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Well I think he uses trials and pipelines interchangeably. Previously they have talked about the 100 as trials. Your post caused me to relisten to the webinar. Just before talking about pipeline (towards the end of the webinar) he seems to refer to the Bimbo contract as “10 million ish”. It is rather mangled as he refers to “a company with sales of 10 million ish”. Not completely clear. Anyone got views?
Not "trials", "pipelines", I interpreted that as potential other contracts with other customers but TBH I can't see any other pipelines coming near the size of GB!?!?!
.....and d o w n it goes.
I dread a bad news day.
In these webinars in recent years Laurier seems to have gone from being quite nebulous to very bullish and now self assured. The part that struck me was when he said Bimbo was just one conclusion out of the 100 trials. So presumably the other 99+ are still active opportunities.
It is very frustrating but then I think many companies do not give that type of financial detail for commercial reasons. One aspect of the contract that I have been wondering about is that it is “exclusive”. I read that as applying to both sides ie Bimbo won’t take another product (I don’t think there is one) and SYM will not sell to anyone else in USA, Canada and Mexico. Although Bimbo is a big existing customer of SYM and they would want to keep them happy that is a lot for SYM to give up (particularly as the bread market is quite fragmented). So I would assume the contract is substantial. Bimbo must also see a good deal of value to want to cut out competitors. However, I might be misreading the situation.
I don’t think we are in a close period - normally 30 days before full or interim results even though there is a trading update in a couple of weeks or so. It will be interesting to see what it says. They have said that they had a slow start to the year but things were picking up. Weak sterling will help as revenues mainly dollar related.
Management have a bunch of share options to exercise by end of year (expiry dates pushed back twice - grrr) so that might be how they are looking to buy in. Laurier already has a substantial stake in the company which probably is enough for him.
As you say still no figures mentioned. Would like to average down but want more detail re revenue or potential revenue. Volume is fairly low but it’s early days.
I think anyone with a holding in SYM thinks the GB announcement is a game-changer for the company.....FINALLY.
But has anyone seen ANYTHING with regards to what this might be worth?
In both the RNS and the Proactive interview not a single figure has been mentioned!!!
With the scale of GB surely this is a multi multi-million pound turnover announcement and something that should double/treble the SYM SP? Yet what have we had, a 20%ish rise.
Are SYM directors currently in a closed trading period? It is yet another example where I'd like to see directors filling their boots, yet they aren't.
That 10.13am trade at 18.22p is my small top up (not a sell). The Grupo Bimbo deal looks like a monster judging by the scale of the company and the size of its market and market share. Their website is well worth a look to get a feel for that. And this is just one of many deals we can apparently expect in the short term. Bring it on!
Pretty bullish if then,if we can believe him
Many thanks Hounddog and Shatter. To clarify the sales forecast I took was from market screener and was for full year 2023. From memory the 2022 full year revenue forecast is for around £11.5m (worth double checking that).
I agree on the profits based multiple as high margin high growth ( if we get the high growth now) will command a punchy multiple on days with strong sentiment.
Dividend is an interesting idea! Agree no signifoxant capex requirements so payout could be quite high and with good near term growth. Would be a confident signal from management.
Troy. It may be better than that. Taking the £14m forecast for this year (out of interest where is that published and when was it made?) that is a £5m hike over 2021’s £9m of sales. Given that it probably assumes that new sales are made on average half way (or later) through the year and sales tend to be more or less recurring an extra £5m in 2023 is not unrealistic. So around £20m sales in total for 2023 possibly (if around about the £14m is met this year). So the extra £11m sales in 2023 over 2021 should be at a good (largely) d2p margin of say at least 50-60% - so £5-6m of extra gross profit and few extra costs outside that. Loss in 2021 was £1.4m but there were a number of one offs so previous year losses of under £0.5m more representative. So they could make £4-5m profit after tax (no tax as losses) in 2023. Stick that on a multiple of say 20-25 (not too absurd for a fast growing company) and that is a £80m - £125m market cap.
Another aspect is that this stock tends to spike periodically. The herd arrives from time to time before getting impatient and thundering off. I also wonder if the City has totally absorbed the implication of the Bimbo contract. I think post lockdown everyone is more focused on holidays and Wimbledon. Bimbo is a very big company - as someone else has pointed out on another board it made £3.8bn in sales in Q1 this year. It is also growing rapidly - greater than 10% per annum.
Also they do not have much need for the cash and if they do get strongly into profit then there is a prospect of a decent dividend - but that will probably only be in 2024.
Troy…Your analysis seems as good as any and as you say perhaps on the cautious side but until Sym give us a few more details doubling up would be very welcome.
£14m is the revenue forecast for the year to end Dec 2023. This is before the grupo bimbo news yesterday. I have no idea how to estimate what the annual sales from the new GB contract could be worth but £5m feels like a reasonably conservative estimate. Given the increased confidence around further sales forecast uplifts related to d2w and d2p outlined in the agm statement today revenue for 2023 could easily be £20m or even as high as £25m.
What that means for company valuation is again an estimation. I don’t think it’s too much of a stretch to assume 3x sales for a low capex and low operating cost business model. That would give a £75m valuation target for the equity over the course of the next few months as investors get more visibility on the 2023 sales forecast. Granted there are A couple of ifs in there but if sales start getting booked for d2w in Latin America as well as traction with the Indorama jv then share price doubles from here on confirmation of those in my opinion. Just an opinion though and would be interested to read what others think on sales for 2023 and valuation. Thanks. Troy
Indeed and more to come in the short term by the sound of it. Feels like they have got the bit between their teeth now.
Another good RNS today.
Don’t wo worry, there will be enough sweets to go around
The reason I sold out some years ago was the perpetual awarding of free shares to directors. Good news today but will the sweets be dished out again at the expense of investors!
Looking at Bimbo’s accounts the d2p agreement covers 80% of their sales by territory.
In its accounts SYM is required to disclose how much any individual customer contributes to sales if more than 10% of sales. In the past they have said there is one such customer and in 2020 * that customer represented £2.5m of sales. I have always believed that that customer was Grupo Bimbo to which d2w was being sold. Laurier has said many times that d2p is a much more valuable product than d2w. Obviously impossible to know if the physical volume of d2p sales will be the same, less or more than d2w but the sales agreement covers Bimbo’s major territories. So one might think that d2p sales to Bimbo could be at least that of d2w with a significant increment for being more valuable. Guesswork but perhaps an indication of numbers.
Gross margins for d2w are 40% plus and for d2p should be much higher. There is really no additional costs to SYM outside cost of goods. So the gross margin falls to the bottom line.
* In 2021 there were two customers over 10% and which contributed between them £2.5m of sales. No split given but the amount of d2w sold to Grupo Bimbo presumably fell. There is no explanation.
Well we are top of the risers board at the moment so that should garner more interest in this.
Those super new salespersons job just got massively easier with the public domain sale to the the worlds leading bread packager. Please please capitalise on it and make additional sales. That’s your job. Go sell it and sell more.
Oh that I've lived to see this day.