Biome Technologies PLC (AIM:BIOM) reported slightly lower revenues in the first half due to raw material availability issues and warned that these are expected to result in “significantly lower” second-half sales than previously anticipated.
Its shares more than halved on Thursday morning, degrading 58% to 70p after the bioplastics and radio frequency (RF) systems group, which had been looking forward to significant growth from its new customer product launches based on its ‘home compostable’ bio-based and biodegradable plastics, issued the profit warning.
Revenue for this and next calendar year, it said, will be “substantially below” current market expectations and this will lead to wider losses.
Having been working on this new range of materials for three years and on the verge of commercial launches with a number of customers, the AIM-listed company said its Bioplastics' increased supply of biodegradable coffee filter material to a second large US customer are now expected to be significantly lower than previously anticipated, impacting expected revenues from this customer in 2022 and 2023.
The Bioplastics division is also experiencing other customer launch delays related to not only to raw material supply, but also logistics and uncertainty of end-consumer behaviour in the current economic climate, it said.
Stanelco, the RF division, while it has also been hit by slower lead-times for some components, it is expected to deliver shipments for the major contracts announced previously in the second half.
Revenues from Stanelco in the second half are expected to be above previous board expectations.
Cash stood at £0.7mln at the half-year stage and directors said they believe the group has sufficient working capital for the foreseeable future, helped by an accounts receivable financing agreement signed in August that provides new working capital finance of up to £0.6mln as required.