RE: This afternoons presentation23 Sep 2020 19:07
A broadly positive webinar and presentation.
Key point for me was that cash burn of £0.4m a month, (and £1m R&D rebate from HMRC), funds should suffice till mid 2022, by when they expect to be cash generating. The fact they don't expect to have to raise any further cash should provide a floor for the share price.
I asked a few questions, one of which wasn't answered (despite them claiming to have answered all the questions). One Q, was about the impact of Donald Brenninkmeijer who was announced in March this year, his appointment from C&A. The answer was very fluffy but that he helped them gain understanding into the garment industry, which they found valuable.
They didn't answer my Q on the tanning business that they spun out to ESTR - their expectations for royalties, whether Xeros saw it as a significant revenue generating market for Xeros in future. As part of the management buyout/spin off, if ESTR didn't meet certain commitments then Xeros could take ownership of this again. I'd like to have seen more detail on this. Perhaps Mark Nichols/Paul Denney will respond on here (as Mark did reveal that they read chat boards from time to time).
There were some numbers bandied about the size of the markets of IFB and Midea but I don't think I picked them up cleanly so I won't post what I had written in case it is wrong. If others have it, please let me know?
I did pick up extracts on the royalty payments, which whilst confidential, could be between £3-10 per machine from my understanding (they were talking about low to mid single digits for one agreement and mid to high single digits for another).
Midea sold 27% of washing machines in China last year, when c. 75 million were sold. Obviously we don't know if Xeros tech will be in all their machines, but you can see the potential scale here - at £5 a washing machine, it amounts to £100m a year from Midea alone.
A further point made on the presentation was the diversification of the company - the many strings they have with the XOrb, XFiltra and XDrum all providing different revenue generating options, in different markets in some cases.
Xeros also announced that they'd been invited to a French advisory board if i picked up correctly, in relation to sustainability in this area............that's significant, partly to get a foot in the door but also to influence and gain connections.
Whilst the delays are disappointing, if not inevitable, there do appear a lot of promising things going on, which should bear fruit in due course.
I have sunk a lot of £ in here, painful amount at a lot higher average than this, despite averaging down, so I do hope it comes good. I remain positive that it will
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