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Trading Statement

Fri, 12th Oct 2018 07:00


RNS Number : 8047D
Symphony Environmental Tech. PLC
12 October 2018

12 October 2018

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain

SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC

("Symphony", the "Company" or the "Group")

Trading update

Sales Revenue of d2p significantly increase

New d2p anti-insect product and first commercial order

Symphony Environmental Technologies Plc (AIM: SYM), a global specialist in products and technologies that "make plastic and rubber products smarter", announces the following trading update.

Revenues for the financial year to 31 December 2018 are expected to be broadly in line with market expectations, being approximately 6% higher than the previous year. Orders for the Group's d2w "oxo-biodegradable" technology remain strong but the timing of orders placed by distributors in our principal market, the Middle East, have been fluctuating quite significantly from month to month and are currently anticipated to be lower than original management expectations due to varying levels of, and delays in, local enforcement action. Over the next 6 months, our market intelligence indicates an improvement in government enforcement actions and this, combined with an increase in the direct sales force of our Middle East distributors, is expected to generate a substantial increase in sales volumes, albeit the timing is not yet clear. Activities in Symphony's other global markets are encouraging as d2w revenues generated from sales in Central America, the Far East, Europe and Africa are all growing ahead of budget.

Revenues from Symphony's d2p "designed-to-protect" technologies are significantly ahead of last year, and are expected to comfortably exceed management expectations. In Italy, our range of d2p anti-microbial gloves are listed in several large, as well as some smaller, retail outlets. Promotion campaigns are scheduled by our distributor during this October and further increases to product listings are expected to continue over the coming months.

After some smaller initial orders, the Group has now also received its first full $60,000 container order for d2p anti-microbial gloves to the USA.

Also, and after two years of R&D and successful trials, Symphony has received an initial commercial order for d2p anti-insect additive technology with a very large global manufacturer of commercial agricultural products. The value of this first part-container order is $120,000, and the finished products made with d2p technology will be marketed globally.

The gross margin generated in the first half of the year, at 47.4%, was lower than the circa 49% historically achieved, principally due to increased lower margin finished product sales and this level of sales mix and gross margin is expected to broadly continue for the full year.

The Group continues to invest in communications and marketing with increased spend of £0.38 million for the year. The primary activity has been in the promotion of d2w oxo-biodegradable technology in the UK, EU and the USA. Some of that activity has been in response to negative misinformation published and reported in relation to oxo-biodegradable technology. In the addition, the Group has recently established a new in-house marketing department to assist driving sales of all the Group's products throughout the distribution network.

The combination of the above means the Board expects full year earnings to be approximately £0.10 million. This figure includes the additional communication and marketing costs of £0.38 million and expensed R&D costs, which for 2018 are expected to be broadly in line with the previous year at £0.63 million.

The Board remain confident that the Group will continue to meet 2019 expectations.

Enquiries

Symphony Environmental Technologies Plc

Michael Laurier, CEO

Tel: +44 (0) 20 8207 5900

Ian Bristow, CFO

www.symphonyenvironmental.com

Cantor Fitzgerald Europe (Nominated Adviser and Broker)

David Foreman, Richard Salmond, Michael Boot

(Corporate Finance)

Tel: +44 (0) 20 7894 7000

Caspar Shand Kydd (Sales)

FTI Consulting (Financial PR)

Daniel Hamilton

Tel: +44 (0) 7813 456720

NOTES TO EDITORS:

About Symphony Environmental Technologies plc

Symphony has developed and continues to develop, controlled-life plastic technology which helps tackle the problem of microplastics by turning ordinary plastic at the end of its service-life into biodegradable materials. It is then no longer a plastic and can be bioassimilated in the open environment. The technology is branded d2w® and appears as a droplet logo on many thousands of tonnes of plastic packaging and other plastic products around the world. In some countries, most recently Saudi Arabia, oxo-biodegradable plastic is mandatory.

In addition, Symphony has developed a range of additives, concentrates and master-batches marketed under its d2p® brand, which can be incorporated in a wide variety of plastic and non-plastic products so as to give them protection against many different types of bacteria, fungi, algae, moulds, and insects, and against fire. d2p products also include odour, moisture and ethylene adsorbers as well as other types of food-preserving technologies. We have also launched d2p anti-microbial household gloves and are developing a range of other d2p finished products for retail sale.

Symphony has also developed the d2Detector®, a portable device which analyses plastics and detects counterfeit products. This is useful to government officials tasked with enforcing legislation, and Symphony's d2t tagging and tracer technology is available for further security.

Symphony has a diverse and growing customer-base and has established itself as an international business with 74 distributors around the world. Products made with Symphony's plastic technologies are now available in nearly 100 countries and in many different product applications. Symphony itself is accredited to ISO9001 and ISO14001.

Symphony is a member of The Oxo-biodegradable Plastics Association (www.biodeg.org) (OPA), the Society for the Chemical Industry (UK), and the Pacific Basin Environmental Council. Symphony is also a strategic partner of the Commonwealth business initiative, and actively participates in the Committee work of the British Standards Institute (BSI), the American Standards Organisation (ASTM), the European Standards Organisation (CEN), and the International Standards Organisation (ISO).

Further information on the Symphony Group can be found at www.symphonyenvironmental.com and twitter @SymphonyEnv See also Symphony on Instagram A Symphony App is available for downloading to smartphones.

BBC World Service film introducing d2w oxo-biodegradable (controlled-life) plastic technology

From within the UK- http://www.symphonyenvironmental.com/d2w/d2w-brochure-5/

From outside of the UK - http://www.bbc.com/storyworks/the-british-bid/symphony


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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