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M&A activity -
Hopefully not targeting PHC at the current price.
I suspect the board are seeing how things pan out with distributors reordering before issuing an update, that's understandable given the volatility at the moment.
Even without the last two registrations PHC have a lot more products this year than last, we should start to see more feedback as planting starts for this season in the Northern hemisphere.
Revenue wise this year, realistically I would expect somewhere between $13-14m with a much reduced loss, Cavendish on the other hand have a revised (in Nov) figure of $16.6m along with a small EBITA profit.
Either way its clear PHC is gaining traction even in extreme (destocking) adverse markets, the last two posts illustrate the market potential with bio stimulants replacing an ever decreasing selection of traditional chemicals
M & A is also very active, something else to be mindful of as the industry consolidates.
On the remaining two registrations for this years planting season, India I think we have missed so this will now be 2025, California Obrona there is around 8 weeks or possibly a bit more to go before the window closes.
This is just an approximation, happy to be corrected.
ironknut, yep, funds perhaps need to see a clearer idea post over stocking, very hard to get a clear picture as the major have their own issues on top of this, AMVAC is a good example which may ultimately benefit PHC and other biostimulants companies.
On April 1, the U.S. Environmental Protection Agency is announcing its next steps to protect people from the herbicide dimethyl tetrachloroterephthalate (DCPA, or Dacthal).
EPA is warning people of the significant health risks to pregnant individuals and their developing babies exposed to DCPA and will be pursuing action to address the serious, permanent, and irreversible health risks associated with the pesticide as quickly as possible. EPA has also issued a letter to AMVAC, the sole manufacturer of DCPA, restating the risks the agency found and stating that due to the serious risks posed by DCPA, the agency is pursuing further action to protect workers and others who could be exposed.
https://news.agropages.com/News/NewsDetail---49703.htm
This is more of a general reference to the dwindling toolkit of existing chemicals rather than to suggest PHC has a direct replacement.
Certainly not boring me with your detailed research 1pencil. What is boring me is the total lack of any sp movement given the potential of this company which you so clearly set out.
At the risk of boring everyone into a deep slumber, wanted to follow-up on the powdery mildew issues clarifying which branded products do what in the PHC line up.
From my understanding Obrona, Innocul8 and Saori® in Brazil are the same product targeting amongst other things powdery mildew, from recent PHC news flow:
'Obrona™, based on the same active ingredient found in Saori® in Brazil, was launched in the US In 2023 by Wilbur-Ellis® Agribusiness.
Obrona is a unique foliar product developed to help growers control a wide range of fungal and bacterial plant pathogens within fruits, nuts, vegetables, and row crops.
Multiple years of field trials validated product efficacy to support initial launch focused on corn diseases, such as tar spot (Phyllachora maydis), Gray leaf spot (Cercospora zeae-maydis), and common rust (Puccinia sorghi), as well as powdery and downy mildew and various other diseases in grapes, as well as white mold (Sclerotinia sclerotiorum) and other diseases affecting leafy vegetables within key Western US states'
PHC are still waiting on California for approval, obviously this being a huge wine producer should bode well for Wilber Ellis partnership if approved, Wilbur Ellis already supply flowable sulfur into California which is the other key component mentioned in Agrii PDF below.
https://www.wilburellisagribusiness.com/product/sulfur-dry-flowable/
Updated list of new products approved and ready for sale in 2024, appreciate OBRONA launched in 2023 but more or less missed growing season hence inclusion now.
MOSHY (PHC25279) Brazil to control foliar diseases in coffee and sugar cane
TEIKKO (PHC68949) Brazil to Control Nematodes in Soybeans
OBRONA (PHC25279) USA fungal and bacterial plant pathogens within fruits, nuts, vegetables, and row crops.
Innocul8 (PreTec) UK promoting greater yields and higher quality of potatoes, berries, peas, beans and grapes.
HARPIN Poland, included as approved late Aug 2023
Mexico (awaiting brand name) PHC68949 to Control Nematodes in Vegetable Crops
Still India with Novazymes/Harpin to come in along with OBRONA in California, Mexico has PHC25279 awaiting approval.
Let me know if I have missed anything.
Excellent news.
Seems as though 2025 will be the year when PreTec really starts to move the needle in terms of revenue.
Seriously doubt we’ll be sub 4p too much longer.
Powdery mildew seems to be an almost fatal disease in grapes the world over, causing significant damage to crop yields, even the smallest infection can make its way into the final product through taste. Fungal resistance is also a major issue as covered in the Agrii pdf below, p4, p5 highlights the use bio stimulants in this regard:
'The final group of organic fungicides are elicitors such as Romeo and the bio stimulants that can have similar incidental affects
as a result of their use, such as Innocul8 (formerly PREtec)'
'Whilst the number of plant protection products in UK viticulture is shrinking annually, with less modes of action available to rotate chemistry than there were historically, there is increasing demand on growers to maintain the efficacy and quality of the products that are available.
Integrating a variety of organic, physical acting and elicitor-based products not only allows you to improve pesticide efficacy, with shorter harvest intervals and novel modes of action, but also helps preserve the efficacy of the other more site-specific products we use every day, to help produce a healthy, high quality crop of grape'
Also worth mention is the recommendation for ProAct under Grapevine Nutrition Programme, p22
Reference material:
Grapevine Powdery Mildew: Fungicides for Its Management and Advances in Molecular Detection of Markers Associated with Resistance
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8307186/#:~:text=Grapevine%20powdery%20mildew%20is%20a,the%20quality%20of%20the%20wine.
Part of the quote contained brackets which cut the bottom half off.
Couple of weeks back there was a LinkedIn post with folks from Agrii UK visiting PHC in Spain, bit puzzled by this as completely different climates and more focused on fruits.
https://www.linkedin.com/posts/plant-health-care-uk_agriculturasostenible-cultivossanos-citricos-activity-7174139541350453248-vwtl/
This may help explain;
Agrii's Vineyard Toolkit catalogue (p14) below features PREtec aimed at powdery mildew on grapes:
* Inocul8 contains zinc and manganese formulated with innovative PREtec™
When combined with the dry flowable sulphur treatments, both rates of PREtec™ peptides helped vines to almost completely contain the powdery mildew infection. All treatments resulted in significantly reduced powdery mildew severity compared to the untreated control *
https://www.agrii.co.uk/media/bsabu0ca/vineyard-toolkit-2023.pdf
Needless to say grape production is a huge market, this is set against a backdrop of increasing regulatory and consumer pressure to reduce chemical residues, especially in wine.
Plant Healthcare ZERYA Certified Pesticide Free Produce partnership in Spain.
https://zerya.org/en/
Couple of weeks back there was a LinkedIn post with folks from Agrii UK visiting PHC in Spain, bit puzzled by this as completely different climates and more focused on fruits.
https://www.linkedin.com/posts/plant-health-care-uk_agriculturasostenible-cultivossanos-citricos-activity-7174139541350453248-vwtl/
This may help explain;
Agrii's Vineyard Toolkit catalogue (p14) below features PREtec aimed at powdery mildew on grapes:
- Inocul8 contains zinc and manganese formulated with innovative PREtec™
When combined with the dry flowable sulphur treatments, both rates of PREtec™ peptides helped vines to almost completely contain the powdery mildew infection. All treatments resulted in significantly reduced powdery mildew severity compared to the untreated control (P
Couple of weeks back there was a LinkedIn post with folks from Agrii UK visiting PHC in Spain, bit puzzled by this as completely different climates and more focused on fruits.
https://www.linkedin.com/posts/plant-health-care-uk_agriculturasostenible-cultivossanos-citricos-activity-7174139541350453248-vwtl/
This may help explain;:
Agrii's Vineyard Toolkit catalogue (p14) below features PREtec aimed at powdery mildew on grapes:
'Inocul8 contains zinc and manganese formulated with innovative PREtec™
When combined with the dry flowable sulphur treatments, both rates of PREtec™ peptides helped vines to almost completely contain the powdery mildew infection. All treatments resulted in significantly reduced powdery mildew severity compared to the untreated control (P
I thought this paragraph from interims was encouraging on destocking, strong sales to actual customers but distributors running down stock levels.
'While our sales to distributors declined, sales by our distributors to growers (on-ground sales), increased for various products, including 9% for FASTAND, 35% for Employ, 29% for H2Copla, of which 27% is for sugar cane processers. These are all Harpinαβ products. Sales of our first PREtec product, Saori, increased 38%.'
Interesting article from the Federation of American Scientists: "Regulations, Funding, And Knowledge Gaps: Challenges And Opportunities In Bringing Agricultural Biotechnology To Market"
https://fas.org/publication/agarda-to-accelerate-biotechnology/
Folk are still selling but I sense a turning point. The spread is saying “we’ll give you peanuts for your shares you fool”
Watch for a breakout, I think this company are beyond the destocking issue now.
Need to read fully but looks positive for biostimulants industry as a whole.
https://research-and-innovation.ec.europa.eu/document/download/47554adc-dffc-411b-8cd6-b52417514cb3_en
There's a fair bit of recovery underway across the pond, FMC has just received an upgrade which is helping
https://www.cnbc.com/quotes/FMC
Novozymes (now novonesis)is doing very well, way past 12 month high
https://www.cnbc.com/quotes/NVZMY
Fed rate decision today, hopefully some good news there too.
Eric Wintemute, Chairman and CEO of American Vanguard, stated: ″We rebounded sharply in Q4 after having weathered the effect of global destocking within the distribution channel, the oversupply of Chinese generic products into multiple regions, and the unavailability of our most profitable products due to supply chain issues.
Increased demand during Q4 provided evidence that destocking activity continues to subside and that, even while showing greater discipline, procurement within the distribution channel is following more normal patterns.
https://news.agropages.com/News/NewsDetail---49527.htm
Another step towards wider adoption for biologicals , PHC target markets to - crops such as corn, soybeans, cotton, sugar cane, coffee, rice and oranges.
https://news.agropages.com/News/NewsDetail---49526.htm
Alarming article from Yale about depleting ground water thanks to solar powered pumps extracting too much ground water. Not a problem anyone wants to see but one that lends itself to PHC's PreTec
https://e360.yale.edu/features/solar-water-pumps-groundwater-crops
Hi
Briefly, the science and many endorsements say the products work. Also there are visible benefits. They have a small lab in Seattle and been working on cheaper productivity costs and margins. The destocking problem is industry wide and led to PHC suffering a lost year (I imagine), but it is widely predicted to resolve by H2 - it resulted from overstocking during Covid when supply channels were squeezed. If we’re up and running again we should reach profits early next year.
We need to get the FY results out of the way 1st. The SP is the product of a broken market. Still waiting for the promised investor return, was hoping for more than a hot beverage served at the AGM.
Joking aside there is great potential here with patience.
Thank you!
You say the products work fabulously - are you in the trade? Interesting also to hear the broker target, I hadn't realised. Wow. Also, it's clear the products are selling, but does anyone know how the all-in costs compare to others/doing nothing?? I'm no farmer or investment expert, just a scientific background a long time back, and a tendency to be a bit adventurous.
Good to have you onboard Qd22.
Yes, the macro picture is excellent and PHC products work fabulously. I await the next RNS with trepidation because 2023 ‘may’ prove to have been a right off. However eyes will be on the forward statement (my eyes at least). If the destocking problem is over, then this is a great time to buy or add at the current levels.
Hard to believe the broker target is 40p+. Hope the company remember this in case of any TO bid.
FMC Corporation expands biologicals crop protection platform in Canada
https://finance.yahoo.com/news/fmc-corporation-expands-biologicals-crop-113000728.html
Agreed, bots. I've bought in here today, had my eye on it since Moneyweek recommended it in November. [Before the fall!]. Risky, but lots to recommend it, so it's bottom drawer for when those registrations come in and hopefully volumes rise a lot.
From Moneyweek:
'Shah points to estimates that the overall global consumption of food will grow by 1.2% a year for at least the next three decades, leading to a 50% increase in demand by 2050. While this may not seem a particularly large challenge, the sector will have to meet this demand at a time when “the available land is shrinking”.
This is partly due to urbanisation, especially in the developing world, where many formerly agricultural areas are being swallowed by towns and cities. However, another factor is the impact of climate change. As Shah points out, this isn’t just a matter of rising temperatures anymore, but also a case of “increased droughts, more pests and generally more frequent extreme weather events”. '
Biological Pesticides Market
Soybean remains the largest crop with +50% share in area and value, followed by corn and sugarcane
+70% of the market value is BioNematicides (soybean and sugarcane as key crops) and BioInsecticides (corn is the key crop)
Bionematicides in corn is considered a big growth opportunity
Biostimulants - Soybean
Soybean area treated with biostimulants has increased 17.5% from 2020 to 2023
An increase of 43% in biostimulant value between 2022-3 was mainly driven by product price
Foliar application remains the most common in soybean at 87% in value terms in 2023, with 13% of biostimulants in value terms applied as a soil treatment
https://news.agropages.com/News/NewsDetail---49474.htm