Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
It was the outlook part of the statement that interested me. Hopefully we will get more insight this afternoon:
“We are pursuing growth from other existing customers and from new accounts with a view to replenishing this revised expectation with higher margin revenues.
“Our balance sheet provides us with new opportunities to target higher revenue growth. There are many exciting opportunities for us to develop new ingredients and increase revenues and we are positioning ourselves to better capture the commercial value of our performance ingredients with new customer wins, new volumes in non-detergent uses, and important new product development initiatives.”
Agreed SI, looks like they traded off one weak profit contract in pursuit of upsides elsewhere. Will be good to see later today during management meet me call with Q &A
It looks like an extremely good set of results and a very promising outlook.
Hopefully we can replace the North American low margin customer quickly, although it wouldn't surprise me if they came back to the table. Negotiating takes all sorts.
Looking forward to the presentation later.
Looking good.
'Our balance sheet now gives us freedom to drive revenue growth from our current ingredients, the opportunity for us to develop new ingredients, and the ability to grow revenues from our itaconate technology platform.'
ATB
It will be very interesting to see how quickly the freed up capacity is used up - a real gauge of how Itaconix and its products are regarded by the chemical market.
John has been saying for a while now that he expects Itaconic to become a large company - a bounce back this trading year will go a long way to validating that claim.
Gross Margin up to 31% is very impressive. All cashed up as well, This looks a lot better than some of my other investments for sure.
John said that negotiations are still ongoing with lost customer which is interesting and a potential upside that could easily come back.
The leather area seems to be the closest major diversification channel 24/25/26 so for John to articulate in such a granular fashion I'm guessing orders are now very close indeed and Im suspecting was a key trade-off consideration for the loss of lower profitability detergent customer. He keeps waving his tan shoes everywhere but lets see the stilettos now!
So my final question re: issuing RNS for new 1st diversification wins --> mgt expect to issue one in next few months - great! I expect this is a "leather" based channel since its always been one of the first in the list for textual updates and also in the last RNS majors on this.
Long presentation and a lot of questions. So here is my honest take on today and whether now is the right time to invest or not.
Positives:
1. The company clearly justified its decision and reasoning regarding its largest customer. Feels like the door is still open there.
2. Really liked all the graphics. They illustrated gross margins of 72% in hygiene and 63% in beauty which are very impressive.
3. Clear explanation on super absorbents and the company are 100% right to get the product right first. It has to match or be superior to existing products to justify the premium.
4. Glad they are going to be pushing investment in Itaconix outside the U.K. I noticed there are listings for Itaconix in France (18GO.F) and Germany (18GO.SG and 18GO.DU).
5. Overall the company is doing all the right things.
Negatives
1. Unless the company wins back their largest customer of 2023 revenues for 2024 will be lower than 2023. We all know why that it but the market will focus on cold hard numbers.
2. As a result of point 1 the next trading update for 2024 H1 will be underwhelming (unless it does a deal with its largest customer).
3. As was repeatedly said break even and all numbers have shifted back 12 months.
My overall conclusion therefore is that the company is a good long term investment. I’m just not convinced that now is the time to invest. I am worried that there will be share price drift until the next really positive RNS. So I’m going to maintain a watchful wait for when best to reinvest.
For an armchair investor like me, this type of company is exactly what ISAs are for. In now, next to other speculative efforts, then check back later. Fundamentally good in the long term I’m sure, short term not fun enough for the day traders out there!
Good luck and may your patience never wear thin.
Sorry all but think I missed this - they said they'd be issuing an RNS shortly relating to a new product? That's quite exciting if so.
I can see the markets are not the best at the moment but I hope the next RNS from ITX is a good one cos a nearly 25% loss in two days is painful.
Down 15% today on a measly 30k shares traded. What a joke AIM is. SI called it right. If it goes down anymore I’ll be hitting the buy button. Back to 2.8p in old money!
Thanks for the acknowledgment Dougerboy. For those who have followed my posts here over the past 3 years you will know I am not a day trader and I am pro-Itaconix.
Unfortunately as soon as news of the loss of the largest customer dropped and the revised forecast income for 2024, I worked out that this put us back 1 year which was confirmed by their broker and in yesterdays presentation.
Unless they manage to renegotiate with their largest 2023 customer the share price will drift down to where we were at the start of the year. That means 110p to 120p. It’s even feasible we touch 100p. Ask yourself why invest now when we are months away from H2 trading update at the end of January 2025. Holding Itaconix shares during the next 8 months is like dead money unless they pull a rabbit out the hat.
Good morning LTH's.
It's. Burt's and Maybe's?..?
My own personal opinion, is that the interview was one of the most honest ive seen .
I also believe that these guys would not let a large customer walk, if they either have them in a corner? Or they have someone more lucrative waiting in the background to take up the slack.
I see the share price as grossly oversold.
OIMHO.
ATB
But's. Lol.
Also the crooked MM's and the way the small cap market is run, any weakness in share price is manipulated, mm's will be taking every opportunity to steal these cheap shares.
ATB
And yet it's currently back up 17% this morning. Glad I bought at 135p yesterday rather than listen to so-called Smartinvestment calling out 110p .
Agreed BD.
Agendas hidden in plain sight. Lol.
Hi DB/Elsol
Spredsheet updated to show 160 metric Tonnes of raw material delivered this year so far.
https://www.seair.co.in/us-import/product-itaconic-acid/i-chemtan-co-inc/e-qingdao-kehai-biochemistry-co-limited.aspx
1 16/06/2022 COHECTASE2035082 Itaconix 19800 20PKG
2 03/07/2022 KLSQTAOKW2204354 Itaconix 19800 20PKG
3 04/08/2022 EXDO62Y0220197 Itaconix 19800 20PKG
4 25/08/2022 EXDO62Y0220796 Itaconix 19800 20PKG
5 15/10/2022 KLSQTAOKW2208079 Itaconix 39600 40PKG
6 19/03/2023 TXSLQD2302Y376 Chemtan/Itaconix 19800 20PKG
7 19/03/2023 TXSLQD2302Y375 Chemtan/Itaconix 39600 40PKG
8 02/05/2023 UULNQD23030547 Chemtan 19800 20PKG
9 01/07/2023 TXSLQD2305Y361 Chemtan/Itaconix 59400 60PKG
10 09/02/2024 UULNQD23120454 Chemtan 39600 40PKG
11 15/02/2024 UULNQD24010550 Chemtan 39600 40PKG
12 20/02/2024 https://www.seair.co.in/us-import/product-itaconic-acid/i-chemtan-co-inc.aspx Chemtan 39600 40PKG
13 25/03/2024 https://www.seair.co.in/us-import/product-itaconic-acid/i-chemtan-co-inc.aspx Chemtan 39600 40PKG
ATB
AJP
Bearded - Let’s see how well your post ages. Today’s rise on a bit of publicity won’t change the fundamentals for 2024.
No hidden agenda. I’ve made my intentions very clear.
I believe the time to buy will be next January before the H2 trading update. That’s the earliest we will get any insight into the expected improved margins because of the timing of the exit of the largest customer during H1.
I continue to maintain there will be share price drift downwards unless the company salvages a deal with its largest customer. The figures don’t lie!