By Martin Clark
It has been a year now since we last looked at Biome Technologies plc, a small company listed on London’s AIM market that’s involved in bio-gradable plastics and natural polymers based on patented technology. Share prices have mostly drifted down during this past year after bubbling up nicely last year, reaching as high as 460p in the middle of 2021 though that’s still some way off the highs seen a few years previously.
The slow news flow could be a part of the problem, with precious little information coming out of the Biome Technologies camp since posting its last set of results back in April. That should not detract from some clear potential though, with the company highlighting a “strong order book” and “further substantial revenue growth… anticipated during 2022” in its last Q1 quarterly results update.
For the full-year 2021, total revenues were largely flat at £5.7 million, but in general, the group managed the poorer trading conditions experienced by pretty much all companies rather well. The Southampton-based company is actually an interesting one in that it is essentially built around two distinct divisions: Biome Bioplastics and Stanelco RF Technologies.
The first is a leading developer of highly-functional, bio-based and biodegradable plastics, on a mission to make products that challenge the dominance of oil-based polymers. The second entity designs, builds and services advanced radio frequency (RF) systems. Dielectric and induction heating products are at the core of a product offering that ranges from portable sealing devices to large furnaces for the fibre optics markets.
Biome’s fully combustible coffee cup
For the quarter ending 31 March, 2022, Biome Technologies reported group revenues in line with management expectations at £1.1 million — the vast bulk of this from its Bioplastics division. That’s slightly down on the same period a year earlier (£1.4 million), though the statement was bullish in its outlook amid good revenue growth expected during 2022.
Biome Technologies also noted that it was navigating through some of the logistics challenges it has faced in the past year or so — most firms faced an unusually challenging trading environment during 2021 — and is now seeing a number of important customer positions accelerate or move into a commercial phase.
Revenues in the RF Technologies division were only small, although a strong order book points to better things to come, which is “expected to deliver revenue both in Q2 and into the second half of the year,” the company reported. There is also a solid pipeline of opportunities from key target markets. Significantly, as at 19 April 2022, Biome Technologies had no debt, plus cash holdings of £0.9 m, against a market capitalisation of £8m.
At that time, Allenby Capital issued its own update on the stock suggesting that the slow start to 2022 may not be truly indicative of its full-year out-turn, reflected in unchanged forecasts that anticipate group annual revenue growth of 43 per cent to £8.2 million. The equity research also noted that revenue growth is forecast to continue in 2023 and that this is not yet being reflected in the share price.
Overall, it’s an outlook that is very encouraging and, while supply chains are still an issue — although management has taken steps to alleviate any pressures where possible — the healthy order books, strong customer interest, and the lack of debt, all bode well going forward.
What might win investors groups is a bit more communication and some updates from the boardroom — that’s something to look out for with the next quarterly updates soon. Biome’s share price was 165pence last evening against a 52-week high of 445p.
