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Itaconix starting to see the benefits of its reboot

The business, now focused on products made from itaconic acid, continues to work with a number of industry players to develop new ingredients for a range of applications
Dishwasher liquid
Momentum is building with particular success to date in laundry and automatic dish wash applications

Itaconix Plc (LON:ITX), formerly Revolymer, is starting to see the benefits of its March reboot to focus on polymers.

Revenues and gross profits in the first half of 2017 beat those of the same period of 2016, while the company has been successful in lowering its cost base.

WATCH: Itaconix 'creating the platform for growth', says CEO Dr Kevin Matthews

Revenue from speciality chemicals sales increased to £325,000 in the first half of 2017 from £25,000 the year before, and gross profit improved to £146,000 from £6,000 the year before.

Organisational and operational efficiencies implemented in May are expected to save the company at least £1mln a year from 2018.

The loss before taxation for the period was unchanged at £2.5mln, as was the loss after taxation at £2.2mln.

Cash and cash equivalents at the end of June stood at £5.4mln, versus £6.1mln the year before.

Broker N+1 Singer initiated coverage last month and said recent agreements with Croda and Akzo Nobel suggest “momentum is building with particular success to date in laundry and automatic dish wash applications”.

The business continues to work with a number of industry players, including funded collaborations, to develop new ingredients for a range of applications in its key markets of personal and consumer health care, homecare and industrial products.

The board believes there is good reason to be positive about the outlook for the business.

READ: Itaconix PLC: New company with huge potential in polymers

“The implementation of the group's strategy is starting to be reflected in financial performance, and our objective is to continue to drive product revenue starts and growth,” the company said.

The majority of Itaconix's products are bio-based, being derived from itaconic acid, which in turn is derived from corn starch, so the products are sustainably sourced and help its customers improve the sustainability of their own consumer products.

The group is seeking to benefit from the trend towards eschewing petrochemical ingredients in favour of sustainable alternatives.

“We believe that Itaconix is strategically well aligned with this long term trend and positioned to play a significant future role in the redesign of many supply chains to improve the environmental sustainability of consumer products,” the company said.

Shares in Itaconix fell 1.2p to 20p on the results. N+1 Singer has a price target of 48p and expects the share price to recover as the reshaping of the group, formerly known as Revolymer, becomes more widely understood.

WATCH: Itaconix 'offering performance advantages at a competitive price'

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Itaconix Plc Timeline

February 13 2018

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