Plant Health Care Share Discussion Threads

[mdrans1] 31/1/2008 19:23

Today's Shares Mag.:-

PHC sows the seeds of success
+ BUY

Published date: Thursday, January 31, 2008
Hot on the heels of a deal with global agricultural firm Monsanto Company, Plant Health Care (PHC:AIM) has struck lucky once again after Bayer CropScience confirmed it would move forward with the second year of Myconate testing.
Myconate is Plant Health Care's wonder growth product which helps crops to develop larger effective rooting volume, often leading to improved yield. Bayer CropScience and Plant Health Care entered into a ten-year agreement last January to develop new seed treatment solutions based on the Myconate technology in combination with Bayer CropScience's seed treatment products. Bayer CropScience will now be making a milestone payment to Plant Health Care for the continuation of the cooperation into the second year.
The two companies will be working on the further development of Myconate as a seed treatment product in corn, soybean, cotton and sunflower on a global basis. In addition, thanks to encouraging results last year on cereals, Plant Health Care has reached agreement, on a non-exclusive basis, with several large multi-national agrochemical/seed companies to move forward this year with testing and potential commercialisation of Myconate in cereal grain crops. This includes crops such as wheat, barley, sorghum and oats.
The good news came as the company reported that turnover for the year ended 31 December 2007 is expected to be up 35% on the year before, at $18.4 million. However, a marginally higher than expected operating loss of $4.4 million is likely due to the delay of an important Harpin deal, which is now expected to be completed in the first half of 2008. Shares in Plant Health Care have rallied since they were tipped as a Shares Play of the Week at just 54p back in 2005 (Shares 25 August '05) and currently sit around the
281p level.
Shares says: With crop growth under greater threat due to changing weather patterns, the potential for this technology remains huge.

[mdrans1] 31/1/2008 19:21

and again
In today's Shares mag.

PHC sows the seeds of success
+ BUY

Published date: Thursday, January 31, 2008
Hot on the heels of a deal with global agricultural firm Monsanto Company, Plant Health Care (PHC:AIM) has struck lucky once again after Bayer CropScience confirmed it would move forward with the second year of Myconate testing.
Myconate is Plant Health Care's wonder growth product which helps crops to develop larger effective rooting volume, often leading to improved yield. Bayer CropScience and Plant Health Care entered into a ten-year agreement last January to develop new seed treatment solutions based on the Myconate technology in combination with Bayer CropScience's seed treatment products. Bayer CropScience will now be making a milestone payment to Plant Health Care for the continuation of the cooperation into the second year.
The two companies will be working on the further development of Myconate as a seed treatment product in corn, soybean, cotton and sunflower on a global basis. In addition, thanks to encouraging results last year on cereals, Plant Health Care has reached agreement, on a non-exclusive basis, with several large multi-national agrochemical/seed companies to move forward this year with testing and potential commercialisation of Myconate in cereal grain crops. This includes crops such as wheat, barley, sorghum and oats.
The good news came as the company reported that turnover for the year ended 31 December 2007 is expected to be up 35% on the year before, at $18.4 million. However, a marginally higher than expected operating loss of $4.4 million is likely due to the delay of an important Harpin deal, which is now expected to be completed in the first half of 2008. Shares in Plant Health Care have rallied since they were tipped as a Shares Play of the Week at just 54p back in 2005 (Shares 25 August '05) and currently sit around the
281p level.
Shares says: With crop growth under greater threat due to changing weather patterns, the potential for this technology remains huge.

[mjbrown1980] 23/12/2007 19:37

See it got tipped in the latest Shares magazine...

[ricky26] 21/12/2007 09:12

I see that institutions continue to add. Read that grain prices likely to go a lot higher next year, so the case for yield improvement just gets better. This is one to tuck away on a 3 year view - imho.

[mjbrown1980] 18/12/2007 11:28

I think has very solid holders now after profit takers left.... Solid support at £2.60 so any purchases around now are good value IMHO

[ricky26] 18/12/2007 11:21

I think this is s good entry price, particularly following the monsanto news. This is one of my picks for 2008 - Trying to find above average growth prospects with transparant risk.

[mjbrown1980] 17/12/2007 12:01

Following Monsanto Agreement.....

• Monsanto will evaluate, develop and commercialize applications for Harpin technology
• Monsanto are granted certain exclusive rights to applications of Harpin technology
• Products available by 2010

Payment
• Upfront milestone payment ($1m)
• Royalty payment based on acreage for which Harpin technology is supplied at commercialization

Monsanto currently has between 50-70m acres of Soy Bean. N-Hibit nematode technology restricts reduces cyst nematodes in soybeans by up to 60%

Increases yield of soy bean by average of 8%

Costs 5-10cents to make. Sell to Monsanto for 20cents-$1 depending on the target product. Margins very high on Nematode product. Adds up to $9bn to Monsanto Market cap because nematode technology can save $250 an acre for Monsanto... Only known effective product on Cyst Nematodes and there are over 150m acres of Soybeans affected in US and SA


Currently in tests to develop a joint myconate herbicide spray which can be used as well as nematode technology so gives Plant Health Care two bites of the apple- ie. 2 revenue streams (spray lower margins and in the form of Poncho-Myconate) Used in combination, increases cotton yield by up to 15%


This deal is not as lucrative as the Bayer Myconate deal in the early stages BUT by 2010 when registration is through for the products it can go commercial.

The Launch Payment is due Dec 2008. Cotton is launched 2009, Soy 2010. These products can be used on Corn, Cotton, Soy, Canola and Vegetable but this nematode product is the only one for Soy beans.

Announcement hopefully due Q1 with regard to Myconate and Grains tests.

Current company situation- $19-20m revenues this year. $10m cash. $2m cash burn next year but $1m of it R&D. No cash troubles at all. Current PBT estimates for 2007 -$3.9m.

[mjbrown1980] 14/12/2007 08:18

Take a look at PHC. Deal with Monsanto announced this week is a good one.... Maybe triple share price by 2010 and hopefully £4 by q1 2008...

Get in everyone...

[labatie] 08/10/2007 09:19

Mandible

V thoughtful post. I've been a holder of this for a long time. I agree totally with yr point on turning potential into sales and that therefore the valuation expects a lot, but I can't really see that the present management are losing face, as you maintain. Could you expand?

Also, having read the interim statement, I can't see anything saying 'unepxected increases' in operating costs, unless you mean the 'logistical teething ' problems in shipping from Europe to US.

[mdrans1] 01/10/2007 19:36

The next two are encouraging though.

[wookie77] 01/10/2007 16:43

What on earth is the purpose of that rns???? The results were released over a week ago!

[mdrans1] 27/9/2007 20:57

The carrots and celery get a mention in today's Shares mag. Yield up 30+ & 14% etc.

Shares says: "the outlook holds huge potential"

[wookie77] 27/9/2007 19:19

More tomorrow I understand.

[mandible] 25/9/2007 13:41

How typical this performance has been of really promising hi tech companies somehow failing to take the difficult step into profitablity. Like all start-ups the operation has been flattered by having the initial investment capital to spend on growing the business. You can hide all manner of inefficiencies in the marketing and development budgets. However, getting the discipline to turn a real profit from actual customer income alone is much harder as there are no hiding places when sales fall short!

If the management team had really been on the ball they wouldn't have allowed operating costs to run ahead of prudent income forecasts.. . . and certainly not incurred 'unexpected increases' in operating costs.. surely they should have seen them coming some time back and included some guidance in the prospects for this year.

If I were investing now, I would recommend a really close look at the costs and borrowings of this business to make sure that no timebombs were being planted in the numbers that will go off should the expected high level of orders not appear to bail out the high level of expenditure.

M - love the business concept but sitting on the side as valuation still expects superior performance - and the current team are losing face.

[dm1066] 25/9/2007 10:45

OK - so much for new highs!

They really needed to announce another deal and a swing into profit for this to take off. I still like the products and the space that they operate in but they clearly need to tie up at least one more distribution deal before the end of the year if the share price is not to fall back a lot more.

[dm1066] 18/9/2007 08:57

Results out on Monday 24th and the chart starting to look very promising again (although it has to be said that the recent rise is on very low volume).

Could this be on the way to new highs ahead of results if the mkts react favourably to the fed's rate decision this evening?

Be interested to hear anyone else's thoughts on this.

[ok,yah] 15/8/2007 15:47

Meanwhile despite hopeful prospects this remains loss making with tiny sales in relation to its market capitalisation. I expect a re rating downwards to reflect the more defensive nature of markets - Chart would also indicate a top.

[mdrans1] 19/7/2007 13:31

PHC featured in Shares Mag cover story

Fields of gold - Sweet food plays.

" The stock market has not fully realised how many bites of the cherry Plant Health will have when it has fully rolled out its licences over the next couple of years"

[mh100] 11/7/2007 07:59

Lots of talk in times and Ft yesterday re rising price of wheat (68% up this year apparantly) driven by increasing use northern american grain for biofuels and increasing demand for bread from china. Price of a loaf of bread in
uk set to rise. On the face of it, and of the figures given from the last field trials, the lack of recent interest in the company is quite astounding. The barriers to entry, I assumed were quite high, as I assumed some sort of genetic engineering production method was required to produce myconate, whaich can be fully patent protected (happy to be corrected on this anyone!).

I sold my holding a little while ago (at 150% profit already) as saw another opportunity and felt this would go sideways for a while till the next field trials. Not back in yet as am waiting for the market to wake up to the stock. Market reaction to good news from the company has been very slow in the past so feel may have time to get back in when it happens. Though, significant deal with bayer giving access to N. American grain farmers and large scale commercial field trials showing 300-600$ worth yield increases per hectare....not sure what else the market wants....myconate treated crops to turn to gold perhaps!

Hope to rejoin you all soon.

MH

[dibbs] 02/7/2007 22:04

Cheers Stegrego,

Re Bayer, exactly what I was wondering!

As a trained commercial horticulturalist I know plenty about mycorrhizal fungi, the effects of which have long been known. What I was trying to establish was the USP of Myconate, in order to try to establish a value.

Dibbs

[stegrego] 02/7/2007 21:50

'Myconate works by triggering the germination and growth of beneficial micro-organisms called mycorrhizal fungi which colonize the roots of crop plants.'

They dont use the fungus - they stimulate its growth - therefore i cant see how the barriers to entry are low.

If the barriers are that low, why would Bayer - the biggest seed producer - need to form a partnership?? Surely they could just do it themselves....

[dibbs] 02/7/2007 21:23

How do PHC have the use of mycorrhizal fungi protected? As far as I can see the barriers to entry to this market are low. The use of mycorrhizal fungi is certainly not new technology.

I've not looked at PHC in detail, but have to say I find myself surprised at the value attached to this company.

Dibbs