6 April 2020
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain
SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC
("Symphony", the "Company" or the "Group")
Trading update and COVID 19 statement
Symphony's 25th Anniversary
Symphony Environmental Technologies Plc (AIM: SYM), a global specialist in technologies to enhance the properties of plastic and some non-plastic products by making them biodegradable and/or to provide protection against threats to health and safety, announces a trading update in this its 25th Anniversary year, and considering the current COVID 19 pandemic.
The new trading year has started strongly, with revenues for the first quarter ended 31 March 2020 increasing 56% to £2.4 million compared with £1.6 million for the first quarter of 2019. The Group's cash position at 31 March 2020 was relatively healthy with more than £1.0 million available between cash and existing bank facilities. Based on current financial modelling, the Group does not expect to need any additional cash in the next 12 months and will be able to continue to operate within its current financial resources.
In the Group's trading update on 17 December 2019, we reported on inventory adjustments by some of our customers awaiting legislative clarification in certain markets which depressed sales in the final quarter of 2019 with an expectation that these sales would be deferred into the first quarter of 2020. In the majority of these markets, inventory levels have so far remained low. Therefore, whilst this first quarter revenue does not include any material inventory correction, we continue to expect inventory levels in our network to increase during the year. The increase in revenue for the first quarter of 2020 is therefore a more general reflection of the organic growth achieved by our distribution network.
As the impact of the COVID 19 pandemic is felt across the globe, the Group has taken, and continues to take all necessary measures to ensure that our workplace, people and customers are safeguarded and that we have protocols and technology in place for business continuity by remote working.
The Group had seen limited effects in some supply-chain areas which have to date been quickly overcome and not resulted in any raw material or manufacturing delays. Some customers have reported cashflow delays within their territories. Our trade receivables are, in the main, credit insured, and our credit insurer has granted an extension of reporting deadlines in order to assist.
Enquiries for our d2p (designed to protect) anti-microbial and other protective products (see www.d2p.net) are growing at a much faster pace and we expect to see increased sales as additional protection becomes an everyday necessity.
On 10 March 2020, we announced that we had initiated independent testing of our d2p anti-microbial technology against members of the Coronavirus group, with results expected before the end of June. We can advise, based on scientific literature and research, that the active ingredient used by Symphony does have good anti-viral properties, and the tests will ascertain performance within general plastic products with d2p included. Satisfactory test results would enable d2p treated products to be sold to a wider market, and we will test against COVID-19 itself as soon as independent laboratory capacity becomes available.
As reported on 28 February 2020, the Food and Drug Administration (FDA) in the United States approved our anti-bacterial bread-packaging, and this is now on their official website. Some customer trials have already begun, and others are at the planning stage, albeit we acknowledge that COVID-19 may extend trial timetables.
The current situation due to COVID-19 is unprecedented and the overall economic impact is currently unknown. While the Board is encouraged by the resilience shown by the Group and its employees to date, the impact on FY-2020 cannot as yet be fully assessed. Accordingly, the Board believes it would be inappropriate to provide forward looking financial guidance to investors and analysts at this time.
The Board remains confident that the Group is in a strong financial position and is, with its suite of highly relevant technologies, well placed in the current environment.
We anticipate announcing our 2019 preliminary results by 30 April and we will update the market further at that time.
Michael Laurier, CEO of Symphony commented:
"This week marks the 25th anniversary of the formation of the Symphony Group. The Group's suite of technologies has evolved and improved over this considerable period and their global relevance has never been more important, given the enormous impact of the COVID-19 pandemic on the lives of so many people across the globe. Our technologies provide the ability to protect lives through our anti-microbial d2p products and also help preserve our planet through our d2w oxo-biodegradable products which reduce the impact of plastics on the environment. We would like to thank our customers, shareholders, distributors and staff for all their support during our 25-year development."
Symphony Environmental Technologies Plc
Michael Laurier, CEO
Tel: +44 (0) 20 8207 5900
Ian Bristow, CFO
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Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker)
David Foreman, Michael Boot (Corporate Finance)
Tel: +44 (0) 20 7894 7000
Caspar Shand Kydd, Maisie Atkinson (Sales)
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Hybridan LLP (Joint Broker)
Claire Louise Noyce
Tel: +44 (0) 203 764 2341
The person responsible for arranging the release of this information is Michael Laurier, CEO of the Company.
NOTES TO EDITORS:
About Symphony Environmental Technologies plc
Symphony has developed a range of additives, concentrates and master-batches marketed under its d2p® ("designed to protect") trademark, which can be incorporated in a wide variety of plastic and non-plastic products so as to provide protection against many different types of microbes, and insects and rodents, and against fire. d2p products also include odour, moisture and ethylene adsorbers as well as other types of food-preserving technologies. Symphony has also launched d2p anti-microbial household gloves and toothbrushes and is developing a range of other d2p finished products for retail sale. See www.d2p.net
Symphony has developed and continues to develop, a biodegradable plastic technology which helps tackle the problem of microplastics by turning ordinary plastic at the end of its service-life into biodegradable materials. It is then no longer a plastic and can be bioassimilated in the open environment in a similar way to a leaf. The technology is branded d2w® and appears as a droplet logo on many thousands of tonnes of plastic packaging and other plastic products around the world. In some countries, most recently Saudi Arabia, oxo-biodegradable plastic is mandatory. See www.d2w.net
The Group has complemented its d2w biodegradable product range with d2c "compostable resins and products" that have been tested to US and EU composting standards.
Symphony has also developed the d2Detector®, a portable device which analyses plastics and detects counterfeit products. This is useful to government officials tasked with enforcing legislation, and Symphony's d2t tagging and tracer technology is available for further security.
Symphony has a diverse and growing customer-base and has established itself as an international business with 74 distributors around the world. Products made with Symphony's plastic technologies are now available in nearly 100 countries and in many different product applications. Symphony itself is accredited to ISO9001 and ISO14001.
Symphony is a member of The OPA (www.biodeg.org) and actively participates in the Committee work of the British Standards Institute (BSI), the American Standards Organisation (ASTM), the European Standards Organisation (CEN), and the International Standards Organisation (ISO).
Further information on the Group can be found at www.symphonyenvironmental.com and twitter @SymphonyEnv See also Symphony on Instagram. A Symphony App is available for downloading to smartphones.
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