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@1Pencil. There is a huge cash-cost saving to going private. I think the US listing is a total waste of money, and that listing should be dropped in the interest of the shareholders. There's no benefit and there is cost. Secondly, I see two paths for the company. Slower organic growth (products come from the PRE-tec platform), or cash of 15-20 mill accelerates the process. That would be equity funded, so would need the agreement of the big existing shareholders. There may be covenants in the investment mandate from Janus Henderson to invest in small high growth companies - so they might be a forced seller into a tender offer. I don't know. I also do not know what Ospreie would do: would they sell another investment in their fund to have more cash to invest in PHC and not be diluted? Do they have cash? Personally, I'll hold for 5 years and have confidence in the Jeffs to deliver. If I have to tender at a higher price, then there's no decision to make.
This is the latest Macrovoices podcast - if the link below doesn't work you can find it on a google search.
https://macrovoices.podbean.com/e/macrovoices-381-leigh-goehring-global-food-crisis-update/
Based on the new issued share cap, top four holders as follows (rounded up)
Ospraie AG Science
58,072,790
17.00%
Scobie Ward
38,984,624
11.41%
Richard Griffiths
36,909,630
10.80%
Janus Henderson
30,214,286
8.80%
Total 48.01%
Going private seems an even more likely option now, obviously the remaining holders would need convincing.
"DWF have advised Plant Health Care, Inc. on a fundraising which raised $3.6million."
"Lester Wilson, Ben Palmer and I worked closely with Neil McDonald and Peter Lynch, CA at Cenkos Securities plc and their legal counsel Tom O'Connor and Tom Nicholls at Stephenson Hardwood to get this deal over the line. The fundraising was launched at 4:35pm last night and completed earlier this morning."
"The company's share price has reacted positively to news of the fundraising which is a testament to the strength of Plant Health Care, Inc.'s investment proposition and their management team."
"We look forward to seeing what Plant Health Care, Inc. do next."
Jemil Visram
Director (Corporate - ECM and M&A) at DWF
‘Global Crop Solutions’? Nah.
‘Plant Health Care’ is more specific; does what it says on the can.
Although I have been invested in PHC since 2021, I have only just found this BB. Does anyone else think that the name Plant Health Care sounds a bit weak? I emailed the company to suggest that "Global Crop Solutions" sounds much more dynamic, but there was no reply. I feel that PHC has massive potential, but the wrong name.
We may have to rejig the figures Occam, Eden having a good day current Market Cap. £35.25m
Yep, there's the RNS watershed.
Ospraie have more or less maintained their position, while Scobie Ward has increased overall position to 11.41% - James Ede-Golightly has also bought a few.
Share register is starting to consolidate, rough tally puts 50% of the company with four major holders.
This should be it now until profitability is achieved.
I like (own) shares of both. The valuation gap between the two is massive: I agree with your numbers, but compare the two stocks based on a multiple of revenue (because neither is currently making money). PHC is at a huge discount on Ev/Sales to Eden. The business both share a huge market opportunity, and there are significant barriers to entry from competitors. The cost of the products is a tiny fraction of the value of the crops which they are protecting for the farmer. If you are driving a Mercedes, it's not a huge deal to take the advice of your mechanic and spend $100 to protect the paint.
I take this as a positive. The pressure on small companies is not only to deliver revenue growth, but profitability. I assume that the capital will accelerate the path to profitability.
Roger that, we may see an RNS in the morning as quite a small raise, plus plenty of time to tentatively bookbuild prior to this announcement.
Sorry ipencil
PHC board wanted to avoid dilution. This is mentioned in the 2022 results RNS and in conversation at the AGM meeting.
I guess they could find a way to do this in the end.
Not sure I understand your reply, do you mean avoid dilution which has not been the case ?
If so, I don't think they had any choice really, agree on clearing the air and hopefully those sellers will now stop.
Also feel this time around is bit different, much closer to profitability with steady growth - prior to this it was all over the place.
I guess Scobie was unware as buying in the market quite recently but good both major holders are backing this -
CR has a fair chunk but CEO/CFO only bought 15k or so of shares last time around.
Avoid dilution!
I’m sure if you asked the board right now they’d say the same. Several directors own shares, CR has 1%+.
We were told at the AGM that Cenkos were reviewing the options on funding. Further questioning on the matter was closed down - draw your own conclusions I suppose.
If the benefit outweighs the dilutive downside I’m happy., and like I say, it clears the uncertainty.
Yes, it was pretty much nailed as I have mentioned before, my reference to the AGM statement was from your post below after attending:
"1/ No decision has been made about securing non-dilutive funds and Cenkos continue to evaluate the options against a tricky macro-economic background. The desire to avoid stock dilution is palpable and that should be refreshing for all investors (they care about us!)."
I would think those that have been selling also antedated buying back via a placing, it would be good in the two Jeff's took a meaningful holding (unlike last time).
9p is a fair discount to the last placing with the company making much progress since last two years
In the 'result of consultation' RNS it states.
" It was clear in the consultation process that investors are consistently supportive of the Company's track record of delivering growth over recent years. Moreover, the Board is encouraged that a number of shareholders were supportive of providing further capital to accelerate organic growth, if justified by returns over the current plan. "
PHC could continue within existing funds to reach profitability within the anticipated time-frame (before 2025), but with additional funds, market conditions are right to out-pace this timeframe. Assuming a successful bookbuild following today’s RNS, the ‘Plant Health Care’ brand can be deeply and broadly embedded within the sector. I note that Ospraie and Scobie Ward are participating in the raise which gives confidence. It’s also nice to hear that H1 sales are in line with expectations.
So for me, this RNS clears the uncertainty that’s been hanging around the share for the last month or so. Onward…
Interested to see what these two large holders do, this explains the weakness in share price though.
The Subscription
As part of the Fundraising, the Company is intending to enter into subscription agreements with Ospraie Ag Science LLC and Scobie Ward, both existing significant shareholders in the Company, (the "Subscription Agreements") in order to facilitate their participation in the Fundraising at the Issue Price.
In addition, certain directors of the Company have indicated that they intend to participate in the Fundraising at the Issue Price.
Not sure how this fits with AGM commentary.
https://www.londonstockexchange.com/news-article/PHC/fundraising-to-raise-up-to-us-3-6-million/16011117
Plant health care with almost x 6 revenue compared to Eden allowing for $/£
Eden Market Cap. .........................................£33.54m
Plant healthcare Market Cap. ......................£31.51m
Eden revenue ................................31 Dec '22 £1.83m
Plant healthcare revenue ...........31 Dec '22 $11.77m
(Based on this web sites data as of today)
Ditto, excellent summary bots and thank you.
Perhaps this is the best way forward, head down and hit the numbers or better still beat !
Cenkos is being bought by finncap which in itself could expand their investor audience, solid small cap broker too imo.
Thanks bots, appreciate the summary.
With regards to the subdued SP, I believe the company needs to market/showcase itself better, whether that be in US or UK. The right broker might help, but engagement is key and whilst PHC are making all the right noises, it's not currently reaching the wider audience
I was at the AGM held at Cenkos Offices earlier today.
Unfortunately, the two Jeffs were busy at another meeting and only attended the AGM very late on. The meeting was chaired by Chris Richards with contributions from Guy van Zwanenberg. There were the usual admin staff and a couple of bods from Cenkos, whose role mainly involved politely advising CR as to what he could or couldn’t say. This was necessary because the three investors (also attending) asked some pretty searching questions. CR was his usual friendly, reserved and very brainy self. An absolute pleasure to chat to along with the other investors.
I’m not going to give a detailed account, but just a few key points.
1/ No decision has been made about securing non-dilutive funds and Cenkos continue to evaluate the options against a tricky macro-economic background. The desire to avoid stock dilution is palpable and that should be refreshing for all investors (they care about us!).
2/ CR reaffirmed PHCs commitment to AIM, but I sense there is still frustration about the share price not representing recent progress.
3/ There was a discussion about consolidation in the sector, but this felt like some way down the track. Instead, it seems that PHC will continue with its progress towards profitability (unless opportunities present themselves).
4/ There was a brief discussion about the role of larger investors/fund manager in influencing consolidation in the sector. I mentioned Dwight Anderson from Ospraie. CR made it very clear that the PHC board is in the driving seat when it comes to corporate development. This gives me confidence.
5/ I asked which competitors the company most admires. From a peptides perspective CR mentioned Biotalys, Vestaron and Elemental Enzymes.
6/ I asked which European country PHC production had moved to, but they didn’t want to say because it might alert competitors. My concern was more about security and CR was quick to say that it was a safe European country.
7/ First sales of PHC279 (via Wilbur Ellis) are close now.
8/ The board has no desire to sell the company on the cheap. Good to hear it, PHC is already a good company and IMO has all the hallmarks to be a great company in the future. CR repeated his desire to have a PHC product on every field – (paraphrasing Bill Gates). Love it!
There was a bunch of other relevant stuff – I recommend investors attending if you can next year.
This should improve PHC's prospects in US market for seed coatings.
https://www.theguardian.com/environment/2023/jun/10/epa-pesticide-toxic-seeds-lawsuit-environment-pollutionhttps://www.theguardian.com/environment/2023/jun/10/epa-pesticide-toxic-seeds-lawsuit-environment-pollution
Link has been posted before but perhaps worth repeating as underlying trends accelerate.
Plant health Care gets a brief mention a fair ways in.
Its worth Googling Dwight to get an overview of his background, Ospraie AG is of course a Plant Healthcare share holder
Dwight Anderson, Ospraie – A Tiger Cub’s Take on The Chaotic Commodity Markets
https://www.youtube.com/watch?v=gLGkokdz9wo
Fertilizer chemicals are also running into the sea causing seaweed blobs stretching hundreds of miles.
There is another way of boosting crop yield folks 😲
https://amp.theguardian.com/us-news/2023/mar/16/seaweed-blob-florida-sargassum-beaches