REG - Biome Technologies - Trading Update

Biome TechnologiesAnnouncement

13/11/2024 07:00

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RNS Number : 9699L  Biome Technologies PLC  13 November 2024

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.

 

13 November 2024

 

Biome Technologies plc

("Biome", the "Company" or the "Group")

 

Trading Update

 

Biome Technologies plc, a leading bioplastics and radio frequency technology
business, today provides an unaudited trading update for the quarter ended 30
September 2024.

 

Group revenues for the nine months to 30 September 2024 were £3.2m, a 39%
decrease over the same period last year (2023 Q3 YTD: £5.2m), but in line
with management expectations.

 

The Group had a cash balance as at 30 September 2024 of £0.9m (30 September
2023: £0.9m), an unsecured loan from a related party of £63k and no bank
debt.

 

Bioplastics Division

The division's revenues in 2024 Q3 were £0.7m, a 49% decrease compared to
2023 Q3 (2023 Q3: £1.3m). Revenues for nine months to 30 September 2024 were
£2.7m, 38% behind the same period in the prior year (2023 Q3 YTD: £4.4m).

 

These lower revenues were primarily due to continued production and regulatory
difficulties at two of the division's end customers which were discussed in
the Interim Results, and which has subdued revenues throughout 2024.   The
current status with these two end customers is as follows:

 

1.   The relevant certifying body for one end customer which operates in the
coffee pod market required additional laboratory testing to be undertaken at
short-notice. This testing was confirmatory and completed with a positive
result as expected. The completion of formal certification is now expected in
due course and revenue ramp-up is now expected to occur in 2025.

2.  The regulatory difficulties at the other customer have now been overcome,
the product range has been launched by the customer and revenues are now
expected to build for Biome in 2025.

 

The technology behind Biome's products is protected by a portfolio of patents.
In recent days, Novamont S.p.A., one of Biome's competitors, has indicated
they are challenging the grant, by the European Patent Office (EPO), of one of
Biome's recent patents. Biome has invested considerably in such technology and
will defend its intellectual property vigorously.

 

RF Technologies Division

Revenues in the RF Technologies division for 2024 Q3 were £0.1m, compared to
£0.3m in Q3 2023, a decrease of 59%.  Revenues for the nine months to 30
September 2024 were £0.4m (2023 Q3 YTD: £0.8m).

 

The division successfully completed factory acceptance testing of a large
project in August and this has since been shipped to the customer in
preparation for installation.  Revenue for this project will be recognised in
2024 Q4.

 

Three further projects of scale are currently works-in-progress in the factory
in Southampton. Whilst it had been expected that all three of these would be
delivered before the end of the current financial year, ongoing challenges
with the delivery of components makes it more likely that only two of these
will be delivered in the next six weeks with a consequential impact on the
timing of revenue recognition.

 

A £193k contract for the supply of the Group's induction heating equipment
for use in a UK regulated industry was signed in the third quarter. The design
and build is well underway, with delivery and revenues expected in 2025.

 

Board

After over 17 years with the Company as Chairman, John Standen has indicated
his wish and intention to retire and step down from the Board in the
reasonably near term.  The Directors are discussing various options in
relation to the composition of the Board following Mr Standen's departure.

 

Group Outlook

The Bioplastics division continues to work to resolve the end-customer
difficulties encountered in 2024 H1. Whilst good progress is being made, the
unexpected additional testing required for certification described above has
caused a delay to the anticipated ramp up for one of these customers. The
Board has therefore made a further revision to its expectations of revenue and
contribution from the Bioplastics division in 2024 Q4 and therefore for the
full year.

 

The RF division is focused on delivering the large contracts won late last
year and in 2024 H1.  However, owing to ongoing difficulties in the supply
chain for components, the Board anticipates a delay in delivery of one of the
RF division's projects until 2025 Q1, impacting revenues in the final quarter
of 2024 for the division.

 

As a result of the matters set out above, the Board has adjusted its revenue
expectations for Biome in 2024, which are now expected to be below current
market expectations with a consequential impact on profitability.  Despite
this, the Board is encouraged by the progress being made in both divisions to
improve revenue run rates, albeit this improvement is now likely to occur in
2025.

 

-Ends-

 

 For further information please contact:
 Biome Technologies plc

 Paul Mines, Chief Executive Officer
 Donna Simpson-Strange, Company Secretary
 www.biometechnologiesplc.com (http://www.biometechnologiesplc.com)  Tel: +44 (0) 2380 867 100

 Allenby Capital
 David Hart/Alex Brearley/Lauren Wright (Nominated Adviser)

 Kelly Gardiner/Tony Quirke (Sales and Corporate Broking)
 www.allenbycapital.com (http://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 ("Bioplastics") and
Stanelco RF Technologies Limited ("RF Technologies").

 

Biome Bioplastics is a leading developer of highly-functional, bio-based and
biodegradable plastics. The division'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 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)

 

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