Symphony Environmental Technologies Plc (AIM:SYM) global specialists in technologies that make plastic and rubber products "smarter, safer and sustainable", is pleased to announce its preliminary results for the year ended 31 December 2022.
- Group revenues £6.15 million (2021: £9.16 million)
- Gross profit £2.28 million (2021: £3.59 million)
- Reported loss before tax £3.01 million (2021: £1.53 million)
- Basic loss per share 1.65p (2021: 0.81p)
- Cash used in operations £1.59 million (2021: £0.60 million)
- Cash raised by way of equity subscription £1.0 million
- Supply agreement with Grupo Bimbo, the western world's largest bread producer for the Group's FDA-approved d2p antimicrobial ("AM") bread packaging technology
- Rivulis increases orders for d2p AI (insecticide technology)
- Better Earth LLC exclusive contract for USA Nutritional bottles
- Middle East - manufacturing agreement for d2w masterbatch production
- d2w legal challenge succeeds in Peru ruling that oxo-biodegradable is not the same as oxo-degradable
- New Mexican biodegradability standard suitable for d2w
Post year end
- Secured convertible loan of £1.0 million
- Middle East manufacturing and sales on plan
- Better Earth LLC signs exclusive agreement with TricorBraun
- Successful cost reductions effected, with normalised administrative cost base now 25% lower than 2022 levels, whilst distribution costs significantly reduced due to lower shipping costs and new Middle East factory
FY-22 is a year that leaves me with mixed emotions. Considerable operational milestones and successes were achieved. However, it was also a challenging and frustrating year with Group revenue for FY-22 down to £6.15 million from £9.16 million in 2021. This follows, as previously advised, a soft first half of the year with results affected by short term logistics and resource issues, temporary destocking issues, primarily in the Middle East, and a change to our glove strategy. The second half of the year was slightly stronger but still affected by these events which were slowly resolving together with delayed government certifications for our partner's new factory in the Middle East, which were not received until the end of the year.
Whilst I am pleased that these situations have now been resolved, unfortunately they were too late to have a positive effect on FY-22s operating results.
Pleasingly, strong momentum in d2p sales continues with revenue in FY-22 of £0.79 million, representing 76% year-on-year growth (2021: £0.45 million). The increase in FY-22 d2p sales has mainly been due to continued conversion of higher value d2p anti-insect ("AI") technology.
These financial results do not therefore reflect the commercial progress made during the year, and the outlook for the Group remains as positive as previously described. This includes key developments and growth in respect to (as detailed in the CEO statement):
- d2p AM ("antimicrobial") USA FDA & Canadian Health food approved bread-packaging technology - Agreement with Grupo Bimbo
- Joint venture in India with Indorama Corporation - Symphony Environmental India Pvt Ltd
- d2w bottles initiative in the USA - partnered with Better Earth and TricorBraun
- Developing d2p AI global business with Rivulis Irrigation
In December we disclosed a £14.0 million annualised revenue run-rate target during H1 2023, and whilst the Board are focused on achieving this target, some key trials will extend into H2-2023. It is worth noting that as a result of the Group's improved cost base, higher gross margins and lower distribution and shipping costs, the previously anticipated resultant profit at this revenue level will be significantly higher than we previously anticipated.
Based upon the Group's trading in Q1-23 which saw a 27% increase in revenues (compared with Q1-22), and more recent trading in Q2, coupled with the benefits from the Middle East manufacturing plus further short term opportunities which are expected to come to fruition in the very near term, the Board expect Symphony to show a significantly stronger financial result for H1-2023 and move back into profitability in the very near term.
None of this takes into account the joint venture in India, where we wait for approval that plastic producers using d2w technology will become certified suppliers.
The near-term commercialisation of several of our key projects and resultant sales are significant, and we are confident in delivering positive updates in this regard in the very near term and throughout 2023.