The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Good to see East Imperial partnering with Cutwater Spirits!
Cutwater Spirits is owned by Anheuser-Busch InBev (an international drinks company with annual revenues of over $60 billion). East Imperial looks to be really motoring. Longer term, East Imperial would make a great bolt on acquisition for a giant like Anheuser-Busch InBev - its "Beyond Beer" segment (RTD beverages) is earmarked to be a key growth driver for AB InBev in the decade ahead!
https://twitter.com/East_Imperial/status/1701860271315128683
Correct Goldstinger. The Convertible Loan and the lien it benefits from over the CEO's stake is designed to fully incentivise him to get the share price up. Over 10p and the lien has no force whatsoever.
The Convertible Loan is well structured so as to maximise the incentives for management and shareholders to increase the stock price.
NFT - you clearly have not read the statement properly. The absolute maximum dilution is 44%. But that the is the worse case scenario. The Convertible Loan Notes unveiled today are a clever way of minimizing the dilution. Under the terms of the Loan Notes, the quicker the company and its share price grows the less dilution existing shareholders suffer.
Well said davethechef!
Who needs capital to fund a cash burn rate of £200k a month when you have a great website and Twitter feed? Let's hope we hear nothing about the imminent fund raising for a good 6-9 months. The longer it takes the better for us, right davethechef?
Davethechef and Agricore are right. The longer the delay the more positive for shareholders. Ideally, the delay runs so long that the company runs out of cash and goes into administration!
We are lucky to have guidance on this chat from Davethechef and Agricore. I would not be surprised if they once worked for top international investors like Warren Buffet or George Soros. Thanks guys!
Davethechef, the power and logic of your post below is overwhelming. Yes now that the company has less than £200k of cash and a monthly burn rate of £200k is the perfect time for it to enter a hugely competitive market like the UK.
Clearly EI is unlikely to get a senior secured loan from HSBC or Lloyds at 6pct. Clearly it will have to have rolled up interest as opposed to cash interest. And yes clearly it is likely to have some kind of equity component.
The WH Ireland note from November shows they need precisely £2.3m to see them to profitability. Keep in mind they were forced to build up significant inventories because of COVID and these will be turned to cash in the coming months as they are run down. So it may actually need a bit less than £2.3m.
Once again I remind people how quickly businesses in this sector can grow. Below are revenue figures for Fevertree for 2008 to 2018:
2008: £2.4m
2009: £3.7m
2010: £6.7m
2011: £11.8m
2012: £16.3m
2013: £23.3m
2014: £34.7m
2015: £59.3m
2016: £102m
2017: £170m
2018: £237m
The WH Ireland note from November 2022 says the company needs £2.3m in 2023 and 2024 to fund it through to being cash flow positive in 2025 and onwards.
If the company issued 150m new shares at 1.5p each that would raise £2.3m. Such a fundraising would reduce Tony Burt’s (CEO) stake from 18.7% at present to 13.0%. I do not see the problem with that.
In 2022 the East Imperial generated £3.2m of revenues.
WH Ireland has the following forecasts for East Imperial revenues:
2023: £5.9m
2024: £15.4m
2025: £23.1m
These forecast are very doable given Fevertree did it. Below are Fevertree’s revenues for the period 2008 to 2018:
2008: £2.4m
2009: £3.7m
2010: £6.7m
2011: £11.8m
2012: £16.3m
2013: £23.3m
2014: £34.7m
2015: £59.3m
2016: £102m
2017: £170m
2018: £237m
If East Imperial achieves the WH Ireland forecasts for 2023 to 2025 the shares are likely to rise significantly.
Just in case people have forgotten how big the opportunity in front of East Imperial truly is:
https://drinksint.com/news/fullstory.php/aid/10443/Growth_ahead_for_mixers.html
I do not understand the obsession among some investors regarding East Imperial moving into the UK market. The UK market has an abundance of premium tonics (which is not the case in the US and Asia) and is also a tiny market in terms to size when compared the US and China (where the company already has agreements in place with top distributors).