Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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'Do business'... at any cost? Anyone can be a busy fool. What's the point of doing business for no, or little profit?
It is alarming, but at the same time can be taken to demonstrate confidence and protecting margins.
Is this really the way to do business? To lose your biggest customer at this stage is not clever! Whilst others might be impressed I am not! There is always room to negotiate, to walk away from a very important customer is ludicrous!
My take here is that John wouldn't have let this contract go if he didn't have a better revenue stream advanced in the pipeline for 2024.
Look out for more positive updates in the coming months
Unfortunately this is the way with Itaconix. Bottom line - The company has failed to renegotiate with its largest customer.
This is a disaster and the share price for this year is screwed and I expect it to continue to fall lower.
Itaconix history seems to be that every time we think we are making progress we suffer a huge setback.
At this stage in the company’s lifecycle it’s hard to comprehend walking away from a large contract in this way. Nothing suggests that it was loss-making and there is no capacity challenge, so what’s the upside of this in the long-term? Two steps forward, one step back I suppose.
Clearly the market was not going to like it but I thought it showed real balls and confidence to not just roll over.
Typical AIM, total overreaction.
"Whilst discussions on 2024 pricing and volumes are continuing, and some order volumes remain likely, the impact is likely to be much lower volumes and revenue from this merchandizer in FY 2024 compared to FY 2023."
Good to see that ITX have made a stand on this, is it a case of this is not dead, but we are demonstrating that we will not be pushed into a corner, but will stand our ground and go toe to toe?
Holding firm and looking to pick up a few more on the dip, clearly a buying opportunity, not only for us but for any potential suitor in the background?
Interesting final results presentation next week? (RNS out this week I would have thought)
ATB
AJP
Itaconix has just lost its largest customer. Predicted Revenue for 2024 slashed by almost half!!!
This might be great for gross margin but it absolutely screws us for revenue.
I’m sorry but you can not paint a positive picture with this and the share price today and for the rest of 2024 will reflect this.
I'm pleased you are impressed cos the markets are less than impressed, Soundman.
Well that’s a big reaction to that RNS!
It’s sets the tone for all future negotiations now.
ITX won’t be rolled over. I’m impressed by this, it means the management feel in control of their own business and aren’t in awe of their big clients.
Margin business (apologies)
A good sign that ITX can afford to focus on profitability and volume is above critical mass without this low m
So basically at step back in revenue but an improvement in gross margins for 2024.
R&D and sales now have a great opportunity to fill the excess capacity with new supply contracts.
I guess its one of the dishwasher supply contracts that failed to renegotiate.
Well played John.
It's time to shed the low margin contracts - There's no point being busy fools.
Don't be pushed around by the big boys, they pay the going rate or they go somewhere else.
...and despite that.... As per the trading update on 27 February 2024, the Company expects to announce final results for FY 2023 in line with current expectations, achieving another record year with unaudited revenues of $7.9 million, a substantial increase of 40.6% over FY 2022 of $5.6 million.
Full steam ahead.
I pulled this info from the “Market Drivers” slide from an Itaconix 2017 presentation. Still seems pretty valid. Though the BAYER share price is down the pan! They could do worse than look at us.
*****************************************************
MARKET DRIVERS
Increasing consumer expectations, regulatory changes and environmental best practice driving major consumer brands to seek sustainable raw materials
P&G – Goal of using 100% renewable or recycled materials for all products
L’Oreal – By 2020, 100% of products to have an environmental or societal benefit Croda - >60% of raw materials currently derived from natural or renewable resources
‘Together for sustainability ’
Major Chemical Companies join initiative
AkzoNobel, Arkema, BASF, Bayer Clariant, DSM, DuPont, Evonik, Henkel, IFF, Lanxess, Solvay, Wacker
Developing sustainable supply chains
Well aligned with global trend and ideally positioned to play a significant role in the redesign of many supply chains to improve sustainability and performance
******************************************************
Thanks for flag AJP! Yes some big transactions going through that we have not seen until fairly recently - that one again looks a buy so could be same purchaser.
Hi Elsol
Looks like another large purchase posted a day later than transaction?
27-Mar-24 14:48:08 260.00 8,600 Unknown* 254.00 270.00 22.36k
Markets closed tomorrow and Monday for Easter, so would think news will be out early next week on date for the finals
ATB
AJP
I totally agree that John and team have managed to marry the science with the market, however I don't think that this is a recent development. It's been fundamental to the growth and success of the company to date.
For example Yvon first created a superabsorbant polymer in 2008 and I'd bet that they've engineered many others in all sorts of different sectors. John has said you can make so many things from itaconic acid, it all comes down to margins and profitability and we're not quite there with superabsorbants.
My point is that they made a conscious decision to focus first on the dish tab market (they have a functional advantage in dish tabs due to having 2 carboxylic acid groups). It's clear that John et al did the maths and they realised they could not only provide a green alternative, but also one that produced better results and was cheaper. John sums this up in the most recent RNS "...the Company's key competitive advantage is in delivering both performance and affordability."
A win, win, win for customers which can be seen in the N. American sales to date. As John says, ITX ingredients are in products in every price range: the premium shelf dish tab products, the budget, and also the ECO ranges.
But, the most interesting part of the ShareSoc presentation for me was John talking about the expected dish tab market growth in Europe.
FY23 Cleaning (mainly dish tab) revenues anfd growth
AMER = $6.9 million
AMER = 35.6%
EMEA = $1.0 million
EMEA = 89.3%
Two points
1. The European dish tab market is bigger than the US. John says this is now the focus.
2. Rossman (Germany) picked up a top award for their dish tab using ITX ingredients. Where one brand gets the ITX advantage, others soon follow.
It's clear we should anticipate huge revenue growth in Europe in the coming years.
P.S. Leather, superabsorbants, and paints are much bigger opportunities than what ITX have done so far in detergents.
"Not many company's manage to marry the science with the market"
Its something they have only really cracked in the last few months I think. It was a message that came over more strongly in the most recent RNS.
And, still sat watching that presentation its all ' performance...cost..performance...cost..performance...cost....and sustainability.
It seems very muck like they are now absolutely dialled in and focussed on the way to take the formulations to market and drive their growth hard.
The reason that the MC of ITX isn't 10x its current level is simply because the UK market hasn't understood the science or the vast potential here.
In that way US investors are certainly more savvy.
Market Cap currently of £33m. Really. Add a 0 and it's still under valued.
I think the volatility on low volume is simply because there is low availability of shares to trade - the algorithms are always set to increase trading and this will be more likely to happen if there are larger fluctuations in the SP - hence even small trades make a difference.
Regarding a takeover - with so many shares in sticky hands and large Director holdings, any potential bidder would almost certainly need the Directors to agree terms before the shareholders were consulted. They would have to pay top price.
Yep, that's a great phrase and sums it all up for me.
It's taken time to get this far, but now we've got here the next few years will be phenomenal.
Not many company's manage to marry the science with the market, but there's no doubt that ITX have achieved it, and one of the best parts as far as I'm concerned is that the longer it takes a major to move in on us the more it will cost them. It's a one way street from here.
Sat here watching the presentation..
"...once you get formulated in, its very hard to get formulated out...".
It struck me this is a very nice way to understand why they can almost guarantee repeat business.
Well done to those discovering that ITX are now in global mega business products. I would bet that its the foot in the door with these behemoths that's the toughest bit to crack, so it really is very exciting confirmation in my view,
Can anyone enlighten me as to why share trade data shows someone selling single shares individually. Surely you'd get hammered on fees.