Biome Technologies Q&A: Cash in the bank fuelling bioplastics growth going forward (LON:BIOM)

Biome Technologies plc (LON:BIOM) Chief Executive Officer Paul Mines caught up with DirectorsTalk for an exclusive interview to discuss final results, growth in the bioplastics division, tree guards and the outlook for 2021.

Q1: Biome Technologies have announced final results for the year ended 31st of December 2020, what are the highlights from your point of view?

A1: 2020 was a real pivotal year for the group, our bioplastics division grew to a record £4.9 million of turnover, it was a 65% increase on 2019, and we’re really continuing to benefit from the momentum that’s going on in compostable bioplastics at the moment.

I think in contrast, our RF division was quiet, as anticipated, it continues to be impacted by overcapacity and by a knockoff of COVID to the industrial sectors.

As a result of those two trends, bioplastics now represents some 86% of group revenues and it reported just a small loss in the year of £0.9 million. We exited 2020 with no debt, cash in the bank at £1.7 million which will really help us fuel that bioplastics growth going forward.

Q2: Where is the growth you’ve seen in bioplastics coming from?

A2: The bioplastics business is really changing because it’s at the heart of the transformation of the plastics industry now and I think people are beginning to recognise that we can no longer rely on oil and gas and we have to move to getting our carbon from renewable resources, from the biobased economy. Those inputs are likely to be a much lower carbon emitters or indeed provide negative carbon emissions.

So, the brands and customers we sell to recognise that, and we’re increasingly being asked to provide materials with great environmental credentials so we’re seeing growth in four areas.

We’re seeing growth with our existing customers who’ve got new launches and new projects, we’re seeing growth with new customers, and we just announced a new contractual position with one of our large customers in the US for coffee filtration and we’re seeing work going on in coffee pods, that’s accelerating. Then we’ve got a pipeline of new customers that are in the US, particularly around flexible packaging, that are at various stages of trialling our products and beginning to accelerate as well.

Q3: You’ve not mentioned the tree guards which we talked about recently?

A3: The tree guards project is a slightly earlier stage, it’s got huge market potential but we’re still in technical development stage for that and the market deployment is going to happen in the next couple of years.

Q4: Is there anything else you should tell us?

A4: I think the underlying message here is that the bioplastics business is just at the start of a real change in the market and a move towards more sustainable materials.

I think Biome Technologies is really well positioned to exploit that going forward and the strategy we’ve deployed to get this far is working.

2021 has started as we expected, our outlook for the year is remains unchanged and indeed, if you visit our broker site, you’ll see they’ve also put their own forecast for our 2022 position of further growth out there as well.

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