Interim Management Statement

RNS Number : 0051L

Stanelco PLC

29 April 2010

 



29 April 2010

Stanelco plc ("the Company" or "the Group")

Interim Management Statement

Stanelco plc issues its interim management statement for the period from 1 January 2010 to 28 April 2010, as required by the UK Listing Authority's Disclosure and Transparency Rules.

Highlights

·      Sales to 31 March up 26% on a like-for-like basis*

·      Trading performance remains in line with Board's expectations for the year:

-  Biome Bioplastics exhibits revenue growth of 76% on Q1 2009 and advances commercial position with a number of key accounts

-  Biotec's third party revenue growth at 7%; favourable findings in French court in relation to patent infringement claims by Novamont S.p.A expected to have a positive impact on future sales

-  RF Applications shows growth of 58% on same period last year and builds order pipeline further

·      Closing cash position at 31 March 2010 £2.4m*

·      Board confident in full year outlook

·      Planned fundraising of up to £3.5m to be achieved through a placing and open offer

* includes 50% of Biotec, following expiry of the rights attaching to the "Golden Share" on 31 December 2009

Trading Update

Group revenues continued to grow strongly during the three months to 31 March 2010 and the Group's overall trading performance remains in line with the Board's expectations for the year.

Previously, Stanelco held a casting vote over certain matters in Biotec (the "Golden Share"); this arrangement expired on 31 December 2009 and shareholder control with SPhere SA moved seamlessly to a clear 50/50 basis. The Company will no longer consolidate 100% of Biotec's results.  The revenues and cash balances reported in this announcement, therefore, include 50% of the figures reported by Biotec and the prior year figures are reported on the same basis to allow a like-for-like comparison.

Group revenues increased from £2.1m to £2.6m in the three months to 31 March 2010 on a like-for-like basis (including 50% of Biotec's revenues), an increase of 26% compared with the same period last year.  This reflected a 76% increase in bioplastic sales made by the UK bioplastics business, Biome Bioplastics, a 58% increase in sales in RF Applications division and a 7% increase in third party sales from our joint venture, Biotec.

Our cash position at 31 March 2010 was £2.4m, including 50% of Biotec's cash balance.

Bioplastics division

In the Bioplastics division, the sales team has had a number of new successes in growing sales into the market, delivering a 76% increase in Biome Bioplastics sales in the three months to 31 March 2010 and a 23% increase on Q4 2009.

The product development team continues to work closely with a number of blue chip customers and mainstream plastics convertors to develop a widening range of biodegradable products that can substitute oil-based plastics.  The quarter saw the launch of the BiomeHT and BiomeClear ranges of products.

In the first quarter a number of notable projects that have been in development for some time have moved towards substantive commercial scale:

·      A producer of personal care products has begun a controlled launch of a new product, made from Biome Bioplastics materials, with a major USA retail chain and is now planning a European launch.

·      A large multinational beverage and confectionery manufacturer has been developing and evaluating a range of Biome materials for confectionery packaging for two years. This company is committed to progressively introducing sustainable materials into their product range.  Full scale trials are underway into two main application areas, one of which, for secondary packaging, is expected to result in substantial sales in the second half of this financial year. The second, requiring modified atmosphere packaging is expected to result in further volumes from 2011, onwards.

·      Having tested Biome resins on full-scale equipment a major American supplier to the food processing market is keen to take the products to market. Having already purchased initial quantities, anticipated success in composting trials could result in this supplier becoming a substantial customer in the second half of this year.

·      One of the world's largest suppliers of horticultural plastic products, this major producer carried out a number of successful full-scale processing trials, of Biome blends, in 2009.  Based on this success, they have since been carrying out field trials in a range of climatic locations. The first set of these trials is nearing completion and is said to be positive.  Although some of the trials will take several more months, larger sales are expected to begin in the second half.  By 2011, this could be another substantial customer.

·      A European retail chain has been assessing making one of its high profile products from Biome bioplastics. Several full scale production trials have been completed and assessed by their convertor. We are now in commercial discussions to firm up on prices and volumes for 2010.

·      Two of the world's largest suppliers to the catering industry are evaluating the new BiomeHT range, which has higher temperature resistance than conventional bioplastics, for hot food and beverage use. The products were developed in association with these companies.

In early 2010 we have seen accelerating demand for our bioplastic products in the market, driven not only by concerns about waste disposal but also by the desire of many large corporations to switch to using sustainable resources in key brands.

The UK based wholly owned bioplastics unit that undertakes both development work and sales/marketing was re-branded Biome Bioplastics in the period

Our joint venture, Biotec, delivered 7% growth in its third party sales for the 3 months to 31 March 2010 compared with the same period last year.

Radio Frequency (RF) Applications division

RF Applications sales revenue grew 58% on same period last year.

In the period the business announced an order for over £0.5m to supply its innovative induction furnace systems and associated equipment to a leading overseas customer. This follows a £0.75m order announced in December 2009.

Since the beginning of the year the business has also secured further orders for furnace and other industrial systems to a value of greater than £350k for sales and delivery in 2010.  These latter orders are driven predominantly by demand from China.

The RF Applications business has good visibility of strong order book for 2010 and is continuing to develop its products and market position.

Outlook

The first quarter has seen our strong revenue growth continue and the Board is confident that the business is well positioned to capitalise on the exciting opportunities that exist in our markets.

We now intend to seek support from our shareholders to enable us to fund the accelerating development of the Group.

- Ends -

For further information please contact:

Paul Mines, Chief Executive, Stanelco plc Sue Bygrave, Group Finance Director, Stanelco plc	Tel: [phone]
Jonathon Brill/Caroline Stewart, Financial Dynamics	Tel: [phone]

 

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