The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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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.
Rivaldo - yes, v. impressive presentation. JS’s best to date.
He talks with an air of confidence not seen before.
What’s not to like here? I note that 25% of shares now held by US investors. Share consolidation appears to be working IMHO.
GLA
Terrific presentation, John is really stepping up to the mark. Thx to Elsol for the summary too.
I just love the huge recurring revenues and the vast range of opportunities here - plus the large cash pile and the minimal need for cap.ex.
AJ - I wasn't joking when I said Itaconix would be a division of Unilever. It may not be them specifically but it's only a matter of time before ITX is taken over by one of the majors product manufacturers.
The products being developed by ITX are transformational for the likes of Unilever et all, and they'll take us in-house to stop the competition doing so as much as for their own ends.
Hi Elsol
Thank you for the breakdown of the presentation, as you allude to there are some very interesting development that are happening right now and even more to come as we move forward.
2 million to replicate a plant in Europe, now that would be a huge step forward? and relatively cheap to double our capacity from where we are at the moment, and all the benefits that would bring.
ITX SP is just in its infancy, how do you value the potential here(huge)? personally I do not think we will get the chance to achieve this and will get taken out?
ATB
AJP
It always amazes me how quickly the ITX share price moves.
I understand the mechanics, but it still always surprises me. The fact you can change a Company's market cap by 10% based on transactions worth a total of £20-25k just seems like a very broken system.
Forgot to mention:
9. Slick new ITX web site in c. 8 weeks time so early May should be launched - will bring further client adoption/conversion benefits due to greater external impact - we are now here to stay as a major ECO functional ingredients business with some compelling new marketing strap lines like we are seeing recently being trademarked.