Interim Management Statement

 

TIDMSEO 
 
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 GBP2.4m* 
·      Board confident in full year outlook 
·      Planned fundraising of up to GBP3.5m 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 GBP2.1m to GBP2.6m 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 GBP2.4m, 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 GBP0.5m to supply its 
innovative induction furnace systems and associated equipment to a leading 
overseas customer. This follows a GBP0.75m 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 GBP350k 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,      | Tel: [phone]       | 
| Stanelco plc                      | 867100                  | 
| Sue Bygrave, Group Finance        |                         | 
| Director, Stanelco plc            |                         | 
|                                   |                         | 
+-----------------------------------+-------------------------+ 
| Jonathon Brill/Caroline Stewart,  | Tel: [phone]    | 
| Financial Dynamics                | 3113                    | 
|                                   |                         | 
+-----------------------------------+-------------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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