tejo
15 Apr 2016
letter from CEO re food for thought. I wrote to Mr Richard Edwards, the CEO of Anpario, as agreed, and asking him the three questions that I think we were all concerned about. I received a very comprehensive two page response, almost by return, for which I have thanked him sincerely. Set out below are the key points.1. re apparent lack of information, company tries to disclose as much as they can, but they are in a market, where competitors scrutinise all statements for detail of strategy, initiatives and technology.2.The company acknowledges the concern over static sales in recent years. In part, this is due to a decision to exit the lower margin business in order to focus on the products providing a higher margin and where the co. has stronger differentiated products in more attractive market segments. (some examples were provided)Action is underway to increase the sales volume through local commercial direction - (a long explanation was provided) and this is being achieved by the appointment of senior local directors who will develop relationships directly with the end users. Appointments either have been or will very shortly be, in place in Asia,the Middle east and in Latin America. The company is going through a transition period whilst these investments are being implemented.3.The company does have various competitors (list of names provided) and the manner in which Anpario differentiates its products, is through the qualities of the ingredients, the manner of delivery into the animal and the establishment of its brand names and reputation for excellence. (this aspect was expanded upon at some length.ConclusionI have tried to convey the essence of Richard Edwards' letter which was too long for my typing skills and maybe II message capacity. It was clear to me that he understands well the position and the actions needed to further grow the company and I will be very happy to hold, or add to, the positions that I and family members have at present.I live too far away to attend an AGM but I am sure that would be the place to ask questions informally and learn a lot more.
CatoCR
15 Apr 2016
Onwards and upwards [link]
Hardboy
08 Apr 2016
Re: food for thought Many thanks Tejo.In my experience genuine AIM companies tend to be excellent responding to shareholder questions. And of course the quality, speed and originator of the response all says something about important about the company.
tejo
08 Apr 2016
Re: food for thought The questions that Games has highlighted and to which we have no answers are as valid for existing investors as for new ones and I had also thought of putting them to the company. Against the background of management changes, director sales and falling sp, I will try to try to make the effort of contacting the company. I am never sure if it does much good. I recall writing to the CEO of Chemring many moons ago with some questions and, to my amazement, received a detailed two page response from him which alleviated my concerns. Fairly shortly afterwards, there was a string of bad news, the sp fell sharply and theCEO left. However, if I do contact ANP and receive a reply, I will advise here.
Hardboy
08 Apr 2016
Re: food for thought Games - good to see you've got your priorities right.
gamesinvestor
07 Apr 2016
Re: food for thought "" this is a very different business from Renishaw""HB - your are correct. I didn't mean to draw any comparison with the types of business, just that the scenario of how numbers are reported and the fickleness of the market can affect the outcome of the shareprice.To be honest, if I can't find a clear differentiation from the companies public's push on it's own products I'm not sure I need to contact the company.I'm an investor in Renishaw for the long term -- I'm interested in Anpario, but have a lot more work to do to find out if it has the same quality of Renishaw.Games -- research on hold until I get my car fixed -- Oh the trials of the day to day stuff eh!!
Hardboy
07 Apr 2016
Re: food for thought Games - this is a very different business from Renishaw, who are effectively contractors building things to order. You could always write to the Company Secretary to say you were thinking of investing but because you can not get visibility of various issues you are inclined not to. Many AIM companies fall over themselves to answer correspondence like that.
gamesinvestor
06 Apr 2016
Re: food for thought """""I am not worried by the flat sales figures to date since the company clearly states that they are concentrating on higher margin natural feed additives and they sold the organic feed division""""Whilst this is true, it's worth remembering that the decision to sell the the feeds business was only taken last year so has had no impact at all on the fact that the sales have been flat for 4 years, so it's really not a factor at all.In fact the worry might be that because the sales were flat in 2015 (or in fact a small decline) then on the next set of numbers the sales might fall off a cliff.Look at Renishaw, they had stellar sales to China one year, warned everyone that it was unrepeatable but it didn't stop the share price getting a kicking when they actually got closer to reporting the reality.Anpario is not a bad company, but I don't have a clear picture why it's sales are static, why is products are differentiated and who it's competitors are -- no one has clarified this to me, I can't find it on the companies web site, it's not in their reports and no press release has illustrated any of these points.Right now, until those points are answered, it's uninvestable pour moi!!!Games
Hardboy
06 Apr 2016
Re: food for thought Tejo, Games: "I am not worried by the flat sales figures to date since the company clearly states that they are concentrating on higher margin natural feed additives and they sold the organic feed division with high sales but low margins"Tejo makes a good point, and also note ANP have recognised they need to increase sales, which is why they are setting up sales offices in their 3 main overseas areas. I f they are going to do that properly it takes time and investment to get the right people with the right knowledge running these offices. Hopefully this has been going on over recent months and the benefits should begin to be seen over the next year.
tejo
06 Apr 2016
Re: food for thought Gamesinvestor makes two good points but the one that would concern me is whether or not the company's products can be replicated easily by competitors. It would be helpful to know. I am not worried by the flat sales figures to date since the company clearly states that they are concentrating on higher margin natural feed additives and they sold the organic feed division with high sales but low margins. W H Smith is a good example where, for years (except last Christmas) sales have fallen but profits increased along with the sp up over 200%.. I still have a lingering unease over the departure of the CEO despite good succession plan. So many example of when the CEO decides to move on, the company loses momentum. Clearly time to keep the faith or exit and I will take the easy option of doing nothing pro tem
gamesinvestor
05 Apr 2016
Re: Food for thought HB, Thanks for the response. The FDA approval thing is easier for a well oiled big player than a small entity like Anpario.The market, according to Anpario's own material - via the report and their web side, is large - so there is established competition.I don't yet know who they are and can't invest in this until I have a better handle on it as the risk is that Anpario can be wiped out if it's products are easy to replicate and customers have alternatives that are synthetic (not natural) and / or antibiotics are still not an issue for many of the other bigger markets like Brazil etc.The other thing I've noticed that concerns me even more is the top line growth has stalled. This is not just for the current report that has just been filed, but in 2012 the revenue was 23, it was again 23 in 2014 and 23 in 2015.If Anpario is small, the market is large, then Anpario is actually failing and the profit growth is coming from squeezing costs - which always has an end date to be effective.I'm now leaning toward not investing here at all because 4 years is a long time for a company like this to be unable to grow sales.Games
Hardboy
05 Apr 2016
Re: Food for thought Hi Games, all good questions. most of which I addressed for myself when I first invested. Unfortunately, once I get information to make a decision, I don't always remember the information or where it came from. The one thing I do remember, which addresses most of your concerns without really answering any of them (I should have been a politician) is that before products can be sold in these markets they need FDA (or equivalent) approval, much like drugs, and the lead time to developing products and getting approval is prohibitive for big players for a relatively small market. (Global market ~ $4.5b of which 50% is made up in US, China & Brazil) If a big player wanted to enter the market, they are much more likely to do it via a take-over. Additionally worldwide legislation is trying to remove antibiotics from animal feed; which helps AMP's products. Hope that helps (a bit at least.)
gamesinvestor
05 Apr 2016
Re: Food for thought HB -- I don'tt doubt the commitment and I like the look of the company.Before investing, does anybody know why the products they sell are :-1. Different than their competitors, or sufficiently differentiated to maintain an edge?2. Who the top 5 competitors are and if they could wipe out Anpario with an ascerted price campaign on similarly created feed additives?3. Given that the products are all natural additives, then the barrier to entry, or development cost is probably minimal, is that a fair assumption?4. Are anti-biotics sufficiently ignored in preference for natural products to make a good future in other regions?5. I'm assuming big pharma/food companies can also offer synthetic products that can offer similar solutions to feed additives in terms of bacterial defence and growth enhancements?Games
Hardboy
05 Apr 2016
Re: Food for thought "Richard Beddard casts it from his watch list because he can't find a clear breakdown of tyhe performance of each product group"Well if that is his criteria for investing he'll be left with only the scams to buy.I agree it is frustrating when trying to fully understand a company's business that they don't break down their performance the way we would all like; but each investor probably wants something different anyway. Many times it is the words rather than the numbers which hold the key to a business' future and I like the extract tejo picked out from the results. One thing which encourages me about this business, which is after all a piddling little AIM company, is the list of shareholders - very high institutional holding and high involvement from the staff. You rarely get that level of institutional share holding in such a small company unless they have real conviction in the company's future prospects.
Hardboy
05 Apr 2016
Re: Solid dividend player with healthy b... To be fair to that simply wall street site, they did ask for feedback, like games, I did give it, and they came back with an explanation of what they were doing with LSE shares, and thanking me for my feedback. if they take note of feedback and enhance and develop their offering it may be worth keeping an eye on.
