Symphony Environmental celebrates its 25-year milestone with a strong start to the year
has announced a trading update in its 25th Anniversary year with revenues for the first quarter ended 31 March 2020 increasing 56% to £2.4 million (1Q19: £1.6 million). With a healthy balance sheet with more than £1.0 million available between cash and existing bank facilities.
In the Group's trading update on 17 December 2019 reported certain inventory adjustments by some customers who were awaiting legislative clarification in certain markets, had depressed sales in the final quarter of 2019 with an expectation that these sales would be deferred into the first quarter of 2020. However, inventory levels across the majority of these markets have remained low to date, which suggests 1Q20 revenue does not include any material inventory correction However, the Group continues to expect inventory levels to increase during the year.
The increase in revenue for the first quarter of 2020 is therefore a more general reflection of underlying consumption and the organic growth achieved by our distribution network.
The Group had seen limited effects in some supply-chain areas which have to date been quickly overcome and not resulted in any raw material or manufacturing delays. Some customers have reported cashflow delays within their territories. Our trade receivables are, in the main, credit insured, and our credit insurer has granted an extension of reporting deadlines in order to assist.
Enquiries for our d2p (designed to protect) anti-microbial and other protective products (www.d2p.net) are growing at a much faster pace and we expect to see increased sales as additional protection becomes an everyday necessity.
On 10 March 2020, we announced that we had initiated independent testing of our d2p anti-microbial technology against members of the Coronavirus group, with results expected before the end of June. We can advise, based on scientific literature and research, that the active ingredient used by Symphony does have good anti-viral properties, and the tests will ascertain performance within general plastic products with d2p included. Satisfactory test results would enable d2p treated products to be sold to a wider market, and we will test against COVID-19 itself as soon as independent laboratory capacity becomes available. As reported on 28 February 2020, the Food and Drug Administration (FDA) in the United States approved our anti-bacterial bread-packaging, and this is now on their official website. Some customer trials have already begun, and others are at the planning stage, albeit we acknowledge that COVID-19 may extend trial timetables.
The current situation due to COVID-19 is unprecedented and the overall economic impact is currently unknown. While the Board is encouraged by the resilience shown by the Group and its employees to date, the impact on FY-2020 cannot as yet be fully assessed. Accordingly, the Board believes it would be inappropriate to provide forward looking financial guidance to investors and analysts at this time.
The Board remains confident that the Group is in a strong financial position and is, with its suite of highly relevant technologies, well placed in the current environment.
We anticipate announcing our 2019 preliminary results by 30 April and we will update the market further at that time.
Shares in symphony have moved 11% higher in early morning trading
Michael Laurier, CEO of Symphony commented: "This week marks the 25th anniversary of the formation of the Symphony Group. The Group's suite of technologies has evolved and improved over this considerable period and their global relevance has never been more important, given the enormous impact of the COVID-19 pandemic on the lives of so many people across the globe. Our technologies provide the ability to protect lives through our anti-microbial d2p products and also help preserve our planet through our d2w oxo-biodegradable products which reduce the impact of plastics on the environment. We would like to thank our customers, shareholders, distributors and staff for all their support during our 25-year development."
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