REG - Biome Technologies - Final Results 2022
26/04/2023 07:00
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RNS Number : 4418X Biome Technologies PLC 26 April 2023
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
26 April 2023
Biome Technologies plc
("Biome", the "Company" or the "Group")
Final Results 2022
Biome Technologies plc announces its audited Final Results for the year ended
31 December 2022.
Highlights:
Final Results
· Group revenues increased by 7.9%.
· A mixed year for the Bioplastics division with revenues declining
by 8.4% in the year. This was caused by a significant reduction in demand from
a long established customer for filmic material, which was partly offset by
growth with other customers and strengthening in the pipeline of commercial
opportunities.
· RF Technologies division revenues increased by 91.6% to £1.8m
(2021: £0.9m) (after elimination of intra-group trade) as the division
continues to diversify its application base.
· Reported Group loss before interest, depreciation, taxation and
amortisation (LBITDA) of £0.4m (2021: LBITDA of £0.6m), better than market
expectations, with Group operating loss of £0.7m (2021: loss of £1.1m).
· Group cash position as at 31 December 2022 was £0.8m (31
December 2021: £1.0m) with no bank borrowings.
Paul Mines, Chief Executive Officer said: "The Group grew less than we had
originally anticipated in 2022 due to a sharp decline in demand from one of
our long standing customers in the Bioplastics division. The greatly increased
revenue from RF Technologies division resulted in improved gross margins and
reduced LBITDA and operating loss for the Group. Demand from customers in the
Bioplastics division improved in the final quarter of 2022 and this
improvement has continued into the first quarter of 2023."
- Ends -
For further information please contact: Biome Technologies plc
Paul Mines, Chief Executive Officer
Rob Smith, Chief Financial Officer
www.biometechnologiesplc.com Tel: +44 (0) 2380 867 100
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner/Tony Quirke (Sales and Corporate Broking)
www.allenbycapital.com Tel: +44 (0) 20 3328 5656
About Biome
Biome Technologies plc 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 the value-added pricing can be justified and 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 Limited ("Bioplastic")
and Stanelco RF Technologies Limited ("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.
Stanelco 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 markets.
www.biometechnologiesplc.com (http://www.biometechnologiesplc.com)
www.biomebioplastics.com (http://www.biomebioplastics.com) and
www.thinkbioplastic.com (http://www.thinkbioplastic.com)
www.stanelcorftechnologies.com (http://www.stanelcorftechnologies.com)
Chairman's Statement
Business performance
Group revenues grew 7.9% in the year to £6.2m (2021: £5.7m) whilst the loss
before interest, taxation, depreciation and amortisation ("LBITDA") improved
to £0.4m (2021: £0.6m LBITDA). An increased focus on working capital
management, particularly around the size of manufacturing campaigns and
timing, ensured that the year-end cash position was better than anticipated at
£0.8m (2021: £1.0m).
The Group, however, grew less than we had originally anticipated in 2022,
consequently we reduced our expectations during the year for a second year in
a row. Following this, the Board decided to adjust its forecasting methodology
(particularly for the Bioplastics division) such that new customer prospects
are now only included in management's expectations when large scale
commercialisation is proven.
We are delighted by the support received in the recent Convertible Loan Note
fundraising, including from a number of our major shareholders, and by the
support of shareholders as a whole at the General Meeting held on 17 April
2023. The aggregate net proceeds from the Convertible Loan Note issue will be
used to support the growth of the Group's Bioplastics and RF Technologies
divisions towards a position of Group operating cash flow sustainability over
time.
Bioplastics division
The Bioplastics division's revenues for the year to 31 December 2022 were
£4.4m (2021: £4.8m) due mainly to a combination of two factors. The first
was a large reduction in demand from a long-standing end-customer of Biome's
materials which are used in compostable packaging films. This reduction was
offset substantially by orders from new end-customers in both North America
and Europe, primarily related to materials for compostable packaging films.
An increase in the number of orders for our compostable coffee filtration mesh
were received for delivery in the final quarter of the year accompanied by
encouraging signs of a sustained commitment for 2023.
Market demand is building strongly for products that are certified for 'home
composting', rather than 'industrial composting'. The technical requirements
of 'home' vs 'industrial' compostable material require that those designated
as 'home' must compost more quickly in temperatures akin to home/garden
temperature conditions. The division's scientists have made great strides in
delivering this technical performance at a competitive price point and a
patent for a new family of materials has been filed. The first products
exploiting this technology are expected to enter the market during the course
of 2023, following the extensive development and testing required.
A number of important end-customer opportunities of scale are being pursued by
the division. These opportunities are at various stages of progress and,
whilst encouraging, can be subject to technical, operational and commercial
delays until they reach full commercialisation. A selected few of these
opportunities have been outlined in previous statements and further details
may be found in the Strategic Report. Following the change in our forecasting
methodology, as mentioned above, this year, they are not included in
management's expectations for the financial outturn for 2023.
Over the last eight years, the Bioplastics division has coordinated
significant research and development funding in conjunction with leading
universities, in pursuit of bringing new novel and patent protectable, and
where possible, bio-based and biodegradable polyesters to market. In November
2022, the division was awarded a further £0.3m in funding from Innovate UK,
the UK Government's innovation agency, to support the scale-up of one such
polyester polymer ("PBAF"). This work is being carried out in collaboration
with Thomas Swan (www.thomasswan.co.uk) and the University of Nottingham, both
of whom we have worked with previously. This polyester polymer is based on
furan dicarboxylic acid (FDCA), an important new bio-based chemical. The
scale-up will allow the performance and production process of this polymer to
be evaluated at an industrially relevant scale and will help map out the
pathway to full commercialisation.
We believe that the progress described above highlights the growing reputation
of the Bioplastics division for innovative materials and demonstrates how it
will lead to market success, particularly in North America. Our ability to
deliver growth from the North America market was enhanced in 2022 by the
relocation of a senior Biome employee, responsible for business development in
Canada and the start-up of legal entities and associated back-office services
in both the USA and Canada. It is our intention to build on this local
presence as growth continues.
RF Technologies division
Revenues in the RF Technologies division in 2022 were £1.8m (2021: £0.9m).
The RF Technologies division's efforts to diversify its revenue stream gained
traction in 2022. Substantive orders for the medical sector in the UK and for
food packaging sector in Continental Europe were delivered during the year.
These are important steps for the division as it refines and demonstrates its
capability on a wider stage.
The downturn in demand for capital goods in the fibre optic cable
manufacturing sector which was first seen during 2019 continued through 2022.
Whilst spares and service orders for the fibre optic sector remain robust and
provide some indication that current capacity is being well utilised, we are
yet to see a pipeline of further large-scale capacity increases emerge from
this area of the market.
The diversification strategy has delivered an encouraging pipeline of
enquiries for 2023 and beyond. Negotiations to convert a number of these
enquiries into contracts continue and these underpin our expectations for
2023.
Covid-19 and economic instability
In the western economies, the direct impacts of the Covid-19 pandemic receded
significantly in 2022 and local precautions were largely removed in line with
government guidance on these matters.
Supply chain issues remained prevalent for the Bioplastics division and whilst
this turbulence is expected to continue through 2023, we are improving our
capability to foresee and manage such issues. We have seen and continue to see
an increase in input costs, including in relation to raw materials, shipping,
energy and staff. We have, in the main, been able to pass these costs on to
customers and we are continually working to mitigate the effects of inflation
on our business.
The RF Technologies division continued to experience the disruptions to supply
lines that other manufacturers have had to contend with in the period. The
widespread long lead times for electronic components did abate in the year but
some individual items remained difficult to procure.
Results
The Group's results were in line with the expectations announced in January
for the year ended 31 December 2022, although with the level of Group loss
being better than market expectations.
Consolidated Group revenue for the year was £6.2m (2021: £5.7m) reflecting
the decrease in Bioplastics sales offset by a healthy increase in those from
the RF Technologies division. Group gross margins for the year were 37.7%
(2021: 33.8%) reflecting an improved mix of sales during the year.
The Group loss before taxation decreased to £0.8m (2021: £1.2m) whilst the
non-GAAP measure of LBITDA was better than January's guidance regarding market
expectations at £0.4m (2021: £0.6m LBITDA). A Group operating loss of £0.8m
for the year was incurred (2021: £1.1m loss).
The Bioplastics division saw a decrease in sales to £4.4m (2021: £4.8m)
representing an 8.4% decline and loss before taxation of £0.7m (2021: £0.6m
loss). The division recorded a higher LBITDA of £0.4m (2021: £0.2m LBITDA)
as sales decreased.
The RF Technologies division's revenues, after elimination of intercompany
sales, were up 91.6% to £1.8m (2021: £0.9m) reflecting the recovery in
demand for the division's products. Profit before taxation increased to £0.2m
(2021: £0.1m lLoss before taxation). The division reported an EBITDA of
£0.2m for the year (2021: £nil) and an operating profit of £0.2m (2021:
£0.1m operating loss).
Cash and debt
The Group's cash balances as at 31 December 2022 were £0.8m (31 December
2021: £1.0m) reflecting trading losses for the year offset by lower working
capital. The Group had no debt, other than leases in respect of right of use
assets as at 31 December 2022 (2021: £nil). Capitalised product development
in the Bioplastics division was £0.4m (2021: £0.3m).
On 31 March 2023, the Company announced a proposed issue of Convertible Loan
Notes to raise £850,000 (before expenses) which completed on 18 April 2023.
The Board had for several months been reviewing potential funding options for
the Company to support the medium-term funding needs of the Group and its
businesses and concluded that the issue of the Convertible Loan Notes was the
best available option in the circumstances. The Board is hopeful that this
funding will support the growth of the Group towards a position of operating
cash flow sustainability over time.
Following the recent fundraise the Group's gross cash balances as at 18 April
2023 were £1.3m, post receipt of funds from Convertible Loan Notes.
Strategy
The Group's strategy is set out in the strategic report on pages 6 to 14 of
the report and accounts for the year ended 31 December 2022.
Economic conditions around the world including higher interest rates and
energy costs have led us to anticipate lower growth rates generally than
previously. Accordingly, we are altering our medium-term growth aspirations
for the Bioplastics division to 25% per annum from 40%. We believe that this
is a more realistic target for our business in the current macro-economic
circumstances and is consistent with market expectations.
The following actions/undertakings have been specifically set by the
Bioplastics division to drive the overall growth target:
1. grow sales to existing customers where we have built
substantial positions;
2. successfully introduce the 'home' compostable material to our
end-customers;
3. expand the number of end-customers using our filtration mesh
material primarily within the beverage industry;
4. convert new customers to the use of our materials in
compostable film in the packaging segment; and
5. expand the number of customers using our rigid materials in
defined performance applications (e.g. coffee pods, tree shelters).
The RF Technologies division is expanding into new sectors by further
exploiting its thermal process solutions knowhow based on induction,
dielectric and resistance heating technologies with the objective of growing
its sales by more than 25% per annum and with more than 50% of its sales
coming from sectors other than its historic core fibre-optic market over the
long-term.
Board
As noted in the circular to shareholders dated 31 March 2023, the Board is in
discussions with a view to Martin Rushton-Turner joining the Board as a
non-executive director following the Company's 2023 annual general meeting.
Race to Zero
Biome Technologies signed up to the United Nations Race to Zero Climate
Campaign and is committed to reducing its carbon emissions in line with
publicly disclosed targets. Our reporting of actual greenhouse gas emissions
and medium-term targets commences in these Statements and demonstrate good
initial reductions of Scope 1 and 2 emissions (direct energy use) against the
recent baseline. Plans have been developed to drive progress towards both 2030
and 2050 targets.
Our Bioplastics division's products are, where appropriate, subject to
individual Life Cycle Analysis (LCA) that encompass the Group's full supply
chain. This allows decision making for Biome and its customers on how to
minimise climate impact. In due course, we will look to extend our broader
Group reporting beyond Biome's boundary, to include Scope 3 emissions (those
from toll manufacture, growing, extraction, manufacture, and processing of the
raw materials used) as robust data becomes available.
Outlook
We believe the Group is positioned well for further growth in the current and
for future years.
The Bioplastics division will continue to benefit from the global move to more
sustainable materials as it continues to broaden its product and customer
portfolio particularly in the area of 'home composting'. The product
development and commercial foundations laid previously provide a base from
which to accelerate a number of opportunities during 2023 and beyond.
The RF Technologies division has a good pipeline of opportunities for 2023
that are diversified beyond the historical fibre optic focus and we are
confident that these will convert to important new orders with deliveries
expected during the second half of the year.
As stated in the Company's announcement of 31 March 2023, trading in the first
quarter of 2023 was in line with the previous guidance, with some improvement
in sales mix, but there is much to do yet to achieve our ambitions for the
year. We remain cautious in these difficult economic times and our outlook
for the year consequently remains unchanged relative to current market
expectations.
John Standen
Chairman
25 April 2023
Strategic Report
Biome Technologies plc aims to be a growth orientated, commercially driven technology group. Its strategy is founded on building market-leading positions based on its technology, intellectual property and serving international customers in the bioplastics and radio frequency heating sectors.
We pursue this ambition by developing products in application areas where value-added pricing can be justified and that are not reliant on government legislation. The growing portfolio of products is driven by customer requirements and compatible with existing manufacturing processes. They are market rather than technology led.
The directors consider its shareholders, employees, customers and suppliers as its key stakeholders and the divisional analysis below outlines the strategies that have been adopted to promote the success of the Group and to meet its objectives.
Bioplastics division
The Bioplastics division achieved sales revenue of £4.4m (2021: £4.8m), a
decrease of 8.4%. This decrease in reported revenues, compared to the
performance in 2021, was attributable to lower demand from a long-standing
customer as they reduced their inventory holding ahead of an anticipated
switch from industrially to home compostable packaging and as other demand
factors impacted their own business. Additionally, an expected ramp-up in
production at one of our end-customers for filtration mesh was delayed and
only commenced in the final quarter of 2022. Whilst the delay was
disappointing, the ramp-up in offtake went well and we can confirm that this
end-customer has continued to purchase from the division via its distributor,
in line with our expectations through the first quarter of 2023.
The industry-wide logistics challenges which were encountered throughout 2021
eased to some extent during 2022 and whilst not back to pre-pandemic levels of
performance, lead-times for both sea-freight and road logistics have become
more predictable. However, many of the division's customers continued to
suffer logistics, macro-economic disruption and labour issues during 2022 as
the world adjusted to post-pandemic demand and inflationary pressure.
The division's operating loss for the year was £0.7m (2021: £0.6m loss),
with the lower sales volume being offset somewhat by a more profitable mix.
Markets
Plastics and their use or misuse by humanity remains a key environmental topic
of focus around the world. There is sustained pressure from consumers, media
and governments to reduce the environmental impact of plastics. In recent
years the focus of this pressure has been on the "end-of-life" of such
materials, how they are disposed of and the consequences of fugitive release
to the environment. In addition, with rising concerns regarding climate change
and the pursuit of "Net Zero" strategies by governments, there is greater
interest in how such materials might also be manufactured with lower carbon
footprints.
The compelling case for compostable (biodegradable) bioplastics often lies in
their ability to ensure that organic food waste reaches appropriate treatment
(e.g. industrial scale anaerobic digestion and composting facilities) and that
the resulting digestate and compost does not contain persistent plastic
contamination when finally spread to soils. This case is driving the growth of
the compostable packaging market around the world in sectors such as food
waste bags, coffee pods, tea bags and other food contaminated packaging
formats.
The growth of the compostable plastics market is often facilitated when there
is a clear route for food waste and food contaminated packaging to reach
appropriate sorting and treatment facilities. This requires appropriate
labelling, user education, collection, sorting and treatment capacity. The
quality of such disposal supply chains for "Industrially compostable"
materials varies considerably by geographic territory and often within
countries. There is, in general, a move to improve and scale-up such
activities to prevent food waste reaching landfill with its resultant release
of methane (a significant Green House Gas).
The consumer desire to change the plastic landscape is pulling through
increased demand for compostable plastics at a rate that is faster than (often
government controlled) collection and disposal supply chains are able to
adapt. As a result, there is increased demand from the market for bioplastics
that can be composted at home - known as "Home Compostable" products. Whilst
it is a minority of the population that has the access and/or desire to treat
organic waste and packaging at home, those that can, are often highly
motivated to treat such waste in their gardens. This adoption by enthusiasts
is driving the compostable plastics market towards the production and
certification of products that are suitable for this end-of-life solution.
Such products are required to compost at lower temperatures and in less well
managed conditions than can be expected at industrial facilities. Home
Compostable bioplastics have the added benefit of degrading faster than
Industrially Compostable bioplastics in industrial facilities.
Compostable (biodegradable) bioplastics do not provide a panacea for the
plastics litter problem. They are not (in general) designed to biodegrade in
the open environment such as water courses or soils and so are not the answer
to such pollution. However, in certain application areas it makes sense to
tailor bioplastic materials for such fates to prevent the accumulation of
micro-plastics in the environment. Specific end-uses are in agriculture and
forestry where plastic can be compelling for productivity but is often not
collected or collectable.
The case for bio-based bioplastics is driven by the growing scientific
evidence that the use of biogenic inputs reduces the carbon footprint of such
materials and will in time lead to a more sustainable plastics industry. There
are a limited number of territories that legislatively require bio-based
inputs in some plastics, but it might be expected that this trend is likely to
accelerate. There is some evidence that some consumers will choose bio-based
materials when offered a choice, but this appears, at present, to rank behind
the desire for compostable functionality.
The division's main market of focus is North America where the scale of
adoption of compostable bioplastics has accelerated in recent years. This has
been driven by environmental awareness and facilitated by the deployment of
end-of-life composting capability. The mid-size food and beverage providers
have led the move away from conventional plastics as they seek to
differentiate their products from those of the major brands. The division has
undertaken manufacturing at two locations in North America for some years and
has provided technical support from both local and travelling personnel. In
2022 this market presence has been reinforced by the location of a Business
Development Manager in Canada and the establishment of legal entities (Biome
Bioplastics Inc.) in both Canada and the USA with supporting back-office
capability. It is intended that these changes will provide the division's
customers with a more "local" experience and help drive further revenue
growth.
The UK market has been somewhat slower to embrace compostable and bio-based
materials than some other territories. Whilst there is considerable focus on
plastic waste, there is still a continuing debate of how best to manage this
problem. The local council control of the disposal supply chain and its wide
variability is seen by some as part of the problem and a move in England
towards universal food waste collection in the latter half of this decade
presents an opportunity for compostable plastics. At present, the UK market
remains a smaller part of the Bioplastics division's short-term focus with the
more immediate sales opportunities and growth being in the US market.
Cost and functionality will remain key hurdles over the widespread adoption of
bioplastics over petro-chemical plastics. Current adoption is therefore driven
by consumer pull, and their willingness to pay a premium for
biodegradability/compostability, or government legislation. To overcome these
hurdles the Group's Bioplastics division focuses on areas of the market where
there is a high technical performance requirement, the cost of the biomaterial
is a small fraction of the end product price, and where there is a consumer
willingness to convert to a biodegradable material.
Research and development within the Bioplastics division is therefore focussed
on these three areas and in particular targeted towards customer requirements
for a biodegradable solution. The commercial lifecycle of our product
developments can be categorised in the following stages of the product
lifecycle:
· Research Phase - technology and product development occurring
within Biome's own laboratories or at external support facilities
· Development Phase - the product is being developed and tested
with small scale supplies to customers for end use testing
· Initial Manufacturing Phase - the product is signed off by the
customer as suitable for its requirements and is now undergoing significant
long-term testing to ensure the end product can be run in commercial
quantities across the supply chain
· Commercial phase - the product has been through the above phases
with the customer and is now achieving regular and significant sales with the
end product being purchased and used by the final consumer
A number of important end-customer opportunities of scale are being pursued by
the Bioplastics division. These opportunities are at various stages of
progress and, whilst encouraging, can be subject to technical, operational and
commercial delays until they reach full commercialisation. A selected few of
these opportunities have been outlined in Regulatory News Service
announcements made by the Company and are updated below. They are not included
in management's expectations for the financial outturn of 2023:
Filtration mesh Rigid parts Filmic (packaging) materials
Name: Alternate coffee format Name: Second pod opportunity Name: Labels
Market: USA commercial coffee Market: North America consumer pods Market: North America, global
Supply: Materials and manufacturing in USA Supply: Materials (in part) from Asia. Manufacturing in North America Supply: Manufacturing envisaged in North America and Europe
Comment: Customer paid development; success rests on Biome's Home Compostable Comment: Technical challenges overcome at small scale; larger scale Comment: Initial technical validation completed; relies on Biome's Home
technology; launch has been delayed previously operational testing completed Compostable technology (in part); engagement at brand and converter level
Progress Q1 2023: Further samples manufactured in two separate trials, further Progress Q1 2023: Commercial discussions continue but without firm commitments Progress Q1 2023: Technical and commercial engagement continues, parties in
certification testing required - customer now auditing production site for to launch timelines supply chains becoming more defined
quality compliance
Name: Third pod opportunity Name: Treeguards Name: UK packaging
Market: North America consumer pods Market: UK, global Market: North America, Australia fresh food packaging
Supply: Materials and manufacturing in USA Supply: Multi-stage manufacturing process Supply: European supply chain with some materials from Asia
Comment: Early stage Comment: Main technical challenges overcome; performance in field being Comment: Initial quantities for validation shipped; validation for Australian
validated; operational ramp-up phase certification required
Progress Q1 2023: Engagement increased and early lab-based trials undertaken
with good customer interest Progress Q1 2023: Larger scale production campaign completed, further Progress Q1 2023: Further application testing complete and Australian
operability improvements planned validation commenced
Technical Development
The Bioplastics division's development work remains focussed on innovative
developments where there is a customer requirement for the product and a
willingness to pay a premium for the functional and environmental attributes.
During 2022, the development team worked on a variety of technical challenges
that included the development of a range of home compostable materials for
different applications, the improvement of oxygen and vapour barrier
performance, the soil degradability of materials to be used in tree protectors
and the improvement of temperature performance for a variety of end-uses. The
home compostable work gained traction in the year, an important patent filing
was made in this area and deployment of this technology in a variety of
customer applications moved into the Initial Manufacturing Phase.
The Bioplastics division also continued its work in utilising advanced
Industrial Biotechnology. This research focuses on the transformation of
lignocellulose (often sourced from agricultural waste) into bioplastics using
microbial and enzymatic routes. These routes are enabled using cutting edge
synthetic biology techniques. If successful, it is anticipated that this work
will result in bioplastics with improved functionality at a cost comparable to
current petroleum-based plastics. This development work continues to be
supported by research grants and much of the work is undertaken in
collaboration with leading UK universities. The scale at which the
polymerisation activities have been carried out has been increased over the
last twelve months and the differentiated performance of materials is better
understood. An important 18 month sub-project (supported by Government
funding) started in the year with Thomas Swan and the University of
Nottingham. This work will explore the production of novel polymers at pilot
scale in facilities with the capability to manufacture at commercial scale in
due course.
RF Technologies division
The RF Technologies division, through the use of radio frequency technology,
creates innovative solutions for thermal process applications. The division's
products are renowned for their quality and durability. The division's systems
are designed and manufactured to provide exceptional sealing, welding and
heating process solutions to a wide variety of commercial sectors.
The division's traditional core offering has been the supply of fibre optic
furnaces. This market has been suppressed since 2018 with little sign of a
return to the levels seen previously. The focus for the RF Technologies
division since 2018 has been to develop alternative markets for its
technology. This has been challenging but we are pleased to report that 2022
saw a strong improvement in both order intake and sales. Significant orders
were for food packaging and medical equipment markets as well as a good base
level of activity in aerospace and nuclear waste management sectors. Total
division revenues in 2022, after the elimination of intercompany sales, were
£1.8m (2021: £0.9m) representing an 91.6% improvement. As a consequence of
the improved sales the division achieved an operating profit for the period of
£0.2m (2021: £0.1m loss).
The business currently focuses on four main revenue streams:
Induction Heating Equipment
The division sells bespoke induction heating equipment into a variety of
application areas. These systems are destined mainly for the UK and
Continental European market but in recent years some have been shipped to
North America. Whilst this has been a small part of the division's sales it is
a strategic aim to increase the product offering and expand sales of this type
of equipment. Speciality focus areas include medical, food and industrial
heating where RF technology can provide both control and efficiency benefits.
The division works both with end-customers and "system integrators" providing
complete factory solutions.
Optical Fibre Furnace Systems
The RF Technologies division is a world leader in the design and manufacture
of induction furnace systems used in the manufacture and processing of silica
glass "preforms" to produce optical fibre. Each system is bespoke to
customers' exact requirements. There has been a sustained period of
overcapacity in the fibre-optic manufacturing industry but investment in
maintenance and upgrades of existing equipment is now at normal levels. It is
expected that as demand for fibre optic cable grows further furnace systems
will be ordered but it is not possible to predict the timing and scale of
further orders.
Plastic Welding Equipment
These units are used in a multitude of end-user applications including the
nuclear, medical and industrial sectors. The equipment is provided in either
hand-held, mobile or fully automated static solutions, dependent on customers'
requirements.
Service and Spares
The business continues to support its large installed equipment base through
the provision of maintenance support, system upgrades and specialist spares
across the globe. This provides an underlying base load of revenues for the
division.
Race to Zero
Biome Technologies is signed up to the United Nations Race to Zero Climate
Campaign and is committed to reducing its carbon emissions in line with
publicly disclosed targets. Our reporting of actual greenhouse gas emissions
and medium-term targets continues in these Statements. Plans have been
developed to drive progress towards both 2030 and 2050 targets.
Our Bioplastics division's products are subject to individual Life Cycle
Analysis (LCA) that encompass the full supply chain where appropriate, and we
will look to extend our broader Group reporting to include Scope 3 emissions
(those from toll manufacture, growing, extraction, manufacture, and processing
of the raw materials used) as robust data becomes available.
Principal Risks and Uncertainties
Biome is subject to a number of risks. The Directors have set out below the
principal risks facing the business. The Directors continually review the
risks identified below and, where possible, processes are in place to monitor
or mitigate all of these risks.
Risk Nature Mitigation strategies Change in year
Customers and customer concentration The Group's ability to generate revenues for a number of its products is The Group works closely with its customers with the aim of ensuring that its ▼ One of the customers accounting for more than 15% of sales in 2021 had a
reliant on a small number of customers. If one of these customers was to products evolve in line with their requirements. In addition, the Group is significant decline in activity. This resulted in an overall reduction in
significantly reduce its orders, then this could have a significant impact on continually seeking to add to its customer base and, as its revenues grow, sales in the Bioplastics division. This was offset by increased activity to
the Group's results. seeks to become less dependent on any single customer. other end-customers but with increased dependency on our largest customer.
Suppliers and Raw Materials The Group's products and manufacturing processes utilise a number of raw To mitigate this risk the division is seeking to validate new materials coming ► Supply chains, overall, became more stable in 2022 and the mitigating
materials and other commodities. In particular the Bioplastics division onto the market which may be used in substitution. steps taken by both divisions were, on the whole, effective.
requires several key raw materials to manufacture its biodegradable polymer
resins. There are very few suppliers of these key raw materials and with the To mitigate increased shipping lead-times the Bioplastics division is working
current increased demand for biodegradable products there is a risk that the closely with customers to improve visibility and forecast accuracy to ensure
division may not be able to purchase the required volumes of materials to meet materials are ordered sufficiently far in advance to ensure that they are
customer demand or that prices may be increased at short notice. available to meet demand.
The Bioplastics division sources raw materials internationally, some of which The RF Technologies division has adopted an agile design and sourcing strategy
are bulk shipped via sea freight mainly to the US. to overcome the long lead-times for electronic products.
Within the RF Technologies division we are reliant on electronic subsystems
that have extended global supply chains. Lead-times increased during 2022 due
to semiconductor shortages and various Covid-19 lockdowns in China.
Intellectual Property Although the Group attempts to protect its intellectual property, there is a The Group takes professional advice from experienced patent attorneys and ▲ The Group continues to develop its intellectual property and has made good
risk that patents will not be issued with respect to applications now pending. works hard to win patents applied for and to ensure that the scope is progress with home compostable innovation which resulted in a patent
Furthermore, there is a risk that patents granted or licensed to Group sufficiently broad. application being made in early 2022.
companies may not be sufficiently broad in their scope to provide protection
against other third-party technologies. The Group keeps up to date with its competitors' product developments and Our growing knowledge in home compostable technology and know-how is
patent portfolios and aims to ensure that no infringements occur. Professional increasingly important as this is a key driver for the compostable materials
Other companies are actively engaged in the development of bioplastics. There advice is sought from experienced patent attorneys if there are any concerns. market.
is a risk that these companies may have applied for (or been granted) patents
which impinge on the areas of activity of the Group. This could prevent the
Group from carrying out certain activities or, if the Group manufactures
products which breach (or may appear to breach) such patents there is a risk
that the Group could become involved in litigation which could be costly and
protracted and ultimately be liable for damages if the breach is proven.
Commercialisation of New Products There is a risk that the Group will not be successful in the commercialisation The Directors ensure that regular reviews of product development are ► The Group has consistently achieved revenues from new product
of its products from early-stage research and development to full-scale undertaken so that unsuccessful developments can be terminated early in their introductions and continues to focus on market opportunities and customers
commercial sales. The Group develops a number of products, and some may not life cycle. Impairment testing of the capitalised costs is performed twice a that value our products and technology.
prove to be successful. Specifically, the risks associated with the product year with any impaired capitalised costs written off.
life cycle are as follows:
The Group seeks Innovate UK grants to mitigate the cost of earlier stage
· Research and Development phase - the development of the products research that carries the greatest risk.
may prove not to be technically feasible or do not exactly match the perceived
customer need The Group works closely with customers to identify applications that are most
likely to progress through to commercialisation. This process involves a
· Initial manufacturing phase - whilst the product matches the multifunctional approach including sales, technical, operational and finance
customer needs it may not be able to be produced at the required commercial personnel to test commercial and technical viability to the greatest extent
speeds and/or at the required efficiency and quality possible before investments are made.
· Commercialisation phase - the product may be superseded either
through price or a competitor product being more advanced
In addition to the principal risks the Group is subject to a range of other
risks and uncertainties. The Board maintains a risk register and reviews this
biannually to ensure that the Group's operations management identifies actual
and potential risks and develops appropriate mitigating activities to ensure
that these risks are managed.
These risks, which also apply to many other industries and businesses,
include:
· Financial
· Political, Economic and Regulatory Environment
· Exchange rate fluctuations
· Competition
· Brexit
· Health and Safety (including Covid-19)
· Cyber Security
· Ongoing geo-political insecurity (including the Russian invasion
of Ukraine)
Financial review
The KPIs which the Board uses to assess the performance of the Group are
detailed in the Chairman's Statement. The Chairman's Statement forms part of
the Strategic Report.
The summary results for the Group are shown below:
Like-for-like comparisons 2022 2021 Growth
£'m £'m
Revenues
Bioplastics 4.4 4.8 (8.4%)
RF Technologies 1.8 0.9 91.6%
Reported Group revenues 6.2 5.7 7.9%
(L)/EBITDA
Bioplastics (0.4) (0.2)
RF Technologies 0.2 -
Central Costs (0.2) (0.4)
Reported (L)/EBITDA (0.4) (0.6)
less depreciation, amortisation and equity share option charges:
Bioplastics (0.3) (0.4)
RF Technologies - (0.1)
Central Costs (0.1) -
(0.4) (0.5)
(Loss)/Profit from Operations
Bioplastics (0.7) (0.6)
RF Technologies 0.2 (0.1)
Central Costs (0.3) (0.4)
Operating Loss (0.8) (1.1)
Net Assets
Non-current assets 1.3 1.2
Inventories 0.7 0.9
Trade and other receivables 0.6 1.4
Tax receivable 0.1 0.1
Cash 0.8 1.0
Trade and other payables (0.9) (1.3)
Long term lease commitments (0.3) (0.4)
Net assets 2.3 2.9
Revenues
Reported Group revenues for 2022 were £6.2m (2021: £5.7m) reflecting the
increased sales in the RF Technologies division partly offset by lower sales
of Bioplastics division products. Good order intake in the final quarter of
2022 and first quarter of 2023 for the Bioplastics division and continuing
growth in the opportunity pipeline for the RF Technology division indicates
that positive momentum will be maintained over the longer-term.
(L)/EBITDA
Reported (Loss) / Earnings Before Interest, Taxation, Depreciation and
Amortisation ((L)/EBITDA) for the year was a loss of £0.4m (2021: £0.6m
loss). The improved LBITDA is a direct result of the higher revenues in the RF
Technologies division.
Operating Profits/(Losses)
The Group recorded an operating loss for the year of £0.8m compared to an
operating loss of £1.1m in the prior year.
Administrative expenses across the Group in 2022 were £3.3m (2021: £3.4m).
When the non-cash effects of depreciation, amortisation and equity settled
share option charges are removed, the cash administrative expenses in 2022
marginally increased to £3.0m (2021: £2.9m).
Investment in product research and development was £1.0m in the year (2021:
£1.0m), which includes the research work in grant backed Industrial
Biotechnology, of which £0.4m (2021: £0.3m) was capitalised in the year. Tax
R&D claims resulted in a credit being recognised in the year of £131,000
(2021: credit of £29,000) and other income from the Research and Development
Expenditure Credit scheme of £6,000 (2021: £50,000).
The Group recorded a loss after tax for the year of £0.7m (2021: £1.1m
loss), giving a basic and diluted loss per share of 18p (2021: loss per share
of 30p).
Statement of Financial Position
The carrying value of intangible assets relates to capitalised development
costs predominantly within the Bioplastics division for development of the
Group's own intellectual property and product range.
As at 31 December 2022, there was £0.8m of capitalised development costs
(2021: £0.7m) within the Group's statement of financial position, of which
£0.5m relates to Biome Mesh. An assessment is made at least annually which
assumes future potential market take up of the products and the margins
achievable.
Cashflow
2022 2021
£'000 £'000
Loss from operations (767) (1,135)
Adjustment for non-cash items 339 489
Movement in working capital 607 69
Cash generated/(utilised) by operations 179 (577)
Investment activities (392) (266)
R&D Tax credit 79 239
Interest paid (35) (34)
Financing activities (50) (44)
Net decrease in cash (219) (682)
Opening cash balance 996 1,678
Exchange differences on cash and cash equivalents 2 -
Closing cash balance 779 996
The cash utilised in operations, before working capital movements, was £0.4m (2021: cash utilisation of £0.6m). Working capital movements generated £0.6m cash in the year (2021: £0.1m generation).
Investment in the year in capitalised product development and capex was £0.4m (2021: £0.3m). Financing activities in the year represented repayments of obligations under finance leases and rounded to a net £0.1m (2021: net £nil). R&D tax credits of £0.1m were received during 2022 (2021: £0.2m).
The resultant closing cash position was £0.8m (2021: £1.0m).
Going Concern
The financial statements have been prepared on a going concern basis as the
directors believe that the Group has access to sufficient resources to
continue in business for the foreseeable future. This is discussed more fully
in the Directors' Report on pages 15 to 18 of the 2022 annual report and
accounts.
The key business risks and conditions that may impact the Group's ability to
continue as a going concern are the utilisation of existing resources to
finance growth, investment and expenditure; the rates of growth and cash
generated by group revenues, the timing of breakeven and positive cashflow
generation and the ability to secure additional debt or equity financing in
future if this became necessary. The primary area of judgement that the Board
considered, in the going concern assessment, related to revenue expectations
and visibility.
The Board was mindful of the guidance surrounding a severe but plausible
assessment and, accordingly, considered a number of scenarios in revenue
reduction against the original plans. A reverse stress test was constructed to
identify at which point the Group might run out of its available cash. The
test was designed specifically to understand how far revenue would need to
fall short of the base case forecast and does not represent the directors view
on current and projected trading. The test was modelled over a 24-month period
commencing 1 January 2023 and was based on budgeted trading that took into
account contracted orderbook, existing revenue streams from current customers
/ products, expected revenue based on management's judgement of the likelihood
of converting current sales opportunities and the net proceeds from the
Convertible Loan Notes announced on 31 March 2023. The sales revenue in the
budgeted model was reduced evenly across the Group to the point where the
projected month-end cash was equal to zero at any point during the 24-month
cycle. In the model, zero month-end cash was reached in May 2024 when
projected sales revenue was reduced to 87.1% of budget. Since the guidance for
going concern is usually based on a period of 12-months from the date of
signing the accounts, a further reverse stress test was conducted over a
period to 30 April 2024. In this test reducing sales to 85.4% of budgeted
level resulted in a zero month-end cash position at 31 March 2024. For the
reverse stress test, the Board specifically excluded any significant upsides
to this scenario. This is despite strong incremental demand potential at both
existing and new customers in the Bioplastics or RF Technology divisions. This
most severe scenario also excludes any mitigating reduction in the cost base
that the Board would clearly undertake in this event or utilisation of the
Group's invoice discounting facility. In all scenarios modelled, including
the reverse stress test, the Group has sufficient resources to operate and
meet its liabilities throughout the going concern review period without the
inclusion of the impact of mitigating actions.
At 31 December 2022, the Group had a net cash balance of £0.8m and as at 18
April 2023 a balance of £1.3m, post receipt of funds from Convertible Loan
Notes. On a revised base case scenario adopted for their assessment, the Board
is comfortable that the Group can continue its operations for at least a
12-month period following the approval of these financial statements.
As a result of this review, which incorporated sensitivities and risk
analysis, the Directors believe that the Group has sufficient resources and
working capital to meet their present and foreseeable obligations for a period
of at least 12 months from the approval of these financial statements.
Consolidated statement of comprehensive income
For the year ended 31 December 2022
Note 2022 2021
£'000 £'000
REVENUE 5 6,188 5,734
Cost of goods sold (3,857) (3,794)
GROSS PROFIT 2,331 1,940
Other operating income 211 364
Administrative expenses (3,309) (3,439)
LOSS FROM OPERATIONS (767) (1,135)
Finance charges (35) (34)
LOSS BEFORE TAXATION (802) (1,169)
Taxation 8 131 29
LOSS AND TOTAL COMPREHENSIVE LOSS FOR THE YEAR (671) (1,140)
Basic loss per share - pence (18)p (30)p
Diluted loss per share - pence (18)p (30)p
Consolidated statement of financial position
as at 31 December 2022
2022 2022 2021 2021
£'000 £'000 £'000 £'000
NON-CURRENT ASSETS
Other intangible assets 841 726
Property, plant and equipment 498 502
1,339 1,228
CURRENT ASSETS
Inventories 736 920
Trade and other receivables 605 1,377
Tax receivable 141 79
Cash and cash equivalents 779 996
2,261 3,372
TOTAL ASSETS 3,600 4,600
CURRENT LIABILITIES
Trade and other payables 933 1,298
Lease liabilities 55 40
988 1,338
NON-CURRENT LIABILITIES
Lease liabilities 354 361
354 361
TOTAL LIABILITIES 1,342 1,699
NET ASSETS 2,258 2,901
EQUITY
Share capital 189 189
Share premium account 2,282 2,282
Capital redemption reserve 4 4
Share options reserve 102 487
Translation reserves (83) (85)
Treasury shares reserve (55) (55)
Retained earnings (181) 79
TOTAL EQUITY 2,258 2,901
Consolidated statement of changes in equity
as at 31 December 2022
Share capital Share premium account Capital redemption reserve Share options reserve Translation reserve Treasury Shares Retained earnings TOTAL EQUITY
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 189 2,282 4 487 (85) (55) 79 2,901
Currency translation movement arising on consolidation - - - - 2 - - 2
Other movements - - - - - - 26 26
Lapsed options - - - (385) - - 385 -
Transactions with owners - - - (385) 2 - 411 28
Loss for the year - - - - - - (671) (671)
Total comprehensive loss for the year - - - - - - (671) (671)
Balance at 31 December 2022 189 2,282 4 102 (83) (55) (181) 2,258
Balance at 1 January 2021 186 2,200 4 617 (85) - 1,062 3,984
Share options issued in share-based payments - - - 48 - - - 48
Issue of share capital 3 82 - - - - - 85
Purchase of own shares - - - - - (122) - (122)
Sale of treasury shares - - - - - 67 (21) 46
Exercise of share options - - - (170) - - 170 -
Lapsed options - - - (8) - - 8 -
Transactions with owners 3 82 - (130) - (55) 157 57
Loss for the year - - - - - - (1,140) (1,140)
Total comprehensive loss for the year - - - - - - (1,140) (1,140)
Balance at 31 December 2021 189 2,282 4 487 (85) (55) 79 2,901
Consolidated statement of cash flows
For the year ended 31 December 2022
2022 2021
£'000 £'000
Loss after taxation (671) (1,140)
Adjustments for: -
Taxation (131) (29)
Finance charges 35 34
Loss from operations (767) (1,135)
Adjustments for: -
Amortisation and impairment of intangible assets 250 353
Depreciation of property, plant and equipment 89 88
Share based payments - equity settled - 48
Operating cash flows before movement in working capital (428) (646)
Decrease/(increase) in inventories 184 (174)
Decrease in receivables 762 13
(Decrease)/increase in payables (339) 230
Cash generated from / utilised in operations 179 (577)
Corporate tax received 79 239
Interest paid (35) (34)
Net cash inflow / (outflow) from operating activities 223 (372)
Investing activities
Investment in intangible assets (365) (258)
Purchase of property, plant and equipment (27) (8)
Net cash used in investing activities (392) (266)
Financing activities
Proceeds from issue of share capital - 1
Repayment of obligations under leasing activities (50) (45)
Net cash used in financing activities (50) (44)
Net decrease in cash and cash equivalents (219) (682)
Cash and cash equivalents at the beginning of the year 996 1,678
Exchange differences on cash and cash equivalents 2 -
Cash and cash equivalents at the end of the year 779 996
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2022
1. NON-STATUTORY FINANCIAL STATEMENTS
The financial information set out in this preliminary results announcement
does not constitute the Group's statutory financial statements for the year
ended 31 December 2022 or 2021 but is derived from those financial
statements. Statutory financial statements for 2021 have been delivered to
the Registrar of Companies. Those for 2022 will be delivered following the
Company's Annual General Meeting on 25 May 2023. The auditors have reported
on those accounts: their reports on those financial statements were
unqualified and did not contain statements under Section 498 of the Companies
Act 2006.
The financial statements, and this preliminary statement, of the Group for the
year ended 31 December 2022 were authorised for issue by the Board of
Directors on 25 April 2023 and the statement of financial position was signed
on behalf of the Board by Paul Mines and Rob Smith.
2. BASIS OF PREPARATION
The Group's financial statements have been prepared in accordance with
UK-adopted international accounting standards.
3. BASIS OF CONSOLIDATION
The Group financial statements consolidate the results of the Company and all
of its subsidiary undertakings drawn up to 31 December 2022. Subsidiaries are
entities over which the Group has control. Control comprises an investor
having power over the investee and is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power. At 31 December 2022 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 (dormant).
4. GOING CONCERN
The financial statements have been prepared on a going concern basis as the
directors believe that the Group has access to sufficient resources to
continue in business for the foreseeable future. This is discussed more fully
in the Directors' Report on pages 15 to 18 of the report and accounts for the
year ended 31 December 2023.
The key business risks and conditions that may impact the Group's ability to
continue as a going concern are the utilisation of existing resources to
finance growth, investment and expenditure; the rates of growth and cash
generated by group revenues, the timing of breakeven and positive cashflow
generation and the ability to secure additional debt or equity financing in
future if this became necessary. The primary area of judgement that the Board
considered, in the going concern assessment, related to revenue expectations
and visibility.
The Board was mindful of the guidance surrounding a severe but plausible
assessment and, accordingly, considered a number of scenarios in revenue
reduction against the original plans. A reverse stress test was constructed to
identify at which point the Group might run out of its available cash. The
test was designed specifically to understand how far revenue would need to
fall short of the base case forecast and does not represent the directors view
on current and projected trading. The test was modelled over a 24-month period
commencing 1 January 2023 and was based on budgeted trading that took into
account contracted orderbook, existing revenue streams from current customers
/ products, expected revenue based on management's judgement of the likelihood
of converting current sales opportunities and the net proceeds from the
Convertible Loan Notes announced on 31 March 2023. The sales revenue in the
budgeted model was reduced evenly across the Group to the point where the
projected month-end cash was equal to zero at any point during the 24-month
cycle. In the model, zero month-end cash was reached in May 2024 when
projected sales revenue was reduced to 87.1% of budget. Since the guidance for
going concern is usually based on a period of 12-months from the date of
signing the accounts, a further reverse stress test was conducted over a
period to 30 April 2024. In this test reducing sales to 85.4% of budgeted
level resulted in a zero month-end cash position at 31 March 2024. For the
reverse stress test, the Board specifically excluded any significant upsides
to this scenario. This is despite strong incremental demand potential at both
existing and new customers in the Bioplastics or RF Technology divisions. This
most severe scenario also excludes any mitigating reduction in the cost base
that the Board would clearly undertake in this event or utilisation of the
Group's invoice discounting facility. In all scenarios modelled, including
the reverse stress test, the Group has sufficient resources to operate and
meet its liabilities throughout the going concern review period without the
inclusion of the impact of mitigating actions.
At 31 December 2022, the Group had a net cash balance of £0.8m and as at 18
April 2023 a balance of £1.3m, post receipt of funds from Convertible Loan
Notes. On a revised base case scenario adopted for their assessment, the Board
is comfortable that the Group can continue its operations for at least a
12-month period following the approval of these financial statements.
As a result of this review, which incorporated sensitivities and risk
analysis, the Directors believe that the Group has sufficient resources and
working capital to meet their present and foreseeable obligations for a period
of at least 12 months from the approval of these financial statements.
5. SEGMENTAL INFORMATION FOR YEAR ENDED 31 DECEMBER 2021
2022 2021
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Bioplastics RF Central Total Bioplastics RF Central Total
Revenue from sales 4,393 1,809 - 6,202 4,797 1,140 - 5,937
Removal of inter-segment sales - (14) - (14) - (203) - (203)
Total external sales 4,393 1,795 - 6,188 4,797 937 - 5,734
(Loss)/profit from operations (734) 176 (209) (767) (601) (59) (475) (1,135)
Interest received - - - - - - - -
Finance charges - - (35) (35) - - (34) (34)
Loss before taxation (734) 176 (244) (802) (601) (59) (509) (1,169)
Taxation 131 - - 131 29 - - 29
Loss for the year (603) 176 (244) (671) (572) (59) (509) (1,140)
Reconciliation to Loss Before Interest Tax Depreciation and Amortisation
(LBITDA)
(Loss)/profit from operations (734) 176 (209) (767) (601) (59) (475) (1,135)
Depreciation/amortisation 292 43 4 339 395 41 5 441
Share based payments - - - - 13 7 28 48
(L)/EBITDA (442) 219 (205) (428) (193) (11) (442) (646)
Other segmental information
Capital Expenditure
Property, plant and equipment 15 69 1 85 3 12 1 16
Intangible assets 365 - - 365 258 - - 258
Total Capital Expenditure 380 69 1 450 261 12 1 274
Total Assets 2,632 920 48 3,600 3,408 1,156 36 4,600
The Bioplastics division comprises of Biome Bioplastics Limited, Biome
Bioplastics Inc. (USA) and Biome Bioplastics Inc. (Canada).
6. ALTERNATIVE PROFIT MEASURE
The Group, and divisions, define loss before interest, taxation, depreciation
and amortisation ("LBITDA") as the operating loss adjusted for share option
charges, depreciation, and amortisation. The Group LBITDA is reconciled as
follows:
2022 2021
£'000 £'000
Loss from operations per consolidated statement (767) (1,135)
of comprehensive income
250 353
Amortisation
89 88
Depreciation
- 48
Share option charges - equity settled
(428) (646)
7. LOSS PER SHARE
The calculation of loss per share is based on the loss attributable to the
equity holders of the parent for the year of £671,000 (2021: £1,140,000
loss) and a weighted average of 3,742,655 (2021: 3,742,655) ordinary shares
carrying voting rights for basic loss per share and a weighted average of
3,742,655 (2021: 3,742,655) ordinary shares carrying voting rights for diluted
loss per share.
8. TAXATION
In the current year, other income includes £6,000 (2021: £50,000) arising
from Research and Development Expenditure Credit scheme (RDEC) that is
accounted for as a government grant.
The Group has estimated trading losses of £32.9m (2021: £32.0m) available
indefinitely for carry forward against future trading profits. The Group had
capital losses of £1.5m (2021: £1.5m). Deferred tax assets have not been
recognised in respect of these losses as there is insufficient certainty of
future taxable profits against which to utilise them.
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