Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
This may be the most frustrating company that I have ever invested in. The core business looks decent, but there have been multiple management missteps/knee-jerk strategy changes over the last few years which have damaged the company hugely. Add to that the complete lack of stability at board level and sub-optimal corporate governance. Only one year ago, Mike Salter was stated to be a key part of management (having been sacked as CEO for good reason) and the company did not even bother to issue an RNS when he left, using the excuse that he had announced first on LinkedIn. Not nearly good enough.
The IMC presentation this afternoon as upbeat, but the credibility of management is on the line and we need to see results, rather than empty promises (of which there have been far too many). Shareholders are now being asked to back management to deliver growth and to accept a dividend pause. It had better deliver. I asked the final question on IMC as to whether the board had discussed strengthening the board by splitting the chair and CEO roles. I believe that it should. The response that this issue had not even come up in recent discussions really concerned me. As things stand, the company is uninvestable for me. I have reduced my exposure at a painful loss, but still hold. That is under review.
I hold both BWY and RDW - as well as a couple of other house builders. I do not think that we have seen the bottom of the market yet. I have added to the above shares when dividends have kicked in, but most of my recent investment activity has been in VCTs. We will have to see what BWY have to say on Tuesday. Despite the very low prices, I am only adding very cautiously.
Muttley
Vlad,
I should first declare that I know Strictly and have met with him in person a few times, so I know that he is not a fictional poster.
I have followed with interest the debate about shareholder surplus. I focus more on total shareholder return. Stripping out intangibles has to be right, but your formula does not actually a concrete return, as the increase in NTAV may not be reflected in an increased share price. So, I can see that it is a sanity check, but I struggle to see the utility beyond that. I may be missing something.
Finally, you should consider joining the blog. I think that you would find it useful.
Just to add that I see that, following the recent virtual presentation , TSTL has now posted Q&A details on its website (Investor Centre - shareholder information - presentations) on its website. A must read for investors/potential investors in this stock. Note the responses to the BYOT collaboration and plans for the Cache range.
My understanding is that the BYOT related products (in the Cache range) will start to be introduced by TSTL bit by bit starting later this year. I agree that the TSTL price jump today seems to be mainly related to the BYOT RNS, but I find that slightly puzzling. BYOT are clearly doing well, but they are still a very small company and the success/actual financial impact of their product range for TSTL is nigh on impossible to predict. It is highly speculative, but with very little (if any) downside risk for TSTL. There are other much more predictable and comforting upside indicators to go on in evaluating TSTL, in my view. Start with the untapped or barely scratched expansion opportunities. It is not that long ago that TSTL shares were trading at over 500p.
I share your hope that further information on the BYOT deal and its progress is included in the presentation. We don't actually know if all regulatory approvals have been secured in the UK/EU for the Tristel8 range. Add to that the need to persuade the NHS and others to recommend using the products. Even in these unprecedented times, it could take a while longer.
Just a postscript on the CFO role. For all I know, Nic Hellyer is a highly competent individual. He may have been an excellent hire. However, I understand that he is a part time appointment. BYOT has had accounting problems in the past. In my view they need a full time CFO if they are to be considered as a serious investable proposition. As I said, I think that they need to upgrade.
stt1,
"I think that any potential is already in the price".
Well, personally, it is too soon for me to consider investing in BYOT, but there is obvious potential. I think that management deserve some credit for steps that they have taken to change the direction and business model for the company. For example, the initial deal that they signed with TSTL was well before anyone knew about COVID-19, so they were already thinking well ahead. The next few years will show whether BYOT can sign (and convert into profit) significant partnering agreements. Investing at this stage is basically a bet on the company's management, which I expect will need to be upgraded - e.g. appointing a decent CFO.
Just on the subject of the finncap 2021 revenue forecast of £10 million, I didn't consider that too awful. In contrast to many other brokers, I think that finncap tend to be more conservative on their projections. TSTL is a case in point, where they have constantly come in with forecast figures below those that the company has actually delivered. In any event, I don't think that this is about 2021, but the years beyond that. The company is undeniably in a sweet spot. The question is whether it can fully capitalise on the opportunity.
James
finncap (house broker) have issued a new note this morning, giving forecast figures for 2021 for the first time. Forecast revenue for FY 2021 is £10 million. Their target price remains at 9p. The note is available for free if you sign up on the finncap research website and can certify that you are a sophisticated investor or HNWI.
Each to their own as to what to make of the forecasts, but I think that the finncap broker notes for life sciences companies are generally worth a read and contain useful information beyond the actual figures. For example, there is an interesting section on valuation which discusses potential and references Tristel (TSTL) - a company I know much better than BYOT. BYOT is at a much earlier stage than TSTL in its evolution, but it is on my watchlist.
I wouldn't be surprised if we get a TU from TSTL much sooner than the end of July. We have not heard anything of significance (officially) from the company since the Byotrol announcement/brief comment on trading conditions back in March. A couple of local newspaper articles which the company retweeted indicate that it is experiencing high demand for its surface disinfectant products in particular (no surprise there), but it would be helpful to have a clearer idea of current trading conditions both in the UK and internationally.
I agree that there is a lot more to come, but I think that that applies whatever happens in the sort term with Covid19 issues. I can imagine that that might actually defer FDA approval, as the FDA must be swamped at the moment and the focus will be on a vaccine.
Putting that to one side, the fact is that hospitals etc will need to maintain higher levels of surface disinfection for all time. That aspect of TSTL's offering has been fairly low key so far (compared to medical instrument disinfection). And I hope/expect that TSTL will start to address the huge non-NHS market potential, probably in JV with a major partner. I think that we are still at a fairly early stage in the growth potential for this company.
From looking at share activity today, there was a fair amount of selling early on and very little activity (and at small amounts) after lunch. Other than people who exit through stop losses, I suspect that most holders are hanging on to what they have and so the market is drying up and the sp is being dragged down by small trades.
It is anecdotal rather than a reliable stat, but there is a story in The Times Business section today about a very small Maidenhead company called Big Wipes, which apparently sells to the trade across Europe. It is apparently a basic cleaning product, but with no evidence (or claim) that it has any impact on the virus. The report goes on to say that the company's distributors have run out of stock in Scandinavia, France and Germany. I am expecting many more similar stories. Of course, TSTL mainly targets hospitals, where standards(and so barriers to entry) are much higher. And TSTL's global footprint is considerably larger. What is happening is going to pose some real challenges for TSTL, but I think that the company will inevitably need to gear up.
I am assuming that in the next few weeks (and maybe even sooner) TSTL will issue a trading update. If that happens, I cannot see that it will say other than that they have had to materially ramp up production across the board. We were told at the last presentation (I asked the obvious question), that they could increase production at least three-fold. Why would they not be flat out at the moment?
Grim times, but at least they have a range of products that do good and protect people. That is paramount.
Yes; I agree that webinars are very useful, but they tend to be the preserve of the larger listed companies, rather than fairly small companies on AIM.It may be down to cost. The only small AIM co I know that does this sort of thing (there may be others) is Judges Scientific (JDG) in relation to their briefing to analysts. TSTL is much more user friendly than most - morning and evening briefing sessions for shareholders of interim and final results, plus a well attended shareholder day at their Snailwell HQ each July. On top of that, Finncap (house broker) is one of the few brokers who give wide access to their briefing notes, the latest of which came out yesterday.
The Chinese order for surface cleaning disinfectant - apparently shipped last week and significant because it required a special exemption as the Chinese regulators have yet to formally approve this product - was mentioned at the investor briefing last night, as was increased ordering by NHS hospitals. The Chinese order was also mentioned in the lead article this morning in The Times Business section (Market report) "Virus provides opportunity for Tristel to clean up", picking up on briefings to the analysts. Unusual for such a small company to hit the headlines.
There are multiple opportunities for this company to grow much further, quite aside from the current focus relating to the Covid-19 virus. I think that we are still in the foothills.
Hello Nige.
If house builders deliver as a group in anything like the 2019 performances then I guess we will do well, whatever system we employ (within reason).
I am not a chartist, but a number of features are obviously relevant to other main stream investment strategies. It was through the LSE share chat site (for TEF, RIP), that I first started to look in more detail at the system that Strictly employs and with which he has had so much success over many years. That led me to sign up to his blog when I was invited to do so and I can thoroughly recommend it.
All the best for 2020,
James
Sain, I agree with the concept, but I think that INL do not have the firepower to execute in the same way as UANC (who delivered pretty decent results today). Bottom line, I regard INL as a successful fee developer who have done very well, but not a master builder, because they are way too small and do not have the required financial backing.
I have been investing in CLIG for a number of years. As you say, it is a completely different type of investment to housebuilders. I hold it because it has an excellent track record over many years as a fund manager and it is a proxy for an exposure to emerging markets - and now increasingly developed markets as it diversifies its offerings. Note that the founder and major shareholder - Barry Olliff - retires at the end of this year.