Iofina Share Discussion Threads

[phoenixs] 27/1/2014 14:20

freshvoice.
Even Numis, who really have got it wrong on a number of counts, have a price target of £1.56.

[tsmith2] 27/1/2014 14:19

SupergWasn't there that contract that had slipped I to Jan, partly causing the missed target?Was is the latest on that?

[woodpeckers] 27/1/2014 14:17

The thing that I can't get my head around is that the board running this company are all well qualified, highly experienced men who must know what the market expects from them by way of information so why are they not issuing clearer guidance? Lets hope we soon start to see the figures we so desperately need to turn this around.

[freshvoice] 27/1/2014 14:02

frog
reminds me horribly of a company whose name i hesitate to mention who had a revolutionary way of making film and we were told of large orders and warehouses in the states full of products that all evaporated. At least we have photos here as well as the nods from the warehouse man. But ...... at this price I am getting worried as to how much further it will drop

[freshvoice] 27/1/2014 13:59

well i have to give it to Nutters, his 75p was spot on the ball. So much for hours of research by the rest of us.

[frog1] 27/1/2014 13:58

bocker01

I'm not sure where those numbers are coming from, but they won't change what's happening. This is falling over 5% a day at the moment and even if they don't need a funding round, the market thinks they will. The fact is we don't know.

On IOF Chemical, they have said they plan to go to 2 shifts, but no one knows when. A forward statement like "we plan to operate 2 shifts starting H2 2014. We believe this will increase revenue from derivatives by 75% and increase margin to 26%" would give some guidance and show some management control. Since they are giving presentations they should know this sort of stuff.

Just as an example, suppose they currently do 20m at 20% GP i.e. their cost is $16.7m. If they go to 2 shifts, the raw material costs, shift labour and some energy costs will increase but all sorts of other costs will remain constant e.g. top management, heating, logistic management. Also the overhead of starting up and shutting down will stay the same. So suppose revenue goes up by 70% (it won't double until they are nearly ready to go to 3 shifts or expand), but costs go up by only 60%. That will increase revenue to $34 m and costs to $26.7m with an increased GP to 27.5% which makes the business much more attractive.

IOF should have presented something like this to Numis, but I don't think they did as Numis used 20% on double revenue.

I really like this company, but I can't help thinking they should have gone with Venture Capitalists rather than to the market to raise their money. At the moment, they do not keep the market informed. It is more like a private company, where you may meet the store man who drops hints about lots of tins with stuff in it in the store and says the company is doing really well, but without producing hard numbers to back it up. In fact this is more like someone else meeting the store man and then telling you what he said.

[freshvoice] 27/1/2014 12:56

woodpeker
So what happened in Miami last week -- was it bad news?

[woodpeckers] 27/1/2014 12:47

Iofina Chemical will be exhibiting at Informex USA 2014 in Miami Florida at the Miami Beach Convention Center January 21-24.

[tsmith2] 27/1/2014 12:41

As I've said before...company needs to clarify/put out a statement..

[bocker01] 27/1/2014 12:41

Frog, Numis have only partially corrected their COS mistake. They closed a lot of of the gap but costs are still very much overstated. Just take the tonnages produced at $21 kilo cost and then factor an extra derivitive processing cost on circa 323 tonns. I used $15 kilo cost extra. There's still the thick end of $2m to $3m unaccounted for. Take that in conjunction with post 15282. An extra 30ppm on average on IO2 to I05 this year adds over $5m to the bottom line. Even without these obvious shortcomings (and the sales price most likely being too low!wow!), A fund raising is highly unlikely next year given the likely timing of next year's capx which pretty much covers the Stena repayment. Do not forget they have to get through this year's capital plans before embarking on next year's. . Besides, where there an issue I am sure Stena would be flexible on repayment..... but I simply cannot see this as likely to be necessary.

[napoleon 14th] 27/1/2014 12:31

re loan repayment/fund raising etc

Even if IOF can only meet a part of the liability, it should not be impossible to pay off a large part of it cleanly & refinance the rest short term.

If IOF don't know how, they should ask KMR who have been at that game for ages!

Mountains.... mole hills..... not make.....

[jointer13] 27/1/2014 12:17

lets not forget we have a chemical division that is flying at the moment.


Iofina Chemical
Iofina Chemical continued its strong performance in H1 2013, with record sales for the period and a greater than 50 per cent sales increase from H1 2012. April 2013 showed the highest single month revenue in Iofina Chemical history at over $3.76m. H1 2013 also showed a marked improvement over record breaking sales of H2 2012. Although Iofina Chemical is traditionally a first half weighted business, it is expected that the ramp up in business will deliver higher profits in H2 2013 over the first half. Record full year sales are anticipated at Iofina Chemical for the fourth consecutive year. The Group will continue to market its iodine through iodine chemical derivatives at Iofina Chemical. In addition the Group has recently begun marketing its crystallized iodine to new customers as production increases.
Iofina Chemical continues to commit to providing the best quality, service and value to customers. In 2013, a number of new higher margin iodine based processes have been developed at Iofina Chemical and the Company has already achieved sales in some of these products. Iofina Chemical is also committed to continuing research and development projects for iodine and other halogen-based products. This will expand product offerings and allow the Group to better serve customers. The Group's commitment to the continual improvement of environmental, health and safety systems is a top priority to better serve customers, employees and community.

[frog1] 27/1/2014 12:12

phoenixs

That's my point though. Numis must have got their numbers from somewhere and since they were recently appointed Nomad would have had access to the company. These mistakes (if they are mistakes) are possible because of the lack of transparency. Looking at the last few RNS's I don't think the lack of transparency is deliberate, it looks more like IOF currently do not know the answers to certain questions. The impression is IOF do not have a grip on the production or revenue they can get. If I feel like that, others in the market will also and the share price will not stabilise or recover until a fund raising is discounted and some control by the management is shown. The latter needs them to show they actually have an idea of what they will produce and how much they can sell.

Also, when Numis made their original mistake of just using a 20% GP, they used this on over double last years revenue. That produced a very small profit on $40m rvenue. So IOF Chemical, working at over double its current level can just about break even. That is far from great business and I think it's something that needs attention. They may be better just focusing on Iodine production and leave the derivatives to companies who can make real money on their operation.

[dcgray21] 27/1/2014 11:56

Frog -

I echo Dig's comments ( 15253) . Its simple :) We need transparency around roll out and production and sales . We know that £6m earnings from FY14 appears to be based off an incorrect pricing assumption for sales of crystallised iodine . We know that 750 mt should be at the lower end . Using $45 and 1000MT could bring in an operating profit circa $18m / £11m versus $10m / £6m rendering a fund raising I would imagine unnecessary. But we need visibility to understand . The company should be duty bound to do that as many PI's have not inconsiderable investments tied up here.

[festario] 27/1/2014 11:56

I know what you mean Dig.
I too added between 92p and 112p, when I thought I saw a trend reversal... but no!
Averaging down has never worked for me in the past, and it has yet to bear fruit here.

[diggulden] 27/1/2014 11:43

Oh Fest I wish, having added numerous times between 95p and 110p I simply cannot afford to 'risk' any more money here at the moment. Compared to 18 months ago, I now have a portfolio of 6 shares instead of 2, so I am trying to be disciplined and not put too many eggs in one basket, no matter how much I believe IOF to be cheap at the moment.

[frog1] 27/1/2014 11:43

Given the Nomad sees only £6m profit this year, the market sees a fund raising on pretty poor terms. The thing that would stabilise the price would be a statement that they have cash and do not need additional funds. It's clearly a long way from the picture painted a year ago and shows that delays in roll out cause more problems than just waiting a few months for the same thing to happen. The money lost is never made up until the end of the whole project, normally a number of years.

There must be a difference in selling price between the Iodine currently produced by IOF and the prill, or why bother with the prilling towers. Using a selling price of $38 on 750mt gives me around the £6m that Numis say so it seems to me a fund raising is necessary. Numis must realise this and so I can't see where their £1.50 comes from.

Given the current management has said little and seem to be plodding along as best they can, it is clear the original management over promised on things they could not deliver. The sooner they can get the actual delivery plan, including production and revenue forecasts base lined the better. My concern is that they don't know how much each plant will or can produce and so can't give reasonable forecasts.

[spike_1] 27/1/2014 11:35

IOF are building plants for a reason. By the end of this year they will have more than doubled last years exit rate, and if they build IO#7 - 9 as planned, they will have tripled last year's exit rate.

They are expanding (rapidly) for a reason, otherwise they would not be doing it. That reason is that there is a market for what they make, and at the price they can make it for.

A pathetic share price is just that. There is nothing IOF have said, or for that matter Numis, that suggests they will fail.

In two or three weeks time they will be in the UK to start off their road show (institutional presentations). It is almost inconceivable that they will not update the market prior to that. The dates of the road show will have taken into account anticipated progress at IO#4 - 6. Hopefully they will give us guidance on rates of production and opex, as a minimum. We know they are / have completed big order to go onto the books this quarter.

I'm still quietly adding.

Best wishes - Mike

[festario] 27/1/2014 11:27

Dig, if you believe it is badly oversold, as I do.. are you piling back in now?

[worraps] 27/1/2014 11:26

digg....wise words from Robbie Burns! I might take the suggestion up to save my sanity!

[bob alan] 27/1/2014 11:20

Thanks for your comments,suspect momentum causing some overshoot.

[diggulden] 27/1/2014 11:18

Worraps, in the words of Robbie Burns, today is a tea and toast day. Move away from the screen, make yourself a cuppa and take a few days off, if you can afford not to have to sell that is.