ok its good to be optimistic...but.11 Oct 2012 16:52
Broker Peel Hunt fears it is the end of the road for Ceres, after "eight years raising money on the back of over-promising."
The broker has reduced its target price from 4p to zero. "A fresh approach from a new CEO [Chief Executive Officer] improved things but there was insufficient potential in the business to make it worth backing, in our view. Investors, who had put in £65m to date, apparently agree and have finally drawn the line."
Peel Hunt notes that the firm's flagship product is still four years away from first commercialisation, and field trials have yet to start. On top of that, "technical progress still needs to be made, there is major uncertainty over manufacturing cost, the economic case for product adoption is limited and there was still a large quantum of funds needed to reach cash break-even," explains Peel Hunt's Andrew Shepherd-Barron.
While Peel Hunt thinks there is sufficient cash for an orderly wind-down of the company the broker is not optimistic that shareholders will see any of it.
"There is a chance that a third party buys the assets, or indeed the business as a whole, but we see a wind down as the more likely outcome," Shepher-Barron concludes.