Member Info for Smartinvestment

I am a firm believer in learning from the past and studying history.

The 7th December trading update forecast $9.7m revenue and improving gross margins for 2024. Despite that the share price fell to 114p just a week later which I think shocked all of us.

So imagine the market reaction if H1 revenue comes in at just £2m ($2.5m).

It’s all very well the company promising jam tomorrow but if the market does not see sufficient evidence of tangible progress replacing the lost revenue it will not react well. Thats not doom and gloom that’s the potential reality of what the market will be faced with in a few weeks time.

Of course I could be way off the mark and revenue comes in higher as AJP suggests. Only time will tell whether the bears or the bulls are correct.

Good luck all and enjoy your weekend.

Hi AJP glad you have sun where you are. Here it’s bloomin freezing.

Please let me refresh your memory on the fund raises to keep the ship afloat:

Feb 2023 £10.5m

April 2022 £0.3m

June 2021 £1.1m

June 2020 £1.76m

July 2018 £3.4m

Do you see a pattern yet?

I love your optimism about £3m revenue in H1. The revenue in the first 4.5 months was so bad the company chose not to disclose it in their trading update on 20th May 2024.

Good luck all and seriously DYOR.

Thanks Dougerboy - if I am permitted to reply to you personally.

I genuinely hope I am wrong on the upcoming trading update as most of us here have already lost enough money. Thats why emotions are so high. You are one of the original long term investors here and will remember all my positive posts prior to the ‘strategic’ loss of our largest existing customer.

I am deeply disappointed at the company for not giving a full balanced picture. Even when things were seemingly going well my positive posts mentioned the word ‘opaque’ several times when commenting on their past TUs. We always get the picture they want to present.

During the past few years there has been capital raise after capital raise to keep the ship afloat. Take all that capital out and where would the company be?

The recent non-disclosure of revenue in the last trading update whilst quoting an improved gross margin, really boiled my urine.

If there is an attractive opening after the H1 or H2 trading update, I will take it and try to win back some of what I have lost. Long term I still think the company might deliver, but before re-investing the market and x-investors like myself will need to see solid proof of progress, not just words and half a story TUs.

Wishing you well.

Hi Elsol

It is ridiculous to say that I am scaring investors and affecting the price by giving my personal opinion openly and honestly.

Thats like saying you are bringing in new investors and driving up the price by providing a bullish commentary.

Perhaps if either you or I, were Elon Musk or Bill Gates our views might carry some weight but we are not.

However, I am happy to stay quiet and see where the share price goes as you suggest. See you after the trading update ;-)

Last year it was 12th July

Hi Elsol

3 straight forward questions:

1. What is your prediction for H1 income?

2. Why is the current price 150p and falling?

3. Why is expressing a bearish sentiment considered as trolling?

My prediction for H1 income is just £2m compared to £4m for the same period in 2023. If that happens it really won’t matter what optimistic words John Shaw espouses, the markets will have a field day.

For those interested in chart analysis you will have noted that today’s share price has now dropped below both the 50 day (159p) and 200 day (152p) moving average.

A death cross occurs when the 50 day moving average drops below the 200 day moving average. With the H1 trading update due in a few weeks time it’s possible the two will coincide or occur very close together.

Another sign that unless there is unexpected good news Itaconix has some way further to fall.

Not sure to what I owe the honour of a whole thread titled Smart Investment. I have always posted my opinion openly and honestly about a company that has great potential but somehow fails to deliver just when we think things are going great.

As I keep saying the time to invest in my honest opinion is after the board get the bad news revenue figures out of the way and shows real progress in replacing the lost revenue (numbers not words).

The recent trading update which talked about and quoted improved gross margin but neglected to say what the revenue was, on which the gross margin was calculated, should have alarm bells ringing in everyone’s ears.

H1 trading update is not far away and surely the board will have to tell investors just how bad the revenue was. I predict a very negative market reaction to this which is why I’m sat watching (again being open and honest about my position). I hope for everyone currently invested that I am wrong. GLA.

Thanks AJP

Pity they didn’t mention the oversight of not telling investors year-to-date revenue in the RNS.

Be interesting to see whether investors get a H1 update this year and if so whether it states H1 revenue or continues to just state gross margin.

Hi Foolsgold I put Strong sell because I think todays’s share price is over inflated. If Itaconix had done the right thing today and informed investors of year-to-date revenue then the share price would be at a more realistic level for the current state of its business which its own broker forecasts as loss making in 2024 and 2025.

I agree that there are lots of positives for the long term and actually I warmly welcome these.

The company should issue an RNS informing investors what was the year-to-date revenue behind its year-to-date unaudited gross margin.

This is the most basic fundamental information in a trading update. The company knows what it is but they are choosing not to disclose it!

Just Deezerts - only time will tell.

The company will have to disclose its revenue at some point. If it had the balls to disclose the actual year-to-date revenue in today’s RNS then the share price might be very different right now.

If you can’t see that they have purposefully omitted year-to-date revenue whilst selectively quoting year-to-date gross margin then good luck to you.

As for whether I’m welcome here or not, I don’t give a hoot. In fact your rude messages make me all the more determined to present some much needed balance on this board.

Thank you AJP I appreciate your feedback on the AGM articles - that makes sense.

I do not hold a short position in Itaconix. I have never held a short position in any stock in my life and I never will.

I just want to see the facts and believe all investors have a right to this. Today’s RNS has clearly been articulated in a positive way but has avoided the elephant in the room. What was the year-to-date revenue? Why is everyone afraid to find out?

Covmutley - Previous RNS on revenue was a forecast. The company has not given any ‘Actual’ achieved revenue data.

Today the company has reported ‘Actual’ unaudited gross profit margin but not given the ‘Actual’ revenue this was based on. This is a glaring omission.

“Importantly, our unaudited year-to-date total gross profit margin is greater than 35 per cent compared to 31 per cent for FY 2023.”

Itaconix - please tell investors your unaudited year-to-date revenue so investors have the complete story.

DD - then why state the improved unaudited gross margin but not state the revenue this was based on?

I understand that people on this forum only want to hear the good news but it is not a balanced trading update if the company only tells investors the bits they want to tell you.

I have never known a trading update announce the gross margin without stating the underlying revenue. Half a picture!

“9.3A A company must take all reasonable care to ensure that any statement or forecast or any other information it notifies to a Regulatory Information Service or makes available through the UK Listing Authority is not misleading, false or deceptive and does not omit anything likely to affect the import of such statement, forecast or other information.”

In light of the above rule, the omission of revenue in today’s trading update is a concern. If the company has calculated an unaudited gross margin of 35% it must also know the revenue on which this gross margin was achieved. I believe that is critical information which the company should disclose.

Given the company has lost its largest customer this is all the more reason it should show us what this has done to actual revenue.

I call on the company to issue an updated RNS and release the unaudited revenue figure it has in its possession, in order to provide a complete picture of today’s trading update.

How can you give a trading update and not state the unaudited revenue?

35% gross margin sounds great but on what revenue?

This is a highly selective trading update.

If that doesn’t ring alarm bells to you guys then nothing will. GLA.

AJP please can you re-read resolutions 6 and 7.

It uses the word “disapply”. I took this to mean they are not proceeding?

Please see resolutions 5,6,7 below. Does this mean ITX were planning to make an acquisition but are no longer proceeding? They never have explained why they needed to make such a large capital raise last year. That’s a lot of money just sat in the bank at the cost of shareholders who suffered the dilution.

5. To grant the Directors authority to allot shares.

Special Resolutions

6. Subject to the passing of Resolution 5 to disapply statutory pre‑emption rights in relation to the allotment of equity securities.

7. Subject to the passing of Resolution 5 to disapply statutory pre‑emption rights in relation to the allotment of equity securities for the purposes of financing an acquisition or a specified capital

investment or making a follow-on offer.

Unfortunately looking at the charts (if you believe in chart analysis) the 50 day moving average (186p) still has some way to go before it drops below the 200 day moving average (156p). When shares hit what is dramatically called the ‘death cross’ it tends to precede a near-term rebound with above-average returns. By my calculations this will be around 115p. If it gets to that sort of level the potential reward - risk ratio becomes more attractive providing you are willing to wait it out a couple of years.

Of course there’s always the possibility of some unexpected good news coming out of the company and thankfully Itaconix acid raw material was not on yesterday’s US list of enhanced China tariffs.

Transient investor?? I’ve held Itaconix since 2020.

Having previously run a large factory I can advise that the majority of overhead costs are fixed. We supplied the 5 largest supermarkets and when we lost our largest supermarket accounting for 25% of revenue we became unprofitable. That customer was our lowest margin customer but their revenue previously made our operating costs much lower relative to total revenue. The loss of 50% of revenue for any company is catastrophic. I am amazed that you are trying to paint this as a positive.

My figures on reduced revenue and negative EBITDA are taken from Itaconix’s broker’s report published after the loss of their largest customer.