Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
In the Guardian newspaper today https://www.theguardian.com/environment/2017/apr/03/grape-britain-uk-merry-on-organic-wine-as-sales-hit-nearly-6m?CMP=share_btn_link Aldi yesterday launches Organic wine range http://www.dailymail.co.uk/femail/food/article-4375334/amp/Aldi-launches-organic-wines-5-bottle.html AND EDEN has commercial contracts with Sipcam and Sumi-Agro to service 50% of the world's wine production through Italy, Spain and France Surely a round of talks with the Supermarkets and the Guardian on this occasion would be very worthwhile for both profiling and spreading the word A Great British Bio-tech success story? We could be, but we need to be more proactive with these things. Organic is a choice Pesticides is now an option, but not a necessity thanks to Eden's 3AEY Organic means no pesticides and minimal and sometimes no sulphates. No sulphates (for those that may be allergic) means better health. So Eden is also contributing to the health of those drinking wine around the world. What a story!
Telling us how much they have shipped or are about to ship to Sipam and Sumi-Agro would be a good idea
Looking for the distributors promotional activity is fine, but the number we want is our own sales to them. We will see that in one of two ways. Either an RNS saying we have today received an order for x litres OR it will appear in the interim accounts, presumably published in July or August. As I posted before, because it can be used as a preventative measure, it may well be that orders are both early in this year and substantial. They cannot afford to be short of stock.
factsnofiction I anticipate with the new sales model of direct sales, that Sipcam, Sumi-Agro, Redestos will be forward buying product to hold in their distribution centres. They will not want to be out of stock and with the product having a two year shelf life, they protect themselves and their sales pipeline. Eden RNS'd that in some geographies Sipcam had achieved 20% market penetration http://bit.ly/2i9n6FP. 3AEY can used sold as a preventative measure or addressed at the point of onset of Botrytis. I imagine the distributors would prefer to sell the former. We'll see!
I cannot see any mention of Oxford Capital and the warrants issued as directed by the recent RNS to the following RNS http://www.lse.co.uk/share-regulatory-news.asp?shareprice=EDEN&ArticleCode=3jgzgwh2&ArticleHeadline=Conversion_of_all_outstanding_debt
There's a few typo's in that post and some jumbled copy and paste text from the Shore Capital broker note, apologies but I'm sure you all get the gist.
cont'd Eden can then share this opinion and research as it will not be seen as Eden "pumping" its prospects. Finally, in the 2015 broker note from Shore Capital, they dedicated two pages to Mergers and Acquisitions citing the following:- Over the next decade, the use of biological solutions is set to record double-digit growth and by 2030 could represent up to 10 percent of the global crop protection market. We believe it is interesting to see the agreements that are mentioned in the final two points in relation to the BioAg Alliance (Monsanto and Novozymes) and the agreement with Syngenta and DSM to focus on developing new solutions to improve global agriculture. We see this as a strong indicator of the prospects for the agrochemical market and especially. In this respect they stated the Eden is "a potential acquisition target". Eden really does need to embrace all of the above in their forward investor communications and soon because the market at large has no appreciation of the above and what significant value the current share price represents. At the same time, existing shareholders suffer the disservice of seeing their hard earned invested money not showing representative value. the biological product aspect of the market. In our opinion, this is positive for Eden’s prospects going forward.
In November 2015, Shore cap issued a broker note with a "prudent" price target of 22.5pence. Shares at this stage were prices at 15pence. in this broker note it was cited that the Bayer evaluation was in its final stages (still no answer) and this was for the licencing of the GO-E technology. An example provided which illustrated value was a Bayer product going off patent, but using the GO-E technology it could be extended for another ten years and the product sales to Bayer were anticipated at $4 billion. In the event of a positive update by Bayer, Eden would/will receive a percentage of net sales value to Bayer. This evaluation was for pet shampoo, conditioner and ear drops. The report also discusses revenue opportunities for licencing GO-E in other markets to improve existing products and we have had no update on this. The note also mentions in some detail Intellectual Ventures who will protect and grow Eden's IP and opportunities as well as deliver new deal opportunities. Given that IV is at the fore of this worldwide, why have we heard nothing on the progress of this relationship? Shore Cap forecast income from milestone payments, royalties and net product sales is £6.21 million for this calendar and financial year, rising to £24.83 million in 2019, just two years away. the cost base of £1 million is only expected on average to grow at 5% per annum. Eden has now signed the Eastman Chemicals deal and Sumitomo (effectively) for 50% of the world's wine producing markets (Spain, Italy and France). Based on these revenue projections, the price target was 79pence based on a weighted average cost of capital (WACC) of 12% (what money is Eden borrowing?) and a "terminal growth rate" of 2%. Now that these deals are in place and the sales and income model has changed from one of royalties based on net sales to a much larger % based on sales direct to these companies, how much will Shore Capital increase this 79pence revenue based price target? I for one would expect it to rise well above 100 pence, allowing for the change in revenue model. So, when Shore Capital update this outdated broker note, it is surely incumbent upon Eden to convey this value message to the market (predominately private investors according to the shareholder register) and not just the institutions and the "city" via the distribution of this broker note. Private Investors do not get a copy of Broker notes so they are disadvantaged. What Eden can do is to take the information that is on the broker note and generally in the public domain and explain this in layman's terms, jargon free, in a way that most of their shareholders will understand, so that the trading share price can best reflect the value that Shore Cap will be telling institutions the shares are worth. I think it would also be helpful of Shore Cap to identify typical P/E ratios for company's in Eden's sector and stage of development. Ed
There will not be an AGM for many months though. Time will tell I guess, but personally I found it unusual.
It is interesting that you say that though because any investor communications delivery should be consistent, timely, relevant and significant and then there is a range of behaviours when communicating that must be adopted for your relevant audience, in this instance, primarily a private investor audience. One of those behaviours is to deliver information jargon free. This is key because it allows ordinary Joe to invest in multiple sectors because when removing jargon, a company and its sector are much easier to understand. Without this delivery, sectors become complicated, difficult to understand and people feel out of their depth which in turn means, no investment. How many private investors understand Bio-Technology and the use of terpenes and yeast applied to agro-chemical markets? I bet if a lot more did then the Eden share price would be significantly higher and more stable too. Meanwhile, people continue to invest elsewhere in what they know and understand.
That RNS was peculiar. No need to issue it at all. So the question is, why have they?
sain@vision Do we know each other? I ask because the observations you make in your 09:00 post are very closely aligned to my own work that has been executed with listed companies.
sain@vision It would be nice for the Company to expand information flow and content to shareholders, PI's and institutions alike. I'm not sure that they have a particular duty. AIM suggests that they get a PR firm upon listing to broaden their message. Unfortunately, PR firms are limp when it comes to the private investor and although paid a monthly fee by the listed company, rarely if ever, do they deliver any measureable value or understand how to deliver communications. Their idea of investor communications is to ask a publication if they can have some newspaper or magazine column space and that is both A) a very competitive space and B) lacks initiative. Todays investor communications is totally different to that which a financial PR firm purports to offer, yet can't even deliver on their own published PR remit. That is an across the board observation and I say that from a point of knowledge. You are totally right about the risks on AIM. What you are requesting, would of course, mitigate those risks and help you and others make better investment decisions which is also good for a company's share register.
If you go to the shareholder information on the Company's website, 25% is held by institutions, namely Livingbridge, JM Finn and Artemis and the rest is in nominee accounts. Therefore, PI's dominate shares held. This takes no account of institutional positions below the 3% threshold. I recall reading on company materials that there was about 2,000 shareholders. What it is now, I have no idea.
If you don't understand how a market maker works, watch this short film https://www.youtube.com/watch?v=KRz259u6A6w. I guess a lot of people are unsure as this is one of the most watched videos of nearly 5,000 that Proactive distributed.
saint@vision I agree. Eden should just kill the story and remove any overhang that there may be on the stock due to fear of something unsavoury coming out of the woodwork. They don't need to get into a bog debate. One simple concise statement will suffice to which anyone interested can then refer.
That last sentence should finish "just how undervalued Eden's shares are"
I think Eden could be, if a larger player is of a mind to do so. 1) The Eastman Chemicals deal will be, according to the RNS http://bit.ly/2mNY12q delivered by Eastman into the largest markets globally for Nematicides and will cover in total 29 countries. However, income for this deal won't occur until 2019, the market size annually is $550 million and Eastman is a leading supplier to this market 2) The Sumi-Agro deal http://bit.ly/2mACIEx offers up an annual botryticides market of $350 million. Sumitomo http://bit.ly/2mTAooh now has access to 50% of the worlds wine production with 3AEY via the wine countries of Italy, Spain and France http://bit.ly/2lRlwXe 3) From 2017, Eden has moved to a new distribution sales model http://bit.ly/2i9n6FP whereby they will sell direct and reap (indicative) net income of 35% of wholesale value which indicatively is 280% higher than the royalty model per litre http://www.edenresearch.com/archives/presentation/Eden_AGM_2016.pdf SLIDE 11 4) Eden has indicated that it's product could potentially penetrate 20% of the Botryticides market in which 3AEY is sold (see link in 3) All of this is without Bayer, the number one agro-chemical company in the world who are trialling Eden's products. This is without the lawn, garden and seeds trial supplier(s) (is this Syngenta, the number two agro-chemical company in the world). This is without the patented technology that is Go-E Eden had income last year of £0.4 million So a potential interested party can see that Eden's market capitalisation is just £20 million, currently has very low income, but forecast income will be high (e.g. 35% of the wholesale value of $70 million/20% annual sales penetration) plus, perhaps, a similar percentage in the larger nematicides market. So these two deals alone will likely generate far more than Eden's current market cap. It looks unlikely that Eden could muster enough support to resist any bid when referencing their published shareholder register http://www.edenresearch.com/html/investor/shareholder.asp where they appear to have 25% institutional holdings with the remainder in nominee (private investor) accounts. This doesn't take account of any institutional shareholding below the 3% declaration threshold. So a less motivated or price expectant market would be able to accept a lower bid price on behalf of the Company, in the event of a bid coming in. Eden is a bio-tech company and the P/E multiples will be quite high. So given those numbers above and Eden's exceptionally low cost base, for each £10 million of profit and assuming 184 million shares in issue, this delivers an earnings per share just north of 5 pence. Based on todays share price and I appreciate I am overlapping time and events, but based on this, Eden would be on a P/E of just 2.2 times earnings. I hope when Shore Capital delivers an updated Broker note that they and the Company are at pains to point out just how undervalue
I can't see that botrytis forecasts would be useful, as you say, probably as reliable as a weather forecast. In regards to newsflow, you always need momentum to maintain interest, knowledge and to educate. Sporadic news will deliver occasional share price spikes, but not true share price value. True share price value can only be delivered when the 'market' truly understands the proposition and is therefore in a position to understand and invest in value.
It's small beer when there are 184 million shares in issue and of little consequence in my opinion