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SORB Sorbic Int

2.50
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Sorbic Int LSE:SORB London Ordinary Share GB00B3CX3F30 ORD 0.1P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 2.50 0.00 00:00:00
Bid Price Offer Price High Price Low Price Open Price
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
  -
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 2.50 GBX

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Real-Time news about Sorbic Int (London Stock Exchange): 0 recent articles

Sorbic (SORB) Discussions and Chat

Sorbic Forums and Chat

Date Time Title Posts
24/6/202213:12Sorbic - preserving the worlds food136

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Sorbic (SORB) Top Chat Posts

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Posted at 08/1/2015 09:06 by skier100
A pocket summary of SORB for new investors:

* SORB is one of the world's leading food sorbate (preservative) suppliers. People must eat...

* Revenues = £14m;
* Net assets = £10m;
* Cash = £7m;
* Profit = £1m;

Upcoming news:

* Potentially up to £6m compensation coming from a Mongolia factory dispute;
* Potential repayment of £2m loan-notes compensation from a subsidiary;

* Current marcap today = £2m...
Posted at 08/1/2015 08:40 by skier100
SORB right now has *£14m revenues, £10m net assets, £7m cash, £1m profit, and potentially up to £6m compensation coming from Mongolia*... and a current *£2m marcap*... Hugely undervalued.
Posted at 07/1/2015 20:50 by smudgedan
Percentage of AIM Securities not in public hands

91.6% of shares are not in public hands

As at 28th July 2014, significant shareholders with more than 3% holding in the Company were:
RAY ANG W B ESQ 33.79%
WALKER CRIPS 6.46%
WESTMINSTER ENTERPRISES LIMITED 5.47%
GUNN J H ESQ 4.21%
HERMES FINANCIAL GROUP BVI LIMITED 3.73%
PEEL HUNT LLP 3.44%
181 FUND LIMITED 3.02%

So only 8.4% of shares are in public hands. None of the above holders have sold and all are in at significantly higher levels than the current share price. In rough terms, at the current share price there is only approximately £200k of equity outside of the holders above.

New due next week on the Mongolian compensation and the release of some the £7 million of cash on the companies books in China.

Current MC less than £2 million.

Underlying business is consistently profitable and growing demand for their products.
Posted at 07/1/2015 15:40 by skier100
Given the £14m revenue, £7m cash, £1m profit, and strong order book for 2015, SORB deserves a rerate to 10p as a minimum starting point (currently 3p, with a £2m marcap).
Posted at 28/6/2012 12:59 by woodcutter
I sold my very small holding recently along with my CFC holding which was much larger, both at a loss. I know there are many who believe in SORB and CFC but this latest set of results has confirmed my feelings that these businesses are poorly managed and are a long way from reaching the goals i had originally expected, despite the China growth story.

I think the bottom line is i foolishly expected the type of performance you'd expect from a uk managment team and we forget how inexperienced these business people are, particularly in terms of a quoted company. They are a long way from sustainable profitability.

Good luck if you're still holding.

Woody

post note

It's hardly surprising that there's a growth in revenue if you're reducing your margins and selling product at a significant loss.
Posted at 28/2/2012 12:17 by aaainvestment
I've only taken a small position is this so far £2k but will consider increasing based on events and increasing knowledgeof the company, would have waited a little longer to get in had the factory not been so close to production. Not worth worrying about the slight fluctuations in SP; Moathunter, IMO your buy in price will be surpassed easily if they make a go of the new factory, patience is required or as you say it's possible to become the driver for the share price

Personally I would take previous performance with a pinch of salt, I believe a strong turnaround is possible for the reasons outlined in my previous post.

I also read that the main alternative preservatives may have various madical complications, if that issue were to ignite then the entire dynamic of the sorbates supply chain could be turned on its head - I'm reconciled to sit on my investment for a few years if necessary.

I took a look at the images of the new factory and it certainly looks like they got their moneys worth. - cionstruction must be cheap in Mongolia.
Posted at 28/2/2012 10:42 by moathunter
AAAinvestment- here's a couple of *possible* disconfirming points to your thoughts above:
"the previous owner got the benefit of an increased shareholding through meeting profit targets - not hard to guess whats happened."
Referring to Ray Ang Wee Boon, he still owns 55% of SORB and built up the original company over 7 yrs. Both points suggest a majority shareholder who takes a long-term view and unlikely to frontload, do aggressive accounting and defer Capex.

I think more likely the then LVST could afford to cherry-pick the most profitable contracts during 2005-8's assumed supply-demand imbalance (high demand, constrained supply since it takes time and risk to build new output).


"that directors and/or major shareholders may have a vested interest in keeping the share price down"
Certainly. Yet perhaps in this circumstance, esp. raising capital via share placing to fund the expansion's working capital (and therefore critically hasten the realisation of future cash flows released by the new factory), a down-trodden share price is strongly to their disadvantage.
~~~~~~~~~~~~~~~~~~~~~~~~~~~

One bullish point: the recent profit fall could be considered a natural part of a cycle for such industries: long-term bulk pre-priced customer contracts, allied to fluctuating raw material and energy prices = volatile profits over a decade period. So the financial results need normalising.
I.e. a high probability that profits will revert upwards to a long-term average.

Second bullish point: look at market share distribution- one massive market leader in Wanglong Group, top 10 sorbate producers owning say 90% of the market and many tens of preservatives producers serving the remaining small market share for customers wanting tiny batch runs of sorbates+other food additives combined.
That market share distribution is power law distributed or "80/20", strongly suggesting that the leaders including SORB having a source of competitive advantage- likely major economies of scale (and other sources such as customer switching cost/ order fulfilment capability).

Such competitive advantage, coupled with expected market growth and low threat of substitution away from sorbates... ... well let's see what happens over the next 3 yrs.
(I stupidly 'chased' the share price to 22p recently (but it's very thinly traded), so you know where I stand).

Anyway, I really dislike talking positively about current holdings. It screws your judgement, so no more from me on this.
I'd be delighted to oblige any holders feeling nervous and wishing to sell :)
Posted at 27/2/2012 14:09 by aaainvestment
Yes, profit fell off a cliff, and if I recall that was after the previous owner got the benefit of an increased shareholding through meeting profit targets - not hard to guess whats happened.

I considered that before buying and assumed the possibility of some degree of manipuilation/creativity which would impact on subsequent years i.e front loaded deals that didn't adequately cover materials price escalation and deferring expenditure into subsequent years!

Clearly they would never disclose this even if it were true, but there are hints in latest RNSs - including getting out of previous contracts and not entering new ones without proper safegaurds. I bought in on the basis that margins will improve at the existing site and be world-class at the new one.

One other thing I always bear in mind with companies like this is that directors and/or major shareholders may have a vested interest in keeping the share price down, or at least have to interest in trying to support it, especially when they are beneficiaries of placing. That all changes when the development is complete.

All IMO of course
Posted at 27/2/2012 12:44 by aaainvestment
serratia - thanks for the links, Idid a bit of checking at the weekend.

Very interesting about the European cartel and subsequent fine - it must be very lucrative and difficult for new entrants to gain market share in order to operate that system!

A couple of things spring to mind, first "old habits die hard" and there are likely to be simmilar "anti competitive" arrangements in other parts of the world and competitor companies that will defend market share even if it means nobbling (or buying out) the opposition. Sorbic's new production facility has huge expansion potential from the same site and I assume their production costs will be a match for anyone in the world, and beat most, so I suspect competitors will have a close eye on Sorbic and their contracts. Particularly No1 and No2 in China, as they risk losing the most I suppose.

The second link suggests that the Wanglong Group is the world biggest producer (actually says "facility" not production) "35000 MT Sorbic Acid and 25000 MT Potassium Sorbate".

Interestingly when Sorbic's Mongolian site is fully operational with 2 lines it will have a combined capacity for 15000MT Sorbic Acid and Potassium Sorbate - seems to me that they they will become a major player and the increased supply capacity and reliability should mean they a get better contractual terms as a supplier of choice.

If they fully expandeed in Mongolia they will have production facilities for approx 37500 tonnes/annum according to my maths and presumably be a real thorn in oneones side

This has the makings of a very attractive growth company IMO, just need to get the factory open and release of a few shares by the main shareholders would help.
Posted at 23/11/2011 11:36 by moathunter
I think SORB is half priced at £11m / 22p (based on 52m shares fully diluted- see my post 61 above) and estimate its true value is around £25m / 48p.

In essence, SORB manufactures a food preservative which is very safe and has been in existence since the 1960s.
Commodity-like prices? Check out its high historical margins. This is believed due to economies of scale (high fixed cost of production and distribution) and scope (solely focussing on sorbate preservatives and nothing else whatsoever, so they know the least energy and raw materials needed to yield the most preservatives etc.).
However, these high profits were likely due to temporary high demand, constrained supply imbalance, so it needs adjusting downwards for conservative projecting forwards.

The company has built a new factory to increase production capacity by 100% in the next couple of years, with such an expansion being very low risk and simple for them- they've increased by 50% a few years ago. So it's a high probability that they'll double revenue without a hiccup with this oncoming expansion.

More importantly, their new factory is in Inner Mongolia, with cheaper land, cheaper energy and tax benefits than China. This is the equivalent to UK manufacturers in the past moving their production eastwards- first to Eastern Europe and then to Far East. As a 3rd largest sorbates manufacturer in the world, it would appear they are ahead of their rivals' cost curve and so should maintain their position and subsequent above normal profitability for a decade or more.

Also there's the back drop of secular long-term demand for sorbates as a few billion Chinese and Indians become more urbanised and hence need more preserved shelf food over "eat on day it was picked" food.

Directors own over 80% of the shares. Net asset Value at present is £15m with no intangibles on the balance sheet and some of that £15m is a nearly complete new factory currently standing idle (and therefore worth more when it's an operating asset). SORB should realise £26m revenues in the next few years and £2m+ annual free cash flow to be worth around £25m.
Sorbic share price data is direct from the London Stock Exchange

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