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Symphony Environmental Technologies

  • BY: Andrew Hore |
  • POSTED: 30/03/2010 |

Degradable plastics additive supplier Symphony Environmental Technologies became a highly cash generative business in 2009.

Net debt fell from £1.25m to £971,000 during the year and house broker Allenby reckons that Symphony could have net cash by the end of 2010.

Revenues grew by 31% to £7.04m in 2009. The d2w additive is sold in more than 90 countries. Central America and the Middle East are the most important markets.

There was a swing from a loss of £398,000 to a profit of £638,000. Earnings per share are flattered by deferred tax credits. There are £12m of tax losses in the group and there is a £993,000 deferred tax asset on the balance sheet. The rest of the tax losses have not been recognised yet but they could reduce significantly over the next couple of years as profits build up.

The carrier bag market is still the core business. Symphony is critical of the Department for Environment and Rural Affairs’ recent report ‘Assessing the Environmental Impacts of Oxo-degradable Plastics Across their Life-Cycle’. Symphony believes that the report did not appreciate the benefits of oxo-degradable plastic when compared with compostable hydro-degradable plastics.

The company’s management has had its first meeting with the Minister following this report and they believe that he has a better understanding of the technology.

At 9.5p a share, Symphony is valued at £11.1m. Allenby forecasts a profit of £1.25m on revenues of £8.2m in 2010. Assuming a nil tax charge, the shares are trading on nine times prospective 2010 earnings. 

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