Versarien Share Discussion Threads

[sonsonnyjim] 19/7/2018 12:39

As a whole market that's not actually very big, I also think it's not something that's quantifiable for 7 years time

[club sandwich] 19/7/2018 12:36

"Even though the market for graphene products is still relatively small today, studies suggest the industry could be worth $1bn globally by 2025"

LOL...

[grabster] 19/7/2018 12:32

Punchline Gloucester maintaining coverage as ever:




Turnover up 50 per cent and Chinese deals in pipeline for Cheltenham firm
By Andrew Merrell | 19th July 2018

Revenue has increased by more than 50 per cent to £9 million for a fast-growing Gloucestershire engineering firm.

Deals with the manufacturing powerhouse that is China and continued investment in its UK operations spell an exciting future ahead for high-profile Versarien.

The advanced engineering plc which has positioned itself as the forefront of the market in graphene has released its preliminary results to the end of March 31.

Its results show a loss before tax of £1.6 million, down on last year's £2.2million - but activity in the pipeline and deals and development outlined elsewhere in the statement help explain the chief executive's confidence.

Neill Ricketts, chief executive officer of Versarien, said: "The year to 31 March 2018 was one of considerable progress for Versarien in both our emerging technologies and more mature businesses.

"The graphene businesses have had a very exciting year having entered into a number of collaborations to incorporate our high quality NaneneTM and GraphinksTM in a variety of different uses such as packaging, aerospace and sports equipment.

"We continue to work towards collaborations with one or more Chinese partners to enable us to manufacture and promote our high-quality products in China.

"New production equipment is on order for scale up in the UK, we have substantially strengthened our team and I consider Versarien to be extremely well placed to produce the quantities needed for the commercialisation of these collaborations when required.

"Our hardwear business has shown much improvement increasing its sales and returning to profitability. Our plastics business is focusing on efficiency improvements to further increase its returns and cash generation whilst also moving towards the incorporation of graphene into moulded parts.

"we look forward to the future with optimism and confidence."

Net assets increased some 23 per cent to £8m, up from £6.5m, and successful fundraising rbought in £2.9m in November 2017.

Deals in the last year include eight graphene application collaboration agreements secured during the year, a further five coming on stream and "more in the pipeline".

There was expansion into Asia through incorporation of an intermediate Hong Kong holding company, and 24 commercial partners now identified in China.

"Joint ventures will be determined by funding levels and IP protection," according to the company.

There is also expansion into the United States and in the UK support from the Government provided through the secondment of its head of outward direct investment.

[cdub1] 19/7/2018 12:27

Cynical Bear’s article can be destroyed by one name........ Matt Walker; not even mentioned once in that article , ooppssy!!!

[grabster] 19/7/2018 12:24

I am pleased that Aac Cyroma and Total Carbide are doing OK. In between FY/HY Results we rarely hear anything from them at all, except last autumn's £200k Rolls Royce order for TC.

It's about time the Banbury Guardian did a piece about Aac Cyroma, who they've not mentioned since a couple of minor fires 6 or 7 years ago.

[chumbo] 19/7/2018 12:19

Scrutable, I think you'll find plastics (AAC Cyroma) and the graphene businesses are lumped together here, no separation.

[dreamtwister] 19/7/2018 12:19

rocketfuel/1retirement,twist your words,to settle your own argument

[dickiebird2] 19/7/2018 12:13

News can come anytime on this one $£.

[scrutable] 19/7/2018 12:12

I did not notice anyone commenting on the actual graphene sales figures referred to in my post just after 8.00am, submerged during the main flood of other posts at the time. The company seems shy of revealing these figures, which I did not see referred to elsewhere.

SCRUTABLE - 19 Jul 2018 - 08:04:16 - 21810

Note 2 of the accounts discloses graphene sales for the first time. At £4,643m they are much higher than I expected and are greater already, than sales from all the other subsidiaries taken together,(£4,385m), which are themselves doing better than expected and will probably soon no longer be a drag on the graphene business's finances.



The great future we all expect is already visible in the infant company, and can only attract full blown admiration. I expect this report to awaken national and international interest as never before.

[rocket fuel] 19/7/2018 12:03

yeah, we’ve been damned by many an article and plenty of johnny come lately experts on the these boards!.. yet the share price and company outlook continues to sail north!

[scrutable] 19/7/2018 12:03

regret repeat below

[grabster] 19/7/2018 12:02

"Results expected shortly" and "results expected in the next two months" is a phrase that appears in regard to several of the current collaborations.

Considering that many have only been running a few months, that is pretty rapid progress. Some collaborations take years to reach fruition, but it sounds like things are moving quickly.

[dianecarberry] 19/7/2018 11:56

A damning article.

[occultusverum1] 19/7/2018 11:48

LOL. A very insightful piece by someone who doesn't even know the name of the company they are analysing.

[dianecarberry] 19/7/2018 11:40

Initiating coverage of Versarian: SELL
By Cynical Bear | Thursday 19 July 2018

If you like this, please share this article using the buttons below

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

I’ve been following darling of the bulletin boards, Versarian (VRS) for some time finding the ever-increasing share price more and more incredulous. I thought I would use today’s results to take a closer look and come up with a considered valuation. In short, this appears to be the in the top 5 most overvalued shares on AIM – get out while the going’s good!

With any business, it is best to start with management and that is where much of the value lies it seems to me with this stock, the CEO, Neill Ricketts. In many ways, he is the perfect AIM CEO; he is very active on Twitter and always keen to get news flow out, preferably with no numbers or names included. Let’s be clear though, that aside, I am unable to find any evidence from his track record that he is able to build a profitable business.

Prior to setting up Versarian, he was head of the ventures arm of Elektron Technology (EKT) until he left there and set up Versarian, taking some of the ideas with him - although I note in today’s results that he appears to have given up on the thermal copper foam that was going to be the company maker back at the beginning. The beauty of running an “advanced engineering materials group” is that you can always go after the next magical golden egg, graphene being the obvious advanced material of choice for now. Again, this makes for a brilliant AIM story.

Looking at today’s numbers, the business states that revenues have increased by 52% to £9 million an and losses before tax have decreased by 27% to £1.6 million. Cash as at 31 March 2018 of £2.3 million.

That only tells part of the story though and one needs to break it down into its various parts to try to get a sense of value. Neill segments the business in two parts. First, there is the Hard Wear and Metallic Products that is predominantly made up of the Total Carbide business that Neill ran at Elektron and that he acquired from it when Versarian came to market in 2013.

Total Carbide was acquired for £2.28 million. It is worth noting that in the year to 31 January 2013, Total Carbide had revenues of £3.8 million and profit of £56,000. Interesting to compare that to this year’s revenues of £3.2 million – doesn’t sound like a great growth story to me.

The second segment, the Graphene and Plastics Product Division, is a bit of a misnomer as pretty much 100% of the revenue in the year has come from the plastics business acquisition of AAC Cyroma. It was acquired in October 2016 for around £2 million when revenues were £4.27 million. These have now ticked up slightly to £4.6 million. The rest of the report is all about graphene and although revenues are limited, there is plenty of information about the various partnerships. But how much are these words worth?

Being generous, I will value the mature businesses at more than double what Neill paid for them, let’s call it £10 million. However, with the current share price still around 127p, that values the graphene side of the business at around £180 million.

The IP for these businesses were acquired for less than £1 million and although there are a whole host of collaborations and partnerships, there is no current evidence of any of these turning into a profitable commercial relationship as yet. Accordingly, at this point, one needs to somehow assess the likelihood of Neill Ricketts translating these deals into cash but I can find nothing in Neill’s past to give me that comfort. Being generous again, I can envisage hope value of say £20-30 million so my conclusion is that I can’t really understand why this share is trading at over 30p!

In addition, further funding will no doubt be required by the end of the year. As I said at the top of this piece, Versarian is the darling of the masses for now but unless real traction is generated on the graphene side soon, gravity will prevail as it always does in due course and shorting at anywhere near the current price looks like free money in the medium term to me. I await the bulletin board and Twitter backlash with interest.

[jadesung27] 19/7/2018 11:37

The only regrets the doubters will have will be when they will be weeping into their pillows when they realise they've missed out. #VRSboomers #Losethenegativity

[grabster] 19/7/2018 11:32

A slightly longer version of this morning's Motley Fool piece by Rupert Hargreaves:





Why a 15% fall could mark the right time to buy into the Versarien share price
THE MOTLEY FOOL
Jul 19th 2018

After publishing its preliminary results for the for the year ended 31 March this morning, shares in advanced materials firm Versarien(LSE: VRS) immediately slumped 15% as investors digested the news.

However, after this initial decline, the Versarien share price has rebounded. At the time of writing, shares in the Cheltenham-based business are changing hands for 126p, down just 4% from yesterday's close of 132p.

REVENUE GROWTH IS KEY
The quick recovery should not come as a surprise to Versarien watchers. Today's results revealed a loss for the year to the end of March, but this was broadly expected. Unfortunately, the loss of 1p per share was slightly larger than the loss of 0.3p expected on revenues of £7.6m. The good news is, Versarien beat on the top line, reporting sales for the year to the end of March of £9m.

In my view, this top line number is a better reflection of group performance for the period than EPS.

Versarien is working to become one of the world's leading graphene businesses. As my colleague Paul Summers pointed out last week, year-to-date the company has already signed numerous deals across the globe with partners to help it reach this goal. In total, for the year to the end of March, it signed eight graphene application collaboration agreements, and since the end of March has signed a further five with "more in the pipeline," according to today's release.

As well as investing in these partnerships, the group has also funded new production equipment to scale up production of graphene at its facilities in the UK. This hasn't come cheap, but I believe it is money well spent.

HUGE OPPORTUNITY
Even though the market for graphene products is still relatively small today, studies suggest the industry could be worth $1bn globally by 2025. By investing in its business today, Versarien is priming itself to grab a significant share of this market over the next five years.

However, while I'm not worried about its profitability (or lack thereof), I am concerned by cash burn.

For the year to the end of March, the group burned through approximately £2.5m in cash. After raising £2.9m in November, at the end of March, bank balances totalled £2.3m, which management believes is enough to meet obligations for the next 12 months. In reality, the longevity of this cash reserve depends on how quickly Versarien can achieve cash flow profitability. City analysts expect the company to report an accounting profit for the year ending March 2019 so, so it looks as if the reserves will be enough, but there's not much margin for error here.

Still, with shares in the company flying high, Versarien should be able to raise new funds from investors to keep the lights on if it runs into trouble over the next 12 to 24 months.

EXCITING POTENTIAL
The company's exciting potential has undoubtedly attracted my attention. The recently reported breakthrough in incorporating graphene nano platelets into power storage devices, increasing the storage capacity of batteries, could be a multi-billion dollar opportunity for the group. This would make a relatively small £3m fundraising seem insignificant in the long term.

So, considering all of the above, I believe that today's decline could present an excellent opportunity for risk-tolerant investors to buy into Versarien's growth story.