Itaconix warns on revenue after tough year

Sustainable specialty polymers company Itaconix updated the market on its trading on Friday, reporting that revenues for the first three quarters of 2019 reached £0.7m, representing a 78% increase over the same period in 2018 and matching full-year revenues then of £0.7m.

The AIM-traded firm said the growth demonstrated the value of its products in detergents, personal care, and odour control.

Its board said it expected second half revenues for the six months ending 31 December would exceed the first half of 2019.

However, as a result of delays in certain customer projects, it added that full-year revenues would be below current market expectations, but still represent a “very significant” increase over 2018 revenues.

The company said it was continuing to have a “strong pipeline” of active customer projects, and was undertaking efforts to accelerate key revenue opportunities, particularly in water treatment and detergents.

As a result of lower-than-expected revenues and also some one-off costs related to new product development, the firm said it expected that the EBITDA loss for the second half of the year would be “broadly in line” with the £1.0m loss for the first half, which would be a “substantial improvement” over the £3.9m EBITDA loss for 2018.

Other than a research and development tax credit of around £0.13m, which was now expected to be received in early 2020 rather than in the current year, the board said it believed that year-end cash would be in line with expectations due to “significant improvements” in working capital utilisation.

“The use of our novel products in an increasing range of end-products is establishing a broad customer base for long-term revenue growth and ultimate profitability,” said Itaconix chief executive officer John Shaw.

“While project delays can be rather frustrating, our commercial momentum continues to build, we remain confident about our outlook, and our future remains equally bright.”