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Great and timely RNS today and supported with an encouraging interview.

I particularly like the "industry is really waking up to the value of the challenge study model" quote.

Hopefully with this contract the £55m 2023 revenue will be at a minimum be confirmed when H1 results are published as we were already near the target. I'm still hoping for nearer £60m to give 20% YoY revenue uplift.

From the YE RNS, below. Q1 2023 has performed ahead of management expectations. Assuming this has continued into Q2 and beyond i'm hoping H1 numbers will be really positive.

Trading in the first quarter of 2023 has been strong, with the group as a whole performing ahead of management expectations. Escape Hunt had an exceptionally strong first quarter with like for like revenues, adjusted for the VAT benefit in 2022, up by 32%. Within this, it has been particularly satisfying to see the oldest seven sites in the UK estate delivering like for like growth of 18%. Margins continue to meet or beat our internal targets. The franchise estate has delivered modest year on year growth.

Boom is still a very new business with very little historic trading against which to compare. The four owner operated sites which traded the full Q1 in 2022 delivered like for like growth of 44%. The rest of the estate has also shown strong growth and continued progression towards the operating metrics we expect at maturity. The franchise estate has performed in line with expectations.

Overall, whilst mindful of the ongoing pressures on the consumer and on our cost base, the performance in Q1 of 2023 gives us cause for optimism.

Parob - reassuring figures, thanks.

Of course you have used the highest monthly increase of 30% - May was 28% and the April increase has not been mentioned so i'm guessing it wasn't overly high (although could be a bit misleading as not all salespeople would have been in place).

Also whilst prescription numbers are critical the overall revenue is the most important number. I note that in 2022 the average net prescription charge was $135 as some non insured customers are allowed a trial price of a few dollars.

Clearly this will increase as more insurers come on board but how quickly? I think STX expect this to be $250 by 2024, which is clearly a big % increase and may possibly be a bit ambitious.

Thanks for the replies.

I have listened to a lot of SOH presentations over the last 5 years and there have always been hints. The lack of commercialisation cannot just be down to covid IMHO.

I suppose my pessimism is that a company like Coca Cola will not just radically change their recipe and if they are considering non cancerous sweetener alternatives we will be one of a number of alternatives they will be considering.

For me the de-risk will be when a large company undertakes a limited pilot of the product.

With all the focus on obesity and gut health we are perfectly placed, but we have been for a few years now.

Hopefully decent numbers will be reported. The bar/pub market seems to be doing quite well and i'm hoping Peach in particular has overperformed as it's food model seems to align with City Pubs, which is doing really well.

Very low market cap so hopefully some positive results will be well received.

Whilst the recent rise has been great as a LTH i'm a little confused.

Much of what was in the RNS is not new other than the naming of some of the partners - and very big companies, hence the interest.

However, things like the £100k annual payment have been received for a few years now and with total revenues still less than £500k it is clear that no company has made a big order.

I remember getting excited when Cadbury's produced a lower sugar chocolate bar a few years ago, however, it wasn't using our ingredients.

So my question is, has anything actually changed?

Yep a welcome update. Not out of the woods yet, but to stop burning cash is a massive positive. A £9m valuation with £8m in cash suggests there is much upside if BOD can make this profitable

Cashflow is still a big concern IMHO. 31/3/23 they had £19.2m after a big fundraise and now 30/6 they have $13.6m. At the current exchange rate that's c£10.6m. That's a massive cash burn in the last 3 months.

Clearly revenues will now start to rise , but how quickly.

In Q4 2022 prescriptions were 9,400, i think c 11k in Q1 and now a better 15k in Q2 2023. By STX own estimates i think they are hoping for c120k to 150k prescriptions in 2023. If they double in Q3 to 30k and double again in Q4 to 60k - a big ask - that's only 116k for the year, below their own lowest estimate.

Q3 numbers will be important as more salespeople become 'effective' and start adding value.

If the disposal has completed how much upfront money has Croma received? Surely this should have been announced at the same time?

Just been sent an invite to an investor presentation on 26/7 at 6pm.

Don't think it's been formally announced yet.

Hopefully to coincide with H1 progress and maybe other developments etc

https://www.investormeetcompany.com/

Iwant, it is clearly not rubbish for someone to point out that a business with over £135m revenues and is making c1% PBT is working on quite tight margins and has been for a few years.

It's EBITDA is c5% of revenues. I would hope this can slowly be increased to nearer double digit.

The inflation protection quoted was i suspect on all new contracts, the legacy ones seem to be the issue.

Any thoughts of this?

IMHO not great, not terrible.

Good news is no fundraise required, bad news is yes there is pressure on wages etc ATM (what a surprise).

Not sure insurance is such a biggie for a diagnosis aid. Where insurance includes diagnosis it is usually in general terms - e.g. there is more than one MRI manufacturer, i don't think they all need to listed separately.

For treatment then the individual medicine would indeed need to be covered by the insurer and this will be listed separately. This is why, for example, STX and accrufer have made such slow progress in the US for their iron tablets, despite them clearly being better than the current salt based alternative.

Dave, fair point re the visitors centre , however, our blended whisky was due to be launched in Q4 2022 and there is still no sign of it.

It's a crowded market - bell's, teachers, famous grouse, johnnie walker etc. We will need a marketing budget to compete

This is encouraging, but still a long way to go. Agree with the TV advert - the timing was madness.

In last accounts it stated Blackwoods revenues were 86% lower - i assume as the Morrisons channel was stopped. Whilst the product is great it makes me wonder if the visitors centre is a little pointless.

Hopefully a placing isn't required however cash must still be tight and marketing spend is critical in this industry. Other than Red Leg this is a one brand company

Yes, agree with ARR growth. For the last couple of years ARR growth has looked impressive, but is actually considerably less than the increase in marketing spend.

Clearly, for every £1 extra in marketing you would expect £2 plus of increased revenues (and that's not profit) yet this is not the case here.

A big red flag and the main reason why we have had 4 or 5 placings in the last 2 years.

Hopefully the We Shop investment might be used as funding going forward as this should start increasing in value and become less illiquid.

Karl, constantly positive posting in the last month or so as the already silly low SP has dropped by another c80%.

This will be suspended now and may never come back to market. These are the facts.

All your positivity is meaningless and pretty disingenuous IMHO

The whole warrant saga seems a big strange to me. Firstly i don't like warrants issued to chairmen as they are essentially a part time role and they should be overseeing the CEO. However, in this case the CEO appears to have 'earned' these from a previous consulting role, presumably in lieu of payment, although this has never been explained to my knowledge.

Last month despite these warrants being assigned 10 years ago they were extended by 2 months. Everyone got a bit excited thinking news must be coming.

However, i thought this was a bit of mates rates deal.

Now they have been cashed in the exercise price is minimal, less than 1 cent per share. So for over 800k shares the chairman has paid $3,500.

So warrants that are almost free were not exercised for over 10 years. Very strange IMHO.

Unfortunately this company now appears doomed. The market value is less than £1m so funding will be almost impossible.

The delay in the EV contract, TWD's biggest customer by a country mile, looks like it has no immediate start date. In the RNS - excerpt below - it talks about a supplier nomination 'may' be made in the immediate future.

What a shame. I first bought this company at about 250p and it soon went up to over £3.

The Company's potential new production customer (a Tier 1) is expected to learn if it has achieved supplier nomination* shortly on a major EV cell-to-pack ("CCS") program with OEM B. A final round of price negotiations has taken place with OEM B, and the Company has been informed that an announcement on a supplier nomination* may be made in the very immediate future. Upon nomination the Company will immediately review its funding options.

Agreed, a pure gamble now.

Money will run out end of June - tomorrow. Can they sell off assets or do some other financing? This BOD has failed at every turn in the past so it would be a brave man to bet on them to succeed.

Such a shame as the product is good.