Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
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Now trading at a capitalisation of £3.99m with £2.8m cash. They should have sufficient cash to year end Sept 24, possibly Sept 25 if costs can be controlled, but, if things continue as they are, then I think there is fair chance they will have to raise. Given small numbers of directors, with 1 leaving this year, then the raise would have to be mainly institutionally backed. But I find it crazy that the shares are 93% down from their all time high. I am personally nearly 40% down on my small holding.
The director salaries of £634k in FY23 (up from £618k the year before) seem excessive given the state of the business. There has not been any staff cuts and it is hard to see where a genuine effort is being made to cut costs until business picks up.
Reassuringly, their pipeline is growing, but this is very much a metric that is given based on the opinion of management rather than totally objective. They promised in their FY23 that "IXICO is uniquely positioned to partner with innovative analytics organisations to provide a market channel to the global biopharmaceutical industry" and that they were "hopeful to announce our first significant partnership agreement early in 2024". I'm not aware of any such announcement being made yet. The departure of the CEO adds to IXICO's challenges this year, although saving £300k plus in salary may be useful... but it remains unclear if it is an attractive proposition for a quality candidate.
I think it might be useful to gain better insight into their historic pipeline numbers and how these converted into revenues. With revenues unlikely to pick up until FY26 at the earliest, the only indicators are pipeline. They will likely "grow" their pipeline to justify business operations (i.e. their salaries) and a future potential raise to keep the lights on. I still think this would make an attractive acquisition (costing only £1.2m to someone after taking out the cash) and I am still on the fence about adding to my holding or not - more likely to add on positive news around IXICO or around the clinical trial market (which seems to be very cyclical and currently entering/in the amidst of a downturn).
Very interested to hear the thoughts of others...
I think you.ve got it spot on BobbyA. This morning's RNS is just more of the same. Cash now £2.5M versus a market cap of £3.6M. The forward sales pipeline is now (supposedly) £12M but it takes years to convert this into actual revenue.
I'm sitting on a big loss on there shares but there is always the temptation to buy some more at 7p or 8p to average down my cost and then wait for either an upturn in profitability or a takeover. But will that ever happen?
The recent management talk did not show much progress, which is concerning. They continue to claim focus on building the order book but to reiterate "this is very much a metric that is given based on the opinion of management rather than totally objective".
It seems obvious, given expenses and slow/uncertain progress, that they will need more cash - either this year or next. I can't see a place for debt due to uncertainty around future revenues and existing institutional backing. So they will have to raise to rebuild their cash balance. Towards this end, they will likely demonstrate increasing order book - how accurately this translates into revenue is not clear - in order to support sentiment around a raise.
The other potential option is delisting, or an low ball take-private acquisition.
My holding is less than 0.5% of my portfolio, and so even a suprise white knight acquisition will make little difference to me. They have struggled to even make make progress around succession planning and this is likely an indicator of short-medium term business prospects. There has also been no movement on board salaries, which represent a huge proportion of costs.
Open to any alternative and more positive views?
There's a very good post on 25/05/24 by 40fathoms on the advfn board. I've sold out for now (usually a sign that the share will now explode) and will be watching from the side lines.
Bobbyaxe, Sadly i think you were very wise to sell out. Ixico has been around in one name or another for over a decade.It looks to be heading out of AIM with the shares being worthless. Promise of breakthroughs have never "born fruit" now there is no positive potential.