3rd Sep 2014 08:45
LONDON (Alliance News) - Biome Technologies PLC Wednesday said its loss narrowed in the first half of the year, as revenue rose in both its fast-growing bioplastics division and its radio frequency systems unit, and it said its order pipeline remains strong into 2015.
The AIM-listed company has two distinct divisions: its bioplastics unit develops and makes plastic from renewable energy sources rather than being derived from oil, while its Stanelco RF Technologies unit designs, builds and services advanced radio frequency systems used for sealing, welding and heating processes in diverse industries including the fibre optics market and the medical sector.
Its pretax loss narrowed to GBP624,000 in the six months to June 30, from a GBP1.6 million loss a year earlier, as revenue rose to GBP2.3 million, from GBP881 million.
"The group has enjoyed a much improved first half. It is especially pleasing that the significant revenue improvement has been driven by both divisions, with Biome Bioplastics and Stanelco RF delivering first half revenues ahead of the 2013 full year results," Chief Executive Paul Mines said.
It said the operating loss at the bioplastics unit narrowed to GBP0.1 million, while RF Technologies returned to profit. However, on a group level, gross margin fell to 35%, from 41% a year earlier, as sales were more weighted to the bioplastics division.
Bioplastics revenue rose to GBP1.2 million, from GBP0.3 million, lifted particularly by sales into the US single-serve coffee market. The unit is focused at the moment on producing products for the single-use coffee and single-use food market.
"Substitution of Biome's products into a broader range of final products in different form-factors is being evaluated and this may reduce immediate demand as existing product lines are de-stocked in advance of further growth," it cautioned.
Revenues in the RF Technologies division doubles to GBP1.2 million, from GBP0.6 million, as sales increased across its product range, including fibre optic furnaces.
Overall, "the board's confidence in the outcome for the year is supported by this good result together with the revenue outlook for the second half," it said.
"RF Technologies' order pipeline remains strong into 2015 and, in Bioplastics, repeat volumes for the commercialised products are expected albeit the rate is likely to be limited in the short term by de-stocking in the supply chain ahead of further product launches," it added.
The company's cash position at the end of the first half was GBP3.1 million, as it used GBP0.3 million of cash in its operations and spent GBP0.2 million on research and development, partly offset by a GBP0.3 million reduction in working capital.
Biome Technologies shares were down 5.6% at 170.00 pence Wednesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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