Member Info for dougerboy

Any view on when break even is coming & sales/profitability in 5 years draft?

Not sure if Jim Gordon‘s name had popped up before, but his credentials (formerly Unilever & McBride) look bang on.

https://uk.linkedin.com/in/jim-gordon-85a51a29

Loot „just because these brands use Itaconix acid...“
They don’t - they use products derived from it. Itaconic acid is our raw material which is polymerised using Itaconix IP and then sold as Velasoft (Sodium Polyitaconate) https://itaconix.com/wp-content/uploads/Tech-Data-Sheet-VELASOFT-v2.0.pdf

Itaconix is a World Leader in this field, no doubt.

Yep, if it goes any lower AJ, I'll be pulling the trigger again.

Yes flow you’re right. End of 2022 it will look a lot different. We are on a long positive burn here - it’s like a hike up Ben Nevis and we’re just out of the car park, crossed bridge over the water of Nevis and begun the initial climb. Over the next while - like the mountain - we will for sure ask are we there yet/how far still/it’s a bit of a slog! but on the way up we can turn around occasionally and view where we’ve come from, which will amaze us, but not nearly as much as the view from the top when we’re there. Note: I’ve been on Ben Nevis on a clear day!

Me too Surfie I bought at at 8 a month ago but holding for not a month but much longer because I see 20p ahead in a few years time. A steady solid journey on growth delivery is what I like here.

It feels like we are motoring along nicely, quietly going about building the business, where the regular releases of quarterly news, I see as further confirming upward ticks in the delivery of the company’s long term strategy. That can mean news feels light compared to other overhyped AIM co.s., where everyone hangs on the next fortnightly RNS (been guilty of that myself), but this is good different.

Disruptive environmentally beneficial profitable products being increasingly accepted, adopted by and sold to industry, certainly provides hope, which is at this stage of the company's growth & development is anything but false.

Excellent find Elsol. It is a big stamp of approval and validation on our products and value proposition.

Chilting ‘we’ are the market, and we know where this belongs long term, which means short term drift is but a passing deflection in a strong ocean current, pulling us towards solid land. IMHO DYOR.

It certainly was!

Yes Thordon, a decent & correct sized operation for the immediate $15M targeted business I reckon but beyond that I don’t know. Not sure I’d use the word massive though! John mentioned in the video that they hold in warehousing 1T sacks of IA feedstock and from experience a decent sized facility can soon seem small when big orders roll in and you begin to wonder where to store/warehouse raw materials/finished goods stuff. We bear in mind feedstock is coming mainly from China, which means decent amounts of IA (one imagines) need to be warehoused. We’re now getting into realms of throughput/capacity planning for a rapid growth business, which I guess is the nice exciting remit of the new VP Ops!

A link to a fascinating read on our feedstock and its production development history (wish I was a chemist).

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5815973/#!po=0.588235

The IA market for 2020 is quoted at $216M, grown by 60% from a previous volume of 41000T, which puts 2020 global tonnage at some 66000T (I’m happy to stand corrected on that).

Interestingly, a further report

https://res.mdpi.com/d_attachment/polymers/polymers-11-01035/article_deploy/polymers-11-01035.pdf

contains this quote: “According to the US Department of Energy, IA is included in the top 12 building block chemicals, since it is a promising platform molecule with extensive applications.”

The more I research, the more I like about the space we are operating in.

AJP, $6M in 2021, would be a good result, and a further step on delivering the expected growth. If we can get to $10M-$15M in 2022, then we are truly off to the races. On break even, though, I think we need a good chunk yet, from where we are now,

If we maintain current margins of 37% GM (CoGS/Sales), and assuming an annual $3M overhead base, then we need Annual Revenue of $8.1M for breakeven. We are on that part of the journey where I see it as no longer the case of if we/will we get there, but when. Perhaps a reason why the CEO wisely put a 5-10 year window on the $75M objective.

Heading out for a walk now in wet Glasgow!

If the existing factory/site can support growth up to $100M+ that is good to hear. Would be good to hear it from John/new Ops VP though! I just watched the July video again and listened carefully -again - to what John Shaw said, Here some key points:

- "make & sell" ie no licencing

- "recognised leader in bio-based chemicals"

- "only producer of these types of polymers in the world"

- "$335M Rev Potential from current ingredients"

- "$75M Rev Target over next 5-10 years" "on existing formulations"

- non-phosphate detergents: "active projects $20M revenue potential" $5M revenue potential from NA alone on "formulations we're already validated in"

- once in, after lengthy selling cycle (3-4 years), there are "sticky revenues"

- "500-600 samples/year going into labs" supporting customer NPD

- "current capacity upwards of $15M"

- from Q&A part: "currently running 2 shifts with multi-million $ growth potential"

- "low capital spend requirements"

- "very few retail stores in NA that don't have our product"

- NA & Europe main focus (Asia still permits phosphate based detergents & lower consumer use of dishwashers)

Which all sounds very positive and it will be interesting to follow the timeline of (profitable) growth development.

I guess the management/exec team will be crossing that make-or-licence bridge, well before the factory is maxing out and running at full tilt. That's a big call though, vis-a-vis IP Protection, quality control, customer demand by geography etc. If they can service the global customer base from the existing manufacturing location, so long as it offers sufficient room for expansion, it would get my vote.

Hi AJP, yes looking at audited annual results for 2019 gave me my number - but then the interims for H1 2020 show - as you say less (just shy of $1.3M) which for the year would give $2.6M on same run rate. For 2021 we have additional overhead of announced senior hires which will knock that number up. So yes, not $3.5M (sorry!) and maybe $3M is a better number on reflection, and that will change when we start to build more capacity ;-) and hence my other question.

My first post and I've been enjoying the change in fortunes of ITX, on what I think is a long term compelling story. I am a long term holder as a consequence and - AJP - "vastly undervalued" may be right, but that can only be relative to the anticipated/expectedimproved value of the company at a future point in time. Profitable revenue growth is therefore key, and so long as momentum continues we will be heading for breakeven. The question is when. If revenues double year on year, whilst maintaining GP margin, and holding annual overhead $3.5M, I see breakeven earliest at the end of 2022/23. Beyond that, assuming growth continues, things will become very interesting. Anyone know at what revenue level we max out current factory capacity?