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*** Investor Presentation (FY Audited Results) - Sept 2022 ***
ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, conducted an Investor Presentation on 7 September 2022 covering their Audited Results for the period ended 31 March.
David Hallas, CEO, and Christopher Wilks, CFO, provided a detailed overview of the operational and financial highlights of the period, discussed the outlook, updated investors on R&D and shared insights on pork pricing & China. The management team also answered questions from the viewing audience.
The full video recording is available below, divided into chapters for ease of viewing:
0:00:03 introduction & summary highlights
0:01:58 Financial highlights from results
0:24:43 Audit & Governance
0:30:27 Pork pricing & China
0:33:28 R&D update
0:39:44 Outlook
0:42:09 Questions & Answers
Link to full video: https://www.equitydevelopment.co.uk/research/investor-presentation-fy-audited-results-sept-2022
ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, is pleased to announce that David Hallas, CEO, and Christopher Wilks, CFO, will be conducting a live presentation covering the company's FY Results for the period ended 31 March 2022.
The online presentation will take place on Wednesday 7th September at 10.00am UK time.
This event is open to all existing and potential shareholders and registration is free. Questions can be submitted during the presentation and will be addressed at the end of it.
Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/ecoanimalhealth-fyresultspresentation-7sept2022
Delayed results going lower never good news
Trading update triggers share price fall
ECO Animal Health issued a trading update in somewhat unusual circumstances given it is in its closed period and expects to report FY22 results on or around 18 August. The statement also flagged up two financial issues that had recently emerged: that it will have to make a provision for a possible but unanticipated sales tax sales liability and treat certain previously capitalised development costs as an expense. The impact of these two items will be largely offset by exchange rate gains and ECO expects to report sales in excess of £82.5m and EBITDA of £6.5m, both broadly in line with consensus.
On current trading, ECO said that Chinese revenue in Q1 FY23 (April-June) was significantly below levels recorded in the prior year, although gross margins remain strong, while revenue in the Rest of the World grew strongly compared with the same period last year. While it is not clear yet the extent of the shortfall in China, it is not helped by comparison with a particularly strong prior year figure that reflected a favourable combination of industry structural changes and restocking of the pig herd after the ASF epidemic together with changes in regulations for use of antibiotics in feed.
ECO should be able to give more colour on its assessment of overall trading in FY23 with its forthcoming results, which should at least remove the uncertainty that is presumably depressing its shares. With cash at the last balance sheet date of almost £23m, its EV currently stands at £45m. Thus, based on known FY22 figures, EV/sales ratio is currently 0.54 and its EV/EBITDA at 6.9 – both very low by any standards and certainly the norms of the animal health sector.
Link: https://www.equitydevelopment.co.uk/research/trading-update-triggers-share-price-fall
Even worse people resigning
It looks cheap but could be a value trap pig prices seem volatile
Healthy cash pile looks like a shining light
Not invested but looking into it
No way it deserved to get smashed like that but any link to china looking a bad bet in these markets just brutal
(Full link here: https://www.equitydevelopment.co.uk/research/collaboration-to-develop-poultry-red-mite-vaccine)
ECO Animal Health has established a research collaboration with Moredun Research Institute aimed at developing a potential first-in-class vaccine against poultry red mite, a blood-feeding parasite with welfare and production implications for egg-laying hens. The move represents ECO’s second new academic R&D collaboration this year and follows an agreement signed with Imperial College last month to develop vaccines against porcine infectious diseases.
Poultry red mite (Dermanyssus gallinae) is one of the most important causes of production losses in laying hens, including by acting as vectors for pathogenic bacteria (including salmonella, E. coli and mycoplasmas) and viruses. The mite can feed on up to 5% of a bird’s blood overnight, causing anaemia and stress that can induce feather pecking, cannibalism and increased feed consumption. As there are no effective non-chemical solutions, insecticides are used to kill the mites but this has its own risks including the potential for chemical residues in the eggs/meat and development of resistance. Over 90% of farms in Western Europe are infested with poultry red mite.
ECO’s shares have fallen to their lowest point since October 2008, primarily on concerns around weakness in the Chinese pork market, as the economics of pork production are a key driver of demand for Aivlosin. Chinese pork prices have been highly volatile over the past three years, after an African Swine Fever outbreak in 2019 and its knock-on effects, compounded by the pandemic and the government’s zero-Covid policy. Chinese pork prices fell throughout 2021 (from an unusual high) and into 2022. However, since May they have recovered to a level where Aivlosin demand should stabilise.
ECO is due to report its financial results shortly, with consensus suggesting sales of c. £81.5m and adjusted EBITDA of £6-7m. Both will be lower than exceptional levels seen in 2021. ECO’s enterprise value is currently £54m (based on forecast cash of c £18m), suggesting an EV/sales ratio of <0.7 and EV/EBITDA of ~8-9, both of which are well below norms in the animal health sector. ECO resumed payment of a dividend in 2021, at 1p/share, that if repeated, would offer a yield of 0.9%.
Encouraging expansion of vaccine R&D pipeline.
ECO Animal Health has undertaken what represents a potentially important expansion of its R&D pipeline via a collaboration to develop veterinary vaccines against three porcine infectious disease targets using a novel self-amplifying RNA (saRNA) technology developed by Professor Robin Shattock of Imperial College London. The collaboration will assess saRNA-based veterinary vaccines against two viral and one bacterial infection in ECO’s validated swine disease models with a view to selecting candidates for development and commercialisation under license from Imperial College.
The company is due to report its financial results for the year to March 2022 next month, with consensus suggesting sales of c. £81.5m and adjusted EBITDA of £6-7m. Both will be lower than exceptional levels seen in 2021. Current ECO’s enterprise value is £64m (based on forecast cash of c £18m) suggesting an EV/sales ratio of 0.8 and EV/EBITDA of ~9-10, both of which are well below norms in the animal health sector (peer group EV/sales 2.5-3.0x). ECO resumed payment of a dividend in 2021, at 1p/share, that if repeated, would offer a yield of 0.8%.
Link to note: https://www.equitydevelopment.co.uk/research/encouraging-expansion-of-vaccine-rd-pipeline
No surprise - pig prices in China very very weak.
China is going to need to make a decision soon about who it supports in Ukraine. There is a risk of sanctions if they side with the Russians; with 41% of first half revenues coming from China where would the company be if they lost that chink of business and potentially had assets / cash stranded there?
Ignore the politics at your peril.
The latest TWiV [This Week in Virology] podcast is titled: "TWiV 873: Pig viruses and big viruses". Might interest some?
https://www.microbe.tv/twiv/twiv-873/
'TWiV reviews the six known coronaviruses that infect pigs and what can be learned about human infections, and how the giant Mimivirus DNA genome is organized into a nucleocapsid.'
Thought the pigs were flying .... .wot happened?
Watch "ECO Animal Health - Investor Presentation (Capital Markets Event) - 26 January 2022" on YouTube
https://youtu.be/cznxwOcAOw0
We were pleased to host the management of ECO Animal Health for a live presentation following their Capital Markets Event on 26th January, focusing on the R&D pipeline, innovation and the company's new product journey.
Marc Loomes (CEO) gave investors an introduction to the company, Dr Hafid Benchaoui (Head of Global R&D) lead viewers through ECO's innovative R&D programme in detail, and Christopher Wilks (CFO) discussed the financial implications. The team also answered a range of questions submitted by investors.
You can see the full video here (with chapter dividers for ease of viewing): https://www.equitydevelopment.co.uk/research/capital-markets-event-investor-presentation-rd-focus-january-2022
0:47 Introduction - Marc Loomes (CEO)
08:06 R&D programme presentation - Dr Hafid Benchaoui (Head of R&D)
23:32 Poultry vaccines: from idea to best in class products in 5 years
27:01 Game changing porcine biologics
30:04 Innovation in the treatment of respiratory disease
34:12 Financials focus - Christopher Wilks (CFO)
46:26 Questions & Answer discussion
Seems like the big holders are selling out and running unsure why? looks solid if china bounces back
ECO Animal Health Group plc (AIM: EAH), a leader in the development, registration and marketing of pharmaceutical products for global animal health markets, is pleased to announce that Marc Loomes, CEO, and Christopher Wilks, CFO, will be conducting a live presentation following their Capital Markets Day to professional investors in the morning.
The online presentation will take place on Wednesday 26th January at 2.30pm London time.
ECO started a programme of significant R&D investment in vaccines about four years ago and has seen meaningful progress. This event will be an opportunity for investors to hear insights from the management team and further details of the potential commercial value that exists within the new product development pipeline.
The presentation is open to all existing and potential shareholders and registration is free. Questions can be submitted during the presentation and will be addressed at the end of it.
Register here at the link: https://www.equitydevelopment.co.uk/news-and-events/ecoanimalhealth-investorspresentation-26jan
ECO Animal Health Group PLC - Surrey-based pet and livestock pharmaceuticals - Updates on its operations in China. Notes that pork price in China has increased from less than RMB12 per kilogramme in early October 2021 to over RMB18 per kg in early December 2021 before settling between RMB15 per kg and RMB16 per kg in early January 2022. "Whilst the improvement in the pork price has resulted in improved trading conditions for pork producers, the commodity price continues to be volatile and producers remain cautious. Consequently, sales of Aivlosin during the first three quarters of our financial year are subdued compared to the same period last year," company says. Adds that revenue generated elsewhere in the Group continues in line with the prior year and, overall, the Board expects to report full year revenue in line with current market expectations.
New broker and 'exploring the possibility of increasing its banking facilities'.
If the banks do not want to play then shareholders might pay - I suspect a placing which might be at a steep discount whilst the share price is weak.
Was this tipped ?
Group plc (LON:EAH) passed below its 50-day moving average during trading on Monday . The stock has a 50-day moving average of GBX 183.49 ($2.49) and traded as low as GBX 150 ($2.04). ECO Animal Health Group shares last traded at GBX 153 ($2.08), with a volume of 47,878 shares.
The company has a current ratio of 3.82, a quick ratio of 2.57 and a debt-to-equity ratio of 1.47. The stock has a market capitalization of £101.58 million and a PE ratio of 18.66. The firm’s 50-day simple moving average is GBX 183.49 and its two-hundred day simple moving average is GBX 276.65.
https://etfdailynews.com/news/eco-animal-health-group-loneah-stock-price-passes-below-50-day-moving-average-of-183-49/
ECO Animal Health Group plc , is pleased to announce the appointment of Tracey James as a Non-Executive Director with immediate effect.
We hosted an investor presentation with the management of ECO Animal Health Group plc.
Marc Loomes, CEO and Chris Wilks, CFO introduced key aspects of their equity story, running through the detail of their Interim Results for the period ended 30 September. In particular they discussed the pork market volatility in China, the performance of the business in the Rest of the World in the face of supply chain disruptions, cash, and the potential of the company's R&D programme.
The full recording is available below (approximate length 54 minutes).
Video link: https://www.equitydevelopment.co.uk/research/investor-presentation-with-ceo-and-cfo
0:03 introduction (Marc Loomes, CEO)
0:55 Financial Highlights (Chris Wilks, CFO)
19:11 China Pork Production discussion
26:53 R&D programme
32:23 Governance / CSR
34:43 Other Matters and Conclusion
38:55 Investor Questions & Answers
ECO Animal Health’s shares currently stand at a 52-week low, likely on concerns over its exposure to the unpredictable Chinese pork market. Sales of the company’s main product, Aivlosin, are highly exposed to the economics of the pig farming sector in China, which has moved from an unusual situation of shortage in 2020 to one of over-supply this year. Thus, the investment proposition is currently geared to a recovery in Chinese pork prices and rebalancing of supply and demand, something that should occur - not least because of State intervention in the market designed to bring this about.
In the longer term, ECO offers investors exposure to a niche within animal health characterised by favourable economic drivers (demographics, good practices in farming) in which it enjoys a strong market position.
Equity Development is in the early stages of formal coverage, so is not publishing forecasts at this point; a comprehensive initiation should be published in due course. Consensus FY22 forecasts suggest sales of c. £81.5m and adjusted EBITDA of £9.4m. The enterprise value is £113m, which based on consensus FY22 figures, suggests an EV/sales of 1.5 and EV/EBITDA of ~12, both well below the average in the animal health sector.
https://www.equitydevelopment.co.uk/research/poised-to-recover-in-2022
Chairman Dr Andrew Jones said: "This set of results has clearly been impacted by the dramatic fall in the pig price in China which had a significant impact on the industry,we are excited to see the positive results of key technical trials in some of our vaccine developments providing us with confidence to continue our investment in these key projects. We look forward to providing more detail on some of our new product development initiatives in the coming months as well as anticipated approvals. The eirectors regard the situation in China as cyclical and one which is expected to reverse and as a result, we are confident and excited about the medium and longer term prospects for the business.However, the late Autumn and Winter period normally gives rise to an increase in demand for Aivlosin, caused by increased disease prevalence in colder months and greater pork consumption associated with Chinese national holidays and festivals. We expect this seasonal effect to feed through in improving revenue opportunities during the fourth quarter of our financial year