Symphony Environmental Technologies PLC (LON:SYM) has reported that revenues for the current financial year are expected to be “in line with market expectations” and higher than last year, however, its marketing spending has also increased.
The firm develops a varied catalogue of plastic products, including its d2w oxi-biodegradable plastics and d2p anti-microbial ranges.
Jordanian distribution hub
Symphony is hoping to capitalise on the recent push by national governments and companies to eliminate plastic waste, much of which is currently polluting the planet’s oceans.
Michael Laurier, Symphony’s chief executive, says that the d2w additive has been scientifically proven to help reduce dwell-time of plastic that escapes recycling and ends up in the open environment.
In July, Laurier said 90% of the company’s sales were outside of the UK and Europe and in economies that have little or no recycling or collection systems.
In September, the firm expanded its Middle East footprint with a new distributor in the Kingdom of Jordan.
The distributor, EVA Plastic Industries, is licensed to supply d2w masterbatches in the country and would join its network of distributors in Saudi Arabia, the UAE, Oman, Lebanon, and Egypt.
EVA is also affiliated with the Sughayer Group, which specialises in supplying raw materials and additives to the plastics industry in Jordan, Iraq, the Palestinian Authority and Ethiopia.
Marketing push as revenues climb
In a trading update in October, the firm said revenues for the full year would be around 6% higher than last year, with full-year earnings expected to be £100,000.
The earnings, a reduction on the previous year, was mostly due to increased investment in the firm's communications and marketing department, which rose to £380,000 for the year. The group had also recently established an in-house marketing department to assist driving sales of its products throughout the distribution network.
The gross margin generated in the first half of the year, at 47.4%, was lower than the circa 49% historically achieved, principally due to increased lower margin finished product sales, with this level of sales mix and gross margin expected to broadly continue for the full year.
Symphony said orders of its d2p anti-microbial technology had been “significantly ahead” of last year and were expected to “comfortably exceed” management expectations, with promotion campaigns scheduled in October to increase product listings.
Also, after two years of research and development, Symphony had received a US$120,000 initial commercial order for its d2p anti-insect additive technology with a large global manufacturer of commercial agricultural products.
For its d2w oxo-biodegradable plastic range, the company said orders had remained strong, but the timing of orders placed by distributors in their principal market, the Middle East, had been fluctuating quite significantly from month to month and are currently anticipated to be lower than original management expectations due to varying levels of, and delays in, local enforcement action.
D2w revenues generated from sales in other markets such as Central America, the Far East, Europe and Africa, were all growing “ahead of budget”.
With shares trading around 8.2p, Symphony carries a market cap of about £13.1mln.