News blog
Biome Technologies
- BY: Andrew Hore |
- POSTED: 01/09/2011 |
Biome Technologies has cut its interim loss and its bio plastics activities have made an operating profit for the first time.
The Biome Bioplastics business increased revenues by 131% to £3.6m, while the 50%-owned manufacturing joint venture increased revenues 19% to £4.9m. The Biotec joint venture has been hit by raw material shortages, mainly starch, and that has held back its progress but these bottlenecks are easing. This did not harm Biome’s core business or its ability to satisfy demand. Biotec is running at less than 60% of capacity.
The whole bioplastics division turned a £492,000 loss into a £79,000 profit. Biome Bioplastics has been able to develop new variations of its technology so that biodegradable versions of coffee cup lids, food packaging, strimmer cords and plant pots can be made. The overall market is thought to be growing at up to 20% a year.
There was a particularly strong performance from the Stanelco RF Technologies division, which nearly doubled its revenues to £1.86m on the back of a recovery in capital investment. Asia is the main source of demand for its fibre optic furnaces and it almost trebled its operating profit to £450,000.
Group revenues improved from £6.73m to £10.4m in the six months to June 2011. Admin costs have been kept down and this helped the interim operating loss from £1.16m to £382,000. There was also a VAT rebate during the period.
At 0.22p a share, Biome is valued at £13m. Net cash was £3.45m at the end of June 2011. There was a small decline in cash in the period but house broker expects a bigger decline in the second half. There will be a further cash outflow in 2012 as Biome moves towards profitability but Daniel Stewart forecasts that there should be around £700,000 left at the end of 2012.
Daniel Stewart forecast that the underlying loss will fall from £1.8m to £1.1m in 2011 and then fall further to £300,000 in 2012.
Download the August 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFAugust2011_23.pdf
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