Biome Technologies warns on profits as coffee pod demand slow to catch up

Biome Technologies issued a profit warning after its predictions for commercialising biodegradable plastic products for the single-serve 'coffee pods' market proved optimistic.

Full year sales and losses will be "significantly behind current market expectations", the AIM-listed company said.

Half-year revenues of £2.2m down up from £2.1m a year ago, and while margins have been robust and the interim operating loss is anticipated to be lower than for the same period in 2015, this is still behind the board's expectations.

Biome said it had endured reduced demand for already commercialised products in the Bioplastics division due to the timing of production runs and some slippage of the Stanelco RF's division's order pipeline into the second half.

Biome has also been developing coffee companies to sell entirely biodegradable 'coffee pods', comprising outer packaging, the lid, ring and "non-woven" filter of the pod, which has taken no little development time in conjunction with pod manufacturers.

The final stages are expected to move into commercialisation by the end of this year.

"Whilst the second half of this year should be favourably impacted as the ring reaches its commercialisation phase," a statement from the company said, "it has now become clear that the inflexion point of significant revenue generation will be later in the half year than the board has previously expected as Biome's customers complete their own work to industrialise this innovative product."

Biome remains confident the long-term outlook for these products remains "very positive", but it now believes likely short-term demand will be less than originally thought.