Accsys Technologies Share Discussion Threads

[damanko] 25/7/2007 10:30

Well, anything is plausible right now. Key to this will be licensing agreements, as we know.

Interesting sentence in power's post above:

"For at best it would maintain but not achive the wonder growth we all expected at the launch."

Not sure I understand that, to be honest. The Accsys share price has quadrupled in less than 2 years. I must be missing something. Ho hum...

[basketbob] 25/7/2007 10:25

We need to see the proof of the pudding.

I'm out for now, but will be watching this one

[philjeans] 25/7/2007 10:22

No - entirely plausible.

This one has been puffed up to unrealistic heights - £400M !!

[power] 25/7/2007 10:13

Busraker. I agree with your comments on the interest business or industry has in buying sustainable woods. Business is business and price is king when buying anything, provides it serves the purpose. As a consumer, never would i consider buying treated Eucalyptus for building nor decorative purposes if it were equal to or even near to the price of a noble wood.

I have interests in Brazil where we utilise treated Eucalyptus for most structural work, much of which is on view as part of the buildings integral structure - support posts etc, both internal and external. It's NOT decorative and in fact is ugly by comparison to noble woods - mahogany-teaks-oaks etc. However Eucalyptus is by far the most used hard wood - but then its cheap !

In my view any attempt to sell off Accoya at a price approximating 'real' wood would be a signal to get out this share, for at best it would maintain but not achive the wonder growth we all expected at the launch . Maybe recent price drops are an early indication of such emerging doubts .

[busraker1] 20/7/2007 17:14

was just going to send you the price list you wanted to see! :¬)

[paulyboy] 20/7/2007 16:48

why busraker?

[busraker1] 20/7/2007 16:10

I have a few qn's with the pricing myself as I wonder how it will compete against established woods, but ultimately the market will decide the price. It is not as though the product is expensive to produce, it's more that the market appears able to sustain that high price.

Not forgetting that the price may be initially high as there is so little Accoya available as it is only Arnhem that is producing at the moment. Also, the price above is the price from the British supplier, so they may be adding their own percentage on top. But it's a useful comparison to the market anyway.

The following was written in sept 05 by Collins Stewart showing the base cost of Accoya is arouns EUR600/m3 or £420/m3, so it's just the profit margins that are going up. If they are not selling enough they can bring the price down til it does.

"Looking at the economics of the acetylated wood process, competing
products, such as durable hardwoods, artificial substitutes and compound
wood products typically sell at wholesale cost between €400 to €2,500 per
cubic metre. The targeted market price for acetylated wood was originally
aimed at €650 per cubic metre; now it has become clear that the market is
likely to bear prices between €700 and €1,100 per cubic metre.

We estimate that the total cost of acetylated wood will be around €500 to
€600 per cubic metre, depending on the wood species, with a little over half
that accounted for by the all in processing cost, and the rest (c.€350 per cubic metre) by the cost of the wood material."

I think they are intending to view Accoya as `better even than hardwood'. In two areas it certainly seems to be not beaten by any other woods, a)lifetime and durability and b) maintenance cycles of coating and recoating due to the very high stability of the wood.

My questions are regarding its ability to compete with the attractive looking Western Red Cedar for cladding, with softwood / upvc pricing for windows and softwoood pricing for decking and the greater attractiveness of, say, oak, if you are going to pay for that. I suspect they are not aiming to eat much in to the plastic windows market, however, it is fair to say that most people go with plastic as much for the low maintenance as for any cost issues. People perceive even oak windows as being a faff to recoat every few years, no matter how beautiful. Accoya is a significant step ahead in this regard and may make the eco-friendly choice for windows an even more compelling choice to go with wood - Accoya.

Just my thoughts - the market will decide!

[paulyboy] 20/7/2007 15:57

anyhow - you are basing your views on hearsay. Show me a real price list please

[paulyboy] 20/7/2007 15:56

hey - calm down guys. Its a new product. Prices will come down as volume production increases

[basketbob] 20/7/2007 15:52

I'm inclined to agree with cestnous.Other than for altruistic reasons, I find it hard to imagine that anybody would be prepared to pay hardwood prices for softwood, no matter how it is treated, particularly for finished wood products. It would need much lower prices to overcome any prejudice from the users of the product.

[cestnous] 20/7/2007 15:31

PB
Appreciate your comments, but;
If we have to wait for avilable hardwood stocks to become decimated before Accoya takes off then this is not a growth stock in either sense of the word.
Personally, I have major objections to the use of unsustainable timber, but I am not a timber merchant,or manufacturer and these people don't buy for environmental reasons, whatever they may say in public. I will remain disappointed if these prices prove to be true.

[paulyboy] 20/7/2007 15:19

cestnous - not at all.

I dont know about the price comparisons but even IF they are similar, Accoya has the major advantage of 1) its source timber growing very quickly compared to Hardwoods. 2) Much hardwood comes from rainforest destruction, so using Accoya, is environmentally friendly

[cestnous] 20/7/2007 14:59

How on earth is this going to be widely taken up if it is sold at comparative prices to hardwoods? If this is true, I would be thinking twice about staying in here. Surely the whole point is the attributes of a hardwood at a lower price. If not then a lot of manufacturers may stick to 'the real thing.'

[busraker1] 19/7/2007 18:13

I've just seen some pricing showing Accoya at EUR 1750/m3 which is not cheap but obviously they feel they can market it at that. It is similar to European Oak pricing, but is 50% more than Western Red Cedar (a popular cladding softwood).

Next year, from March 08 to March 09, the Arnhem plant alone at 30,000m3 output will produce EUR52.5m revenues at that price. Profit would be around EUR 30m, which, taxed at 28% or whatever leaves eps of 15c, which at PE30 is enough to justify the current share price without the much more significant and higher G.P. license agreements and the following 20 years of royalties etc.

Plenty to come here I reckon.

[busraker1] 17/7/2007 17:21

Great find Grippa, really appreciate that because there aren't many PI's following this as it has been bought up by the Institutions first for a change.

That whole interview smacks of him justifying the current share price whilst leaving room for upward revision. When you do the calcs for what he stated it underpins the current share price but not much more.

That last statement about doing more than EUR30m this year means they must be confident of getting at least 300,000m3 signed up this year alone which blows out the 1m over 5 years statement he made earlier in the interview. We are only in Q2 so he must be looking at EUR 50m revenues or so to be that confident this early in the year. Why would the licenses take 2 years to sign? I don't think Scanfore will be sitting on their rights to sell 500,000m3 of licenses for that long.

[silverthread] 17/7/2007 16:01

Good find, Grippa. And good that the CEO is out spreading the word!

[paulyboy] 17/7/2007 15:40

wow thanks Grippa

[grippa] 17/7/2007 15:39

Accsys Expects Sales of EU200 Million From Accoya
2007-07-17 10:31 (New York)

By Lenka Ponikelska
July 17 (Bloomberg) -- Accsys Technologies Plc, a U.K.
producer of non-toxic treatments for lumber, expects revenue of
about 200 million euros ($275 million) over the next five years
from licensing contracts for its Accoya wood product.
London-based Accsys may sell licenses for 1 million cubic
meters of Accoya wood, Chief Executive Officer William Paterson-
Brown said in an interview today. Royalties from the licenses
will generate an additional 20 million euros a year over 20
years, he estimates.
``We are in active conversation with more than a dozen
groups in different countries now,'' Paterson-Brown said. ``I
expect a number of those to take a license over the next couple
of years.''
The company's Accoya technology treats wood with
environmentally friendly material to make it more durable,
creating a suitable replacement for tropical and European woods
used in garden decking, bridges or musical instruments, according
to the company's Web site.
In June, Accsys signed an agreement with Skanfore S.A for
500,000 cubic meters a year of the wood.
The stock gained 6 cents, or 1.4 percent to 4.30 euros at
3:30 p.m. in London. The shares have more than doubled in value
this year, giving the company a market value of 639.7 million
euros.
The company's net loss for the 12 months ended March 31
widened to 22.6 million euros from 5 million euros a year
earlier. Sales fell 37.5 percent to 50,000 euros in the period.
Annual sales for 2008 will be at least 30.3 million euros,
according to the company's house broker Collins Stewart.
``I believe that we will do better than that,'' Paterson-
Brown said, without elaborating further.
The company still expects to post a profit this fiscal year,
the executive added.

[azalea] 17/7/2007 12:32

Can only buy 200 shares online; share price is up, but that's ridiculous!

[busraker1] 12/7/2007 11:36

Thanks hashertu,

Ultimately it will be licenses signed this year that will tell us how successful a product Accoya will turn out to be. I think it will win big against other hardwoods, though it may be up against it when it competes with Western Red Cedar (technically a softwood) for cladding the outside of contemporary buildings.

[hashertu] 12/7/2007 10:57

Busraker1.
I suspect accoya will compete with hardwood windows and conservatories rather than plastic.
Japan is a huge importer of hardwood. Is this because of appearance or durability? If Japan were to adopt a similar approach to Norway,

then regulation could open up huge potential for Accoya.

[george62] 12/7/2007 10:03

Down to E4.00 then steady buyer at 4.04. Price now going better.

[george62] 12/7/2007 08:46

A little bit of news on licenses would be useful at this point to buoy the share price.