Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Agreed KP22.
Some BOD's in small cap companies have a way of manipulating the share price for many different reasons.
Let's hope this has been done to the advantage of all, and not just the few.
ATB.
It shouldn't have been crashed to this level on last RNS. Finger crossed for much bigger rise this time
That's a jump. Leak of results???
Results.. 15.4
Out of curiosity I did a bit of research to try and work out who was Itaconix’s largest customer in 2023. My money is on Hannaford Bros for these reasons:
1. Their HQ is within an hour of Itaconix
2. Itaconix’s polymer makes up 10% of the powder in Hannaford’s automatic dish detergent pods
3. Significant sized company
4. I believe their president Mike Vail and John Shaw are friends.
5. Profile matches the information in the proactive video posted earlier this week.
5. I also found this article from last year.
https://www.businessnhmagazine.com/article/itaconix-the-nh-company-you-donrsquot-know-but-is-part-of-your-daily-life
The other connected point is that EU supply agreements may stipulate EU plant access to avoid potential for interruption of supply. That's why I think the Bod will do everything to invest in plant capacity as soon as contracts become highly visible
Hi DB. My thinking on capacity is that these new product streams gobble up capacity at prob at least twice the current rate. In addition you cannot immediately miracle up a new plant. It will prob. Take a good 18 months of prep. Planning, Cape ordering, staff hiring, staff training Qc testing and production valudation. Then you are still trouble shooting for a few months. So if the new stream was a high volume line poss. Super Abs then you could in theory run out of plant capacity and that would be severe for the Unilevers or Reckitts of this world and we may pay large penalties under supply agreements. That's the point here.
Fair point WD. And there have been many others fair points made by the various bystanders to this decision, including Smart Investment, Elsol et al. There is validity in much of them, if not all. BUT on the capacity point, it must be remembered, that JS has always said CURRENT plant capacity can handle up to $15M in revenue. So, the idea that capacity shortfall is a reason for the recent termination of the major customer negotiation (leading to the $3M+ rev „loss“) cannot be correct.
UNLESS waiting in the wings of the coming months are the beginnings of new higher margin contracts with potential revenue pipelines that would eat up the now „released“ capacity, equivalent to some $8M and more.
Other metrics such as Ops Hires and Raw Material imports are for this reason worth continued monitoring.
As others have said, revenue without profit is pointless and costly in the long run.
This now gives the business the capacity to quickly produce replacement profitable products with the released capacity. This makes solid business sense and I personally support John with the decision.
The short term fall in the SP is a knee jerk reaction, ultimately this will improve the profitability of the business and the SP accordingly.
Interesting statement?
https://www.linkedin.com/company/itaconix-corporation
Itaconix takes short-term revenue hit to build for long term.
SHORT-TERM ?
ATB
AJP
Smart.
I read all posts , good and bad.
I also , like everyone on here ,do my very in depth research.
I think we know your outlook by now , a certain agenda can soon slip down the murky path of trolling.
ATB in your investing elsewhere.
SI - you said you were having a 9 months break from ITX after selling out (that was a short interlude indeed!); are you sure you are not trying to buy back in coming weeks or days after rubbishing ITX's opportunity outlook? Why would the company invest say 80m GBP since inception? Why would there be a professional raise at 250p more than 1 year ago? Why Why I could go on. Thank you for your efforts I have just topped up twice now - as they say "buy after bad news sell after good news" as you wait on the sidelines to do the same.
there is no explanation for why you are here. Even John fails to see the connection with the share price (undervalue) as I do so go speak to him is my suggestion.
High revenues can be 'vanity' if there are minimal profits. I know values are often formulated, based too much on revenues, misguided perhaps in this case?
Something had to give, but possibly a bit too early, have to wait and see.
Elsol it isn’t scare mongering - it’s cold hard facts!
Loss of largest customer accounting for about half of all revenue in 2023.
Positive EBITDA pushed back a year to 2026
Time to stop seeing the world through rose tinted glasses. Your over optimistic posts are more to blame for “poor PIs” continuing to loose money here. Keep pumping based on scant speculative information to explain this disastrous business decision and see where it gets you.
This SP adjustment is understandable, as it skyrocketed from 120p to 270p on not a lot of news - that's AIM for you. When you're out of favour, you really are out of favour!
What is not understandable is the timing of this latest announcement. If it was done in concert with the approval of its broker, then it's poor advice by them, too.
If you listen to JS's latest interview, he refers to this customer as still be a 'good mate' having shared his wife's cheeseboard with them 16 months ago - what was that remark meant to suggest? Friends don't deal with each other in the way this has panned out.
Something doesn't ring true about not waiting to announce this with the April RNS on the 2023 results. If there was a contractual reason as to why this announcement could not be delayed, then shareholders have a right to be told - transparency is the key to any disclosure of such materiality.
In the interview JS states that the relationship with this long-time customer had gone from one of 'friendly' to one of 'mutual fear' - so JS, "What was the fear from our perspective?"
Having watch this interview a few times now, I have concluded that JS has been all too jocular and dismissive of this customer loss and it will take time to repair the damage for LTHs and those who see ITX as a match winner in the fulness of time.
GLA
We are well oversold on this news for sure. The scaremongering has successfully taken money off some poor PI investors and they have lost some fair value as a result. As I said the professional price one year ago is the best placeholder today at c 250p due to massive strides of the company in 13months offset by this growth related little bump in the last few days that still will likely inform more positively on diversification advancement very soon...when we get all the rationale amd news that John has to say something about in coming days
Would not be surprised to see a bunny appear out of a hat here....
There are two sides to every negotiation, we've only heard one side, let's be clear on that.
The share price drop is quite understandable, probably now at a reasonable level given the change in circumstances. But always very hard to come up with a valuation for startups that aren't profitable, revenue multiples are unfortunately one of the alternative valuation options in those circumstances.
Love the optimism in this group (generally at least!), now all we can do is sit back and wait for more clarity on the plans.
Hopefully this is either a negotiation tactic (which I doubt) or the company perhaps wants to (and sees a bigger opportunity to) pivot it's focus to other higher margin products.
Who says we are not competitive? Recent RNS' and presentations have said we are lower cost and better performance than the alternatives.
This was about a commercial deal where a customer was trying to chip the price and reduce our profits! John took the view that the deal wasnt something they could accept. I can only assume he did that as he is confident about the future, not because he wants to destroy his business.
The big question for me is; if we are not competitive in the N. American detergent market then why does John believe we can be competitive in Europe. In a recent interview John described the European market as "larger but more competitive". John needs to explain why we are investing in European manufacturing capacity when atm, the whole business model seems flawed. There's a lot of cope going on here with "diversification". This is still a start-up situation; diversification and exploring new markets is a given. What is more concerning is whether we are even competitive in our existing market.
Hi Thordon, welcome back. I think John has to reveal more of this cards in the next few weeks during the full year financial discussion and I agree things don't add up at the moment. We have an ITX puzzle to solve => “when does -1 equal +1 for ITX? The timing of this arguably very preventable customer loss decision by the BOD is intriguing, counter intuitive and strange all at the same time. After sleeping on it, I have come to the view that there must be a key strategic business reason for the BOD decision and it’s a reason that can only make sense from a major ITX product diversification opportunity perspective (e.g. functionality / value added product v’s price competition lower value added product supply). The company must be on the verge of something important that is yet to be revealed in its diversification journey is my take on whats ahead otherwise it was so easy to offer the marginal customer another 6 months of GM positive product supply.
This news is extremely bad for both sides , in the end a resolve will be implemented.
Why investment in product and then going back to old ingredient's.
Its a stand off and poker faces are ready to who moves first , in this case ITX made first move.
More i read the more can see that this is near term.
Good Luck
Good luck with investing outside the world of ITX SI. If you miss some pivotal diversification news you know how the share reacts so may miss out. At least you are knowledgeably abstaining until post January. As you say you want to keep an eye on things so maybe you will be tempted back sooner should John have another curve ball in his pocket in the next 9 months!
> Canaccord advised it was our largest customer worth half the 2023 revenue.
How do Canaccord know who the customer is, or the size of it?
We look forward to a nice break until January then.