Share profits. - 10 Bagger.20 Jul 2014 12:15
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
My friends in private equity all tell me the same story - the key is management, management and management. AIM listed TyraTech (TYR) has this in spades. In fact a number of the team came from very big jobs in very big companies to run a very small company. Last year, I said to Bruno Jactel the CEO that I could see the shares at 25p or higher. His answer was that he was not there to build a company valued in £10s of millions, but in £100s of millions.
Unlike virtually every ‘natural’ company, TyraTech is different as it has a technology. This allows it quickly to find natural oils (normally a cocktail of these), which bind with and disrupt the chemo-receptors of invertebrates, but not those of vertebrates - you and me and the dog etc. So the products are safe for us but can be used as insecticides or repellents. It also affects other invertebrates such as parasitic worms, but that may be some time away.
The other difference from other ‘natural’ products is that Tyratech’s work. I have used the mosquito and tick repellent and you can see the effect on Head Lice by visiting the website and read reviews on Amazon (US).
The Group currently has three ‘direct’ product ranges on the market. Vamousse a head lice treatment currently sold in the US through Walmart and other outlets. But it will soon, early August, be available in Superdrug, in late August in Boots and I expect it to be sold on the continent next year.
The other retail product range is sold in the US under the Guardian label is a Mosquito and Tick repellent. In the US, 70% of this market is accounted for by DEET 15% strength. Guardian is superior to DEET 15%, is safe, does not rot plastic and can be used on children.
The last of the current range is insecticides for use in production animal housing – poultry, cattle and swine sheds. This is under the Natunex name marketed by Novartis. All these products have USPs, safety, efficacy and work on pesticide resistant strains, but are also in potential large market segments. In addition, I understand that there are a further 10 products in the pipeline.
The company also has a JV with AMVAC in termite control, but that will have no cash effect for two or three years, but that does take us to numbers. TyraTech has only just launched its current ranges. It is therefore early stage with those attendant risks. Market projections are for sales of $4 -5 million this year. My guess is $1 million in H1, which implies H2 in the range of $3 - $4 million. Market projections for 2015 and 2016 are for revenues of $9.5 million and well over $12 million. Current costs are around