Symphony Environmental Technologies

Biodegradable plastics and waste-to-energy specialist Symphony Environmental Technologies is planning new product launches after a £1m profit turnaround.

Based in Hertfordshire and quoted on AIM, the company is developing a process to disintegrate waste tyres and is about to unveil a biodegradable shampoo bottle after converting a £398,000 loss into £638,000 pre-tax profits (£923,000 after tax credits) last year, on turnover 32% up at £7m. Founder and chief executive Michael Laurier says Symphony, whose oxo-degradable polymer-based technology, branded as d2w, can ‘control the life of plastics’, is also preparing a push in the US market, with suitable allies.

After finishing 2009 with net debt down by £340,000 to £1m, the company is on its way to end 2010 free of debt and with a positive cash balance, suggests house broker Allenby. Symphony, which does 85% of its business overseas, is taking cheer from legal measures in countries such as the United Arab Emirates in favour of the use of biodegradable plastic.

Laurier criticises the Mayor of London and others calling for paper to replace plastic bags, arguing paper is less environmentally friendly and less efficient than oxo-degraded plastic. He argues a new report on the subject by the Department of the Environment and Rural Affairs, though positive in tone, lent undue weight to rival ‘composting’ and ‘hydro’ technologies, which Symphony insists fail to match oxo degradation in either environmental impact or return on investment.

Laurier concedes the powerful ‘composting lobby’ could present a powerful challenge in the USA. He stresses the key to the company’s long-term prospects and profitability is making Symphony’s drw technology an established brand among commercial and industrial clients.

Analysts see pre-tax profits reaching £1.2m this year, with £2m on the cards for 2011. Before floating on AIM nine years ago at 30p, Symphony shares had reached 160p on the old Ofex (now PLUS-quoted) market, but the subsequent need to re-orient the company took its toll and they fell as low 2.25p over the past year.

Recommended by Growth Company Investor at 3.12p a year ago, the shares hit 12p and now stand at 9.5p. The medium to long term prospects look fair.