Byotrol Share Discussion Threads

[1gw] 30/1/2020 21:17

Medimark.

Just looking back at my notes on Medimark, I see that the FY20 max earnout target of £900k was based on £650k EBITDA with 9:1 gearing. So if they did £550k EBITDA they would be £100k short which means earnout would be reduced by £900k, i.e. they would be due nothing.

For FY19, if the shares are valued at 2.4p (the end-March price) then the share consideration is around £220k, so £510k total consideration. This would mean £390k short of max earn-out, divide by 9 to get £43k short on EBITDA. If instead we take the £620k earn-out number given in the prelims, that would be £280k short of max earn-out, divide by 9 to get £31k short on EBITDA.

So it looks to me like around £460k to £470k EBITDA for FY19.
And they could be anything up to £550k EBITDA for FY20 and still not get any earn-out.

Which means that the Medimark story could well be one of continued growth in profitability, even though they haven't triggered FY20 earn-out.

I'd be very happy as a byotrol shareholder if Medimark have been able to continue growing from FY19 to FY20, earn-out has been significantly reduced (from the maximum) and they can get on with delivering synergies 2 months earlier than expected. I would be less happy if Medimark's profitability or revenue has declined from FY19 to FY20. There is nothing in this morning's RNS to say whether Medimark is still expected to grow revenue and EBITDA profitability from FY19 to FY20, so we may have to wait for the results to find out - by which time it may all be academic if they have managed to land a decent US deal.

[sikhthetech] 30/1/2020 18:24

Boots have re-stocked the Boots antiviral hand foam..
Both the 50ml & 200ml available in stock...was out of stock yesterday...

50ml: '73 purchased in last 24hrs'
200ml: '81 purchased in last 24hrs'...





Lets see how many they sell by tomorrow evening...

[1gw] 30/1/2020 17:08

Good to see some director purchases - perhaps they had been on hold pending the announcement of the Medimark earn-out settlement.

If the chairman and CFO are buying, though, it presumably means there are no imminent deal announcements.

[slicethepie] 30/1/2020 14:29

He is a complete nuisance on every board where he posts ( not sure he does much else!) seems to have a vendetta against 1gw and thinks we all know each other.

[sikhthetech] 30/1/2020 13:54

Mudbath,

Warnings like that could lead to consumers questioning all sanitisers. It could also have an opposite effect in that consumers might stop using all sanitisers during this coronavirus scare.

[sikhthetech] 30/1/2020 13:46

1gw

"although disappointing to see that Medimark performance in FY20 was not going to be good enough to qualify for any further earn-out under the terms of the original agreement."

Medimark performance very disappointing and not as expected then.

[mudbath] 30/1/2020 11:37

Not long to wait for developments !

"Its parent company, GOJO, has 15 days from when the January 17 letter was sent to explain to the FDA what actions its going to take to make sure that it complies with the agency's regulations and isn't making false claims."

[kcowe] 30/1/2020 11:02

Just took some more at 1.815.

[mudbath] 30/1/2020 10:51

The earn out RNS is parochial in its impact, whereas the Mail expose on GOJO could be global in its implications.

[kcowe] 30/1/2020 10:43

Coronavirus could spread on surfaces, World Health Organization (WHO) said Wednesday.
This is a no brainer as this new reality picks up speed ....

[1gw] 30/1/2020 10:43

The Medimark settlement is interesting if you compare it with the estimate for FY19 payout they put in the preliminary results. There, in note 19 we had:

"at the balance sheet date the further consideration payable in respect of the first year earn out is expected to be a nominal (undiscounted) amount of at least £0.62m (and potentially more)"

So that suggests (at least) £0.31m cash and £0.31m shares due for FY19.

The end-March shareprice was 2.4p and the 1Q'19 average price was 2.66p. So at the end-March price, the shares due would have been around 13m and at the 1Q average price, shares due would have been around 12m.

So they appear to have settled for similar cash but fewer shares than might have been expected from the prelims. If byotrol had an option to pay in cash rather than shares then maybe Medimark held out for shares, but accepting a discount. Or maybe there was a premium in the shareprice calc (shares to be issued at x% premium to a reference price). Or maybe there was some clawback of FY19 amount due to FY20 underperformance against earn-out targets.

Whatever way I look at it, it seems less dilution (and less cash) than I expected. I just hope that's not the result of recently-deteriorating performance by Medimark in FY20. In the interims byotrol said "Medimark running ahead of previous year". So it could be mainly down to earn-out mechanics, which byotrol hint at in todays release "given the terms of the SPA which require a carry forward of any shortfall against target in FY2019". But it might at least suggest that Medimark are going to be a bit under the FY19 EBITDA target in FY20 (i.e. possibly FY20 ahead of FY19, but not ahead of the original max earnout target for FY19).

[1gw] 30/1/2020 10:08

It was a negotiation, Brownson. The original terms foresaw equity payments of up to £0.45m for each of FY19 and FY20 (up to £0.9m total in shares in addition to up to £0.9m in cash) so I'm pleased to get away with only 9m shares issued.

I would imagine as part of the negotiation, the Medimark side might have been arguing for a higher proportion of shares (if they thought the current price undervalues them). The entitlement to shares for FY19 would in any case have been determined by the FY19 performance and some reference share price set presumably towards the end of FY19 - so this would have set an obvious starting point for the negotiation.

[kcowe] 30/1/2020 10:08

managed to and grabbed a few cheap ones on the drop .

[brownson] 30/1/2020 09:54

More dilution. Clearly haven't heard of bank loans

[1gw] 30/1/2020 09:51

Good to see that they've managed to accelerate completion of the earn-out, although disappointing to see that Medimark performance in FY20 was not going to be good enough to qualify for any further earn-out under the terms of the original agreement.

But now they can get on with delivering synergies. It presumably also frees them up to out-license/sell any non-core Medimark technologies.

[mudbath] 30/1/2020 09:50

This news story strikes me as a very significant development for Byotrol:-

"US regulators are demanding that Purell stop telling consumers that its hand sanitizers can kill viruses like flu and Ebola.

The Food and Drug Administration (FDA) issued an an exhaustive warning letter to GOJO Industries, the maker of Purell products.

In addition to its insistence that Purell stop making 'false claims' about its products, the FDA said that Purell's alcohol products qualify as drugs - but have not been approved for their advertised uses by the FDA.

Purell is far and away the most popular brand-name hand sanitizer in the US - but so long as it claims to use alcohol for the 'mitigation...or prevention of disease,' it is also distributing a drug illegally."

[smithie6] 30/1/2020 09:15

RNS

advance settlement...so they can start integration (seems strange to me it didnt start straight away after acquisition)

phps happened now, during the virus crisis
to instantly get/have more staff for supplying demand for products from the original part of the co. ?

[smithie6] 30/1/2020 07:03

you don't think the virus crisis can help open doors at retailers, to get their products added to shelves ?

(getting added is not easy)

& also that ppl might become more conscious about disinfectants & the average spend/person/year on disinfectants may well increase ?.....hopefully increasing the turnover & profit & this co.


-----
from BBC website

from someone inside China

"....went to a pharmacy and it was already limiting the number of shoppers. It had already sold out of masks and alcohol disinfectant"


if the world goes crazy for disinfectant, ...well, this co. is expert in disinfectants

----

there are now ppl infected in all regions of China

& the WHO is imo getting more concerned & I predict that they will today categorise the crisis as being a bigger problem/risk....which will be reported on all national TV news bulletins

& the use of disinfectant, especially for hands, & masks will get more tv coverage

[the ghost who walks] 29/1/2020 18:27

The investment case here is not the virus, wouldn't buy the stock for that.

[smithie6] 29/1/2020 12:49

infected ppl now in 17 countries !

4 ppl infected in Germany & they didnt go to China

5 ppl infected in USA

----

"It’s unclear at this time how the virus spreads, but there have been confirmed cases reported both in the US and Canada. At the time of writing, confirmed cases have been reported in Arizona, California, Illinois, and Washington."

[smithie6] 29/1/2020 12:17

if of interest

I live outside the UK

& now seeing a big jumps in adverts for liquids etc to kill bacterias y viruses

for use with floors, clothes, hands

the product makers think that sales are rising, or will, because of the daily headline media coverage of this virus crisis

the makers wouldnt ramp up their advertising spend if there weren't logical reasons

[smithie6] 29/1/2020 10:11

BBC website

"Coronavirus: Australia plans island quarantine as foreigners leave Wuhan"




and similar plans of quarantine for other countries planning to get their nationals out of that region of China

they will, I assume, all be buying protection clothing & masks & gloves etc for medical staff

& high quality proven cleaning products , (such as available from Byotrol) (from prof. suppliers), they wont imo be popping down to buy 'whatever' is on the shelf at the local supermarket.

[smithie6] 29/1/2020 09:58

so Brit. Airways has stopped direct flights to/from mainland China

so, imo there is a high chance that Brit. Airways (& all aurlines) will be reviewing its cleaning processes & high chance they might buy higher spec. cleaning products
including for meal trays & those ally trolleys that move meals, & drinks

& Starbucks has closed 2000 outlets in China
..so I assume that they will already be using high spec. products & will be routinely spraying/wiping the service/paying counters during the day
...& the WC areas. & doors & handles

and imo they cant do that using chlorine or bleach based products due to the very unpleasant/unhealthy chemical vapours

whereas products like Byotrol24 don't give off nasty chemical vapours & are proven to kill corona viruses.

common sense says that sales of co. products have already increased dramatically