Itaconix building strong base of recurring revenues as it heads towards profitability

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Itaconix PLC (LON:ITX) said the first half of the year saw the company’s proprietary sustainable chemistries increasingly used by major brands in everyday products.

The sustainable speciality polymers specialist saw revenues in the six months to the end of June 2020 shoot up 80% to US$1.1mln from US$604,000 in the first half of 2019.

The acceleration in revenues is the result of the continued broadening of the customer base and advancement in customer projects in the company’s major application areas, Itaconix said.

Revenues increased across all of the company’s home and personal care polymers, including those used in household cleaning products – a hot sector at the moment because of the coronavirus pandemic; however, Itaconix said it believed the majority of its new revenues are coming from new customer products that are capturing long-term market share based on new levels of performance, cost and sustainability.

The company’s progress towards break-even continues apace, with adjusted underlying losses (LBITDA) halving to US$0.6mln from US$1.2mln the year before. The loss before tax narrowed to US$813,000 from a loss of US$2.21mln the year before.

Cash and cash equivalents as at the end of June 2020 was US$459,000, compared to US$765,000 at the end of 2019.

Itaconix said it has a pipeline of active customer projects to drive it beyond its goal of moving into profit.

“Major advancements in our customer pipeline allowed us to enter a new phase of commercial growth in the first half of 2020. Our customers are succeeding with new products that leverage the unique value and functionality of our sustainable ingredients,” said John Shaw, the chief executive officer of Itaconix in the results statement.

“When consumers purchase these new products for their performance and cost, they also benefit the environment through a reduction in the depletion of natural resources, an increase in the use of safer chemicals, and a reduction in the release of chemicals,” he noted.

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