Biome Technologies PLC Trading Update (2776C)
27 June 2016 - 4:00PM
UK Regulatory
TIDMBIOM
RNS Number : 2776C
Biome Technologies PLC
27 June 2016
27 June 2016
Biome Technologies plc
("Biome", the "Company" or the "Group")
Trading Update
Biome Technologies plc, a leading bioplastics and radio
frequency technology business, today publishes a trading update for
the six month period ending 30 June 2016. This update is being made
ahead of the period end and in place of the trading update
scheduled for the end of July. The interim results are expected to
be announced on 31 August 2016.
Trading Update
Total Group revenues for the first half are expected to be
GBP2.2m (H1 2015 GBP2.1m). Whilst this revenue is marginally ahead
of last year's performance, it is below that of the Board's
expectations. This shortfall is due to a reduced demand for already
commercialised products in the Bioplastics Division and some
slippage of the Stanelco RF's division's order pipeline into the
second half.
The Group's cash position at 27 June 2016 is GBP1.0m (31 March
2016: GBP1.6m) reflecting the current trading activity and timing
of anticipated cash receipts from work in progress in the Stanelco
RF division.
Bioplastics Division
Revenues generated by the Bioplastics Division in the first half
of 2016 totalled GBP0.6m (H1 2015 GBP1.0m).
It was noted in the trading update of 25 April 2016 that
revenues in the Bioplastics division in the first quarter of 2016
were GBP0.2m (Q1 2015: GBP0.5m) reflecting the timings of campaign
production runs of packaging and lidding materials for the US
single-serve coffee market (coffee pods). Whilst revenues recovered
in Q2 2016 to GBP0.4m with some additional campaigns, it had been
expected by the Board that this recovery would be stronger.
Biome has been developing a suite of related materials to enable
coffee pod producers to sell biodegradable end products to the US
consumer market. This is an important advance for the market and
has received supportive media comment. The materials Biome has been
developing comprise the outer packaging and the lid, ring and
"non-woven" filter of the pod. Each part has entailed significant
development cost both in time and in production testing and we have
worked in a collaborative way with the manufacturers of the pods
and packaging in the US to achieve success. The packaging and lid
materials have completed their development stages and have been in
full production from the middle of last year. The ring and filter
materials are in the advanced stages of development and we expect
to move into commercialisation by the end of this year with these
materials. Whilst the second half of this year should be favourably
impacted as the ring reaches its commercialisation phase, it has
now become clear that the inflexion point of significant revenue
generation will be later in the half year than the Board has
previously expected as Biome's customers complete their own work to
industrialise this innovative product.
Throughout this broad programme, Biome has been continually
re-assessing the likely demand for the portfolio of the Bioplastics
division's materials, although this is made difficult by
fluctuating underlying market growth, the rise in demand for such
bio-degradable products as they become available and, contrarily,
improving efficiencies in our customers' production processes. The
Group has just completed such a review and the Board continues to
believe that the long-term outlook for these products remains very
positive. In the short term, however, it believes the likely demand
will be less than originally thought. This will result in a
near-term fall in anticipated revenues. A similar review will be
undertaken at the end of August, prior to the Group's Interim
Statement.
Stanelco RF Technologies Division
Revenues for this division in the first half of 2016 were
GBP1.6m (2015: GBP1.3m), slightly behind the Board's expectations.
Whilst a number of the prospective orders for the second half are
still being finalised, the division has a healthy enquiry book
forward into 2017.
Group Outlook
Group revenues at the mid-year point are behind the Board's
expectations. Whilst margins have been robust and the operating
loss for the period is anticipated to be lower than for the same
period in 2015, it will be behind the Board's expectations.
Whilst the Board is confident that revenue growth should
accelerate in the second half of the year, it is now likely that
the Group's full year performance will be significantly behind
current market expectations, with the Board now expecting Group
revenues for the year to 31 December 2016 to be only marginally
ahead of those achieved in the prior year.
- Ends -
For further information please contact:
Biome Technologies plc
Paul Mines, Chief Executive
Officer
Declan Brown, Group Finance
Director
www.biometechnologiesplc.com Tel: +44 (0) 2380 867
100
Allenby Capital
David Hart/Richard Short
(Nominated Adviser)
Chris Crawford/Kelly
Gardiner (Broker)
www.allenbycapital.com Tel: +44 (0) 20 3328
5656
FTI Consulting
Oliver Winters Tel: +44 (0) 20 3727
www.fticonsulting.com 1535
This information is provided by RNS
The company news service from the London Stock Exchange
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