Plantic Technologies Share Discussion Threads

[lfc4ever] 14/7/2010 14:51

has anyone had any direct contact with morris? do they respond to emails?

[greengiant] 14/7/2010 14:41

By the way, I am not ruling out ever buying in, just want to see them hit this years numbers, even if it is at a price a lot higher than here.

gg

[greengiant] 14/7/2010 14:39

TMM2 - I hope I am wrong. There has never been an occasion where I have wanted someone to lose money. It is just dangerous that a 1 year slip between now and 2013 will eat up all the cash reserves which would mean a further raising (however that is done)

GL

gg

[themoneymonster2] 14/7/2010 14:36

gg, we will just have to wait and see I guess. It is worth noting that 2010 outflow of $15 million would be the cash they had at start of year. They intend to raise circa $10 million so that would more a less take them through to 2012 on your figures above, from Matrix. There are also other options regarding financing remember, ie. alliance loans or investments, loans from Gordon Merchant.

Like I said though, we'll wait and see.

[lfc4ever] 14/7/2010 14:32

gg, you say the issue is the sales line, full stop.

my initial research would suggest this is right.

my point is that the Matrix note, with its valuation of 19p (including a fundraising at 8p) is based on a sales line for FY2010 of 5.7 million or about 475 k pcm

The recent trading statement suggests a sales line for 5/12 2010 of about 756k, or 151k pcm.

therefore, to hit the target they need to jump to over 700k pcm for the rest of the year.

that looks pretty ambitious.

they have got rapid sales growth, but is it enough? Bearing in mind that the matrix note is projecting profitability as far out as 2013.

[greengiant] 14/7/2010 14:30

TMM2

These are my thoughts and like I said I would be objective as possible.

The Positives.

The market favours this type of company, and certainly as the economy improves, oil costs will increase and the cost of oil based plastics will increase. This is one scenario where you want the economy to improve.

The economies of scale are so very prevalent in this type of business. I am surprised that the numbers in COGS does not fully represent this, I would say that costs should drop off quicker in 2012.

We can talk a lot about the market and whether A$37m is possible in 2012 - personally I think it is, if the company executes well.

The negatives

The numbers.

I don't believe they will hit A$5m this year. It places too much emphasis on the second half and their first half performance means that they would have to increase sales in the 2nd half by a multiple of 4x - considering that the max they would have achieved in H1 would have been around A$1m. Tough, the market isn't really there yet. I would think it is prudent to assume a 1 year slip.

I don't understand their DCF. But then again they only give 3 years numbers on a 6 year DCF - so it is understandable. The thing to be careful here is the following.

1) It is heavily cashflow negative in 2010, 2011 and 2012. If you ignore the financing activities you can see the effect is
2010 - $15m outflow
2011 - $7m outflow
2012 - $5m outflow

Now the only reason that Matrix have come up with a DCF value of 19p per share is that they have extrapolated but not provided any numbers for scrutiny. AND they have assumed that the company can raise $9.5m AND raise long term debt in 2011 and 2012 of $4m each.

A one year slip will kill this company.

That is why it is so high risk - I could be wrong I have been before
;-)

gg

[themoneymonster2] 14/7/2010 14:30

It's worth noting that when I spoke to Paul Mines of Biome Technologies (formerley SEO), he seemed very interested in why PLNT was down at 5.25p and capped at £4 million against current cash of 6.5p per share. I would brace yourselves a for a knockout bid from either Biome or SYM for around 10p per share, take it or leave it.

[greengiant] 14/7/2010 13:30

denc,

I understand packaging waste regulations well. Valpak were one of the first major companies that set up to control the waste regulations. Basically, each supplier in the chain purchases PRN's (Packaging Waste Recovery Note) to calculate how much of each component they have used. (Paper, plastic, metal, wood etc). Each component "costs" a different amount and is driven by market forces.

Unfortunately at the moment this is hugely difficult - Symphony explain it better than me



But basically for a retailer to be able to offset the cost, they would have to recollect and show that the product has been composted, whilst this would be admirable, it would also be bloody expensive

Hope it helps

gg

[themoneymonster2] 14/7/2010 13:24

Sent, you can delete that post now.

[denc] 14/7/2010 13:17

er - i am not talking about supermarkets disposing of their empty boxes

- in the uk [ and eu] any retailer selling over £2 million annually fills in an annual packaging waste report - there are from memory - 10 or so different kinds of packaging - glass plastic paper etc

The retailer is required to work out how much of each type of packaging he has used - ie sold - this is usually done from an analysis of purchases plus information on how much of each type of packaging there is in each type of product - sound a horrendous task eh? and it is is - some retail systems such as the CSY Retail Systems Vector program do some or most of the work from an analysis of sales but it is still complex and an onerous task

once the amounts of each type of packaging are determined the total is calculated - obviously each type of packaging carries a different penalty rate

the retailer must then buy offset units to the total of his packaging waste

[ aint the eco lobby and the eu wonderful]

i would have thought anyone investing in a packaging company would have been familiar with all this

my question was whether the plantic technology would give retailers an advantage in this area by carrying a lower off set penalty than traditional plastic by being in a separate category from standard plastic in packaging waste calculations

if it is there would be an advantage for the retailer in using it

[masurenguy] 14/7/2010 13:13

the_doctor - 14 Jul'10 - 13:02 - 40011

The_doctor seems anxious to make an issue out of directors compensation on VIY - a share he does not hold - so I am very happy to reciprocate here where the issue is even more marked !

"What kind of message is the Plantic BoD giving out when their collective compensation is 40% of the annual net losses that the company is still producing. There collective compensation (excluding a redundancy) was around $1.6m last year !"

[masurenguy] 14/7/2010 12:30

the_doctor - 14 Jul'10 - 12:28 - 40007

You better checkout what levels of compensation are paid to the BoD of Plantic. Maybe you should focus your attention on a company where you hold shares which are substantially underwater instead of constantly deramping another company where you don't hold any shares at all !

Plantic half year sales revenue: $581,087
Plantic Half Year losses: $(5,334,987)
Plantic directors compensation in 2009: $1,919,138

It would appear that directors compensation exceeds annual sales and accounts for 40% of annual losses !

[masurenguy] 14/7/2010 11:51

the_doctor - 14 Jul'10 - 11:47 - 39994

I feel SO sorry for the_doctor and Cynical Sid whose investments here are substantially underwater. You've both been such caring and altruistic posters on other boards like VIY that you're entitled to some consideration here !

Cynical Sid - 4 Jan'10 - 96: Hi there! Don't think I'm wrong on this. I think the company is worth somewhere between 40-50p. Have now bought more than 2m shares so really hope I'm not wrong!

January 4th: Share price 12p

the_doctor - 8 Jan'10 - 125: Well done here Sid! Glad you pointed it out and after a bit of research, I decided it was a clear buy. The coming deals should help to lift this substantially higher. As you say, the market cap is still undemanding.

January 10th: Share price 16p

July 14th: Share price 5.1p

[themoneymonster2] 14/7/2010 11:24

Leevel 2 is 3 v 1 5-5.25p and the next mm is on 6p offer.

[masurenguy] 14/7/2010 10:47

the_doctor - 14 Jul'10 - 10:46 - 39985

You better checkout what levels of compensation are paid to the BoD of Plantic. Maybe you should focus your attention on a company where you hold shares which are substantially underwater instead of constantly deramping another company where you don't hold any shares at all !

Plantic half year sales revenue: $581,087
Plantic Half Year losses: $(5,334,987)
Plantic directors compensation in 2009: $1,919,138

It would appear that directors compensation exceeds annual sales and accounts for 40% of annual losses !

[themoneymonster2] 14/7/2010 10:47

And again, boring hell.

Can we make a promise to ignore this idiot from now on. He may get bored that way.

[masurenguy] 14/7/2010 10:46

the_doctor - 14 Jul'10 - 10:24 - 39980

The_doctor seems anxious to make an issue out of directors compensation on VIY - a share he does not hold - so I am very happy to reciprocate here where the issue is even more marked !

"What kind of message is the Plantic BoD giving out when their collective compensation is 40% of the annual net losses that the company is still producing. There collective compensation (excluding a redundancy) was around $1.6m last year !"

[themoneymonster2] 14/7/2010 10:05

Looks like it:


ANNUAL GENERAL MEETING AND TRADING UPDATE


Plantic (AIM:PLNT), the technology company engaged in the development and commercialisation of a range of environmentally friendly plastics from renewable resources, will today hold its Annual General Meeting in Melbourne, Australia.

Ian Wightwick, Plantic's Chairman, will make the following statement at the meeting:

"Plantic has delivered a significantly improved performance in the first half of the current financial year. Sales of product sold in the 5 months to the end of May have increased by approximately 80% compared to the second half of 2009, with revenues 50% higher. The mix of sales reflects higher sales of sheet and resin as opposed to finished packaging, in line with our strategy. The trading loss and cash position for the first half of the year are expected to be in line with market expectations. We continue to reduce costs and improve efficiencies and have been careful to conserve our cash resources. Our cash position is expected to be approximately A$9.2m as at 30 June 2010.

"In February, we entered into a wide-ranging agreement with Kl?er Pentaplast, the world's leading producer of rigid film products. I am very pleased to report that Kl?er have been most efficient in progressing all areas of the agreement. Kl?er staff are now fully trained, have picked up servicing existing customers and are well advanced in the rolling out of Plantic's products branded as Pentafood® Biofilm*. Kl?er has engaged with several major multinational corporations in the USA promoting Plantic rigid sheet and has also advanced its plans to manufacture Plantic sheet under licence. Finally, negotiations are underway with Kl?er to distribute Plantic product in other territories outside of the USA.

"We have also seen increased orders from a number of key customers in Europe, including Marks & Spencer, in the UK and a major German confectionery company. Our plant in Jena, Germany is delivering increased volumes of product into the European market. We have also made our first sales of injection moulded resins into the Australasian market, illustrating the value and importance of our product development programme.

"In February, after completing a major product development programme, we launched our eco Plastic*resin product. We are currently negotiating a global distribution agreement for this product and expect a favourable conclusion in the near future. The roll out of eco Plastic resins for both film and injection moulding applications is also going well. Several multinational food and healthcare companies are evaluating eco Plastic* for a range of applications.

"A major strength for Plantic is its Intellectual Property, with many patents approved in major global markets. We recently secured our fifth US Patent to protect the technology behind Plantic's new rigid sheet material with improved impact resistance.

"We achieved improved manufacturing output and yields during the first half of 2010. The plan to establish a manufacturing plant in the USA, in collaboration with National Starch, is progressing in line with expectations. Once complete, it will deliver significant cost reductions, not only in substantially reduced logistics costs but also from a more efficient manufacturing process. Plantic has also received several offers of government subsidies to support our investment in the USA, which we are currently evaluating.

"In summary, the development of our strategy and agreements with new partners, together with increased sales, product development and manufacturing, has seen the most significant progress for Plantic since its inception. The growth in the breadth of our product range and associated opportunities is pleasingly co-incident with renewed market confidence post the GFC, and an increasing aversion to hydrocarbon based products, accentuated by the ongoing environmental disaster in the Gulf of Mexico. The strategic steps we have taken leave us well placed to exploit these opportunities on better terms than had previously been possible. We therefore remain confident of future success.

"It is important for me to pay special tribute to our CEO, Brendan Morris, and the whole staff of Plantic. It is one thing to lead a company enjoying steady market demand and good returns, but far greater demands are placed on Brendan and our senior staff as we secure our new partnerships, and ensure the proper promotion of our products in the USA and Europe, as well as Australia and New Zealand."

[themoneymonster2] 14/7/2010 10:01

mas

We heard you the first time, why post it again?

[lfc4ever] 14/7/2010 09:59

yes, but is the rapid sales growth at the necessary rate?