Member Info for ox123

The true scale of Royalty revenue to be received is not factored in to forecasts for fear of upsetting the goose. Going forward this should allow management to exceed expectations and receive plaudits that may not be truly deserved 🤣

If you look closely, occasionally the confidence of management in the Royalty revenue seeps out, such as the following written in the recent Final Results announcement:

"following the completion of the Croda commercial agreement, we have been able to update expectations further to be cash positive for the foreseeable future"

A bold claim to write in the published Accounts.

Hi net, there's more to golden eggs than food 😂. Hopefully some on this board will reflect on Aesop's Fable where killing the golden goose is a short-sighted action that destroys the profitability of an asset. I'm hopeful we'll all hold our nerve so that won't happen to anyone here.

By my calculation Royalty revenue was £758k. That's just to 30/6/25 - wow! The Sales Team at Sederma are delivering. No surprise really - the potential customers for Zenakine were already on Sederma's client list...

Everything else is a sideshow - forget Dermatonics, BTS, AxisBiotix, and forget SBTX management.

Don't expect a proper forecast for Royalties. The SBTX management is petrified of saying or doing anything to disturb the goose laying the golden eggs...If they end up reporting results exceeding forecasts they are congratulated 🤣.

At current price the shares are a BUY on a 12-month view. By then, if not before, the figures will do the talking...

Hi Toyin

I don't know. I think it is possible that one retailer could have represented around £1m of turnover at Dermatonics in year to 30/06/25 (without it generating much profit🤣 ). If that were so, the royalty revenue from Zenakine deal would have to have exceeded £1m in the year to 30/06/25....So it is possible that, by turnover, the largest customer of SBTX group in FY 25 was a Dermatonics customer....I don't know, but I do think it's a reasonable assumption...So even if SBTX Accounts state one customer represented 20% of revenue, it may not be Croda...

Future years would hopefully be different but we may be waiting a relatively long time before getting a completely clear picture....

Hi Toyin

Your scenarios are good way to look at this. My suspicion is the "revenue" is somewhere between your scenario 1 and scenario 2. In this case of course the "revenue" represented by Zenakine royalties is also the profit figure. So it is possible Croda is not the largest client by revenue (even if they are by profit!). So I guess the management could get away in the Accounts with stating "no one customer accounts for more than x% of revenue" even if one customer accounts for most of the profit. As far as I am aware companies are not required to disclose that one customer accounts for most of the profit (as in many cases, though not this one, that customer may, on reading that, wish to renegotiate their terms!).

So we may be disappointed by the Accounts in terms of transparency.....

Https://cosmeticsbusiness.com/sederma-introduces-matrixyl-inside-branding-programme-65243

Hi Aquae

There are already products out there in some countries containing all the ingredients you list for Zenakine and I conclude Zenakine is already in formulations available for the consumer to buy - the Holy Grail is hiding in plain sight!

At this stage Zenakine has no name recognition with the end consumer - why would a cosmetics business want to put the name on their packaging? Matrixyl was launched in 2000, whilst the "Matrixyl Inside" logo was first introduced by Sederma in 2011 once the product was such a success that even the end consumer was hearing about it...

Hi Toyin

The FY Revenue forecast for Dermatonics was likely wishful thinking by SBTX management. Dermatonics is a relatively small business so its overall impact on SBTX profitability was not that significant (when the Zenakine sales royalties can counterbalance so the true picture is hidden.....). So the management can get away with no RNS and likewise any upside is not significant enough to RNS it.

I don't subscribe to the view that the acquisitions are a disaster but neither are they going to justify a higher share price. Prior to its acquisition, Dermatonics looked like a small business driven by its owner (who will have left). It needs substantial management effort in developing additional new products to grow the business and make it meaningful. I don't see any evidence that the current management is making any progress on this....

So for me - Dermatonics = sideshow, BTS = sideshow, Axis-Biotix = sideshow (but potential drain on profits if management waste too much time and money on it). If they must spend money, it should be a limited amount on developing Dermatonics but not Axis-Biotix.

Thanks Toyin. Hmmm...

P.s. Is "gamble" your Friday afternoon pun due to the horses - you got me 😂

DireCons, would you care to give any information you have?

I believe this is the same "Mark H Dixon" and may well explain where some of the money to buy SBTX came form (unless you can point to another "Mark H Dixon"):

Filtronic plc (AIM: FTC), the designer and manufacturer of products for the aerospace, defence, space and telecoms infrastructure markets, announces that on 12 June 2025 the Company received notification that Mrs D.M. Dixon holds 20,000,000 ordinary shares of 0.1 pence each in the Company, representing 9.1 per cent of the Company's issued share capital. Mr M.H Dixon has sold all remaining 2,500,000 of the shares held in his own name.

Hi Toyin, sorry not intended as a reply to anyone, just a pun on Zenakine sleep qualities - not a very good one probably 😂

Mr & Mrs Dixon currently own about 7% of Filtronic worth about £18m. At one point they owned almost 20% of the company. They will likely also own shares in other companies below the reportable threshold.

MD will not be losing sleep over £4m in SBTX....

Hi Toyin

Is £4m a lot? - depends how much you have...And AIM shares still have 50% off the Inheritance Tax rate. Look back at MD's holding in Filtronic over last few years and the rise in that company's share price.....

Thecontender, the NDA means SBTX are not at liberty to tell you about launches (even though SA said previously on one IMC that he would be "shouting from the rooftops" as soon as a cosmetic with Zenakine is launched - I guess Sederma told him he can only comment on anything Sederma put out into the public domain so basically had his wings clipped - why would Sederma disclose their client list?).

Before Bazza jumps in, I have no argument with those who are unhappy with the poor level of comms, and conflicting signals, from SBTX/SA - the charitable explanation is that SBTX/SA were naive.....at the very least it does suggest a lack of experience in this area (some prefer to say "incompetence").

Thecontender, look back at the "Holy Grail" thread - quite a few posters concluding the product is on the shelves based on cosmetic companies listing "all ingredients" - so MD's broker could have come to same conclusion from publicly available information, or at least claimed the same.....

Well, I think products containing Zenakine are already on sale (judged by the list of ingredients - the cosmetic companies are not going to say "contains Zenakine").

So Croda/Sederma are selling Zenakine, their customers are making their formulations, the product is on the shelves and some consumers already use it (even if they don't know it as "containing Zenakine"). The "Holy Grail" is hiding in plain sight, which is likely why MD bought in....

I guess it could seem strange they put out an RNS at 17.11 yesterday evening but looking at history of their RNS announcements, this is not uncommon. If the half year results are uninspiring (as we have been led to believe) one would have thought "burying" them with a positive corporate activity announcement at the same time would have been preferable. But maybe MSI management don't think like other AIM companies 😂.

So I am in the camp of no imminent announcements (but likely to be happy if I am proved wrong....).

Hi JohnLewis79,

Assuming there is no leak so nobody "knows" in terms of any corporate activity, it seems to me the share price is sensitive to news on Ukraine war (which now looks likely to drag on) and especially drone activity (such as recent problem in the Netherlands). Not sure if this is justified but perhaps MSI could book some VSHORAD orders linked to this. Agree with you this "macro event" sort of response should be ignored (unless you consider the price has exceeded "fair value"). For what it is worth my view is hold on the assumption some VSHORAD orders will eventually surface from somewhere.

Whilst it is not my base case, British companies are relatively cheap for foreign buyers so cannot rule out takeover, but the sensitivity of the sector and MSI's defence clients does I feel make a takeover hard to achieve, at least for most foreign buyers.

Aquae, if royalties are paid by Croda quarterly in arrears, surely sales have been confirmed, delivered and invoiced anyway...