Biome Technologies : Interim Statement 2019

12 September 2019

Biome Technologies plc

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

Interim Results

Biome Technologies plc announces its unaudited Interim Results for the six months ended 30 June 2019.

Highlights

• The Group generated revenues of £3.6m and gross profit of £1.7m
• The Biome bioplastics division is continuing towards becoming the principal revenue generator for the Group
• Biome bioplastics revenues were generated from both existing products as well as the early phase of commercialisation of three new products
• Stanelco RF division trading in line with normalised levels of fibre optic furnace demand

Paul Mines, Chief Executive Officer said:

"The first half of 2019 has seen substantial progress in the commercialisation of three new products in the Bioplastics division with initial revenues in the latter part of the period. Against this backdrop it is anticipated that the Group will evolve with the Bioplastics division becoming the principal revenue generator in coming periods."

- Ends -
For further information please contact: Biome Technologies plc
Paul Mines, Chief Executive Officer
Declan Brown, Group Finance Director
www.biometechnologiesplc.com	Tel: [phone]
Allenby Capital
David Hart/Alex Brearley (Nominated Adviser)
Kelly Gardiner (Broker)
www.allenbycapital.com	Tel: [phone]

About Biome

Biome Technologies plc (Ticker:BIOM) is an AIM listed, growth-orientated, commercially driven technology group. Our strategy is founded on building market-leading positions based on patented technology and serving international customers in valuable market sectors. We have chosen to do this by developing products in application areas where the value-added pricing can be justified and that are

not reliant on government legislation. These products are driven by customer requirements and are compatible with existing manufacturing processes. They are market rather than technology-led.

The Group comprises two divisions, Biome Bioplastics Limited and Stanelco RF Technologies Limited. Biome Bioplastics is a leading developer of highly-functional,bio-based and biodegradable plastics. The company's mission is to produce bioplastics that challenge the dominance of oil-based polymers. Stanelco RF Technologies 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.

In 2018, the Board adopted the following three high level KPIs for the next three years to continue its ambitious momentum:

• Compound revenue growth of 25% per annum across the Group and 40% compound revenue growth in the Bioplastics division
• Diversify the Group's turnover by product and market to ensure that no one product or end customer contributes more than 15% of revenues by 2020
• Increase investment in the Group's next generation of products by spending significantly more per annum on average than the £0.3m per annum average spend over the previous strategic objective cycle

www.biometechnologiesplc.com

www.biomebioplastics.com and www.thinkbioplastic.com

www.stanelcorftechnologies.com

#ThinkBioplastic is our digital educational platform, launched in October 2018 in response to the emerging global plastic conversation. It speaks to a wide audience, highlighting bioplastics as a leading solution among several to reduce the negative impact of plastic manufacture and disposal. Following the much acclaimed first series of short videos the second series was recently released.

Chairman's Statement

The Group's Bioplastics division continues its strong growth path towards becoming the principal revenue generator for the Group. In that context, the Bioplastics division delivered a more than 50% increase in revenues in the first half of the year. Group revenues were £3.6m 2019 (H1 2018: £4.4m) which reflected a more normal level of revenue at the Stanelco RF Technologies division after the exceptional level of sales in 2018.

Gross profit was £1.7m (H1 2018: £2.3m) impacted by the effect of the revenues highlighted above. The

overall gross margin for the Group was 48% (H1 2018: gross margin 53%) reflecting the increased weighting of sales towards the Bioplastics division.

The Group recorded a small loss before interest, depreciation, amortisation and share option charges for the six months to 30 June 2019 of £0.2m (H1 2018: £0.5m profit). The loss after taxation was £0.5m (H1 2018: £0.2m profit), which equates to a loss per share of 20 pence on a basic basis and diluted basis (H1

2018: profit per share of 9 pence on a basic and diluted basis).

The Group's cash position as at 30 June 2019 was £1.7m (31 December 2018: £2.6m) reflecting the increase in working capital requirements in line with activity.

Biome Bioplastics Division

Revenues in the Bioplastics division for the first half of 2019 were £1.4m (H1 2018: £0.9m) with this turnover reflecting increases in existing products as well as the early phase of commercialisation of three new products.

The operating loss for the period was £0.3m (2018: operating loss of £0.3m).

We gained some initial revenues for the following three products with customers in the USA in the first half of the year:

• a new material for single serve pods in the sports nutrition market
• a new material for use in the compostable disposable cutlery market
• plastic film products for a new customer

It is anticipated that revenues from these products will increase over the coming quarters as they scale up in line with customer demands.

The Bioplastics team is now also working on a strong product development pipeline of other opportunities with a variety of existing and new customers.

To further these opportunities, a number of new commercial and technical team members have been recruited into the business in the last 12 months and they are all now making significant contributions alongside their more experienced colleagues. Sally Morley, until recently the Commercial Director of the division, has recently been appointed Managing Director. This strengthening of the team's leadership has enabled other organisational changes as the business adjusts to heightened levels of activity in both manufacturing and development.

The division has continued with its mid-term strategy to develop a new range of lignocellulose-derived bioplastics, with the aim of generating bio-based and biodegradable plastic products with increased performance that can be produced at a cost more comparable to traditional plastics made from petro- chemicals. This work is supported by a number of government grants. During the first half of the year, development work commenced on the scale up of one of the new monomers in conjunction with Nottingham University. Further updates on the progress of these projects will be made as they evolve.

Stanelco RF Technologies Division

Revenues in the RF Technologies division were £2.2m (H1 2018: £3.5m) reflecting a return to the more normalised levels of fibre optic furnace demand from the previously reported exceptional demand recorded in 2018. As a result of this, operating profit recorded in the first half of the year was £0.6m (H1 2018: £1.3m).

The division signed a £1.3m contract for the supply of a number of fibre optic furnaces in the second half of 2019 and it is against this backdrop that the Board continues to expect full year revenues for this division to be in line with those of 2017.

Outlook

The Bioplastics division has made substantial progress in its aim of commercialising new products within the last six months and additional revenue growth is expected in forthcoming quarters. In line with its previous expectations, the Board anticipates that the Bioplastics division will maintain a gradual but sustained increase in revenues in 2019 and will eclipse the RF Technologies division as the main revenue generator for the Group in a year or so.

The commercial opportunities in bioplastics that we are sourcing are growing in scale and improving in quality. The Board will continue to use all available means possible to take advantage of this change in market dynamic for the benefit of shareholders.

John Standen

Chairman

CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the period ended 30 June 2019
		Total for	Total for
		6 Months	6 Months	Total Year
		Ended	Ended	Ended
		30 June	30 June	31 December
		2019	2018	2018
		Unaudited	Unaudited	Audited
	Note	£'000	£'000	£'000
REVENUE	5a - 5c	3,605	4,391	8,850
Cost of sales		(1,890)	(2,068)	(4,042)
GROSS PROFIT		1,715	2,323	4,808
Administrative expenses		(2,210)	(2,117)	(4,745)
PROFIT/(LOSS) FROM OPERATIONS	5a - 5c	(495)	206	63
Profit/(Loss) from operations before share options charges		(424)	311	281
Share options charges		(71)	(105)	(218)
Investment revenue		3	2	4
Foreign exchange gain		8	8	17
PROFIT/(LOSS) BEFORE TAXATION		(484)	216	84
Taxation	6	-	-	59
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT		(484)	216	143
Basic earnings/(loss) per share - pence	7	(20)	9	6
Diluted earnings/(loss) per share - pence	7	(20)	9	5