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[supernumerary] 11/3/2017 20:03

I also remember Stanelco - they got ripped off to the tune of a million quid by the late unlamented Bazza Muncaster of Bioprogress infamy for patent infringement if I remember correctly. The judge as good as said he thought Munky was lying, but awarded bprg the verdict anyway - an unlucky man Mr Balchin.

As far as I can see, vrs has interesting technologies, vast potential markets, but no customers. So the real need is for them to focus unremittingly on winning business. So far NR has just been stocking the toy shop - it's well past time for him to go out and sell the toys, not just keep playing with them. People will start calling it onanene if he's not careful...

DrAD - your analysis is interesting, but all it shows is that the opportunity is large, which I don't think anyone doubts. I would point out however that (amongst others) there's an implicit assumption in your calculation that CFRP will stay the same price and functionality while graphene advances on all fronts - that's unlikely to be the case in practice, so graphene is aiming at a moving target. It has to move faster in price and/or functionality than the CFRP it's aiming to improve. This may be possible - it's a new technology at the start of its development curve, but an awful lot of effort is going into productionising CFRP.

[cyberbub] 11/3/2017 19:43

Christ I remember Stanelco about 10 years ago, I bought some, lost money etc. I don't think it is anywhere near 'most ramped ever' though in numerical terms!I don't think VRS is in the same situation. There is a proven market and we have a proven production capability. The main question is pricing and capacity. We should find those out soon.I do agree (and have said previously) that unless they are both profitable *and* low-management, we should be divesting distraction divisions.NAI

[theklf] 11/3/2017 19:42

lo

I'm no expert on Carbide but I have been on previous visits to Hardide (where Ricketts used to work).

Hardide (HDD) is valued at £15m by the market but has revenues of £3m

Total Carbide apparently has revenues of £3m. It would stand to reason for most analysts that a reasonable valuation for £3m of annual sales will be worth somewhere in the range of 1x - 5x sales. Even taking the low point of that range it would free up £3m of capital, free up management time and obviate £3m worth of future dilution here. Looks like a win-win-win to me ?

If two companies operate in the same industry and one is valued highly and one lowly when they have similar sales the only conclusion is that one Management team is dropping the ball either in managing the business or 'selling' the investment story effectively. (You could say the same about our graphene business versus the likes of HAYD and AGM)

[shavian] 11/3/2017 18:21

Worried about Neill's workload. VRS does not have a depth of executive talent, so he needs to pace himself a bit and recruit some more backup.

[rogerbridge] 11/3/2017 16:31

Thanks SG for your excellent posts, VRS certainly have many applications for Nanene, and inks. This is all very encouraging, though some mass market applications will take time to come to fruition.
No doubt there will be those non mass market applications that will be financially lucrative in the shorter term.
The decisions N.R. has to take is how to pick the juicy low down fruit for fast payback and work with the longer term blockbuster applications that are not far down the road. Has he time to sleep?

[theklf] 11/3/2017 15:18

This was the StanelCo chart. I note threads there on advfn describing it as the most ramped stock ever. That's going some.

[theklf] 11/3/2017 15:12

Some observations on 'insights' coming out of the Momentous Events gig.

Carbide might have seen a brief upturn due to rising oil price but oil price is going down again now. I still get the impression Ricketts is trying to talk this up more than is evident from actual orders and numbers (remember the last formal trading statement was a profit warning to all intents and purposes), maybe due to internal board pressure. I think it's detracting from focus and capital would be better utilised in the core business which looks ready to go. We have Ricketts complaining he has his hands full so why detract from his time with a commodity cyclical business rather than the exciting secular blue sky growth story ?

The breathless talk about an entirely new 'focus area' of food packaging strikes me as engineers getting excited about engineering/product but having no commercial awareness/sense whatsoever. The Health and Safety standards around packaging are immense it would take YEARS to approve any new material packaging. I've not mentioned this before but one of my concerns with this Company is the background of the Chairman who is ex Stanelco? For those of you unaware it was a ridiculous stock which perished in the RF tag / food packaging area. Even if you ignore that warning signal we all know that supermarkets work on wafer thin margins, they won't be paying up for graphene so it is pointless following this supposed opportunity when VRS could get high price for it's scarce graphene from legitimate markets which already exist in high performance bleeding edge auto/aerospace uses.

[baz99] 11/3/2017 14:22

Fortunate to attend the event and meet the ceo and SG. Had not heard of VRS previously so spent a fair amount of time with them, and left fairly impressed. Short term opportunities seem to include grp applications for the auto industry improving strength etc, reducing weight, cost of repairs etc for little extra cost. Only barrier is volume/ speed of production which is being addressed short term. Medium term opportunities are many and varied, costs are under control

[luckyorange] 11/3/2017 12:27

Thanks superg, good stuff, the future looks very very promising.

[fatherjack2] 11/3/2017 12:15

Thank you SG. Just hope VRS is the 'one' for us all to make some real money. Seems to tick all the basic boxes for me - disruptive proven product, patented protected with substantial markets to satisfy. Is it too early to dream? You have been right with FUM and Iofina imo - have a feeling that VRS will outshine them. Thanks again.

[handygandhi] 11/3/2017 12:14

Thanks superg, great reading and a very encouraging report.
Would love to have been there, but distance is a problem. ;-)

[dr andrewd] 11/3/2017 11:39

I've been working through the business case for using GNPs in Carbon Fibre Reinforced Plastics CFRPs to see if it really makes sense.

There are a number of reasons why you might use GNPs in CFRP, but most will focus on the a combination of the following:
- make things lighter for the same strength
- make things cheaper for the same strength

If you can make a component cheaper by using GNPs that has the same performance then, adding GNPs to a CFRP would be a no brainer. In terms of how that would work I can think of the following two savings:
- the material is stronger and stiffer, so less CFRP is required which offsets to cost of GNPs
- the method by which forces are transferred to a bolted joint becomes easier as the plastic part of the component is much better and therefore simpler and cheaper inserts can be used.

This VRS document shows that all properties are improved by 23-52%. The only property not listed is strength in the direction of the fibres which should be dominated by the fibres.


If we make an assumption that the amount of CFRP can be reduced by 20%, and this will depend on whether strength in the fibre direction is the most important factor or not, then the cost of the plastic and carbon fibre in the CFRP would be 20% less.

This is a useful report which shows global demand for different sectors for carbon fibre and CFRPs

Based on the amount of carbon fibre sold and the CFRP used, on average, ~60% CFRP is carbon and the other 40% will be resin.

From the same paper you can also show that aerospace CFRP revenue is $100 (£80) per kg. So if you can reduce CFRP by 20%, you save £16 per kg

For our 800g of CFRP with GNPs that replaces the original 1kg of plain CFRP there are 320gms of resin, which at 3% loading, would require 9.6 grammes of GNPs.

So in that basis, for GNPs in CFRP to be a complete no brainer, cost needs to be <£1.67 per gram, assuming the amount of CFRP can be reduced by 20%.

This does not include benefits from fuel saved, or performance due to light weight which could be worth a significant premium.

If this sort of price could be achieved in the long term, then GNPs could be used in all CFRPs and with a global CFRP market of about $15bn in 2020, 20% of that for GNPs would mean a very significant GNP market for the first company to get there to aim for.

[clive205] 11/3/2017 11:32

Doing some research here.

Couldn't see a link in the header to

I note the January update. What are current market expectations for the y/e March 31st?

[jointer13] 11/3/2017 09:44

superg1

much appreciated.

[superg1] 11/3/2017 09:44

Yes Spike and that's not the end of it either, got to go out for a cycle then will dig re that aspect over the weekend.

I met the CFO too and what a thoroughly nice chap he is. Also good to hear he wants justification for every last penny spent. Very tight purse strings type who is casting a keen eye currently over certain city related costs.

He and the CEO have worked together for many years.

[spike_1] 11/3/2017 09:40

Utterly fascinating!

[superg1] 11/3/2017 08:54

I've been to an open day, arranged my own for a few about 3 years back and had other direct contact. I've talked about composites and composites and the next time composites. In fact on the open day it was all about composites.

So someone explain to me why on that night the CEO has suddenly turned into a bit of an expert on packaging on graphene enhanced packaging and smart packaging. Then why an ex F1 connected guy engineering mad is now asking PIs what they think the highest risk/cost for supermarkets is. Any guesses ??? cooked chicken.

Now spin back

Quite clearly as in videos on news they have been surprised by the amount of enquiries about Nanene since they launched and it seems clear that some companies have come out of the woodwork on graphene, they have been hunting for it but the real deal simply isn't out there or rather wasn't until Nanene launched.

The CEO keeps saying there are not enough hours in the day and I did say he needs to get someone in to help. I think they have one ex guy from a very well known brand name lined up.

So packaging.

I know if you add graphene it improves the shelf life (oxygen blocking) is stronger and perhaps light weighting kicks in too, but he went in-depth on smart packaging. We have talked Rfids before and how graphene ink may change the market there.

So he gives the story using a ready meal as an example and how smart packaging can give the history.

EG the meal gets wrapped and has graphene seal and an rfid sensor or both.

If that meal leaves cold storage from the company it registers how long.
The use by date is known.
It goes to the supermarket and the packaging knows the temperature it was stored at.

It has sensors in it, it can tell you if nuts are in it, or if it's degraded (bio sensor) that it is now unfit for sale.

You buy it. The scan system in the supermarket automatically updates the re-order system.
You take it home and stick it in your fridge.
You take it out and break the seal, that is recorded.
The smart packaging recognises that and adds it to your online shopping account should you wish to order it again next week.

No doubt there would be a relevant app.

So is it fit to eat. Well before you stick it in the microwave check your app and it may tell you that product has been out of refrigeration for too long and that dangerous bugs have formed.

But if it's been out of the fridge too long the supermarket would know if that was your fault or theirs as it's all recorded. In fact a package could tell them take me off the shelf.

He didn't say this but I think of product recalls due to contamination which costs millions. If you have the smart packaging and sensors on the high risk times you have a full database of what is contaminated or not. But the senor has already told you that before you stick it on the shelf.

So after the show I'm thinking WTF why is he talking packaging and have had a very very brief look.

The graphene ink site talks of smart packaging so does the NGI and countless other sites. Then I quickly came across a graphene based nuts sensor in a Cambridge report with a very very large relevant company mentioned in that paper.

I need to dig some more.

I don't think for a minute that the CEO who is run off his feet, one night sat down and decided to look up cooked chicken and the impact on the retailers.

[phoenixs] 11/3/2017 08:27

superg, thank you.

[phoenixs] 11/3/2017 08:21

sg, just a point on the carbide side. I would have thought the Brexit impact on currencies will have made VRS more competitive. In a competitive market and purchasing directors hitting on costs all of the time, the value of the £ wil certainly help.

[superg1] 11/3/2017 08:18

Well one exiting thing is scale up potential and opex which isn't fit for the public domain VERY VERY VERY exciting (Is that enough).

The others bits are as below but then I can't be exact nature of some things. Anyone that attended the open day knows the CEO asked that some things were not posted on public forums and we honoured that, just like I did about the find re Nanene. That's why I urge people to attend such events.

I'm not doing a sales pitch for the investor show or VRS but they are there on the 1st April. So it's up to individuals to decide whether it's worth talking to the company or not. Personally it think it's absolutely vital that any serious investors do just that and talk to the CEO.

[superg1] 11/3/2017 08:08

I'm going to mention food packaging as it was a regular topic, but first say that if you don't attend such events or attend open days you are not going to get the full picture. So on some comments you now have new PIs absolutely blown away, the comments are not inside info it's just that companies do not necessarily want customers or end users to know things that may affect negotiations.

What I will do is point to old news that the market didn't read way back and no one was talking about VRS

Versarien CEO Neill Ricketts commented: "Our technique is highly scalable and we can also use our existing group resources to manufacture relatively large quantities of high quality graphene.

It has moved on from there, you can bin relatively and as I keep saying it's modular, The technology can produce any amount, it is only restricted by demand but then the demand thinks it can't be produced or rather THOUGHT it couldn't be produced

then this bit in the same news.

'We are now planning to commence production and by utilising our existing production facilities we expect to lower our graphene production costs.'

The guys that attended the open day heard some things on that, well if you are reading that that well down and that's before the scaling up just announced. I try not to display too much excitement as BBs are full of that but it is seriously mind blowing.

One worry for investors is competition and clearly that is a hot topic well if you attend events you wouldn't worry.

The first point is VRS can do what no one else seems to have mastered few layer graphene. They can scale up to any number needed subject to cash flow and staff, but anyone wanting large scale could licence it of course and at this time there doesn't really seem to be anyone else to go to.

The market seems to want GNPs and VRS have them. I'll comment further on that in the next post.

[phoenixs] 11/3/2017 08:05

sg, thanks for your comments on the event, sounds as if it was useful and not just a drinking party. As Spike writes, any comments on "exciting things" ?

[spike_1] 11/3/2017 07:55

Thanks sg: so far so good, but would you care to comment - since it is in the public domain - on your earlier remark: I was surprised to learn some new and exciting things which other new investors and potential investors heard. Some of them may not have appreciated what they were told but I did of course.

Best wishes - Mike