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(Alliance News) - Biome Technologies PLC on Thursday reported a swing to a loss in 2019 on lower revenue and announced cost-saving measures to help bolster its finances in light of the coronavirus outbreak.
The stock was trading 4.2% lower at 156.11 pence each on Thursday afternoon in London.
The polymers supplier posted 2019 revenue at GBP7.0 million, down 18% from GBP8.5 million. Pretax loss of GBP1.0 million was recorded. swinging from a profit of GBP84,000 in 2018. Gross margin also fell to 47% from 54%
Biome Technologies said the fall in revenue came as a result of reduced demand in its Stanelco RF division which recorded revenue of GBP4.0 million, down by 43% year-on-year from GBP7.0 million.
Looking ahead, the company said it expects its Bioplastics division to see "robust" revenue growth in the medium-term. It added that while it previously expected the Stanelco division to see an increase in fibre optic cable demand from the end of 2020 into 2021, it expects the growth to be delayed due to current "global circumstance".
Biome Technologies said it has implemented cash conservation methods to see it through the period of uncertainty arising from the virus outbreak. Measures include a 20% reduction in the salaries of executive directors and non-executive directors for three months starting May 1, the use of the UK government's furlough scheme, and the restriction of discretionary, operational and capital expenditure.
"Demand in early 2020 for both divisions was as expected with a strong demand-pull from the bioplastics market. However, travel and operating constraints are having an increasing effect. At this time it is too early to predict with any confidence the likely overall impact that there may be on the business from Covid-19. The board remains confident in its strategy and believes that the group is well-positioned to benefit from the growth of the global bioplastics market," said Chair John Standen.
As at the end of December, Biome Technologies had cash of GBP2.1 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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