Biome reports revenue, margin increase in 2014 earnings results

By Katie Fletcher | April 01, 2015

On March 25, Biome Technologies plc—a U.K.-based bioplastics company—announced its financial results for the year ended Dec. 31, 2014, reporting an 80 percent increase in revenues reflected in both of the company’s divisions: Bioplastics and Stanelco RF Technologies.

The revenue increase reflected a significant improvement in the company’s financial performance from the prior year, taking in revenues of £3.57 million ($5.29 million) in 2014 compared to £1.98 million in 2013. Margins increased to 42 percent during the year, up from 39 percent in 2013. Biome Bioplastics revenues increased to £1.34 million from £96,000 in 2013, as it continued its focus on sales of high-performance, higher-margin products. Also, Stanelco RF Technologies division was reported as moving back into profitability and more than doubling its revenues to £2.12 million in comparison to £1.02 million in 2013.

According to Paul Mines, chief executive with Biome, strong revenue and margin growth shows a much improved financial and operational performance in 2014. “Our strategy of focusing on a select number of technically demanding product and application areas within Biome Bioplastics is progressing well and further technical development activity, directed at expanding the product range, is expected to generate substantial revenue growth from a broader customer base in future periods,” Mines said. “Our RF Technologies division has had a strong year with growth seen across its diversified product range.”

The company’s resultant, pre-exceptional operating loss reduced to £1.32 million, from £1.69 million in the prior year. The loss per share in 2014 was 54 pence (80 cents) and in 2013 a loss per share of 107 pence was reported. Cash position of Biome at Dec. 31, 2014 was £2.39 million, compared to £3.31 million in 2013. Also, trading to date in 2015 for both divisions is in line with the board’s expectations.

According to John Standen, Biome chairman, 2014 was a busy year for developing new products and diversifying the product range. In fact, 17 percent of the year’s revenues resulted from new products. The company has a goal of 50 percent by 2016.

In regards to the company’s Biome Bioplastics division, the production costs of functional bioplastics are at a substantive premium to materials that are of petrochemical origin, and according to the financial report will not be resolved in the short term. This is why the company has focused on what it deems the best suited areas of the market to accommodate the price differential, including those where there is a high technical performance requirement and those where there is strong customer interest in the end-of-life performance of the material. Products include BiomeEP for flexible films, BiomeBioLam for lamination, BiomeEasyFlow for coating and BiomeHT for high temperature product applications. Some development has been undertaken to produce a biodegradable non-woven mesh for uses like filtration and absorption, and a product suitable for use in 3D printing was undertaken in 2014.

The division is also undertaking mid-term research activities directed at the development of biobased materials through the use of synthetic biology, aimed at developing a new generation of lignocelluse-derived bioplastics that can be made at a comparable cost to traditional petro chemicals. The division began a three-year project to drive this technology towards commercialization after completing a successful feasibility study in 2014. The overall project will cost £3.02 million, of which £2.69 million is being funded by Innovate U.K. and other European public-funding bodies.

The division Stanelco RF Technologies achieved revenue growth in a diversified product range, not just in its core offering of optic-fiber furnaces. Four key revenue streams the company focuses on are optical-fiber furnace systems, plastic welding equipment, induction heating equipment, and service and spares.

The company spent time in the end-of-the-year report reviewing principal risks and uncertainties including risks concerning political, economic, and regulatory environment issues, as well as intellectual property, competition, financial risks, customers, suppliers and raw materials. After all these were considered and the financial statements approved, the directors consider that the company has sufficient resources to continue its operational existence for the foreseeable future, and they expect substantial progress in 2015.