Byotrol strategy guidance29 Feb 2020 18:10
Report from 28/8/18 gives a good account of the basics around the How , Why & What of their business strategy: Byotrol plc
CHAIRMAN’S STATEMENT
I am pleased to report another year of progress, with reported results of EBITDA break-even after accounting for R&D tax credits and our financial position much more secure following the equity raising of ÂŁ4.6m in September 2017.
In my report last year, I indicated the need to increase the team’s focus on product propositions, profit margins and sales and marketing expertise. There has been good progress in all these areas this year, but there is still a lot to do and many challenges remain.
One such challenge is how to invest our cash wisely and generate returns sufficiently quickly to achieve our targets. This is not an easy task for any listed company, but it is particularly difficult for SMEs where small teams generally need to align behind one large project at any time and where the downside of failure cannot then be offset against success in other areas. We frequently debate at Board level about investments that we should be making for the longer term but then decline due to potential adverse impact on the short term.
An example is that we thought long and hard about how to best monetise the intellectual property and commercial opportunities we had established with Solvay on our Actizone project – do we wait for eventual royalty income from jointly-targeted customers, or do we restructure the deal to bring forward funds and achieve short-term targets. In my view, the deal we closed at the year end was the right combination of near-term financial pragmatics and retention of future upside (commission/royalties), for negligible future investment and an excellent ongoing relationship with a world- class polymer company.
I believe that the team has managed the challenges well and has now hit its annual financial targets for three years in a row, all the time improving the quality of the Company behind the scenes. They are doing so in an industry that normally requires a large resource base, in-house manufacturing and a service offer, but they continue to feel that the “excellent science” competitive positioning is going to be a long-term winner, and progress so far seems to be supporting that.
Our three strategic initiatives using separate technology platforms continue to progress although not always as fast as we would like. It remains the case though that Byotrol’s risk profile is high and we are all looking forward to the time when we can confidently run several projects in parallel, with a more balanced risk / reward profile across the portfolio. We were certainly helped in that journey with equity raising in September last year from existing and new shareholders. We were delighted to receive such excellent support and are fully committed to using the cash wisely.
We raised the money primarily to invest in sales and marketing, to support commercialising the Company’s technologies and to start
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