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This may be of interest. A research report which shows that the global bread packaging market is estimated to be $42 billion (can be implied from the other figures) and is set to grow by $8.5 billion in the next five years. This includes all sorts of packaging - not just “flexible” ie I guess film, which is SYM’s target market. However, I would guess film is a significant part of the packaging market.

The summary narrative is interesting (may need to click Read More under the figures) - the trends are all about “Rising focus on improving the shelf life of products”.

https://www.technavio.com/report/bakery-packaging-market-industry-analysis

The interim results will be in line with the trading statement they have already made ie a smallish loss. What will be interesting is what they say about H2, the 100+ trials and if their guidance for a £1m operating profit in H2 still stands.

Eric is doing a proactive webinar tomorrow. I would imagine that Shanta will get their interims out before that. Not certain as webinar is with a number of other resource companies so that may be determining timing but interims normally around this time. I am not sure for those that closely follow Shanta the interims will have any surprises but likely to be positive.

Yes, actually there are a couple of interviews where Eric has said a bit more about the VAT (one with lse - can be found via SHG media icon at the top of this page). He has said that the Tanz authorities are now working on the VAT refund audit for HY1 2021. So it looks as though we are back on track for getting ongoing VAT refunds - which is about $8m a year.

However, Eric has also said that about $23m of the historic balance is (his words) “locked in”. He indicated there may be some movement on that. However, my guess is that will only start being recovered when the Tanz govt are owed higher tax receipts from Shanta. Technicalities aside the govt will want to extract a certain minimum amount of money from Shanta each year. It may also be that some of that $23m gets written off. Hopefully, not too much.

Yes, it also occurred to me that it is likely close to the surface as they have not disclosed depth figures - not disclosing location should have been enough. Might be tough to keep secret. I think Eric should go there with a pick and shovel himself before the artisanal miners turn up.

Yes I thought so as well. Rather more informative. The particularly interesting bit at the end (albeit a brief comment) was about the ongoing trials, particularly the bread bag stuff. I think there are more announcements to come fairly soon. SYM has constantly disappointed over the years but it seems in a different place now. We shall have to see.

I should imagine a good deal of the buying is Meditech. If you have to buy up 2.5% and the backstop is 35p then you might as well get on with it at the current price. They also face the possibility of further positive news flow from SYM in the next few months which may take the share price higher.

To clarify Meditech are not obliged to buy at 35p unless they have to go to SYM to issue shares to get to the 2.5%. However, existing shareholders may think that is the price they should hold out for before selling. Sorry for the less than well worded first post.

So 35p seems to be the fair price that SYM/Meditech have agreed SYM is worth in the next six months. Meditech has to buy at least 2.5% of SYM in that period, almost 5 million shares. Then there is Vincel, already on the shareholder register, which has been buying. It was obviously interested in more of SYM, as had warrants for 5m shares at 25p which expired 25 July. They let them lapse as cheaper to buy in the market.

Seems the Meditech deal will see revenues next year so is not factored into SYM’s profit forecast of £1m for H2 2021. If some of the 100 other trials conclude successfully 2022 could be a breakthrough year.

I suspect Vincel have been the main buyer of late and why the share price, in a traditionally weak part of the year, has moved up. They are effectively an insider and will have a decent understanding how the 100 trials are going. I presume they think good news is to come.

For every trade there is both a buyer and seller. So whilst you have sold someone else has bought. Classification of sell/buy depends on the price of your trade versus the mid price.

Presumably this is what has kept the share price up. I would guess that it is the trials that have shown the need for adding more d2p and in more types of plastic and so they have gone back to the FDA for the approval. Hopefully, this will unblock any remaining obstacles to customers signing contracts.

The RNS says the US bread plastic packaging market is worth $20bn. I think d2w gets added at a rate of 1% and is basically cost neutral. So using that for d2p the addressable market is $200m. Capturing even a small percentage of that would make a huge difference to SYM. And on this product I don’t think they have competition.

As far as I know SYM does not manufacture and sell direct to retail. It’s business model is the inclusion of an additive in the manufacturing process for plastic to be used by, typically, medium sized or large corporates. So they have to market the product to these corporates who require trials and testing to ensure the additive works and adds value. The pandemic was not good for this long term process when corporates were grappling with very immediate concerns. SYM has repeated in the update that they have 100 plus trials ongoing for d2p which should come to conclusion soon (probably next six to nine months). Hopefully out of that they can pick up at least a handful of decent sized orders. If not then the commerciality of the d2p product is doubtful. H2 is going to be important.

I agree the update smacks of future jam manufacturing - something SYM has form for. I certainly was expecting some sort of profit, particularly given the “carry over” of £0.7m of revenue from last year (they didn’t bother to mention that alongside the detriment of currency movements).

However, there does seem to be a good deal going on (past commentary on future business has usually had little to say). They say they think they are on for annual consensus operating profit of £0.4m, which means that they will make around £1m in the second half. If that is the near term carry forward position ie £1m per half year that could mean 2022 is a £2m profit year (operating profit and profit after tax virtually the same given little borrowing costs and tax losses). That is the hope.

Looks like something is up. Possibly good first half year results. I am expecting a profit - but is it just around break even or much better than that? There has been quite a bit of resilience in the share price over the last few weeks - seemingly because of Vincel buying. I wonder what their game is on that.

Nigeria?

Proactive

https://www.proactiveinvestors.co.uk/companies/news/945511/symphony-environmental-technologies-says-d2w-plastic-study--reinforces-message-we-ve-been-driving--945511.html

This is an enormously helpful report although I am not sure it has a DIRECT impact on the EU litigation. There has been some scepticism on this board about the merits of taking such action. However, I don’t think SYM did it primarily for damages. I think it was for two reasons. Firstly, from a marketing perspective it is deeply unhelpful to have the EU banning oxo bio-degradable - competitors can weaponise that fact and many customers will not have the appetite/skills to think about it further. Secondly, where the same batch of plastic is being manufactured by the same customer for use both in the EU and in a country that allows/requires oxo biodegradable there is an obvious conflict. That is unlikely to be resolved in SYM’s favour.

The claim, as I understand it, is that the EU did (PAST tense) not follow its own procedures in arriving at an oxo-biodegradable ban. So in that sense this report does not help from an evidence point of view. What it makes much less likely is, if SYM wins the case, the EU going back fixing its procedures (abetted by the bio plastics industry) and going for a ban again. It also MAY reduce the EU’s appetite to fight the case (but they will want to resist damages for past harm). It is also very helpful that this study is by a FRENCH institute (I am not sure how apolitical the EU judges would be given rather fraught EU/UK relations).

It is worth remembering that SYM’s commercial director is a very experienced former barrister so SYM are much better placed than most to internally evaluate the success of the case. However, I see it as more a defensive move than one going for damages. (Although if SYM wins they should get something).

Telegraphist50. That caught my eye as well. They have not made that disclosure in the f/statements before and I do not remember it in the presentation to investors for the accelerated book build. It seems there are at least two ways in which the Govt may take 50%. Firstly, as a free 50% carry or secondly taking 50% of the ‘economic benefits’ which I assume would be after taking account of tax, royalty and clearing fee receipts (so somewhat less). Shanta say the ‘economic benefits’ approach “could” happen (notably they could have been vaguer but were not). Then there is the business of taking a matching payment for any equity or even loan repayment.

I rather fear that now Shanta is in profit the Govt may start to really screw them. The VAT is not a good omen. The VAT audit, which does not seem to have reported, yet was well over half a year ago. Other companies eg Wentworth Resources, Petra Diamonds have had similar problems getting money back which the Govt owes.

I hope I am wrong as I have a decent number of shares in Shanta and in all other respects it is doing incredibly well.

Proactive interview:

https://www.proactiveinvestors.co.uk/companies/news/940794/symphony-environmental-technologies--very-encouraged-by-global-results--940794.html