24th Sep 2020 11:34
(Alliance News) - Biome Technologies PLC on Thursday said its loss widened in the first half of 2020, but it hailed progress made by its Bioplastics division, which partially offset difficulties in its business serving the fibre optic cable market.
The Southampton, England-based developer of biodegradable natural polymers and radio frequency systems also announced a successful equity raise to support its growth in bioplastics.
Biome Technologies posted a pretax loss in the first half ended June 30 of GBP821,000, widening from GBP484,000 a year prior.
Total revenue was down 26% to GBP2.5 million from GBP3.4 million a year before.
Bioplastics revenue grew to GBP2.1 million from GBP1.2 million a year prior. The strong performance was underpinned by increased sales of outer packaging for the US coffee market and by growing revenue from rigid ring materials for coffee-pod application, the company said.
However, Stanelco RF Technologies revenue was down to GBP400,000 from GBP2.2 million a year before. Stanelco RF designs, builds and services advanced radio frequency systems.
Overcapacity in the fibre optic cable market was exacerbated by the Covid-19 pandemic, while international trade disputes slowed the deployment of 5G, hindering the division, the company explained.
Chief Executive Paul Mines said: "The Bioplastics division performed exceptionally well in the first half despite the upheaval caused by Covid-19, with a 71% increase in revenues compared with the same period in the prior year.
"As previously reported, the revenues of the Stanelco RF division, however, were compromised by both over-capacity in the fibre optic market and the slow-down in industrial activity caused by Covid-19. The Bioplastics division has now therefore become the principal revenue generator for the group, and we expect this to be maintained into the future."
Chair John Standen said: "Looking further forward, the Bioplastics division's orderbook remains strong with a range of products with a more predictable and improving growth profile, particularly in the US market. An encouraging list of prospects for 2021 and strong customer engagement has enabled the board to form its expectations of continued vigorous growth in this division for 2021."
"The board believes that the Stanelco RF division's prospects for 2021 will remain moderated by continued overcapacity in the fibre optic cable market and Covid-19 related uncertainties around demand and capital expenditure in the industrial markets that the division serves," he added.
Current trading is in line with the company's expectations.
Biome Technologies additionally announced that it has conditionally raised GBP1.1 million before expenses through the placing and subscription of 916,667 new shares at a price of 120 pence per share.
The proceed will be used to grow capital needed to support revenue growth with existing customers and new bioplastics projects as well as maintain an increased investment in sales activities, development and logistics.
Non-Executive Chair John Standen and wife Kathleen Standen subscribed for 12,500 shares, while Chief Executive Officer Paul Mines also subscribed for 12,500. Sally Morley, managing director of Biome Bioplastics, subscribed for 4,167 shares.
Biome Technologies shares were down 32% at 163.00 pence each in London on Thursday morning.
By Greg Roxburgh; [email protected]
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