Byotrol Share Discussion Threads

[football] 08/10/2021 10:30

A decent buy for once let's hope it continues

[1gw] 07/10/2021 17:49

Saw this release with seaweed in the title so read it. Feels like seaweed's time is coming.

"The pitch, as much as there is one, is that seaweed cultivation must be ramped up significantly."

[1gw] 06/10/2021 10:32

And perhaps worth commenting also that with the share price where it is an equity raise to fund investment may not be very popular with existing shareholders. So that puts more focus on looking at options for non-dilutive funding through IP sale, or licensing agreements which include up-front and/or year-1 guaranteed elements.

[1gw] 06/10/2021 10:10

football - if you look back at the IMC presentation from 8th September, you can see (extracts from the slides referenced):

Slide 10:
o Short term focus on IP monetisation - existing licensees, new agreements
o Monetise non-core technologies - IP sale with ongoing upside and future royalty stream

Slide 11:
o Byotrol 24: Plan for FY2022/23 - Monetise; run for cash

So with hindsight, they told us what was coming. Note in particular the references to existing licensees and IP sale on Slide 10.

What do they want the cash for?

Slide 10:
o Increase investment in product sales as premises re-open, especially in FM
o Focus product sales on core technologies
....o Increase sector expertise over time, via specialist marketing spend/hires
o Consider bolt-on acquisitions to accelerate growth and potentially provide greater scale

Slide 11:
o Actizone: Plan for FY2022/23 - Invest and grow...Launch own brand D2C
o HLD4/CRUISE: Plan for FY2022/23 - Invest and grow...

Slide 12:
o Invirtu: Plan for FY2022/23 - Invest and grow...
o Sustainables [seaweed]: Plan for FY2022/23 - Invest, patent, develop and grow

So they have a relatively long list of core technologies with investment needs and they also want to look at the possibility of acquisitions.

It was all laid out for us 3 weeks before the deal was announced. But clearly retail (at least judging from this bulletin board) needs reminding and a quick interview giving context would have helped I think. Then it's just down to investors' perception of price achieved vs what they hoped B24 in the US might have been worth and whether they trust that management have done a "good" deal for the right reasons. On price, there simply isn't enough information in the release to judge what the ultimate figure (including royalty) might be, so attention naturally focuses on the headline $1.4m which at first sight to many investors I suspect seems disappointing.

[football] 06/10/2021 09:19

1gw all you've got from byotrol is is that this deal is to level up the books this year so it makes it easier to hit this year's price target according to finncap.Unless there is a deal being done in the background so nothing can be said DT should of have come out and said like he does with any bit of good news in an interview this is for future growth and to accelerate the company into its next phaseBut the company is silent and we don't know what the money for a part from backing up this year's price taggla

[1gw] 05/10/2021 12:25

To be fair, football, I don't think anyone can reasonably accuse the company of keeping shareholders in the dark recently. The company has in my opinion provided an awful lot of data and context in the 19th August results and in particular in the 8th September IMC presentation. The transparency provided on both royalty portfolio characteristics and technology portfolio was a step change from what has been provided in the past. And there's a very nice "Key Investment Case" slide in the presentation as well. So lack of data & context overall is not the issue.

The issue I was trying to highlight is the lack of context in the RNS itself, which in the absence of other data (a lot of which the company may not be able to give for confidentiality reasons) on the deal terms is what I think caused some of the negative reactions on this board. The company chose to highlight "The Agreement continues the Company's strategy to cease its day-to-day operations in the US..." which I think is a bit of a problematic statement in that this agreement involved renegotiation of an existing 10-year licence agreement (didn’t that extract the company from its day-to-day operations?) and further it involved the company getting involved in a completely new 3-way agreement with IRI and USCo and it sounds like the company is going to have to get involved in the day-to-day business of registering (a new label or brand?) with the EPA. So I think that pushed some investors to see the final statement "…helping to underpin management’s expectations for the current and next financial year." as the more significant rationale for the deal and they then worried about the price achieved for what they thought was an exciting long-term asset.

I suspect the company thought that having gone to great length to lay out strategy, positioning and portfolio in the IMC presentation, that context could be taken as read for this RNS just 3 weeks later. I expect they also thought that shareholders would take the value equation for granted - of course management wouldn't do a "bad" deal. But perhaps they failed to account for the sceptical nature of some of their retail base, caused in part I think by disappointments in both share price performance and past communication.

[football] 04/10/2021 10:52

Top post again 1gw maybe Byotrol could employ you in their PR department or Investor relations to explain what's going on at the company so investors are informed like a shouldAnd not treated like mushrooms or the ex-wife

[1gw] 04/10/2021 10:37

So this latest RNS is a great example of where different interpretations are possible, and where it would have been helpful to see DT pop up on an interview (LSE, IMC, even Flagstaff TV) to explain the context to the retail investor base.

Some have interpreted it (on here) as a desperate move to avoid awful 1H financials and perhaps a further profit warning for the full year. Selling the family silver cheaply to massage near-term financials.

I've offered an alternative interpretation where this is a strategic move to accelerate monetisation of "old technology" byotrol24 ahead of the "new technology" Actizone becoming established in the US. Increase total expected return from byotrol24 and position byotrol for the arrival of Actizone products in the US.

The RNS is silent on a number of key points that would aid interpretation:

o What happens to the remaining guaranteed payments under the original deal? Are they still to be received (in addition to the $1.4m) and will the new royalty in the relevant year still be net of these guaranteed minima?

o How does the level of royalty compare to the level under the original licence?

o How does the level of royalty for sales by IRI to USCo compare to the level on other sales and the level under the original licence?

o Will IRI itself be making an investment in supply chain, working capital or otherwise if the USCo deal goes through?

o With several quarters of actual sales figures for byotrol24 now available to byotrol, what are the trends?

o Does byotrol expect to come into the US market with Actizone products once Solvay achieves EPA (and State) registration?

Launching byotrol24 in the US was a big deal, and it seems reasonable to expect a bit more context on this (exit) deal now. Most retail investors can't or don't want to pick up the phone to the CEO or CFO but would (I expect) appreciate a bit of actual, timely context from the company.

[1gw] 03/10/2021 21:47

I think it must have been a factor in the guidance. I imagine there are a number of parallel IP negotiations going on, and this one must have been pretty advanced given the complexity, even by April. So in giving both the original guidance (in April) of £2m earnings, and then the reduced guidance of £1.7m I think they must have been taking a risked view of what would be delivered from the then-known portfolio of IP negotiations expected to conclude in FY22.

But because it is going to be such a chunky contributor to FY22 earnings, I don't think they would have dared count 100% of the income (of a successful deal) in the guidance, so I agree that, everything else being equal, this ought to give them a good chance of beating the August £1.7m guidance.

[the ghost who walks] 03/10/2021 21:15

1gw I also don't believe the guidance included the impact of the us sale.

[football] 03/10/2021 15:51

well some PR

[the ghost who walks] 02/10/2021 17:45

Although frustrated by the share price, I'm pretty relaxed. The mgt team I think are doing the right thing, I think there were hints in the investor presentation of some stuff to come, and the company now has a lot of cash and an attractive cash outlook. Hopefully they find some acquisitions. The mcap looks way too low for the prospects, but I suspect it only moves materially higher with either new ip deals announced or some of the existing deals coming through into the numbers.I'm relaxed as I plan to keep buying shares, and I'm already a material shareholder.The main frustration I have is with the lazy date keeping a d not being prompt in scheduled announcements. That really annoys me.

[1gw] 02/10/2021 14:04

Wisecat/ghost – so this raises the topic of how should a company (and/or its shareholders) best engage potential and existing retail shareholders? This is a conversation I have been trying to have with byotrol, and it has also come up recently with 2 other small companies I am invested in.

Enteq Technologies (NTQ) is an £11m market cap oil services company. I went to the AGM on 23rd September and was the only shareholder who turned up (other than those there in an official capacity). I am a long-term shareholder and have previously talked to them about the difficulty of retail shareholders getting information on the company – their broker used to be Investec and their reports did not get into the public domain, so it was difficult for retail investors to understand what “market expectations” were. Enteq have changed their broker to finnCap, meaning reports are easily accessible, and have also engaged with Proactive Investors, and more recently IMC (Investor Meet Company). However, their bulletin boards remain even more deserted than byotrol’s, liquidity is very low and they wonder what they have to do to attract retail interest (they asked me for my views at the AGM).

Zinc Media (ZIN) is a £10m market cap media company (TV/content creation). They also use IMC and in their latest presentation, yesterday, talked about the low liquidity in their shares and their frustration at not being able to engage more effectively with retail investors. Their investor bulletin boards are also extremely quiet, but like byotrol there are 1 or 2 posters who clearly dislike the company and post negatively. Zinc expressed their annoyance with posts that keep suggesting they are running out of cash despite evidence provided by the company to the contrary.

Apart from being small and having poor share liquidity, what these 2 companies and byotrol have in common is that they are all turnaround plays viewed over a long-enough timeframe. This means their shareprices have been much higher and there are clearly retail investors who have been burnt in the past. On byotrol and Zinc, some of them appear still to hold a grudge and to be out for “revenge”;, or more charitably to warn other investors, by posting negatively on the bulletin boards. Where NTQ and ZIN differ from byotrol though is that both NTQ and ZIN have a relatively large supportive institutional base of shareholders, so to some extent they don’t “need” retail shareholders in quite the same way that byotrol does. They also I think each have a business that is easier to understand.

So what’s the answer? My comment to Enteq was that I was struggling to suggest an effective answer, since fairly clearly, Proactive and finnCap hadn’t changed the dynamic noticeably. But I thought IMC was a good platform because of the Q&A facility, if they could attract retail investors to listen to the IMC sessions in the first place – and that will in Enteq’s case probably be event-driven around their results and some new technology they are about to roll out.

For byotrol, I have taken the view that the company has decided it doesn’t really see retail investor communication as a priority (given its limited resources) and so by posting what I believe to be the company story and my reasons for being invested on advfn I hope to give any passing readers at least a starting point for considering the company. However, that comes with the very obvious downside of giving the grudge-holders (and my personal troll) an opportunity to throw mud.

I have argued that byotrol should be presenting at least quarterly on IMC, not necessarily to present new information but just to keep the investment case fresh in people’s minds. It is a competitive world out there for retail investor interest and some companies (Open Orphan [ORPH] being a good example among my holdings) pitch frequently and aggressively. I believe that byotrol has squandered the gift it was given of relatively big retail investor interest following the Midas tip by not engaging effectively with those retail investors. I understand the resource argument, but had they made a bit more effort to engage (and continue to engage) their new shareholder base I think they could have retained much more of it and as a result the shareprice would now be higher, with the resultant implications for looking at paper-funded acquisitions. I am very interested to know how many actually watched the byotrol IMC session – because it doesn’t really matter how good the presentation is if hardly anyone is watching it. I am disappointed that despite saying in the results that they would make retail presentations post results on “familiar online platforms” they have only presented on IMC, as far as I can see.

So we are where we are. Given FY23 appears likely to be the year in which material Solvay (and maybe other) royalty starts to appear, and FY22 performance now looks relatively secure following the IRI deal, maybe the right answer is for the company and bulletin board posters alike just to back off and wait for results to demonstrate the value in the company? Or alternatively is now the time to ramp up communication given the greater visibility that there is in the business?

[sikhthetech] 02/10/2021 14:02

It gives them a tiny amount of cash, over 2 yrs, to fund jam tomorrow projects. As if £1m over 2 yrs would make a huge amount of difference to jam tomorrow projects.


With 2 of the top 3 worst affected countries, US & Brazil, being in Americas you would have thought the opportunities in Americas would be massive and there would be room for byotrol.

Giving up after a year, which is what they are doing, and accepting palty £1m, over 2 yrs, for IP rights in whole of Americas says a lot about the opportunities and strategy.

If you read the rns DT is effectively congratulating IRI and wishing them well. Where is the longer term benefit to Byot shareholders?



2 out of top 3 and 7 out of top 30 worst affected (number of infections) countries

[football] 02/10/2021 10:19

wisecat2 not shareholders? only DT & JL hold motr shares than some here that you say have such negative views

[the ghost who walks] 02/10/2021 08:30

Agreed. They aren't shareholders. Ignore or mute them

[wisecat2] 02/10/2021 06:05

1gw. excellent post but you are wasting your time there are people here that don't understand the business they have invested in. This was an excellent deal.I don't understand why so many have such negative views and remain shareholders or maybe they aren't.

[football] 01/10/2021 23:41

The way I see it is if they sold the wives ring just a fund Christmas lunch is a bad deal but if they sold it to buy a ladwder and a van to start a business then it's okBut do have one question to ask if they knew this deal was in the pipeline Was it insider dealing when they sold there shares at higher price to institutions?

[1gw] 01/10/2021 16:14

They're playing a portfolio game here. That's the great thing about the optionality of the position they've got. They can pull levers to fill earnings gaps, or to bring forward cash to fund investment elsewhere.

They appear to have identified PHMB technology (not liked in Europe) as having relatively limited growth potential, so they're looking to monetise products based on that technology.

Specifically on byotrol24, with Actizone coming over the horizon even in the US, I think they've decided the optimal strategy is to accelerate monetisation, as it may be too difficult to establish it further once Actizone products are being widely rolled out. So the 10-year licence deal gets reshaped into a sale plus 3-year royalty deal and they force the pace a bit by trying to land the distribution company for professional sales. If successful this will build the byotrol24 brand and potentially increase the value they can get for monetisation in Asia (where Actizone is already being rolled out).

This gives them cash this year and next to fund investment in higher growth projects, specifically Actizone (Hycolin 24), HLD4/Cruise (Medimark products?), Invirtu and Seaweed.

It also clears the decks better in the US, where I guess they may wish to return with Actizone products once that is established there.

In terms of the value of the deal, we have to wait to see what royalty accrues, but clearly it would have been nice to get more for byotrol24 IP. However, the writing was perhaps on the wall with the strategic process they ran before selecting IRI, where it was apparently not possible to find a funding partner ready to put in the $5m investment they thought they needed to take them to $20m sales. The royalty deal with IRI held out the hope of getting something material if IRI could have built a position quickly, but after the excitement of the Turtlewax deal it all seems to have gone a bit quiet. With big FMCG companies launching their own 24 hour products and Solvay going through EPA registration for Actizone, and byotrol wanting to simplify their product portfolio anyway, as well as raise cash for investing in higher growth areas, I guess it was just time to cut and run, protecting this year's earnings guidance in the process.

[microscope] 01/10/2021 15:48

At least this should help with an apparently otherwise dull H1.However the first payment is not disclosed and while they say it will help underpin management expectations for the first half, no mention of reaching market expectations.

[football] 01/10/2021 13:37

Byotrol sells American rights to antimicrobial formulation


[...]

[the ghost who walks] 01/10/2021 13:19

Looks a very clever way to bridge to the monetisation of the ip deals, also given the inability of byotrol itself to fund the US,

[sikhthetech] 01/10/2021 11:55

That's a paltry amount, £1m ($1.4m) to be paid over 2 yrs(Max) for all rights to the formulation in the Americas.

They clearly referring to Americas and not USA and they also comment "particularly in the very large US markets", so they must be referring to North and South America, which is a huge market.

It also sets a 'guide price' for anyone else wishing to buy the rights in markets elsewhere.


It doesn't matter how this is dressed up it doesn't look like a good outcome. If anything it smacks of desperation.

If anything, the AGM should be 'interesting'...

[football] 01/10/2021 10:09

So no big shareholders sold out which everyone thought was causing the share price to fall so was it family and friends

[effortless cool] 01/10/2021 10:00

tradertrev,
I'm afraid that you have understood perfectly. It looks a pretty lame deal to me. The royalty period is much too short.