TIDMBIOM
RNS Number : 7487N
Biome Technologies PLC
27 September 2023
This announcement contains inside information for the purposes
of Regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
this information is now considered to be in the public domain.
27 September 2023
Biome Technologies plc
("Biome", the "Company" or the "Group")
Interim Results
Biome Technologies plc announces its unaudited Interim Results
for the six months ended 30 June 2023.
Highlights
-- The Group generated revenues of GBP3.6m (2022 H1: GBP2.4m),
an increase of 47% on 2022 H1, and gross profit of GBP1.1m (2022
H1: GBP0.9m)
-- The Bioplastics division's revenues for 2023 H1 were GBP3.1m,
a 50% increase on 2022 H1 (2022 H1: GBP2m)
-- The Biome Bioplastics division was the principal revenue
generator for the Group and saw good demand from both new and
existing customers, particularly in North America
-- Revenues for the RF Technologies division in 2023 H1 were
GBP0.5m, representing an increase of 30% compared to 2022 H1 (2022
H1: GBP0.4m) and the division secured a significant new
contract.
-- Gross proceeds of GBP0.85m received from a convertible loan
note issue to support the working capital needs of the Group.
-- Appointment of Martin Rushton-Turner as a new Non-Executive
Director of the Company in May 2023
Paul Mines, Chief Executive Officer said:
"I am delighted by the revenue growth achieved in the first
half. I am particularly encouraged by the diversification of our
customer base and the applications of use in both the Bioplastics
and RF Technologies divisions."
For further information please contact:
Biome Technologies plc
Paul Mines, Chief Executive Officer
Rob Smith, Chief Financial Officer
Tel: +44 (0) 2380 867 100
info@biometechnologiesplc.co.uk
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner/Tony Quirke (Sales and Corporate Broking)
Tel: +44 (0) 20 3328 5656
About Biome
Biome Technologies plc (Ticker: BIOM) is an AIM listed,
growth-orientated, commercially driven technology group. Our
strategy is founded on building market-leading positions based on
patented technology and serving international customers in valuable
market sectors. We have chosen to do this by developing products in
application areas where value-added pricing can be justified and
that are not reliant on government legislation. These products are
driven by customer requirements and are compatible with existing
manufacturing processes. They are market rather than technology
led.
The Group comprises two divisions, Biome Bioplastics and RF
Technologies.
Biome Bioplastics is a leading developer of highly functional,
bio-based and biodegradable plastics. The company's mission is to
produce bioplastics that challenge the dominance of oil-based
polymers.
RF Technologies designs, builds and services advanced radio
frequency (RF) systems. Dielectric and induction heating products
are at the core of a product offering that ranges from portable
sealing devices to large furnaces for the fibre optics and other
industrial markets.
www.biometechnologiesplc.com www.biomebioplastics.com and
www.thinkbioplastic.com www.stanelcorftechnologies.com
Chairman's Statement
Group revenues for 2023 H1 were GBP3.6m (2022 H1: GBP2.4m), an
increase of GBP1.2m or 47% on 2022 H1. This growth was driven
predominantly by the increased demand in the Bioplastics
division.
As mentioned in our last trading update announced on 26 July
2023, the Group's two divisions both made progress in the first
half of 2023. For the Biome Bioplastics Division ("Bioplastics"),
strong growth was driven by a broader set of customers in a variety
of applications, particularly in North America. For the Stanelco RF
Technologies division ("RF Technologies"), revenues grew slightly
and as announced on 22 June 2023 a contractual agreement to proceed
was concluded on the first of several opportunities of scale in the
division's pipeline.
Gross profit for the Group was GBP1.1m (2022 H1: GBP0.9m) on the
back of this revenue growth. Other income, in the form of grant
receipts in support of the Group's work on novel bioplastics, was
GBP0.2m (2022 H1: GBP0.2m). The overall gross margin for the Group
fell to 31% (2022 H1: 36%) reflecting the changing product mix as
the Bioplastics division grew rapidly in the period.
In the context of global inflationary pressures, the rise in
activity and foreign exchange rate movements contributed to a rise
in administrative expenses to GBP2.0m (2022 H1: GBP1.7m) of which
exchange rate translation represented a loss of GBP0.1m (2022 H1:
GBP0.1m profit). The Group recorded a loss before taxation for the
six months to 30 June 2023 of GBP1.1m (2022 H1: GBP0.7m loss). This
includes a fair value movement on financial instruments of GBP0.3m
in line with IFRS 9 and financing charges for interest and costs
associated with the convertible loan notes issued in the period.
The fair value movement was and will be driven by movements in the
Company's share price from the date of inception to the balance
sheet date for the embedded derivative in the convertible loan
notes. Increases in share price result in a loss recorded on the
statement of comprehensive income with reductions in share price
resulting in a profit. This is a non-cash item that will be
transferred to equity if the convertible loan notes are eventually
converted to shares.
The total comprehensive loss was GBP1.1m (2022 H1: GBP0.6m
loss), which equates to a basic and diluted loss per share of 28
pence (2022 H1: basic and diluted loss per share of 17 pence).
In March and April 2023, following a review by the Board of
potential funding options, Biome was pleased to announce issues of
convertible loan notes to raise gross proceeds of GBP0.85m for the
Company. These proceeds are being used to support the commercial
and technical resources required to deliver growth and build sales
margins within Bioplastics and to provide RF Technologies with the
cash resources to convert existing opportunities within its sales
pipeline.
The Group's cash position as at 30 June 2023 was GBP0.9m,
reflecting the first half's trading, working capital movements,
GBP0.85m outstanding of the convertible loan notes repayable in
2026 and no bank debt or drawdowns against the Company's invoice
discounting facility.
In May 2023, the Company was pleased to announce the appointment
of Mr Martin Rushton-Turner as a Non-Executive Director of the
Company. Mr Rushton-Turner is an important investor in both the
ordinary shares of the Company and the convertible loan notes and
the Board is already benefitting from his experience and
insight.
Bioplastics division
Revenues for 2023 H1 were GBP3.1m, a 50% increase on 2022 H1
(2022 H1: GBP2m).
The revenue performance in the period remained underpinned by a
continuance of sales to existing customers for outer flexible film
packaging and filtration material for the North American coffee
market and also a number of new customers which are now purchasing
Biome's materials on a regular basis. We believe that this progress
highlights the growing reputation of the Bioplastics division for
innovative materials and demonstrates how we hope it will lead to
market success, particularly in North America.
Our drive to deliver growth from the North American market was
enhanced in late 2022 by the relocation of a senior Biome employee,
responsible for business development, to Canada and the start-up of
legal entities and associated back-office services in both the USA
and Canada. Work to build on this foundation has continued in 2023,
with an enhanced level of tradeshow and customer activity. We
expect to build further on this team with additional resources in
North America in due course.
In the winter of 2021/22, Biome launched materials designed to
allow tree shelters (plastic tubes around saplings) to be left on
the forest floor after use to biodegrade in a benign manner. In
2022, Biome announced the commencement of large-scale, UK-wide
field testing and initial commercial sales with a commercial
partner of biodegradable tree shelters using Biome's proprietary
bioplastics materials. In the last six months the product is
becoming established in some areas of the market and work to
develop this further continues.
Some of the growth of revenues in the first half is based on
"home compostable" plastic grades of polymers. Some of these grades
are subject to the protection of a pending patent application. The
key "end-of-life" functionality of such materials is that they
degrade much faster in conditions akin to a home compost bin rather
than those materials designed to biodegrade in the controlled and
higher temperature environments of industrial composting
facilities. Biome's team has been working on this new range of
materials for some four years and we are now beginning to see
commercial revenues with several customers particularly in
applications such as food packaging pouches.
The Bioplastics division continues to see a high level of
interest in its products in North America across a wider variety of
applications than has been seen traditionally. Management expects
demand for the division's products in 2023 H2 to continue at
similar rate to that experienced in 2023 Q2, with further
substantial growth linked to product launches, the timing of which
remains uncertain as referenced in previous trading statements.
RF Technologies division
Revenues for 2023 H1 were GBP0.5m, representing an increase of
30% compared to 2022 H1 (2022 H1: GBP0.4m).
On 22 June 2023, the division announced a significant new
contract win with a revenue value of GBP452,000 for the supply of a
novel induction furnace system to a global manufacturer of
scientific glass products. As announced, the specific revenue
timing was dependent on the availability of key components.
Completion of the project deliverables is now expected in the 2024
financial year with revenue and profit being recognised in that
year in line with IFRS-15. Several novel design concepts are being
incorporated in the system being developed with the new
intellectual property being retained by the division. It is
anticipated that this technology will form the basis of future
system sales.
The division continues to be in discussions with several
potential customers regarding contracts that would have revenue and
profit recognition potential of significance for 2024. Management
is pleased with the novel market sectors in which the division is
building a pipeline of potential new business and the scale of some
of these opportunities. We remain cautious on the precise timing of
converting these opportunities to orders and the associated revenue
recognition as much of this work requires considerable new
collaborative designs with customers.
With the medium to longer-term trend for the RF Technologies
division improving, we have commenced recruitment to improve the
range of internal technical and commercial resources required to
achieve our growth targets, whilst ensuring overhead expenditure
remains controlled.
Outlook
We are pleased with the progress of the Bioplastics division in
the first half. The exceptional revenue growth of 50% over the
first half of the previous year reflects a significant broadening
of both customers and applications in the North American market.
Investment in the local team has already provided a higher level of
market visibility for our products through visits and tradeshows
and enhanced customer service. Whilst we anticipate revenue for
2023 H2 to continue at a similar rate to that experienced in 2023
Q2 , we expect further growth in due course as this broader set of
customers undertake further product launches.
We are also pleased with progress being made in the RF
Technologies division to build a business with a broader business
base beyond the traditional fibre optic market. The diversifying
contract win in the scientific glass sector, announced in June,
reflects the conclusion of just one of the discussions underway to
deploy a new and more efficient RF technology across a variety of
applications. We expect to make further announcements with impact
on 2024 financials in due course.
Adverse exchange rates and the phasing of revenue from RF
Technologies into 2024 will provide some pressure at the operating
profit level and the Board's outlook for the Group's trading
performance in 2023 is broadly in-line with current market
expectations. The expected loss for 2023 has been adjusted to
reflect the required technical accounting treatment of the
CLNs.
John Standen
Chairman
(1) Loss before interest, taxation, depreciation and
amortisation is an alternative profit measure as detailed in Note
7.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June
2023
6 Months 6 Months
Ended Ended Year Ended
30 June 30 June 31 December
Note 2023 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------ ----- ---------- ---------- -------------
Revenue 5 3,569 2,428 6,188
Cost of goods sold (2,463) (1,562) (3,857)
---------- ---------- -------------
Gross Profit 1,106 866 2,331
Other operating income 201 203 211
Administrative expenses (1,969) (1,718) (3,309)
---------- ---------- -------------
Loss from operations (662) (649) (767)
Investment income 1 - -
Fair value movement on financial
instruments 8 (333) - -
Finance and similar charges (105) (18) (35)
---------- ---------- -------------
Loss before taxation (1,099) (667) (802)
Taxation 35 30 131
Total comprehensive loss for
the period (1,064) (637) (671)
---------- ---------- -------------
Basic and diluted loss per share
- pence (28)p (17)p (18)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
At At At
30 June 30 June 31 December
Note 2023 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------- ----- ---------- ---------- -------------
NON-CURRENT ASSETS
Other intangible assets 829 765 841
Property, plant and equipment 460 473 498
---------- ---------- -------------
1,289 1,238 1,339
CURRENT ASSETS
Inventories 872 1,552 736
Trade and other receivables 950 861 605
Taxation receivable 176 109 141
Cash and cash equivalents 932 652 779
---------- -------------
2,930 3,174 2,261
TOTAL ASSETS 4,219 4,412 3,600
---------- ---------- -------------
CURRENT LIABILITIES
Trade and other payables (1,425) (1,761) (933)
Lease liabilities (61) (47) (55)
---------- ---------- -------------
(1,486) (1,808) (988)
NON-CURRENT LIABILITIES
Financial instruments 8 (1,148) - -
Lease liabilities (325) (340) (354)
---------- ---------- -------------
(1,473) (340) (354)
TOTAL LIABILITIES (2,959) (2,148) (1,342)
---------- ---------- -------------
NET ASSETS 1,260 2,264 2,258
---------- ---------- -------------
EQUITY
Share capital 189 189 189
Share premium 2,282 2,282 2,282
Capital redemption reserve 4 4 4
Share options reserve 108 487 102
Translation reserve (78) (85) (83)
Treasury shares reserve - (55) (55)
Retained earnings (1,245) (558) (181)
TOTAL EQUITY 1,260 2,264 2,258
---------- ---------- -------------
The interim statements were approved by the Board on 26
September 2023 and signed on behalf of the Board of Directors by:
-
Paul R Mines Rob Smith
Chief Executive Officer Chief Financial Officer
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 30 June 2023
At At At
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------------- ---------- ---------- -------------
Loss after taxation: (1,064) (637) (671)
Adjustments for: -
Taxation (35) (30) (131)
Fair value movement on financial
instruments 333 - -
Finance charges 105 18 35
---------- ---------- -------------
Loss from operations (661) (649) (767)
Adjustments for: -
Amortisation and impairment of
intangible assets 144 174 250
Depreciation of property, plant
and equipment 49 44 89
Share based payments - equity settled 6 - -
---------- ---------- -------------
Operating cash flows before movement
in working capital (462) (431) (428)
(Increase) / decrease in inventories (136) (632) 184
(Increase) / decrease in receivables (345) 516 762
Increase / (decrease) in payables 576 463 (339)
----------
Cash utilised in operations (367) (84) 179
Taxation received - - 79
Interest paid (59) (18) (35)
---------- -------------
Net cashflow from operating activities (426) (102) 223
---------- ---------- -------------
Investing activities
Investment in intangible assets (131) (213) (365)
Purchase of property, plant and
equipment (11) (7) (27)
Net cash used in investing activities (142) (220) (392)
---------- ---------- -------------
Financing activities
Proceeds from issue of treasury
shares 1 - -
Proceeds from issue of convertible
loan notes 850 - -
Costs of issue of convertible loan
notes (112) - -
Repayment of obligations under
leasing activities (23) (22) (50)
Net cash from financing activities 716 (22) (50)
---------- ---------- -------------
Net increase / (decrease) in cash
and cash equivalents 148 (344) (219)
Cash and cash equivalents at the
beginning of the period 779 996 996
Exchange differences on cash and
cash equivalents 5 - 2
Cash and cash equivalents at the
end of the period 932 652 779
---------- ---------- -------------
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 30 June 2023
1. CORPORATE INFORMATION
The financial information for the period ended 30 June 2023 set
out in this interim report does not constitute statutory accounts
as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 December 2022
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not
contain statements under Section 498 of the Companies Act 2006. The
interim results are unaudited. Biome Technologies plc is a public
limited company incorporated and domiciled in England & Wales.
The Company's ordinary shares are publicly traded on the AIM market
of the London Stock Exchange.
2. BASIS OF PREPARATION
These interim consolidated financial statements (the interim
financial statements) are for the six months ended 30 June 2023.
They have been prepared in accordance with UK-adopted international
accounting standards. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 31 December 2022.
These interim financial statements have been prepared in
accordance with the accounting policies adopted in the last annual
financial statements for the year to 31 December 2022. As disclosed
in note 8, convertible loan notes (CLNs) have been issued during
the period. These CLNs incorporate an embedded derivative
recognised at fair value through profit and loss and a residual
debt component measured at amortised cost in accordance with IFRS
9.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of the interim
financial statements.
3. BASIS OF CONSOLIDATION
The Group's interim financial statements consolidate the results
of the Company and all of its subsidiary undertakings drawn up to
30 June 2023. As at 30 June 2023, the subsidiary undertakings were
Biome Bioplastics Limited, Biome Bioplastics Inc. (USA), Biome
Bioplastics Inc. (Canada), Stanelco RF Technologies Limited,
Aquasol Limited and InGel Technologies Limited.
4. GOING CONCERN
The Directors have reviewed forecasts for the period to December
2024. These have been prepared with appropriate regard for the
current macroeconomic environment. The forecasts included
assumptions on exchange rates, supplier lead times and receipts
from customers being broadly in line with agreed terms. The
Directors believe the assumptions to be reasonable but fundamental
to the forecasts.
The Directors have considered the future growth of the
Bioplastics Division, its need for continued investment in
development resource and working capital, the steps they can take
to improve the efficiency of the working capital deployed and the
availability of future funding.
The model has assumed growth in the period from the RF Division
and the Directors have already taken steps to ensure resources meet
current demand.
On the basis of the above, the Directors are satisfied that the
Group has sufficient working capital to continue as a going concern
for at least one year from the date of approval of these Interim
Results.
5. SEGMENTAL INFORMATION
Revenue from external customers
For the period ended 30 June 2023
6 Months 6 Months Year
Ended Ended Ended
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------- ---------- ---------- -------------
Bioplastics Division 3,053 2,031 4,393
RF Technologies Division 516 397 1,795
---------- ---------- -------------
Total Revenue 3,569 2,428 6,188
----------------------------------- ---------- ---------- -------------
6. LOSS PER SHARE
The calculation of basic earnings per share is based on the loss
attributable to the equity holders of the parent for the period of
GBP1,064,000 (H1 2022: loss of GBP637,000, FY 2022: loss of
GBP671,000) and a weighted average of 3,760,497 ordinary shares in
issue (H1 2022: 3,755,930, FY 2022: 3,755,930). The calculation
uses the same weighted average number of shares under the basic and
diluted basis in the current and comparative periods due to a loss
being made.
7. ALTERNATIVE PROFIT MEASURE
The Group measures and reports on Earnings (Loss) Before
Interest, Taxation, Amortisation and Depreciation (E(L)BITDA). The
following table sets out the calculation of E(L)BITDA.
For the period ended 30 June 2023
6 Months 6 Months Year
Ended Ended Ended
30 June 30 June 31 December
2023 2022 2022
----------------------------------- ---------- ---------- -------------
GBP'000s GBP'000s GBP'000s
Loss from operations (662) (649) (767)
Depreciation 49 44 89
Amortisation 144 174 250
Share based payments 6 - -
Loss Before Interest, Taxation,
Depreciation and Amortisation (463) (431) (428)
----------------------------------- ---------- ---------- -------------
8. CONVERTIBLE LOAN NOTES / FINANCIAL INSTRUMENTS
The convertible loan notes issued by the Company in March and
April 2023 are recognised as financial instruments in the
consolidated statement of financial position and are calculated
as:
Embedded
Debt component derivative Total
GBP'000 GBP'000 GBP'000
-------------------------------- --------------- ------------ --------
Face value of convertible loan
notes 477 373 850
Less issue costs (63) - (63)
-------------------------------- --------------- ------------ --------
Value at recognition 414 373 787
Fair value adjustment - 333 333
Interest expense 35 - 35
Interest paid (7) - (7)
Value at 30 June 2023 442 706 1,148
-------------------------------- --------------- ------------ --------
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