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ECONOMY

Inflation was flat in October from the prior month, core CPI hits two-year low

https://www.cnbc.com/2023/11/14/cpi-inflation-report-october-2023.html

UBS sees a raft of Fed rate cuts next year on the back of a U.S. recession

https://www.cnbc.com/2023/11/14/ubs-sees-a-raft-of-fed-rate-cuts-next-year-on-the-back-of-a-us-recession.html

> This is the first year THG will be without disruption from investment/integration process, New Jersey is now fully up

with lower running costs.

>Whey significantly down from this time last year.

>More customers onboard with Ingenuity will help top line, economies of scale.

Lots of consolidation too, Chr. Hansen with Novozymes is but one recent example.

If any one of these major want a head start on pipeline with or close to, regulatory approvals then PHC has to be a prime candidate.

Valued at way below any realistic valuation.

I thought the below para from Novozymes recent results encouraging following industry wide destocking:

"Growth was supported by destocking gradually levelling off in the food-related areas and increasing customer demand for our sustainable biosolutions"

https://finance.yahoo.com/news/novozymes-accelerates-growth-q3-track-060100297.html

Many tracker models are positioning for the turn imo, looking at Templeton's four positions are new totalling just over 24m shares or 4.1%.

Not far off TR1 threshold of 5%

Templeton have had a fair dabble adding across four of their funds, this is at end of Sept so a fair delay, there are also sales to take into consideration by GMO funds.

Overall it looks to be in S4's favour by some margin.

From Sept PREtec announcement:

· MOSHY (PHC25279) is a foliar product registered in Brazil to control foliar diseases in coffee and sugar cane.

· TEIKKO (PHC68949) is a seed treatment to control harmful soil nematodes in soybean fields. This is expected to be registered in Brazil before the end of 2023.

· MOSHY and TEIKKO add to the portfolio of Plant Health Care products available to growers in Brazil.

· Discussions with potential Brazilian distributors of MOSHY and TEIKKO are ongoing.

· For the six months ended 30 June 2023, revenue in Brazil was up 48%, driven by in-market demand for H2Copla® (Harpinαβ) and Saori® (PREtec).

That's a great find 2p, highly informative article especially the tables which really illustrate the growth potential (Table 2: Nematicide products introduced in Latin America within 3 years).

Some big names in this market

Direct link to article

https://news.agropages.com/News/Detail-47987.htm

This was Paula Dinnies (eCommerce Innovation (EMEA, APAC & LATAM) at The Kraft Heinz Company) response last week :

"It’s been a ride exploring our DTC initiatives for the past year and there’s so much more to come! This is a thrilling (and endless) learning curve for myself and The Kraft Heinz Company."

https://www.linkedin.com/posts/pauladinnies_ingenuity-ecommerce-kraftheinz-activity-7125187171254231041-DdpZ?utm_source=share&utm_medium=member_desktop

Someone else posted this link couple of weeks back (ended up in my bookmarks), of some relevance perhaps :

"We're planning a big finish to the year, and excited to see what 2024 brings!"

https://www.linkedin.com/posts/joeparker017_thgingenuity-kraftheinz-activity-7123321117762580480-Olkj?utm_source=share&utm_medium=member_desktop

Thanks for that, interesting commentary in the first para given previous trials;

"The approval was based on the Ph3 MRCT FRESCO-2 (18% patients enrolled from the US) as well as the China FRESCO trial, implying the recognition of China clinical data by the FDA"

Perhaps there is potential for Surufati nib after all, that study also had bridging data from Japan could a smaller US study be added similar to above ?

15% y/y increase would be okay in my book, of course happy if this is exceeded but also mindful of the lumpy nature of revenues, smoothing out year to year may help appease investors.

Morningstar updated, not a huge fan of this site as there are no dates but it does show Crux selling down further, could be our distressed seller in which case has to be close rump with data being delayed.

PHC shareholder page has yet to update but looks okay when adding in Newlands and Scobie recent purchases.

Just as a closed out this page after posting, CBNC has a feature on funds money flow, again interest bearing instruments receiving most of the capital.

https://www.cnbc.com/2023/11/10/t-bill-and-chill-why-jack-bogles-strategy-of-lazy-investing-is-making-a-comeback-.html

Concur with Investment Approach as posted below.

Starting to really build out with new product lines :

https://heinztohome.co.uk/bundles/build-your-own-box.list

Also noticed THG have a new tag line on Heinz site :

'THG Ideas with momentum'

By chance, Lion Trust is featured in today's Mail article

https://www.thisismoney.co.uk/money/markets/article-12717623/The-FTSE-350s-worst-performers-2023.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fmoney%2Findex.html

Many of the Investment funds I follow are sitting at multi year lows, the whole redemption thing is feeding on itself as funds sell assets to meet their obligations. Funds held by other institutions such as Lion Trust are in a worse position with both retail and institutional selling, Lion Trust for many years was highly converted by the likes of Buffettology which hold sizable stakes.

Hopefully a change on rates will see some of the declines reversed in 2024 for everyone.

What are investors thoughts on H" this year Sept IMC Q & A session was interesting, Jeff's sounded pretty confident when quizzed on figure need to for f/y.

H1 $5.6m which equated to 1% increase on 2022 H1, this leaves a whopping $10.3m for H2 to achieve f/y $15.9m guidance.

H2 - 2022 came in at $6.3m so adopting a more cautious approach I would suggest in the region of $8m is more realistic, therefore f/y 2023 would come in at $13.6m.

Even if they roll over some of the revenue into 2024 it would still equate to a very reasonable 15% growth on 2022 numbers.

The results were fine given where we are economically, Trade Desk dropped 35% the same week whilst not a direct comparison its still advertising.

As long as the main shareholders stay firm and see it through things should improve markedly next year, we should here soon on the proposal to merge both Premium and Standard listings, no point in being listed if only overseas investors can buy stock - S4 has a relatively small free float along with THG, both could benefit from these long overdue changes.

It was so predictable apart from the fact of announced three weeks early !

Great news though..

Agreed 2p, even if we take a conservative view on H2 for this year, company is valued at less than 2 x revenue.

Looks like some of the selling pressure is abating, now second largest holding in portfolio.

Props didn't want anyone buying in the auction this morning, grabbed some but had to work for it.

That looks okay to me, but wasn't expecting too much either given other sector announcements.

Cessation of merger payments in 2024 will change the dynamic, long dated debt, comfortably inside covenants can afford to ride this out until market improves.

Lot baked in already..