2nd Sep 2015 08:14
LONDON (Alliance News) - Biome Technologies PLC Wednesday said its pretax loss narrowed in the first half of 2015 after it improved its margin, and it said it expects a stronger second half from both its divisions as new products are launched and new contracts are completed.
The supplier of biodegradable natural polymers said it made a GBP562,000 pretax loss in the first six months of 2015, narrowing from the GBP624,000 loss made a year earlier despite revenue falling to GBP2.1 million from GBP2.3 million.
The loss narrowed because its margin improved to 39% from 35%, and as a result of administrative expenses falling and because it booked fewer exceptional items.
"The group has enjoyed a positive first half with both divisions reporting improved performance compared to the second half of 2014, illustrated by strong margin growth," said Chief Executive Paul Mines.
The company said the Bioplastics division, which supplies plastics made from renewable sources, had performed well following the recovery of the US single-serve coffee market, which allowed the division to report a small earnings before interest, tax, depreciation and amortisation of GBP40,000 compared to a GBP40,000 loss a year ago.
"The division remains committed to a strategy of focussing on the commercialisation and development of its own intellectual property. A new product line has recently reached the commercialisation phase which should result in revenues in the second half of 2015," said the company.
In addition to that new product line, the company is testing a non-woven biodegradable mesh with a customer with "encouraging initial results", it said.
The company's other division, Stanelco RF Technologies, which builds and maintains radio frequency systems, reported a slight year-on-year drop in revenue due to the timing of shipments and generated lower Ebitda of GBP200,000 compared to GBP300,000 a year ago.
"Order levels within the division remain high with a substantial pipeline stretching beyond the remainder of the year and into 2016. This includes the recently announced GBP1.1 million contract to supply multiple furnaces in the second half of 2015," said Biome.
Biome is expecting revenue from the division to be "substantially above" the GBP1.0 million generated in the first half of the year.
"The board believes that the group remains on target to meet its three strategic [key performance indicators] relating to revenue growth, product development and passing the 'earnings positive' inflexion point in quarterly trading in 2015," said Chairman John Standen.
"Trading in both divisions since the mid-year point and encouraging order flow received both underpin the board's confidence that the growth momentum will accelerate in the second half of the year," he added.
Biome shares were down 1.9% to 125.05 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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