Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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I noticed a few of the agri tech business starting to recover a bit, FMC being the one highlighted by Cavendish in their note.
https://finance.yahoo.com/news/fmc-fmc-11-7-since-163014584.html
Fertilizer prices are also starting to increase, not sure if there is much read across to PHC
Its a start, does show at least UK gov has noticed something is up.
Potato prices continue to climb, shortages reported in Netherlands:
On 27th February 2024, the Mintec Benchmark Price (MBP) for Dutch processing potatoes reached €37.5/100kg, the highest price for February since the price series began in 2014.
https://www.mintecglobal.com/top-stories/dutch-processing-potatoes-reach-their-highest-ever-february-price
Brit ISA to boost UK markets and growth stocks in particular just announced in the budget. I assume PHC would count as UK listed. Anything to increase interest and liquidity has to be a good thing.
"The market is growing for greenhouses since farmers are now noticing that biostimulants are becoming a must. In my opinion, it's quite impossible to produce high-quality, healthy, and safe food in a greenhouse without dealing with crop stress as a critical issue that needs to be managed.
In the Spanish market, we already see that biostimulants are as important for greenhouse growers as irrigation or nutrition is. The stress will always be there; nothing can change that; you have to reduce and manage it."
https://news.agropages.com/News/NewsDetail---49407.htm
ICL Accelerating Biologicals Portfolio Growth in Brazil with Strategic Acquisition
Company adding meaningful manufacturing capabilities and expanding product portfolio with acquisition of Nitro 1000
https://www.businesswire.com/news/home/20240227911936/en/ICL-Accelerating-Biologicals-Portfolio-Growth-in-Brazil-with-Strategic-Acquisition
Couple of brief articles:
According to a recently compiled report from Market.us, the biostimulant market size is forecast to exceed $5.6 billion (USD) by 2033. This reflects significant growth from its estimated value of $2.7 billion (USD) in 2023. The expected growth would equate a compound annual growth rate of 7.5% from 2024 to 2033.
https://news.agropages.com/News/NewsDetail---49145.htm
***************************************************
Brazil’s surge in biopesticide use marks a sustainable agriculture shift
Over the last five years, Brazil has witnessed a 45% yearly increase in biopesticide use.
This growth far exceeds the 6% seen in traditional agricultural chemicals. Now, biopesticides cover 70 million hectares in Brazil.
https://news.agropages.com/News/NewsDetail---49362.htm
'write up'
Good right up in Ago pages for SAORI
https://www.linkedin.com/posts/plant-health-care-inc_sustainableagriculture-agriculturasostenible-activity-7167994791434076161-6GJh/
'Chr. Hansen and Novozymes have joined forces to create Novonesis, a leading biosolutions partner.'
This merger looks to be well received by the market, shares are well up since the low in Oct.
Novozymes is obviously our partner in India, great partner to have with deep pockets.
https://www.novonesis.com/en
It bodes well for TEIKKO (PHC68949) which is awaiting approval in Mexico, that leaves just California and India with outstanding registrations.
For me it’s important that PHC continues to make progress with registrations in key countries. Suggests there’s a bright future beyond the current global agrochemical headwinds.
Good spot, its slow but the regulators are gradually phasing out conventional herbicides in favour of climate friendly substitutes.
OBRONA never really got off the ground last year (pun intended), legislation (if passed) could be a great opportunity for Wilbur-Ellis to pick up on.
https://www.thedailyscoop.com/news/new-products/wilbur-ellis-offers-obrona-fungicide-2023-corn-diseases
Exclusive: White House set to back tougher climate model for ethanol, sources say
https://www.reuters.com/world/us/white-house-set-back-tougher-climate-model-ethanol-sources-say-2024-02-16
Feb 16 (Reuters) - President Joe Biden's administration is poised to announce an adjustment to its scientific modeling for ethanol that will show the corn-based fuel to be less effective at reducing greenhouse gas emissions than previously estimated, three sources briefed on the plans told Reuters.
The adjustment, previously unreported, will make it more difficult for ethanol producers to take part in lucrative new U.S. tax credits for so-called sustainable aviation fuel, seen as crucial to the industry’s growth, the sources said. It will still leave them a pathway to the subsidies if they can partner with corn growers that use sustainable farming practices.
The adjustment is intended to more accurately account for the environmental damage caused when land is converted into farms to grow corn, while also rewarding climate smart farming techniques like no-till farming and covered crops, said the sources, who asked not to be named because they are not authorized to speak publicly.
Poland and France are pretty much joint second behind Germany for potato production, Staphyt are also based in France, two big markets.
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=The_EU_potato_sector_-_statistics_on_production,_prices_and_trade#Potato_production_in_the_EU_is_highly_concentrated
Reviewing the overall situation again, there may be grounds for optimism this year – reasons outlined below.
For Poland it would have been too late to secure a distributor and get product applied, according to the potato field trials (below) Harpin is a foliar fertilizer (via the leaves) application which has to be applied regularly during growth phases.
The same applies to Agrii UK partnership which was announced in October again, too late for 2023 growing season.
‘The Agreement will support commercial sales of PREtec technology and novel Agrii foliar micronutrient combinations. The first Agrii foliar fertilizer product to be launched containing PREtec technology will be sold under the brand Innocul8 and is expected to be widely available to growers in the UK for use in 2024.’
Agrii field trials November 2021
Potato specialist discusses the crop health and yield benefits of using a bio-stimulant containing the protein, Harpin αβ.
https://www.agrii.co.uk/news-and-media/news/trust-the-science-with-bio-stimulants/
In terms of a distributor for Poland, the Agrii article above mentions:
“Trials by Staphyt in Poland in 2019 show that early applications can increase tuber numbers, while later applications boost tuber size and quality. Both approaches resulted in an improvement in marketable yield and, depending on variety and sale price, net margin benefits of up to £350/ha.”
https://www.staphyt.com/en/sectors.
‘
Staphyt assists companies in various industries, multinational, micro and small enterprises or start-ups, from development strategy to launching products on the world markets.’
Couple of potential bright spots for Plant healthcare this year, wet conditions in Europe last year have seen a shortage of seed potatoes for planting, prices continue to rise.
EU faces dire potato seed supply challenges for 2024 growing season, prices soar
February 8, 2024
https://www.potatonewstoday.com/2024/02/08/eu-faces-dire-potato-seed-supply-challenges-for-2024-growing-season-prices-soar/
It would be good to hear if PHC has secured partners in these regions, especially Poland (quotes from news releases):
‘Achieved three significant country registrations for Harpinαβ in Europe (Poland, France and Cyprus); plans are advancing for product launches in these geographies, anticipated in 2024.’
‘In August, Harpinαβ successfully achieved Mutual Recognition in Poland. This is a major milestone for the Group and permits immediate sales of Harpinαβ in Poland. Poland is the sixth largest agricultural producer in the European Union, and the second largest potato producer behind Germany, growing around 322,000 hectares.’
January 18, 2024
Mintec Benchmark Prices (MBP) for White Potatoes rose by 16.3%
https://www.mintecglobal.com/top-stories/short-supply-pushes-uk-potato-prices-up
Still plenty of time to catch this year’s growing season, if successful could have a material impact on 2024 results.
Since news flow's dried up; here's my wild (& probably incorrect) speculation.
I'm wondering if PHC are selling Teikko directly to growers thus taking 100% of the profits.
The Brazil technical team is amazing and they've been doing loads of promotional work over the last year.
Just a thought...
This is what Cavendish detailed in their November update
‘Our FY24 revenue forecasts have been reduced by 28% in line with guidance and, despite this downgrade, a more cautious outlook on costs means we still expect the company to reach positive EBITDA in FY24.’
Going back to the consultation last year, it felt odd as management didn’t offer any alternatives to the current situation. It wouldn’t surprise me if they already had interest from a third party and this was a toe in the water exercise to see how investors feel about going private.
The attraction for one of PHC’s existing partners must be tempting, Origin for example (owners of Agrii UK) currently have a €20m share buyback programme and well-funded, Chris Richards is also Chairman.
Wilbur-Ellis similar situation, Plant Healthcare would almost earnings enhancing from day one with cost savings, plus the benefit of $100m of accrued losses going forward.
No worries, in general terms PHC need to generate around $16m to reach breakeven. Cavendish have forecast $16.6 for this year which seems too high, at least at the moment anyway.
In the right market I think this is very achievable especially with several new products on offer, if they can pull back on admin costs it will bring this threshold down.
In terms of value, product development, patents and registrations are all barriers to entry, this is why many think consolidation is inevitable as currently too fragmented.
One other thing worth mentioning for any potential acquirer is the significant accrued losses of nearly $100m, this in itself has value to the right purchaser.
@1Pencil - thanks, that's a great chart. I'm in the stock for the long term, because I believe in the value proposition the products offer to farmers. In my experience in new agriculture products, they are always 2 (or 3) years later than hoped. Regulatory approvals, distribution contracts etc all take time, but then become huge barriers to entry for a company to defend against competition. My frustration is that I thought that the company was "asset light", and that the value was in the intellectual property. When product was contract-manufactured by a third party, huge profit margins would belong to shareholders (with a barrier to entry). I did not expect to see no profit at all, and cash flows now going into manufacturing technology. When am I ever going to see earnings, even if sales targets are met?
Couldn't find this graph earlier which demonstrates the painfully long and drawn out process from development to actual sales, I doubt many investors would have signed up knowing just how long it would take.
https://www.planthealthcare.com/new-technology/pretec
We are (thankfully) now at the end of this process with sales gaining traction albeit at a time when agi markets are very challenging, FMC recently reported only modest growth for 2024 of 2-4%
Biotalys NV (BTLS.BR) are listed in Brussels and enjoy a much (much) higher valuation with no real income as yet, if PHC were going to re-list somewhere else this would be a good place imo.
PHC have a good product line up now which has gone from just one (Harpin) to say five if you include variants, geographical locations have increased too with new registrations and/or partners, the problem is one of scale and reaching that elusive tipping point.
Griffiths, I would have thought he would have sold by now, his recent purchase of XSG is somewhat perplexing.
OAPK20: From what I understand of the minimum requirements for listing on NASDAQ (in terms of financial assets, liquidity etc.) Plant Healthcare might qualify to list there in a decade when they have achieved their long-term goals. In the short term, there is absolutely no point in spending thousands of pounds listing a UK company on minor US exchanges. It simply never trades there, for good reason. There isn't a single UK company listed on a US exchange (which isn't an ADR, which is a very different animal to listing the local share in USD).
I am disappointed that the sales of the product launches come, but there's no profit for the owners (shareholders). Being a bigger company, selling more, but not making any money is pointless. 2 years ago (when funding good ideas with free money) ended, the only companies any investors beyond VC were interested in were those who could make a profit. Love the products, but I don't understand the point if there is no profit.
Occam - I used to hold here but no longer following the current board announcing on 2nd May 2023 - "Therefore, the Board has decided to evaluate over the coming weeks a range of financing options for the Company, including how Plant Health Care might access non-dilutive and strategic capital to support its growth ambitions. As part of this process, the Board intends to consult with shareholders as to whether AIM remains the right capital market for Plant Health Care to achieve its ambitions"
That destroyed any trust in what could have been a superb company. The dual listing, in my view, remains indicative of this Boards ambitions to delist from AIM and gain a full listing in the US. "
18/05/23 - This didnt inspire much confidence "Whilst there are various perspectives within the shareholder base with regards to the listing on AIM and there is a broad acceptance that the Company is currently under-valued, there is clearly a prevailing view that the Company should remain listed. Having considered the feedback in full, the Board is pleased to confirm, therefore, that the Company remains committed to its listing on AIM, including for any potential funding needs."
Also Scobie Ward has increased their holding (and influence) to 13.1% whilst Richard Griffiths has reduced their holding to 5.54%.
The current SP suggests I made the correct choice for me. Until there is a new board in place who are committed to growing this company as a UK listing its not for me. Still love the products and what the company as a whole are trying to achieve but my view is the current board care little for PI's and would think nothing of delisting from aim with zero thought or notice to PI's.
Be interesting to see if Richard Griffiths remains a seller and clears out fully from PHC.
Until there is a Board change or PHC's future listing is confirmed whether AIM or NASDAQ ill keep watching from the side.
During the last IMC presentation one question/answer related to a wind down of R & D following current product launches.
Without going back the answer was something like, 'heavy lifting is done, time to reap rewards' or words to that effect.
This has to be the core objective for 24/5 to get those costs down whilst showing modest growth, 10% announced so far but it needs to halve at least for this year imo.
Agree, TAKE-oh has some great attributes for soy, Brazil partner announcement would be good, or can they not use existing partners ?