Renovo Share Discussion Threads

[praipus] 20/7/2011 09:57

So cash per share is circa 18p.....sell the trials and return the cash to share holders IMHO.

[holly_dog] 20/7/2011 09:29

That is a nice bit of additional upside. Some other things which caught my eye
- Still planning to sell all the other products, something which they didn't mention in the last update. I wonder/hope if things have maybe moved along now, and that we might get a sale of their rights in the near future. I would hope that could be at the very least another £2m or so
- I think this is the first time they have said they would consider acquiring, rather than being a target, and that it could be across any sector. With the new management team on board, they could easily have some nice targets in mind which could completely change the prospects of the company
- On the tax liability (cumnor I think you first flagged this). I'm doing a corporate finance qualification at the moment and this came up yesterday. I asked how it actually works and the chat was that while Gordon Brown tried to close down some of the loopholes, it still applies for same sector. Another guy chipped in saying that a recent deal he had done saw the bidder paying full price for the liability as a cash equivalent. So there is definitely value there

All in all good stuff. We're now in H2 2011 so countdown for adaprev.

[undertaker] 20/7/2011 09:06

If they move to AIM what happens if I currently hold these in my ISA?

[smith99] 20/7/2011 08:48

What! You mean we're not going down to 7p afterall ? Damn, I was shorting it ;-)

Get Terry on the phone, he lied to me ;-)

In all seriousness, we have the cash and the trials are still out there, there may be a little gem amongst them, worse case, we've got more than mcap in cash!

[cumnor] 20/7/2011 08:27

I don't think so. With funding and borrowing practically out for even asset rich companies the likes of Rnvo with very significant cash reserves and a listing are in a far stronger position than before, particularly with recent market declines and general market nervousness affecting many good companies. imo

[newkid] 20/7/2011 08:19

with a current market cap of 28 mil and 35 mil in the bank there's a 20% premium to current share price should they pull the plug.

[cumnor] 20/7/2011 08:02

Pleasent surprise, a couple of million more than expected and costs lower. Now how many times does that happen on Aim? I hope they use it to acquire or merge with some asset rich (dd so important here and not to be taken in by the ususal guff and corruptive exaggerations by auditors/mgmt etc) company in need of cash at knockdown price (no shortage at present). With new hands on board I can see this as a phoenix if they play cards right and leverage their strong cash/mgmt/quoted position correctly. No hurry though as dd critical. imo

[daytraders] 20/7/2011 07:55

looks like we have another extra £2million cash then.

[holly_dog] 14/7/2011 14:14

Glad you held on GS, while it hasn't crystallised as quickly as initially hoped, another activist investor on-board is great news. Very few times will you get the opportunity to invest in cigar butts, as Ben Graham used to call them, where a company is actually trading below guaranteed cash (+potentially significant upside)

Interesting article in FT today which also supports a reverse takeover. 'In a week when news emerged that rejection rates for small businesses applying for bank loans have increased eightfold since the banking crisis, their histories confirm that Aim is still fulfilling its original role of offering "venture capital with a quote"

Two tales of Aim live up to 'venture capital with a quote'
By David Blackwell

Published: July 13 2011 16:40 | Last updated: July 13 2011 16:40

Provexis and Clean Air Power are innovative businesses with Aim quotes dating back to the middle of the last decade.

Each has promised much and delivered little during the past few years, indicating that they arrived on London's junior market far too early. But it is unlikely that either would have survived the recession outside Aim. In a week when news emerged that rejection rates for small businesses applying for bank loans have increased eightfold since the banking crisis, their histories confirm that Aim is still fulfilling its original role of offering "venture capital with a quote".


They could not operate in more different sectors – food and engineering. But in spite of falling share prices and constant disappointment they have been able to return to the market again and again when they needed further funds. Neither company has net debt, and both might be about to start rewarding their shareholders.

Clean Air Power, which floated on Aim in 2006 at 100p a share, has developed equipment that enables trucks to run on a mixture of liquefied natural gas and diesel, leading to savings of several thousand pounds a year in fuel costs per truck as well as reduced carbon emissions. At the start of 2009 the company announced a letter of intent to co-operate with Volvo Powertrain. However, it was not until last month that the company was able to confirm that Volvo trucks incorporating the technology would start to roll off the production line at the end of this year. It may well be one of those overnight successes that takes years to achieve – but the shares are below May's placing price of 7¼p.

Provexis, which reversed onto Aim in 2005, has spent years and millions of pounds developing Fruitflow, a tomato-based product that can be added to drinks and diet supplements to smooth blood flow and to promote cardiovascular health. By the end of 2008 the company's survival seemed threatened, but DSM Nutritional Products, the Dutch vitamin supplier with annual sales of €9bn, rode to the rescue, buying into the company at 0.65p a share. In May 2009 Fruitflow became the first new product to be adopted under revised rules from the European Food Safety Authority. The shares shot up to 15p.

The company then clinched a 20-year alliance with DSM to market and to sell Fruitflow, and also started to look for acquisitions. The search took more than a year, but last month it bought Science in Sport (SiS), a maker of nutrition products for athletes, including Olympic competitors and professionals. The total consideration was £8m, made up of £7m in cash and £1m in new shares.

Total revenues for Provexis in the year to March were up sharply, but still only £50,000. SiS had sales of £4.6m last year, and underlying profits of £200,000. It looks like Provexis has found a transformational deal just as revenues from its core business are ready to flow. The company says DSM is making "good progress" on the commercialisation of Fruitflow in all major global markets.

Better prospects

Other companies might like to study how Provexis has made full use of its Aim quote in difficult circumstances. It has raised more than £2m by an equity financing facility (as described in this column last year) with Darwin Strategic, a division of Evolution Securities, its advisers. It also raised £2.5m through a placing at 1½p to coincide with the SiS acquisition, at the same time promising an open offer so its many hundreds of retail shareholders would not be diluted.

Shareholders will meet this month to vote on the open offer, at the same price. It is expected to raise up to £2.2m – the maximum allowed under the European Prospectus Directive before a full prospectus needs to be issued. The decision will save the company at least £200,000 in costs.

If the Provexis acquisition had been delayed another month, the company would have been able to raise twice as much money under the open offer since the rules are to be eased at the end of this month. When the European Prospectus Directive came into force in 2005, it allowed companies exemption from the necessity to publish a prospectus only if they were raising less than €2.5m, and if they were making the offer to fewer than 100 people. The European Parliament last year agreed to allow member countries to double the amount to €5m and to increase the number of people to 150. The implementation of the changes normally takes up to 18 months. But such has been the interest by market participants, including the Quoted Companies Alliance, that they have been adopted in just six months. Let's hope decisions on future measures to help small companies can be made just as swiftly.

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[smith99] 14/7/2011 14:14

I think it will be when it will be, but however long it will be, it will be worth the wait. Stuff me theres a lot of "will be's" in that sentance.

[holly_dog] 13/7/2011 23:22

Great to see some new investors (both institution and PI)

Welcome aboard

[smith99] 13/7/2011 22:16

there is a very good reason why ferguson hasnt wound the company up as yet, hes a major shareholder and knows that theres a deal to be done if we wait a little longer. I rate this as a Strong Hold for the moment, It certainly shouldnt lose any value from here.

[waterloo01] 13/7/2011 20:45

I think the recent board addition re-enforces this. He'll make sure they look at the best options to increase shareholder value. I would say that at 23p ish I'd be happy but do feel there is still unlocked value in the pipeline. An added bonus (worth waiting for) would be realising some of this value.

[daytraders] 13/7/2011 20:38

and me, i see at least 19p to 24p coming to us.

[cumnor] 13/7/2011 19:40

ALSO, how much tax credit/rand d losses worth to a pure bio/pharma that can use them to offset profit from own business. I;m going to hold this one out. imo

[waterloo01] 13/7/2011 19:04

I recon this is where we'll end up. The cash on the books is worth a great deal more than it's face value given the difficulty of raising funds, especially where they can charge a 10% interest rate on higher risk companies. Plus any reverse into RNVO gets instantly to market. I'd value that at cash plus 25% (2.5 yrs interest) plus whatever they can get for current trials. It will come and it will be around the 23p mark, so nice return (from here) for the patient.

[praipus] 13/7/2011 15:04

Active investor/liquidator and arbitrager Weiss Asset Management buying. To track the rest of their holdings see post 3 on the WAM thread:

[evanick] 11/7/2011 09:36

this is turning into a zombie stock.looking for something with a pulse.

[smith99] 07/7/2011 09:04

Actually as I see it rise today, was he just meaning to say 17p and the number 1 on his keboard wasnt working ?