they are above 50-micron thickness,
and 120 microns for carrier bags, (which generally means an
increase in cost by more than two to three times). Producers and
brand owners using certified biodegradable plastic materials will
be free from this obligation, thus providing Symphony's d2w
technology with a competitive advantage in a country with a
population of c.1.4 billion.
Based on current enquiry and order activity, sales of d2w by
Symphony India are expected to increase to levels of over
GBP250,000 per month from early 2023.
EU Action
As previously announced, Symphony commenced a legal action
against the Commission, Parliament and Council of the EU having
been advised by three specialists in EU law that Article 5 of the
Directive 2020/904 is unconstitutional. We are currently waiting
for the court to fix a date for an oral hearing in Luxembourg. This
is expected in Q4 2022 or Q1 2023.
The Defences did not reveal anything unexpected, and Symphony's
legal team remain confident that the EU acted unlawfully in
imposing a ban on a material which they call "oxo-degradable
plastic" in Article 5 of the Directive. In any event, Symphony does
not accept that the ban applies to oxo-biodegradable plastics,
which are made by incorporating Symphony's d2w masterbatch into
ordinary plastic, and do not have any of the undesirable
characteristics listed in Recital 15 of the Directive.
Confidence that our product is not included in the ban has been
reinforced by new legal Advice from Josh Holmes KC a leading
Barrister at London's Monckton Chambers, who specialises in EU
law.
Eranova
As announced in October 2020, The Group entered into an
exclusive distribution agreement and made an investment
representing 1.6% of the enlarged capital of Eranova SAS
(GBP123,000 including costs) as part of a EUR6 million
pre-industrial plant project. The pilot plant was completed on
schedule during October 2021 and is operational and processing
small-volume commercial orders. We expect further positive
developments during 2022.
Balance sheet and cashflow
The Group had net borrowings of GBP0.7 million at the end of the
period (30 June 2021: net cash of GBP0.7 million). Net cash of
GBP0.8 million was used in operations (H1-2021: generated in
operations GBP0.3 million).
The Group has an invoice discounting facility of GBP1.5 million
to assist in funding outstanding receivables. Since the period end
GBP1.0 million of new equity was issued, further strengthening the
Group's balance sheet. The Board believes that the Group has
sufficient working capital to support the business and its current
opportunities going forward.
The increasing strength of the US dollar as against the UK pound
is beneficial for the Group, as we generate most of our revenues in
US dollars.
Outlook
After many years of R&D and product development,
commercialisation of some key product lines is now expected in the
very near term with substantial sales growth anticipated. Further,
we are encouraged by the level of positive trials and sales
activity in many areas of the business worldwide, covering a wide
range of different product applications and technologies.
We expect to achieve a minimum annualised run-rate revenue of
GBP14.0 million between Q4 2022 and H1 2023, through the conversion
of a number of our active near term active pipeline opportunities,
and is made up as follows, compared to FY 2021:
Initiative 2021 revenue Near term
annualised
expected revenue
d2w biodegradable (excluding India) GBP7.2m GBP9.0m
------------- ------------------
d2p AM bread technology - GBP2.5m
------------- ------------------
d2p AI technology GBP0.1m GBP1.0m
------------- ------------------
d2p general pipeline GBP0.2m GBP1.0m
------------- ------------------
d2p gloves GBP1.0m GBP0.5m
------------- ------------------
It should be noted that the above necessarily excludes d2w
projects in Symphony India. This is because of Symphony's ownership
of 46.5% means that from an accounting perspective, we cannot
consolidate Symphony India revenues into the Group results - we are
instead required to equity account for Symphony India which means
we can only recognise our share of the profits made by Symphony
India in our Group consolidated accounts. Accordingly, it would be
misleading to present Symphony India revenue opportunities above,
but as further set out in the India Operations Update, released at
7:01am on 29 September 2022, these are considerable.
Our medium to long term sales pipeline is substantially higher
than our near-term annualised sales pipeline of GBP14 million. To
meet this financial year's market expectations, the Group is
relying on timing of the key areas as described. Whilst the Board
remain of the view that full year market expectations are
achievable, there is, for the above reasons, risks outside of
management's control, in these numbers.
Our opportunities are real and significant, and we look forward
with growing confidence.
Michael Laurier, Chief Executive
Condensed consolidated interim statement of comprehensive
income
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------- -------------- ---------- ------------
Revenue 2,973 4,878 9,161
Cost of sales (1,891) (2,940) (5,569)
---------------------------- -------------- ---------- ------------
Gross profit 1,082 1,938 3,592
Distribution costs (225) (234) (500)
Administrative expenses (2,228) (2,303) (4,571)
---------------------------- -------------- ---------- ------------
Operating loss (1,371) (599) (1,479)
Finance costs (28) (33) (54)
Share of results of joint -
ventures (22) -
---------------------------- -------------- ---------- ------------
Loss for the period before
tax (1,421) (632) (1,533)
Tax credit 119 127 127
---------------------------- -------------- ---------- ------------
Loss for the period (1,302) (505) (1,406)
---------------------------- -------------- ---------- ------------
Total comprehensive income
for the period (1,302) (505) (1,406)
---------------------------- -------------- ---------- ------------
Earnings per share:
Basic (0.73)p (0.29)p (0.81)p
Diluted (0.73)p (0.29)p (0.81)p
---------------------------- -------------- ---------- ------------
All results are attributable to the owners of the parent.
There were no discontinuing operations for any of the above
periods.
Condensed consolidated interim statement of financial
position
At At At
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- ------------
ASSETS
Non-current
Property, plant and equipment 158 153 166
Right-of-use assets 459 621 548
Intangible assets 263 72 260
Interest in joint ventures 43 - -
Investments 123 123 123
1,046 969 1,102
Current
Inventories 1,422 1,230 1,316
Trade and other receivables 2,648 2,573 3,146
Cash and cash equivalents 505 1,323 881
-------------------------------------- ---------- ---------- ------------
4,575 5,126 5,343
-------------------------------------- ---------- ---------- ------------
Total assets 5,621 6,095 6,445
-------------------------------------- ---------- ---------- ------------
EQUITY AND LIABILITIES
Equity
Equity attributable to owners
of
Symphony Environmental Technologies
plc
Share capital 1,793 1,768 1,793
Share premium account 3,910 3,185 3,910
Retained earnings (3,503) (1,350) (2,231)
-------------------------------------- ---------- ---------- ------------
Total equity 2,200 3,603 3,472
-------------------------------------- ---------- ---------- ------------
Liabilities
Non-current
Lease liabilities 296 411 338
-------------------------------------- ---------- ---------- ------------
Current
Borrowings 1,210 620 167
Lease liabilities 125 158 677
Trade and other payables 1,790 1,303 1,791
-------------------------------------- ---------- ---------- ------------
3,125 2,081 2,635
-------------------------------------- ---------- ---------- ------------
Total liabilities 3,421 2,492 2,973
-------------------------------------- ---------- ---------- ------------
Total equity and liabilities 5,621 6,095 6,445
-------------------------------------- ---------- ---------- ------------
Condensed consolidated interim statement of changes in
equity
Equity attributable to the owners of Symphony Environmental
Technologies plc:
Share Share Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- ---------- ----------
For the six months to
30 June 2022
Balance at 1 January 2022 1,793 3,910 (2,231) 3,472
Share-based payments - - 30 30
Transactions with
owners - - 30 30
------------------------ ------------------ --------- ---------- ----------
Total comprehensive income
for the period - - (1,302) (1,302)
--------------------------------- --------- --------- ---------- ----------
Balance at 30 June 2022 1,793 3,910 (3,503) 2,200
--------------------------------- --------- --------- ---------- ----------
Share Share Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- ---------- ---------
For the six months to
30 June 2021
Balance at 1 January 2021 1,768 3,185 (865) 4,088
Share-based payments - - 20 20
Transactions with
owners - - 20 20
------------------------ ------------------ --------- ---------- ---------
Total comprehensive income
for the period - - (505) (505)
--------------------------------- --------- --------- ---------- ---------
Balance at 30 June 2021 1,768 3,185 (1,350) 3,603
--------------------------------- --------- --------- ---------- ---------
Share Share Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- ---------- ----------
For the year to 31 December
2021
Balance at 1 January 2021 1,768 3,185 (865) 4,088
Issue of share capital 25 725 - 750
Share-based payments - - 40 40
Transactions with
owners 25 725 40 790
------------------------- ----------------- --------- ---------- ----------
Total comprehensive income
for the period - - (1,406) (1,406)
--------------------------------- --------- --------- ---------- ----------
Balance at 31 December
2021 1,793 3,910 (2,231) 3,472
--------------------------------- --------- --------- ---------- ----------
Condensed consolidated interim cash flow statement
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ----------- -------------
Operating activities:
Loss for the period after
tax (1,302) (505) (1,406)
Depreciation 114 112 223
Amortisation 15 4 12
Share-based payments 30 20 40
Foreign exchange (profit)/loss (2) (11) 25
Share of loss of joint venture 23 - -
Tax credit (119) (127) (127)
Interest paid 28 33 46
Change in inventories (106) (170) (256)
Change in trade and other
receivables 494 1,052 453
Change in trade and other
payables 2 (88) 389
-------------------------------- ----------- ----------- -------------
Net cash (used)/generated
in operations (823) 320 (601)
Tax received 119 127 127
-------------------------------- ----------- ----------- -------------
Net cash (used)/generated
in operating activities (704) 447 (474)
-------------------------------- ----------- ----------- -------------
Investing activities:
Additions to property, plant
and equipment (13) (210) (54)
Additions to right of use
assets - - (17)
Additions to intangible assets (17) (31) (227)
Purchase of joint venture (65) - -
Net cash used in investing
activities (95) (241) (298)
-------------------------------- ----------- ----------- -------------
Financing activities:
Movement in finance lease
liability (83) 60 (198)
Proceeds from share issue - - 750
Lease interest paid (10) (14) (29)
Bank and invoice finance
interest paid (17) (19) (17)
-------------------------------- ----------- ----------- -------------
Net cash (used)/generated
in financing activities (110) 27 506
-------------------------------- ----------- ----------- -------------
Net change in cash and cash
equivalents (909) 233 (299)
Cash and cash equivalents,
beginning of period 204 470 470
Cash and cash equivalents,
end of period (705) 703 204
-------------------------------- ----------- ----------- -------------
Represented by:
Cash and cash equivalents 505 1,323 881
Bank overdraft (1,210) (620) (677)
-------------------------------- ----------- ----------- -------------
(705) 703 204
-------------------------------- ----------- ----------- -------------
Notes to the interim financial statements
1 Nature of operations and general information
Symphony Environmental Technologies plc (the "Company") and
subsidiaries' (together the "Group") principal activities include
the development and supply of environmental plastic additives and
products.
Symphony Environmental Technologies plc, a public limited
company, is the Group's ultimate parent company. It is incorporated
and domiciled in England (company number 03676824). The address of
its registered office is 6 Elstree Gate, Elstree Way, Borehamwood,
Hertfordshire, WD6 1JD, England. The Company's shares are listed on
the AIM market of the London Stock Exchange.
These condensed interim consolidated financial statements
("interim financial statements" or "interim report") are for the
six months ended 30 June 2022. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2021.
The financial information set out in this interim report does
not constitute statutory accounts. The Group's statutory financial
statements for the year ended 31 December 2021 have been filed with
the Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
Section 498(2) or 498(3) of the Companies Act 2006. These interim
condensed consolidated financial statements have not been
audited.
These interim financial statements have been prepared in
accordance with the requirements of International Accounting
Standard ("IAS") 34 "Interim Financial Reporting", and are
presented in Pounds Sterling (GBP), which is the functional
currency of the parent company. They have been prepared under the
historical cost convention. They have also been prepared on the
basis of the recognition and measurement requirements of
International Standards as adopted by the UK, and the policies and
measurements are consistent with those stated in the financial
statements for the year ended 31 December 2021.
These interim financial statements were approved by the board on
28 September 2022.
2 Significant accounting policies
These interim financial statements have been prepared in
accordance with the accounting policies adopted in the last annual
financial statements for the year ended 31 December 2021 save for
investments in joint ventures as detailed below as a result of the
46.5% equity purchase made in Symphony India during H1-2022.
Investments in joint ventures
A joint venture is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net assets
of the joint arrangement. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent
of the parties sharing control.
The results and assets and liabilities of joint ventures are
incorporated in these financial statements using the equity method
of accounting, except when the investment is classified as held for
sale, in which case it is accounted for in accordance with IFRS
5.
Under the equity method, an investment in a joint venture is
recognised initially in the consolidated statement of financial
position at cost as at the date of acquisition and adjusted
thereafter to recognise the Group's share of the profit or loss and
other comprehensive income of the associate or joint venture. When
the Group's share of losses of an associate or a joint venture
exceeds the Group's interest in that associate or joint venture
(which includes any long-term interests that, in substance, form
part of the Group's net investment in the associate or joint
venture), the Group discontinues recognising its share of further
losses. Additional losses are recognised only to the extent that
the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture."
3 Seasonal fluctuations
The Group operates in many countries and in many different
markets. There are therefore no formal or considered seasonal
fluctuations affecting the operations of the Group.
4 Segmental analysis
The Board considers that the Group does not have separate
operating segments as defined under IFRS 8.
5 Shares issued
Shares issued are summarised as follows:
6 months 6 months Year to
to to 31 December
Shares issued and 30 June 30 June 2021
fully paid 2022 2021
------------------------ -------------- -------------- --------------
- beginning of period 179,251,277 176,751,277 176,751,277
- issued during the
period - - 2,500,000
------------------------- -------------- -------------- --------------
Total equity shares
issued and fully paid
at end of period 179,251,277 176,751,277 179,251,277
------------------------- -------------- -------------- --------------
6 Earnings per share and dividends
The calculation of earnings per share is based on the result
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
on the assumed conversion of dilutive options and warrants which
were exercisable during the period.
Reconciliations of the results and weighted average numbers of
shares used in the calculations are set out below:
Basic and diluted 6 months to 6 months Year to
30 June to 31 December
2022 30 June 2021
2021
-------------------------------- --------------- -------------- ---------------
(Loss)/profit attributable GBP(1,302,000) GBP(505,000) GBP(1,406,000)
to owners of the Company
Weighted average number
of ordinary shares in
issue 179,251,277 176,751,277 172,851,825
-------------------------------- --------------- -------------- ---------------
Basic earnings per share (0.73) pence (0.29) (0.81)
pence pence
-------------------------------- --------------- -------------- ---------------
Dilutive effect of weighted
average options and warrants 4,671,785 4,784,605 4,041,984
Total of weighted average
shares together with dilutive
effect of weighted options
and warrants 179,251,277 176,751,277 172,851,825
-------------------------------- --------------- -------------- ---------------
Diluted earnings per (0.73) pence (0.29) (0.81)
share pence pence
-------------------------------- --------------- -------------- ---------------
No dividends were paid for the year ended 31 December 2021.
The effect of options and warrants for the six months to 30 June
2022 and 30 June 2021, and year to 31 December 2021 are
anti-dilutive.
7 Availability of Interim Financial Statements
Paper copies of the Interim Financial Statements will be sent to
shareholders upon request. Shareholders will be able to download a
copy of the Interim Financial Statements from the Group's website
www.symphonyenvironmental.com . Further copies of the Interim
Financial Statements will be available from the Company's
Registered Office at 6 Elstree Gate, Elstree Way, Borehamwood,
Hertfordshire WD6 1JD.
NOTES TO EDITORS:
Symphony Environmental Technologies plc
https://www.symphonyenvironmental.com
Symphony Environmental Technologies ("Symphony") - an award
winning ESG company -- is a British SME, listed on the AIM market
of the London Stock Exchange. Symphony is a recipient of the London
Stock Exchange's Green Economy Mark in October 2019 for devoting
over 50% of its portfolio to contribute to the global green economy
and welcomed being named "ESG Company of the Year" at the November
2021 Small Cap Awards in London.
Symphony has developed and continues to develop, a biodegradable
plastic technology, branded as "d2w(R)", which appears as a droplet
logo on many thousands of tonnes of plastic packaging and other
plastic products around the world. d2w(R) is a scientifically
proven technology and a solution to the issues of plastic waste and
plastic pollution; this technology helps tackle the problem of
microplastics by turning ordinary plastic at the end of its
service-life into biodegradable materials. It is then no longer a
plastic and can be bio assimilated in the open environment in a
similar way to a leaf.
Symphony has also developed a range of additives, concentrates
and masterbatches marketed under its d2p(R) ("designed to protect")
trademark, which can be incorporated in a wide variety of plastic
and non-plastic products so as to give them protection against many
different types of bacteria, viruses, fungi, algae, moulds, and
insects, and against fire.
Symphony's technologies are now available in nearly 100
countries and in many different product applications. Symphony
itself is accredited to ISO9001 and ISO14001. Symphony is a member
of The BPA ( www.biodeg.org ) and actively participates in the
Committee work of the British Standards Institute (BSI), the
American Standards Organisation (ASTM), the European Standards
Organisation (CEN), and the International Standards Organisation
(ISO).
Further information on the Group can be found at
www.symphonyenvironmental.com
About Symphony India
As announced in November 2021, Symphony India is a joint venture
company in India with Indorama India Private Limited ("Indorama"),
a wholly owned subsidiary of Indorama Corporation Pte. Ltd.,
("Indorama Corporation"). Called Symphony Environmental India Pvt
Ltd, the shares are held 46.5% by Symphony UK, 46.5% by Indorama
and 7% by Mr. Arjun Aggarwal, an Indian citizen, who has been
appointed Managing Director of Symphony India.
Mr Aggarwal is one of India's prominent young entrepreneurs, who
has introduced a portfolio of modern technologies that are in line
with the aspirations of India's young demographic profile.
Symphony India started trading in February 2022.
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END
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