These are very good results, somewhat disguised by the modest pre tax increase over last year, but this is because there was a one off positive finance gain. The underlying trading is good and all set to continue imho
Thanks for that report, JIGSAW47. Were the board specifically asked about the extension of aivlosin to other animals and was there any indication given of how likely this is, which species and when? If this were to come into play, it could give a sinifcant lift to the sp.
Thanks very much JIGSAW47 for that report. Still interested to know where the product is made and distributed. The Chairman, Peter Lawrence, is also the Chairman of Anpario, similar set up, and they produced very good results to-day
A good AGM with the Board demonstrating professionalism and strong commercial grasp of their market and although unable to update trading and profit forecasts, appeared confident for the future. The flagship product Aivlosin is still gaining further regulatory approvals and although the emphasis is still on pigs and chicken could also be used for a range of other animals. High levels of stock to cater for ongoing expansion of sales with stocks having a lengthy shelf-life.
Brokers increased target price from 650p to 725p on 1st July.
I believe there are two production plants that are outsourced with a build up of substantial stocks to meet current and anticipated expanding demand. (six months of Aivlosin stockpiled). "There are currently over 600 drug registrations around the world for its pharmaceutical products, which are principally, but not exclusively, for the various conditions in pigs and poultry. The company uses advanced science in order to offer a wide and effective range of specialist treatments underpinned by strong customer service" 2016 Annual Report. Since then additional important authorisations have been obtained, especially in the USA.
The Company is debt free with net cash of £18.5m at last report and in December 2016 the Company's brokers said they believed that "ECO is in a strong position to drive stellar growth". Hopefully, an update will be given by the Company at the AGM and Peel Hunt (Broker) will issue an updated marketing note soon thereafter.
I believe production is in China but don't know if this the only source of supply - bit worrying if it is.
As you are planning to be at the AGM, JIGSAW, it would be really helpful if you could try and clarify this for us. Any other interesting information which you are able to glean would be very welcome if you feel able to share it, especially re the possibility (or probability?) of authorisation for aivlosin being extended to other species - which and when? If this does occur in due course it would give a huge boost to the company's prospects.
If you were able to post a short note on what is said at the AGM, JIGSAW47, that would be of much interest. I am not able to be there but would very much like to know where the products are manufactured and distributed. I have also built up a larger than usual(for me) holding, and like you, am very content with the situation.
The Chairman still retains a very substantial shareholding and recent sales have had little impact on the price suggesting that major institutions still have an appetite for more shares. I have a large shareholding (for me) and remain confident that steady growth will continue and the price is up from £5 since the start of the year so an occasional consolidation is to be expected especially when trading volumes are very low as has been the case recently. The AGM is on Friday 19th September that I will attend and hope we will receive an encouraging update at that time.
However, follow your own instinct as with any investment.
This time the important and long awaited approval for Aivlosin to combat swine respiratory disease in the USA. Excellent! News! Should result in significantly increased sales and market share in this major market.
If profits grow at 25% p.a., (and they've been doing better than that and could very well continue to do better), then it'll only take a couple of years. Better than banks and building societies by some margin!
Let's see what is said as commentary to the interims later this week, or next.
Yes, I quite agree. It will take time to market and sell the product and for the profits to show through, but I would think that, if it is the the success we all hope for, the sp could be at least 50% higher than it is to-day.
The regulatory approval for Aivlosinby the Thai authorities,is, in my view, of great sigtnificance because it should open up the whole Asian market. This is because Thailand is a top poultry producer and their approval will very likely lead to approval in most, if not all, Asian countries. Clearly it will be some time before this manifests itself through into the profit and loss account, but for any one with a three to five year time horizon, this should be a very worthwhile investment and I am adding a few more.
PE is the wrong measure to judge as it includes amortisation of the costs of regulatory approvals that are in reality a growing and substantial asset and increasingly so as sales accelerate. Brokers have today reiterated a buy recommendation with a target price up from 450p t0 550p but "continue to see significantly higher value as the business grows and given its strategic value."
No surprise to me - I've held these some time, waiting for news to break. Just consider how many people world wide are made ill from eating chicken - salmonella. These chicken are thoroughly over anti-biotic-ed - this goes into us, and eventually we become immune to the antibiotics = no more operations! Take that along with EAH plans = surely EAH will go well?
Very surprised to see such a large jump in the sp, especially since there was fairly substantial director sales in July. I was clearly wrong in thinking there was adverse news on the way when quite the opposite is the case. The p/e is sky high and there yield very low, but it looks as if the regulatory approvals have cleared the way for sustained growth.. Still puzzled by the directors' selling but they still have very substantial interests and of course, yachts have to be paid for. Broker forecast achieved in days and interesting to see if this is revised, unless they were aware of the impending news about the sales growth. Lovely company but very hard to take a realistic view of potential market and potential competition
I am sure there is no lack of confidence and executives may need funds for other reasons and may not want too many eggs in one basket bearing in mind they have share options, salaries and pensions. I suggest they are helping meet strong institutional interest and the strong trading statement from the Chairman with a very substantial stake should be borne in mind. HE is a former AIM engtrepreneur of the year and still fully deserves that accolade.
Yes, excellent results but why do they again declare a second interim div and not call it a final div!
That said, more than happy with these figures and expect further upside in the future.
Sizeable buys today and I expect there will be RNSs soon of both an institution increasing its holding and also a reduction (earlier investor reducing overweight position/taking profit).
Clearly this should drive sales and profit to a higher level but clearly difficult to quantify to an outsider. However, what is clear is the enormous value of these marketing approvals that take around 10 years to obtain and cannot be easily replicated without significant cost and patience.
Hence their value is very substantial and the depreciation unwarranted and distorts true earnings and PER and their value to a third party possibly well in excess of the current market capitalisation. I have been a long term holder and anticipate steady growth in the share value over the next few years.
The regulatory approvals are clearly very good news and the sp has reacted accordingly. My difficulty is gauging how these will be translated into profits and when. I know that the market is huge but I do not know to what extent these are "must have products" or simply desirable if affordable. Does anyone have any back of the envelope or better calculations of what all this will mean to the bottom line and when??
My understanding is that general concerns over antibiotic use, whist perfectly valid, are likely to be advantageous to EAH since Aivlosin, whilst being an antibiotic, is effective at low dose levels, is fast acting and is quickly eliminated. Thus it is increasingly likely that if there is a decrease in overall antibiotic usage, Aivlosin will, more and more, become the one of choice. Just possibly this will help the company on it's way to becoming, in it's own words, "a truly major force in worldwide animal health".
Helpful thank you. Yes I think maybe it will be one of those things like climate change we all know action is needed but the market operates with a different agenda. With demand for meat increasing throughout the world it's hard to see how antibiotic usage can decrease, unless there is some pandemic superbug that forces a radical and immediate rethink. Thanks again for your input
A recent brokers report said " although press reports regularly suggest that antibiotic usage is reducing, the reality is that the global market is growing at 2-4% .....We expect Aivlosin to significantly outperform the market as it is fast acting and has rapid withdrawal, which means that it should be a beneficiary of the increasingly tough regulatory environment". "We expect Aivlosin to exceed our forecast of 18% growth in the current year..."
Did anyone see last night's Horizon programme and the recent report in the press about drug resistance, superbugs and the like? In my previous post I mentioned I'd sold out but since the share price has risen since had thought about getting back in. However, after last night's programme I'm now not so sure. The programme seemed to suggest that the use of antibiotics in animals needs to be radically reduced. Whether it will or not is another matter as the pricing pressure on farmers isn't going away anytime soon, but with EAH a bit of a one trick Avlosin pony it got me wondering if there is too much risk of potential resistance to it, and reduction in use. Is there someone out there with more knowledge that me that would care to add an opinion?
Exactly - the price having doubled means I'm just nervous how much the sales have to increase to justify that high share price and also nervous about being in equities generally at the moment. There's always doom and gloom around but I want to hold a bit more in cash at the moment. Knowing me I'll have sold out of the wrong share and you'll be onto a winner by holding on!
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