15th Dec 2006 07:58
Symphony Plastic Technologies PLC15 December 2006 Symphony Plastic Technologies plc Trading Update and Convertible Redeemable Loan Facility Symphony Plastic Technologies Plc ("Symphony" or the "Group"), the degradableplastics and waste-to-energy company, is pleased to announce that, following therecent Trading Update on 13 October, trading is in line with managementexpectations of moving into profitability from quarter four of this year. Salesand gross profit margins continue to increase. As reported in September's Interim Results, this margin improvement follows thechange in strategic direction of the Group and the re-focus from a high volumelow-margin commodity business to a much leaner higher-margin environmentaltechnology business. This transition has allowed the Group to expand into newmarkets and products and to take advantage of the significant opportunitiesprovided. The Board have concluded its review of the CARICOM business (Caribbean Communityand Common Market) and is making a final provision of £500,000 against the baddebt of a former distributor. It is anticipated to recover this investmentthrough new licence fee income over the next three years and materially enhancedsales in the region. As part of this on-going strategic review Symphony has recently reviewed itsNorth American investment in Degradable Polymer Products Inc. It is the Group'sview that the medium term value of this investment, based on current events,could be materially higher than the PUT Option price contained within theDistribution Agreement. As a result, the Group will no longer be exercising thePUT Option which had expected to be completed before the end of December 2006. Any impact that this would have had on the business will be covered by a new£500,000 convertible redeemable loan facility with the Headstart Funds leavingthe business in a cash neutral position. It is anticipated that the Group willnot require the full facility which will be used to bridge the short-fall incash-flow due to the Board's decision not to exercise the PUT Option but waitfor higher returns in the future. This will be available for conversion into 1p ordinary shares after 120 daysunless redeemed. Conversion into 1p ordinary shares is calculated at 95% of thelowest bid price during the 15 trading days prior to the conversion date. Inaddition 500,000 warrants have been issued at a subscription price of 15p per 1pordinary share, 200,000 of which may be deferred up to one year. Interest on theloan is 8% per annum. The cost of redemption if made will be either 110% of theloan if repaid within 180 days, or 105% after 180 days. Michael Laurier, Chief Executive of Symphony, said: "The recent strategic review and the subsequent evolution of the business hasbeen an extremely beneficial exercise for us both in terms of improving ourrevenues and enhancing our margins Symphony continues to develop the many opportuntities available in a wide rangeof applications and markets. The restructuring of the CARICOM region has impacted the balance sheet but ispositive in terms of maximising profitability and cash flow going forward. Weare now in full control of the development in the region. We continue to work towards the profitability of the business and look forwardto the future with confidence." For further information, please contact: Symphony Tel: 020 8207 5900Michael Laurier, CEOIan Bristow, FD Citigate Dewe Rogerson Tel: 020 7638 9571Freida MooreGed Brumby Further information on Symphony Plastic Technologies plc: Symphony develops and supplies environmentally responsible pro-degradentadditives as well as plastic packaging products. The Group's main technology,marketed under the d2w(R) registered trademark, causes plastic to degrade,leaving only water, a minimal amount of carbon dioxide and trace amounts ofnon-toxic biomass over a short time period. The d2w(R) product range includespro-degradent additives developed for an increasing variety of applications aswell as a range of finished flexible plastic products. Symphony has a diverse and growing customer base in the UK and has successfullyestablished itself as an international business after signing distributionagreements with companies in Argentina, Brazil, Canada & USA, Chile, Colombia,India, Mexico, New Zealand, Peru, Portugal, South Africa, the Caribbean, SaudiArabia, and Qatar. d2w(R) products can already be found in more than 40countries. Symphony is now marketing and developing innovative waste-to-energy technologyprocessing plants and is exploring various opportunities where there is a demandto increase recycling of waste plastics, tyres and other waste streams by costeffective processes. Further information on Symphony can be found at www.symphonyplastics.com andwww.degradable.net. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Symphony Env.