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Let's hope the trading update isn't hanky rhymes with ...
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.
Trolling again I see SI to try to buy back in 'via fear' at an un-warranted low share price that has already over-reacted to the customer rejection. As a past BUT CURRENTLY announced non - ITX shareholder who said the company is completely "un-investable" until H1 2025 you do seem to be very active on this board solely for the above reason and others need to be aware of your motives here.
I am pasting below key analysis from recent ITX Broker report - Alex Brooks | Analyst | Canaccord Genuity Ltd (UK) | abrooks@cgf.com | 44.20.7523.8379 Salvatore Verdoliva | Analyst | Canaccord Genuity Ltd (UK) | sverdoliva@cgf.com | 44.20.7523.8377
15 April 2024
Valuation: retaining 325p and BUY rating
Our target continues to be based on two arguments: the multiples applicable to a
mid-cap chemicals company, and the value which we believe is applicable to Itaconix's
differentiated market position and which would be relevant to an industrial third party.
At our 325p target the stock would trade at 5.1x/3.7x 2025E/26E EV/revenue, which we
believe would be highly attractive to an industrial buyer looking at markets with gross
margins in the hundreds of millions of dollars annually.
Outlook: still robust
Excluding the major North American detergent merchandizing customer growth from other
customers in 2024E is expected to be c.70%. We expect this growth to be across Itaconix's end
markets, in cleaning, hygiene, beauty, and in various new industrial applications. We also expect growth to continue in 2025E at above 50% y/y.
PY 2023: Whilst year-end cash & investments of $10.0mn (CGe $9.3mn) is
strong on better EBITDA, better working capital and lower capex. Detail in the results
shows revenue in Europe up 85% y/y, highlighting the strength of new client wins
in recent months, and continued growth in gross margin in the core Performance
Ingredients division (38%, up from 31% in 2022). We are making only minor changes
to our forecasts, which continue to reflect the reduction in 2024 sales to an existing
customer announced on 2 April, but which see a rapid return to growth going into 2025.
We remain BUYers with an unchanged target of 325p.
The reason the ITX Board chose to eject the US customer is from a position of strength and was done for short/medium profitability enhancement reasons. I very, very much doubt even you could argue that the economic value of said 1 single customer makes up some c.100p in the share price fall from pre-announcement (e.g. £13m GBP) being one of the least profitable customers for the business pre-2024.
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?
Hi Elsol
3 straight forward questions:
1. What is your prediction for H1 income? Answer => It's a pretty irrelevant metric due to the short-term pivot to new revs/volumes with higher profits for full year 24 and then platform for 2025 - you have the full year fcst stated and also I expect that to be exceeded (as normal for the company).
2. Why is the current price 150p and falling? SP is volatile within a band as you know but you are scaring existing shareholders to sell for sure with an overdue focus on H1 revenues for some reason - you know what you are doing.
3. Why is expressing a bearish sentiment considered as trolling? Its trolling when you are watching this company like a hawk every day as a non current investor that said you were going to wait until 2025 to reinvest or did you forget that? Stay quiet and see where the SP goes without your adverse impact is my suggestion and don't sell fear across other shareholders when the company is already very over sold as you know.
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 ;-)
Well, you can’t be in two places at once Smart! For existing investors you’ve said you hope you are wrong, and I guess for “non-existing investors” (you), presumably you hope you are right!
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 S
Where are you getting these multiple raises from to keep the ship afloat? I can only recollect the last one for £10 million, which is more than we need, a previous £2.1 mil several years ago was an approach from an institutional investor at 12p old money, can you clarify please.
Are the sheep being guided by the wolf?
As for $2 mill revenue for the first 6 months were we not just given guidance recently that we were in line with expectations $6/6.5 mil for the year which would mean at least $3 plus million for the first half at close to 40% GP.
Just to try and give some balance.
Back to the sun now
ATB
AJP
I repeat;
Smart? Investment is not invested here, talks absolute rubbish about further raising etc. Their posting record for all to see is only on ITX ! So no other investment interests elsewhere? Treat with suspicion IMHO.
Apologies
£1.1 million from Institutional Investor,
ATB
AJP
Hi DB/Elsol
Have you had a look at Chemtan imports lately, is there any significance in the quantities and ingredients they are buying to the leather products that ITX is involved with?
Thoughts would be appreciated
ATB
AJP
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.
Hi S
Think you need to look at these again and the background behind them, not a cash call on PIs
In the 30s here so quite nice
Did you even bother to email John, as I suggested at the time for clarification?
I did and got a very prompt reply
Guess we will find out where the truth lies mid July when I would expect the next TU
ATB
AJP
Yep, I get all that Smart. And understand your disappointment - got some of my own, given that the revenue/GM growth curve has been too tardy. If it started to lift like FTC, I’d be a lot happier!
Not sure on recent quantities AJP. For sure there is a LOT being imported into the USA, also going to LUBRIZOL, TORAY COMPOSITES, among others. A rising tide lifts all boats, hopefully.
Hi DB
Was looking at the other ingredients they have been taking delivery of, not the Itaconic acid, which there has been 120 metric tonnes delivered this year so far, are these other ingredients forming part of the green tanning process that we are involved in?
ATB
AJP
Apologies
160 Metric tonnes this year of Itaconic acid, fat fingers
ATB
AJP
AJP. thx. How does that equate to 2023??
My view currently, is you need to be in to win it. Ill wait for rerate as or seems more probable than a future meltdown disaster scenario that SI is peddling. As per Broker concensus viewing all evidence from company to date
Hi Elsol
On holiday at the moment, so do not have access to my spreadsheet, but from memory 40 metric tonnes more purchased this year, than last year so far.
Roll on July so as we can get a clearer picture of progress.
ATB
AJP
"A rising tide lifts all boats, hopefully".
Well there is no rising tide with this sinking ship. I wish I had never heard of ITX. Plus if Smartinvester is correct we are really foooked.
You might be right Surfie - for a while. Or you might be wrong! My expectation on the rate of revenue/profit growth has been wrong. But I still hold, maybe wrongly. But what I hold fast to is that Itaconix SELLS product. It is making and selling. So will they be selling (profitably) more or less in future years? I’m still holding.
Okeee doke Doug, I wish they would sell more then cos I'm down 74.5% since my initial investment some time ago and things seem to be getting worse rather than better.
Surfie I agree with you, overall 40k down from this pipe dream of a share, even if it rises to its highs unless i average down I’m at a loss!
Furthermore why should i average down on this rollercoaster of a share, Johns happy as he invested large chunks pre Covid so he know it won’t drop to those levels again but it seems to be run like a family business / a corner shop / a spar / a local in terms of what it’s done.
There’s long term and then there’s ITX, should I wait another 5 years and make it 10 altogether to even get what I put in or do I just call it a loss and invest in a company that can at least offer 10/20% return per year on my money?
I considering Rolls Royce, I wish during Covid I’d invested there not here, John you have let a lot of people down, you’re full of promises but you’ve so far been all talk!
DYOR but I feel let down BIG time.
The £10m cash raise was a surprisingly large sum at the time. What seemed like a vote of confidence back then may in fact have been an admission of how long it will take this company to achieve positive cashflow.