Good interview with Ian King on the Business Section - a great promotional opportunity, well taken!
Back to JS's presentation - I listened carefully to the explanation of the lost customer and it was interesting to hear that the breakdown in negotiations was NOT as a result of failing to agree a price increase, but related to ITX refusing to give away to this (greedy?) long-standing customer, all of the post-pandemic global cost savings attributable to ITX's unit cost.
Presumably the cost-savings demanded were more than the profit ITX had been making on the $2m contract - so JS walked away and good on him for holding his nerve.
Yes, a major set back in revenue streams and profitability by about 12 months, but rather have this pragmatic conclusion, instead of reporting results next year that we are selling volume product at a loss.
Apparently, our 'lost' customer will more than likely have to replace ITX product with petroleum-based alternatives - well, good luck with that!
We look forward to welcoming back this customer, next time with cap in hand - so, fingers crossed....
GLA and DYOR
Interesting presentation - nothing really added to the RNS, but an honest appraisal as to where we are.
In response to a question and if I heard Laura correctly, the 'lost' merchandiser was not a direct customer, but an intermediary supplying two of our customers.
JS also intimated that these 'lost customers' will have to replace ITX formulations with ones which are petroleum-based. So if they have an eco-conscience, may be all is not lost and they may return to the ITX fold at some time in the near future.
This SP adjustment is understandable, as it skyrocketed from 120p to 270p on not a lot of news - that's AIM for you. When you're out of favour, you really are out of favour!
What is not understandable is the timing of this latest announcement. If it was done in concert with the approval of its broker, then it's poor advice by them, too.
If you listen to JS's latest interview, he refers to this customer as still be a 'good mate' having shared his wife's cheeseboard with them 16 months ago - what was that remark meant to suggest? Friends don't deal with each other in the way this has panned out.
Something doesn't ring true about not waiting to announce this with the April RNS on the 2023 results. If there was a contractual reason as to why this announcement could not be delayed, then shareholders have a right to be told - transparency is the key to any disclosure of such materiality.
In the interview JS states that the relationship with this long-time customer had gone from one of 'friendly' to one of 'mutual fear' - so JS, "What was the fear from our perspective?"
Having watch this interview a few times now, I have concluded that JS has been all too jocular and dismissive of this customer loss and it will take time to repair the damage for LTHs and those who see ITX as a match winner in the fulness of time.
GLA
Hi Elsol - how confident are you identifying DG as the lost customer?
Perhaps I've missed something here, but his company product range doesn't include dishwasher detergent, only laundry detergent and definitely no tablets whatsoever to be found anywhere.
Rest of your comments great! - thank you and keep them coming....
What JS hasn’t explained in yesterday’s interview is what this ‘lost’ customer does now. Do they go back to non-ecofriendly detergent tablets, or is there an alternative out there, which ITX is unaware of.
JS needs to calm down the market.
Troajan - thanks for the link. Good interview and explains it all.
Well done MMs today for mugging all those who live in fear!!
Qd - I took a slightly different view on this morning’s drop in SP.
MMS saw the RNS and took a chance that it was a negative . They had no idea what price to set at the opening, but were short of stock from pre-Easter. So that tried it on with a ridiculous price of 177p to sell.
Someone (a non-believer IMHO) took the bait and sold and that set the sentiment for the rest of the morning.
Time will tell, if my judgement is anywhere near correct
GLA
Thank DD - you could be right here - let's hope so.
The only additional question I have here is, why would JS make this specific revelation NOW, when he could have simply included it in the 'Outlook for 2024', when the Final results for 2023 are announced about this time of year?
The drop in revenue for 2024 (cf. 2023) is anything between $1.4m and $1.9m. Even if the lost GP is say, at a paltry 15%, that's a bottom line hit of $200k.
It would be informative to know whether there are any associated cost-savings accompanying the loss of this customer, or is it a $200k hole to be funded out our $10m money chest.
Wacca - you misunderstood my comment.
Of course JS has done the right thing here (walking away from an onerous contract )
My concern was telling shareholders that, once our formulation is in, it’s difficult to remove, when all the time, ITX is having a problem retaining a long-established customer on low profit margins.
Yes, of course JS has done the right thing in walking away IMHO, but don’t talk about ‘stick ability’, when it simply isn’t always deliverable.
That all I’m saying..
Agree with you Smart.
Can’t see the point of making that statement, when all along in the background ITX was having trouble renewing a contract with a customer providing a major revenue stream.
Makes you wonder how naive his negotiating skills really are!
Always said we shouldn’t be busy fools!
In JS's last presentation he emphasised that once our formulation in included in a product, it is hard to get it removed and ‘orders keep rolling in’.
Well, one customer appears to be challenging that concept. So the fact that this customer is still going to use our formulation, but in lower volumes probably requires clarification.
GLA
Hi 2Good!
TLY - share movement today 0%
NANO - share movement today after interim results DOWN 8% - enjoy!
Rivaldo - yes, v. impressive presentation. JS’s best to date.
He talks with an air of confidence not seen before.
What’s not to like here? I note that 25% of shares now held by US investors. Share consolidation appears to be working IMHO.
GLA
AJ - Quite right and my apology
AJ - wishful thinking, I'm afraid.Final results always in June. Only exception was April 2022, when they announced a fundraising exercise, shortly after.
Scarcity of shares around to buy and the 'cashing-in profit' sentiment will continue until June, probably.
Many investors seeing a doubling of the SP in a month can't believe their luck, so have cashed in, accordingly - can't blame them, really.
Will drift further I expect, unless a good news RNS is about to be launched- but us LTHs know the true value.
GLA
Missing Thordon’s regular contributions to this BB.
Only one post anywhere since 16th February.
Fingers crossed that all is OK…
AJP.... and a well done from me, too - great research.
Does anyone know what Sodium Polyitaconate has replaced to make the shampoo 'eco-green'?
Https://goodtoknowthis.com/cleaning/dishwasher-tablet-toilet/
Warren - absolutely agree with you!
At last some news with meat on the bone and not simply jam tomorrow!
From the latest RNS it would seem that revenues streams are gaining rapid momentum all on their own.
With the cash pile at year end standing @ $10m compared with $10.9m at June 2023, the accelerated growth of revenue over the second half-year would suggest that we are close to break-even at the beginning of 2024.
The current market cap gives little, or no recognition to the potential value from new products in the pipe line.
Compared with some insane values accredited to other innovative eco-companies, ITX now looks undervalued.
IMHO, had the share consolidation not taken place. the SP would now be around the 8p mark (400pence in new money)
DYOR & GLA