Symphony Environmental Technologies, the specialist plastics group, has warned that it expects to post a trading loss of around £1.1m for the current financial year, compared with a £0.5m operating profit the previous year, following a 30% fall in sales of its d2w additives product.
The stock market-listed company said in a trading update today that total sales in the second half would be “significantly higher” than in the first six months of the year, which came in at £2.12m.
However it warned that revenues for the year as a whole “will be substantially lower than the previous year [when they were £8.5m] and market expectations”.
Outlining the background to the additives sales fall, Symphony said that a number of new, large potential territories from which d2w additive sales were expected had been delayed.
“However, the group has received initial orders from some of these territories and positive indications of interest for future sales, albeit the timing is not yet known,” the group said in the update.
It added it was in “advanced negotiations” with an un-named global pharmaceutical company, “which may lead to the granting of substantial distribution rights to the group for what is believed to be a unique plastic masterbatch.
“As a result of positive laboratory tests and ongoing field trials, we believe this masterbatch technology may add benefits to most industries where plastic is used, and especially the food industry. This technology is expected to be complementary to our existing d2p technologies,” it said.
Symphony said its working capital cycle had benefitted from reducing debtor exposure and stock levels and that it had “sufficient cash-flow and trading facilities to enable substantial business growth going forward”.