Plant Impact Share Discussion Threads

[wan] 19/6/2017 10:59

Let's be clear....it's not a profit warning, but we are on notice that there might be an impact depending on the outcome of discussions with Bayer. So, until discussions have concluded, what we have is a period of uncertainty and we know what the market thinks of uncertainty!

Obviously a delay in any decision to alter the contract and marketing strategy could potentially impact Q4. However, the 'right' outcome could potentially improve the prospects for next year. On this point I would highlight (as I have done several times) how Veritas has improved the effectiveness and performance of Bayer's Fox fungicide against Soybean Rust. So I am particularly interested in what a more integrated commercial offering might mean. Could it be that lower margins is a sacrifice worth paying if Veritas/Fortalis becomes a more essential companion, or integrated ingredient of Fox fungicide and in other words, in exchange for far higher volumes?

The above aside, I note that material growth (at the very least) is expected from other products and geographies.

It will thus also be interesting to monitor how last seasons soybean sales progress in Brazil, because farmers were holding back sales in expectations of higher prices (and to some degree a weaker currency). This may have also contributed to the current challenging environment, and therefore it may improve if soybean sales increase, especially if better rates are realised.

I note that Brazil's farmers may have played the situation quite well, with farmers recently increasing their soybean sales at improved rates -

June 14, 2017

Brazil Farmers increase Soybean Sales as Currency Weakens
Brazilian farmers have been slow sellers of their 2016/17 soybeans while they wait for better opportunities to sell their soybeans at a profit. They are waiting for either a weakening of the Brazilian currency or adverse weather to develop in the United States resulting in higher soybean prices. It appears that their wait may be paying off, at least for now, because the Brazilian currency has weakened and hot and dry conditions have developed in the United States.
Full story - hxxp://www.soybeansandcorn.com/news/Jun14_17-Brazil-Farmers-Increase-Soybean-Sales-as-Currency-Weakens

[here and there] 19/6/2017 09:53

It is a profit warning.

They will do a deal to bulk sell and discount to Bayer to allow them to fulfill their commitment cheaply.

As I've mentioned previously…the business model is brought even more sharply into focus. Can they grow sales quick enough and maintain margins before they run out of cash. I don't think so. I thought before they would need to raise some cash, now I a think it is even more likely.

Not a huge problem but a bump on the road.

[cerrito] 19/6/2017 09:45

As you say buywell3 a key issue is the dependence on Brazil and soybeans.
At one level relaxed that they need to amend the contract with Bayer given that in a new market not easy to get things right first time but agree that their wording does read like a profit warning. They did send a bit of a warning flag in the Outlook statement of the interims and with hindsight I did not pay enough attention to it. Another David and Goliath negotiation and let’s hope that Bayer can focus on this given the Monsanto merger.
I was actually pleased with the high level of sales in the third quarter and was not expecting them to be at the same level as the first half-perhaps my understanding of the seasonal drivers in Brazil faulty. Pleased to see that we will be having Fortalis sales in the US and that they seem happy with Argentina

Big drop in cash from the £7.1m at 4.16 to even the improved cash position at 5.17 of £5m. Something we will need to focus in on when we get the full year figures; remember that capex was just 0.8m in the first half of the current FY and my reading(which may be wrong) is that given the working capital aspect of the annual cash flow cycle the cash figures at the end of May should be high.
To me seems a bit oversold but do not see myself as buying

[buywell3] 19/6/2017 07:39

I read it as a sugar coated profit warning

Brazil and soybeans represents around 75% of turnover

[here and there] 19/6/2017 07:17

hhhmmmm! perhaps this explains recent weakness,


'In order to preserve their exclusive rights to market Veritas® in Brazil, Bayer Cropscience are required to purchase annual minimum contractual volumes of product. The Group is in discussions about how they will meet these commitments, including exploring contractual amendments which would enable higher volume product strategies and integrated commercial offers to growers. The outcome of these discussions may impact the full year results and expectations for growth in the next financial year. We will update the market with further announcements as appropriate.'

If you translate this, it means discount prices for bulk orders…!

[wan] 11/6/2017 08:45

For some interesting aspects, PI's Half Year Presentation is now available to download (not available the last time I checked!) -

hxxp://www.plantimpact.com/investors/reports-and-presentations

[bigglesbingham] 08/6/2017 14:37

Obviously in play at the hands of the market makers. We need more news flow here.

[wan] 08/6/2017 08:29

Something that I think is perhaps being overlooked is the geographic expansion in terms of commercialisation of Veritas/Fortalis. Recall that last year Argentina sales were from controlled trials, so we may see greater use there this coming season. Also, commercialisation was extended into Paraquay and Bolivia, so again this will hopefully increase overall volumes into South America.

Of perhaps greater interest is whether PI have a successful launch of Fortalis into the US, which is the worlds largest Soybean market. I have been monitoring US fertiliser registrations for Fortalis which has progressed well, but I also note the map showing the availability of Fortalis in the main soybean growing regions -
hxxp://www.fortalisyields.com/where-to-buy/

If we assume (for the time being at least) that there is a more challenging environment in Brazil (against which PI performed well previously), then any volume reduction/inventory build, could be more than offset by geographic expansion elsewhere.

Not to mention that there is a real prospect of new products and also the real prospect of significantly increased Banzai use/sales.

In summary, PI have diversified by effectively entering the top 3 global soybean markets and are therefore not as reliant on the Brazilian soybean market as in previous years.

[visionon] 07/6/2017 16:44

Thanks biggles. Trading update imminent, no ?

[bigglesbingham] 07/6/2017 16:02

MMS trying to come across as sellers but want to buy 50000 at .46

[wan] 23/5/2017 09:23

Agrimoney LIVE starts today, Millennium Mayfair | 23rd – 25th May 2017 and PI's Chairman will be speaking on Thursday, 09:00 Keynote address: Agriculture in 2025
David Jones, Chairman, Plant Impact.

Five key themes to watch out for at Agrimoney LIVE
Want to find out what is happening in agricultural investment?

5 - Agtech

One new theme for ag investment – in name at least – is agtech, including its subsector of big data, which has opened up fresh ground for ag groups to prospect in, and mine reams of statistics for trends which could open up ground-breaking areas of research.

But what is really on the horizon for agtech? And how much hope should investors place in big data?

Look to the likes of Monsanto's Mac Marshall and Plant Impact chairman David Jones to map the future in this area, besides Sarai Kemp, vice president business development at Trendlines Agtech.

I am sure many delegates will have other questions too. Given the expertise on show at Agrimoney LIVE, I am sure they will be able to find some answers.

Full story - hxxp://www.agrimoney.com/feature/five-key-themes-to-watch-out-for-at-agrimoney-live--523.html

hxxp://www.agrimoneylive.com/

[bigglesbingham] 17/5/2017 08:26

Why is this down on no news and no sells?

[wan] 09/5/2017 09:17

I have commented on Soybean Rust previously and how Veritas/Fortalis appears to improve the effectiveness of fungicides used to treat such diseases, so I note the following with interest.

Excerpts -


May 8, 2017

Brazil, Paraguay, Bolivia to Coordinate Efforts to Combat Soy Rust
The city of Cuiaba, which is the capital of the state of Mato Grosso, was the site last week of the first meeting of the Latin American Antiresistance Working Group (GTA - Latam). As reported by So Noticias, the working group consists of scientists, industry representatives, and government officials from Brazil, Paraguay, and Bolivia that came together to start the process of developing a coordinated effort to combat soybean rust in South America.

According to the president of Soybean and Corn Producers Association of Mato Gross Aprosoja-MT), South America is the leading soybean producing region in the world this group was born out of the need to develop policies needed to combat the most devastating disease of soybeans. If left untreated, soybean rust can reduce soybean yields up to 80%.

It took scientists and farmers in Brazil several years to develop relatively effective control measures, but it costs Brazilian farmers billions of dollars in increased costs and lost productivity. In recent years scientists have become alarmed that many of the old standby chemicals used to combat the disease are no longer effective because the disease has developed resistance. One of the focuses of this working group is to coordinate efforts to slow down the development of even more chemical resistance.

Full story - hxxp://www.soybeansandcorn.com/news/May8_17-Brazil-Paraguay-Bolivia-to-Cordinate-Efforts-to-Combat-Soy-Rust

[wan] 08/5/2017 08:16

A further update worth reading -

R&D News & News 04 May 2017
Collaborating to improve drought tolerance in crops
Dr Amarjit Basra, Principle Scientist, Pathways, Plant Impact

hxxp://www.plantimpact.com/~/media/Files/P/Plant-Impact/RandD%20news%20and%20views/04052017_Ghent_Collaboration_ABasra.pdf

It's very clear that PI have undertaken a lot of research and investigations into ABA signaling, and they are now directly involved in what looks like a very exciting opportunity.

[visionon] 03/5/2017 13:28

It sounded positive but it would be helpful if at the investor day PIM explain how it fits in with other programmes e.g. Alethea

[wan] 03/5/2017 08:30

Today's news is very interesting!

Triggering/controlling leaf stomata is actually something I have looked into, but it is difficult to say the least, and thus this development is indeed ground-breaking.

The fact that it has been developed as a foliar application, sits very well with the best (necessary?) application method in my view -

"The ground-breaking compounds elicit many of the same responses as natural plant hormone abscisic acid ( ABA ) but are more suited to be used by growers as a foliar spray."

And of course the patent portfolio grows further.

This is, in my opinion, an excellent 'exclusive' collaboration.

[wan] 02/5/2017 09:40

Visionon...But it has been a great investment since 2013! Nothing goes up in a straight line though, so let's hope that the next 4 years provides something similar in terms of share price performance.

Talking of time invested, it will be 'very' interesting to see how things sit when the dust settles from the current spate of large agriculture mergers and acquisitions. In my view, the opportunities look like they will have also increased (in size and number). Put another way, and without wanting to put too much emphasis on it at the moment, Bayer are relatively small in seeds (which is still a large opportunity to PI), but a Monsanto/Bayer merger would result in the new entity selling around 30 percent of the world’s seeds. Food for thought!

Whilst we wait for the dust to settle, hopefully a combination of geographic expansion and new products (not to mention further advances in R&D) will provide new stimulus (other than the ones added to PI's product portfolio!).

[visionon] 02/5/2017 08:51

Thanks Wan for that. trading update only 4-6 weeks away and perhaps another investor day at the beginning of July. In past years PIM have launched a product to coincide with the latter.

PIM hasn't been a great investment since the 2015 investor day, the graph being notable for lower highs. But I'm sticking for now. Some diversity with wheat would be welcome.

[wan] 02/5/2017 08:36

I am sure other would have noticed commentary which implies PI will soon have seed treatments added to their product portfolio (in both soybeans and wheat).

Excerpt from the recent interim's -

We have been steadily increasing our R&D activities for wheat crop enhancement products following the March 2015 fund-raising. Our focus so far has been on a product that will support the early establishment of wheat following planting. We are now at late stage field trials with prototypes of this product and subject to the outcome of these trials would anticipate having a commercial product ready to launch in the next two seasons.
(END)

So I was interested to note two recent YouTube videos -

Plant Impact
Published on 28 Apr 2017
Wheat growth time lapse


Published on 7 Apr 2017

R&D Seed treater
Online tutorial demonstrating how to treat seeds using two different methods


Given that PI were conducting final trials with a new soy product in the recent South American growing season (in Brazil the soybean harvest finished in April and is May for Argentina), I am hopeful we do indeed get a new product to launch in the 2017/18 campaign year (early planting of soybeans in Brazil starts September and in October for Argentina).

[wan] 25/4/2017 07:51

R&D News & Views 11 April 2017

Integration of crop physiology and genetics to close the yield gap in wheat
under climate change

Dr Amarjit Basra, Principle Scientist, Pathways

Importantly, many of them are also keen to foster better collaborations with companies like Plant Impact, recognizing that genetics and breeding alone is only a part of the integrated solution.

Full article -

hxxp://www.plantimpact.com/research/research_article_archive

[wan] 12/4/2017 11:30

Mthead...PI highlighted that the Monsanto/Bayer merger may cause some loss of focus at Bayer, but "reading between the lines" I think that the overall strategy and strong relationship are still firmly in place, and in my opinion only, the opportunities that will emerge once the mergers have all cleared are potentially much larger!

You are entitled to your opinion of course, but clearly and generally speaking we are singing from different hymn sheets, so let's agree to disagree and see who ends up being nearer to things being correct.

[mthead1968] 12/4/2017 09:38

Wan.
The company is now far too reliant on one partner, on one crop, in one country.
They are spending millions on R&D and have little or nothing to show for it.
In order to support sales they have had to employ an army of expensive agronomists and appear to be presenting the cost of this as R&D spend when to my mind it is simply an additional cost of sales.
They have abandoned their markets in Europe.
There is no real indication of current sales.
It is likely that Bayer is holding large inventories.
They have done nothing with the BugOil product.
They cannot defend their patents.
And despite what you might say to the contrary, there is a clear danger that the Bayer/Monsanto merger could have a serious impact on PIM.

[mthead1968] 12/4/2017 09:36

Visionon.
I have divested enough to have removed most of the risk to my investment here. I continue to hold as I have always believed there is a good chance of PIM being taken up by one of the ag.chem's. At what price is anybody's guess but in my view, there will be further dilution before that can take place.