reports revenues for its Bioplastics division have performed well despite the upheaval caused by COVID-19 showing a 53% increase during H1 2020.
In a trading update for the six months ended 30 June 2020, total group revenues for the period decreased to £2.6m (1H 2019) but remained in line with the Board’s expectations.
Revenues in the Bioplastics division continued to grow during H1 2020, reaching £2.2m while revenue in the second quarter was £1.2m, slightly above the first quarter and representing a new record for the division, despite the disruption caused by the pandemic.
The strong performance was underpinned by increased sales of outer packaging for the USA coffee market and by growing revenues for rigid ring materials for the coffee-pod market.
However, while the group’s Bioplastics division performed well, revenues for the group’s Stanelco RF division were compromised by both over-capacity in the fibre optic market and the slow-down in industrial activity caused by COVID-19, which the company said remains ongoing. Revenues for Stanelco division were therefore down significantly to £0.4m (H1 2019: £2.2m).
Biome’s cash position at 30 June 2020 stood at £1.1m compared to £1.8m at 31 March 2020 which it said reflects its trading performance and an expected increase in the working capital requirement of the Bioplastics division to support ongoing growth in that business.
Shares in Biome Technologies have traded strongly over the past three months, reaching highs of 200p and opening today at 190p.
Looking ahead, the company said it is confident on the outlook for its Bioplastics division for the remainder of the current financial year given its strong range of products while its order book ‘now extends further forward than the division has ever experienced before.’
However, whilst the fibre optic market is likely to benefit from the pandemic in the long-term as the pace of global digitisation is enhanced to meet certain demands such as increased home working and the 5G roll-out, near-term demand is likely to remain weak.
Whilst refilling of the Stanelco RF division's orderbook has begun ‘in a modest manner’, significant further momentum will be required in the second half of the year to meet the expectations previously set by the Board, the company highlighted.
As a result, the Board has concluded that it is necessary to revise downwards the revenue expectations for the Stanelco RF division for the second half of the year.
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