Disperse Tech Share Discussion Threads

[rambutan2] 19/11/2004 11:32

hi guys, just read ic. yes, all ef bullish and only mention of other stuff is to say that low margin! but concludes that looks v cheap for potential. in any case, all good stuff which should help bring about a gradual rerating and then as mb says, there could be some very nice surprises to come and really excite.

[mickbaxter] 19/11/2004 11:17

Thanks Fez.

I don't mind them concentrating on the EF business for now. If some of the other stuff starts to achieve it's potential, it will be a nice surprise, but in the meantime, this is a part of the business that the market can understand.

[mickbaxter] 19/11/2004 10:30

Thanks callumross.

Might I ask if it's a big article or a one line comment, if there's a price target or anything of note?

[mickbaxter] 19/11/2004 09:44

One can only assume there's a buy or buys in the background.

More activity than I've seen in a long time. Has anyone seen a write up anywhere?

[tyranosaurus] 19/11/2004 08:31

Why has it opened up 1.25p today ??

[rambutan2] 18/11/2004 16:00

yes, the agm, very much so.

[mickbaxter] 18/11/2004 15:26

Well I know BBW are due to launch products, but haven't heard anything regarding Sheseido or Nu Skin.

Something to ask at the AGM I suppose.

[rambutan2] 18/11/2004 14:38

mickb et al, any views on bf's licence theory (post 100)? surely dpt would have made some mention of those two giant cos if something good was soon to emerge from those 2001 agreements?

[mickbaxter] 18/11/2004 13:56

Conclusion from the results section of Shares Magazine:

"The group is holding down costs and seems to be heading in the right direction."

[blank frank] 14/11/2004 15:39

Disperse Technologies plc licence agreement announcements:-

17/03/2003 14:05 Re Licence Agreement [Cosmetic Essence Inc]
22/01/2002 08:00 Licence Agreement with Nice-Pak
13/12/2001 08:00 Licence Agreement With Nu Skin
10/10/2001 08:00 Licence Agreement With Shiseido America
04/05/2001 08:00 (Amendment) XME Equipment Contract [Emulsion Systems Ltd]
20/04/2001 08:00 Licence Agreement With Bath & Body Works

If Bath & Body Works have just launched products using DPT's technology, then that timelag suggests three and a half years from licence signing to product launch, as a rule-of-thumb. This is clearly longer than the 12-18 months timelag that has been anticipated in the past ... and this delay is part of the reason why the Disperse share price fell about 90% from its high on Ofex.

However, we may now have come through this longer waiting stage, and revenues from other licences may start to come on-stream in the first half of 2005, if this 3.5 year period applies.

Shiseido America ( ) and Nu Skin ( ) both have the potential to deliver huge licensing revenues to Disperse. Shiseido America is the USA subsidiary of the Shiseido Company of Japan, the world's fourth largest cosmetics company, with annual world-wide group sales of about US$5billion. Nu Skin has annual sales of about US$1billion. Both these licences were signed about three years ago.

In a competitive industry, companies will find it harder to ignore the considerable commercial benefits of Disperse's technology when their rivals are adopting it.

B.F.

[blank frank] 13/11/2004 15:30

* Bath & Body Works is a bigger US version of Body Shop: 1,800 outlets in the USA, and turnover $1.8Bn. They're launching four products using Disperse's technology in September [2004]. Disperse is revising its licence agreement with them: in broad terms, this will give Disperse a four-fold increase in revenues. [Notes from the 13/7/04 event.]

Of the 9 products in the Tutti Dolci collection, there are four fairly obvious candidates ...


* The first quarter results for the next financial year (quarter end 30/11/04) should be very good, because they will include revenue from the September 2004 licencee product launches, and a full quarter contribution from EF - which will also include a full quarter from the launch of VIVO. These results will be announced. [Notes from the 13/7/04 event.]

Will licensing revenue double? Company projections / house broker forecasts suggest this, and have not been downgraded. Currently most licensing revenue has come from one main Estee Lauder product at poorer margins. So if you add four from BBW at far better margins ...

High exceptional costs have reduced last year's results. These should not recur.

B.F.

[blank frank] 11/11/2004 19:53

A tale of two products:-

1. Katie & Friends trolley case by Elizabeth French. £5.95.
Pink, plasticy, with a pull-out pulling handle.
Approx. dimensions: 32c.m. high (+ 28.5 c.m. high pulling handle) x 25c.m. wide x 9.5 c.m. deep.
Transparent plastic zip-up front, with a tray underneath containing the following:
Heart lipgloss compact
Square eyeshadow compact
Star wand
8 x mini hair clamps
2 x heart bangles
2 x rings
6 x hair bobbles & stick on jewels
[Wilkinson shop in an English town, 11/11/04. ]

2. Funky Friends wheely bag. [Not by Elizabeth French.] £14.99.
Pink, plasticy, with a pull-out pulling handle.
Approx. dimensions: 34c.m. high (+ 30.5 c.m. high pulling handle) x 28c.m. wide x 9.5 c.m. deep. [Very similar to the EF trolley case, except for non-transparent front, hard inside edging at narrow sides, and that some dimensions c. 10% more.]
No contents.
[Woolworths shop in an English town, 11/11/04.]

Neither item was on sale.

Two conclusions:-
1. Great news that a large national chain like Wilkinsons is (now) a customer of Elizabeth French.
2. Further evidence that Elizabeth French products offer outstanding comparative value for money.



B.F.

[blank frank] 11/11/2004 19:23

MickBaxter - 8 Nov'04 - 14:58 - 83 of 96
"BF - is the £0.8m sales of VIVO in the first 2 months (ie to the end of the FY) or sales to date? It's hard to tell from this:
"In respect of Elizabeth French, sales of "VIVO" since the launch in June of this year have exceeded #0.8m, with a strong forward order book and rapidly expanding number of retail outlets both in the UK and overseas." "

Could be either, and no one has provided any feedback from the presentation to clarify (was Mick's info. about BigT20 being there right?). But either way it looks on course to meet/exceed the £3M. year one sales expectation, on the basis of a "rapidly expanding number of retail outlets both in the UK and overseas".

Similar possible uncertainty re. this:-
"We also believe that new products using our technology will be launched in the coming 12 months by both Estee Lauder and Bath and Body Works."

Does that mean the twelve months of the current financial year, as the report is focussing on the previous twelve months? But either way, I gained the impression at the 13/7 Disperse event that Disperse may not actually KNOW precisely when a licencee is launching a new product using DPT's technology, and therefore may not find out immediately when such a product is launched. I presume this is because of the distance from America, and the fact that the licencee companies have different priorities to updating DPT.

B.F.

[blank frank] 11/11/2004 18:28

Bath & Body Works have just launched a new range of products, the Tutti Dolci collection, that they describe as "European confections for beauty and body", and "Our luxurious new body care collection, inspired by our favourite guilty pleasures".:-




Adding one plus one to get two, I think I know what I conclude, albeit with an element of (reasonable) speculation. But please refer to my posted (14/7) notes of the 13/7 Disperse event in London, in which I addressed the issue of confidentiality:-

"[Re. confidentiality: I was informed that Disperse is not authorised to (officially) announce by name specific products from licencees that use its technology; but it is OK to say that a licencee has/is going to launch such products, and when.]"

B.F.

[rambutan2] 11/11/2004 14:43

fair enough bf. but my point really is re lack of news of progress with big licensees. as im sure the point was raised at the presentation im v keen to hear what the answer was.

[blank frank] 11/11/2004 14:33

Rambutan2,

You say that: "im sure that once you get into worldwide mkts/us mkts the el model will produce much higher margin." Do you mean margin, or revenue? A company with worldwide sales may well give DPT more revenue, but from a lower margin on the sales. It stands to reason that DPT are getting a bigger slice of the revenues where they are doing more of the work by providing the finished products; this was certainly my understanding from the 13/7 DPT event.

And with a Richard Branson company, who's to say that UK won't eventually become Worldwide?! And with DPT along for the ride ...

[rambutan2] 11/11/2004 13:26

thanks for that bf, just one thing to note. you missed off the last bit on your quote above.

"...this will give Disperse much better margins on these products. This is more important for UK licencees, because the products sales are much smaller than with US licencees."

im sure that once you get into worldwide mkts/us mkts the el model will produce much higher margin. with el, its size that matters!

[blank frank] 10/11/2004 20:14

Fez,

Actually, this additional route apparently gives better margins; from my post above:
"Disperse will be providing the finished products, rather than VV formulating the products themselves: this will give Disperse much better margins on these products."

But I certainly don't think that the old licencing model has been abandoned; the two routes can run in parallel with each other. In fact, there will be three routes when Disperse starts launching its own products through Elizabeth French. Exciting times ahead I think.

B.F.

P.S. Did any poster from this thread go to Monday's presentation? (I didn't). If so, some feedback would be appreciated please. BigT20?
[MickBaxter - 8 Nov'04 - 15:58 - 88 of 90
I think BigT20 will be there.]

[blank frank] 09/11/2004 20:48

This extract from the Chairman's Report was interesting:-

"We received our first design and supply order for two new products for a prestige UK brand for delivery early 2005. We are currently negotiating with other companies both in the UK and the USA to develop this particular aspect of our business as an alternative to our traditional royalty remuneration."

We can usefully speculate who that first company might be, if you read my notes from Disperse's 13/7/04 presentation in London:-
"Virgin Vie are launching products using Disperse's technology early in 2005. In this case, Disperse will be providing the finished products, rather than VV formulating the products themselves: this will give Disperse much better margins on these products. This is more important for UK licencees, because the products sales are much smaller than with US licencees."


Follow-up comment by Fez two days later:-
"3) Virgin Vie is good news - for VV too - I know a couple of people who thought their products looked excellent but when they used them they could be quite nasty to the skin (in particular)"

So how are Virgin Vie doing? Very well apparently, according to the 22/10/04 "Investors Chronicle":-
"Little-known Victory Corporation has suddenly become one of Sir Richard Branson's profitable projects - and with no publicity from him. Until last year, Victory had been reporting losses - nearly £39m in the previous four years - but, in 2003-04, it traded its way out of deficit. Specifically, the retail and direct sales activities turned in an operating profit of £3.29m, compared with a loss of £1.28m in the previous year, before exceptional costs of £1.32m. The key to the business is Virgin Cosmetics Direct, with largely fixed overheads and variable commission payments. It accounted for 84 per cent of cosmetics sales and increased last year's sales by 38 per cent.
Behind those figures was a one-quarter rise - to nearly 10,000 - in the number of self-employed consltants. They held more than 211,000 "classes" which were attended by almost 2m customers. Each has his or her own website. New products accounted for more than a third of sales, including Out of Sight optical brighteners to smooth away wrinkles and Icon and Goddess bath and body lines. Men's products, including after shaves and balms, accounted for 12 per cent of sales growth. In July, Victory paid back a Virgin loan of £8.4m, following a £10.1m open offer at 170p.
Brokers hope for 2004-05 sales of over £72m and profits of around £4.5m.
IC VIEW. The shares have doubled this year and are tightly held, but they are still a buy.
ORD PRICE: 360p MARKET VALUE: £40.7m ...
YEAR TO 31 MAR 2004 TURNOVER £64.3M PRE-TAX PROFIT £2.11M"

[mickbaxter] 08/11/2004 15:58

I think BigT20 will be there.

[callumross] 08/11/2004 15:49

as I live in Aberdeen, Scotland, you'll understand that it is a bit inconvenient for me!