Biome’s revenue declines by 36% amid regulatory hurdles for key clients.
- Revenue drops to £2.3m in the first six months, mirroring a significant downturn.
- Company shares fell sharply by 11% to 6.2p after earnings announcement.
- Delays in product certification hindered sales, notably in the coffee pod sector.
- Despite current issues, Biome remains optimistic about future growth.
In a challenging first half of the year, Biome’s revenue diminished by 36% due to regulatory difficulties faced by its principal clients. The Southampton-based bioplastics company reported earnings of £2.3 million for the initial half of the year compared to prior periods, reflecting a slowdown primarily attributable to certification and regulatory impediments.
The company experienced a significant hit to its share price, with an 11% slide to 6.2 pence following the release of its earnings report. This decline was largely influenced by setbacks encountered with a key coffee pods client. The product in question necessitated additional laboratory testing from the certifying authority, causing delays that adversely impacted Biome’s sales campaigns and revenue trajectory in the latter part of the year.
Biome also constructs radio frequency systems, further complicating its operational landscape amidst these regulatory challenges. The firm has expressed its commitment to addressing and overcoming the hurdles faced by its end customers, showing confidence in improved revenue figures for the foreseeable future, with the Board projecting a continuation of growth into 2025.
Paul Mines, CEO of Biome, acknowledged the complexity of the bioplastics sector, noting, “The challenges encountered by the Bioplastics business in the first half are progressing towards resolution, albeit some hurdles remain to achieve the revenue run-rate we expect in the near term.” His statement underscores the cautious optimism prevailing within the company despite the financial downturn.
In an effort to stabilise its financial standing, Biome recently completed a £1.1 million fundraise earlier this September, aimed at bolstering its cash reserves amidst the steep stock decline. The urgency of this capital infusion is underscored by the firm’s stock depreciation, which has plunged by more than 90% since the beginning of the year.
Despite the setbacks, Biome anticipates an improvement in revenue performance, with growth expected to continue in the coming year.
