AttyG
23 May 2017
Earnings Looking at the accounts, I note Product Sales of £65k with Cost of Sales of £29k producing a gross margin of 56%.Royalties, Licensing and Evaluation fees and Milestone payments all at 100% gross margin.On the basis of the data in the accounts (£123k royalties from ~€1m sales) the Royalties generated ~14% on distributor sales.Eden now appear to have agreed with Sipcam etc that they will supply 3AEY direct. From the accounts we know ~ 85,000 litres were sold for ~€1m meaning the Distributor sales price was ~€11.76 per litre.Let’s assume Eden sells 3AEY for €5 per litre and makes a 50% margin.I think sales of 3AEY will be more than 4 times the sales achieved last year – 340,000 litres.Using the above assumptions, Eden will generate ~£726k contribution to profit from manufacturing.Using the above assumptions and on the basis the royalty rate remains as in last year, then we can expect Royalty income of ~£491k.These two contributors to profit then generate ~£1.2m.Of course there will also be Milestone payments (Sumi Agro France for the approval to sell 3AEY in France - £50k?Eastman fees for Nemanticides - £50k?Royalty receipts from TT from the sale of Head Lice products etc.I will be disappointed if Eden is not cash positive in the current year.To get a sense of the size of the opportunity Eden presents:In 2016, Italy had 1.7m acres of vineyard under production.This equates to 690k hectares.If Eden captures 20% of the market, then it might not be unreasonable to consider sales of 2.2m litres of 3LOGY (4 litres per hectare applied 4 times in the year).Of course that is just Italy.Should 3LOGY capture 20% of this total market then we might expect Royalties of ~£3m and manufacturing gross profit of ~£4.7m producing £7.7m – in only Italy and this is only 3AEY.We can expect to see other products generating revenue:2018 – Bayer; 2019 Eastman and others beyond.Of course TT will be producing income to Eden in 2017 and we will be equity accounting for our share of TT’s annual profit.I consider the potential in Eden to be enormous.Each of you will have different assumptions, I just thought that with JakNife sharing his POV, I would share mine.
JakNife
23 May 2017
Re: Final Results investingisatrickygame,If I might pick you up on a couple of points:1. "new higher margin sales model and the first full year of sales into the three main global territories" Eden's gross margin in 2017 was 92.7%, that's already high because of the royalty model that Eden follows. I don't believe that a "new higher margin sales model" is expected or even possible. But given that you've suggested otherwise would you care to explain it please?2. "minus cash burn at circa £80,000 per month"Eden's cash burn in 2017 was higher than this but you need to note the "Capitalisation of development expenditure and intellectual property costs" in the cash flow statement to appreciate this. In total, Eden burnt through £1.28m in 2017, which equates to closer to £110k per month. That should mean that, at today's date, Eden has less than £1m cash at bank. In particular, allowing for seasonality of cash flows they undoubtedly have less than £1m cash at bank. 3. "To the above cash position, sales income will be added this year so it is extremely unlikely that Eden will have any cash requirements or pressures for the foreseeable future."Based on a cash burn of £110k per month and the current cash balance of less than £1m it strikes me that Eden does not, as at today's date, have adequate cash resources to meet its liabilities as they might reasonably fall due for the 12 months from today's date. Given that, I suspect that either (i) Eden need to raise cash *now*, or (ii) Eden's full-year accounts will be qualified by their auditors when the actual accounts are published.Regardless, elsewhere I've explained that Eden needs to grow at its current rate for another four years before it might get to break even, never mind actually getting round to making a profit like sensible well managed companies mange to do.regards,JakNife
investingisatrickygame
22 May 2017
Re: Final Results They were already advised in the December 2016 year-end update.Performance wise, they are irrelevant to 2017 (new higher margin sales model and the first full year of sales into the three main global territories). 2017 performance should be measured against future years.£1.5 million was in the bank, plus upfront payments since received minus cash burn at circa £80,000 per month. So, still more than £1 million cash in the bank.To the above cash position, sales income will be added this year so it is extremely unlikely that Eden will have any cash requirements or pressures for the foreseeable future.This year will all be about Sales income for 3AEY. Sumi-Agro France (at the highest level) seem to think they will be quite successful."Antoine Meyer, President of SumiAgro France, said: “We are delighted by the Eden Research team’s support to the project and the fruitful cooperation with the French Authorities and Regulatory Agencies to bring this innovative biocontrol solution to French growers and worldwide wine consumers. Mevalone fits growers and consumers market demands in terms of performance and characteristics. I strongly believe that the uniqueness of the Mevalone technology provides outstanding and long-desired benefits to the French wine producers and exporters. ”Source:[link]
JakNife
22 May 2017
Re: Final Results They look quite dire.
ash6666
22 May 2017
Final Results Eden Research plc (AIM: EDEN), the AIM-listed company that provides breakthrough natural bio-control products and microencapsulation technologies to the global agrochemicals, animal health and consumer products industries, announces its preliminary results for the year ended 31 December 2016. Financial highlights· Revenue of £0.4m (2015: £0.9m)· Operating loss of £1.9m (2015: £1.1m)· Operating loss, before non-cash share based payment charge and amortisation, of £1.1m (2015: £0.2m)· Loss before tax of £1.9m (2015: £1.3m)· Loss per share of 1.03p (2015: 0.74p)· Net cash of £1.5m (2015: £0.15m)· Equity accounting adopted in 2016 for Eden's investment in its associate, TerpeneTech, with prior period restated accordingly.· Successful placing of £2.6m in March 2016 Operational highlights· Lead agrochemical product 3AEY approvals granted for table and wine grape protection from botrytis in Spain, Italy and Bulgaria· First commercial sales of lead agrochemical product, 3AEY, in Greece, Spain and Italy· Exclusive commercialisation agreement with Eastman Chemical signed for Eden's nematicide product B2Y in nearly 30 countries representing a high percentage of the global nematicide demand· 3AEY label extensions in Greece, Spain and Kenya for new crops and disease targets· Appointment of Michel Villeneuve, as Senior Strategic Commercial Advisor, and Peter Watson, as Regulatory Strategy Advisor Post Period end· 3AEY approval granted in France for table and wine grape protection from botrytis· First commercial scale order of 3AEY from SumiAgro in France· Ongoing 3AEY sales in Kenya, Greece, Spain and Italy· Extension of patent protection in Greece
ash6666
11 May 2017
Re: Tweet They've finally got round to an RNS letting us know about it.[link]
Deckhard
10 May 2017
Featured on You & Yours today Radio 4 [link] mins in.
investingisatrickygame
10 May 2017
Re: Tweet Here is the link to listen [link] starts at 23:20 and lasts about 7 minutes
ash6666
09 May 2017
Tweet Tune into BBC Radio 4’s You & Yours tomorrow at 12.15pm: British innovation rejuvenating the French wine industry.
investingisatrickygame
05 Apr 2017
Organic Wine - Eden PR Opportunity In the Guardian newspaper today[link] yesterday launches Organic wine range[link] EDEN has commercial contracts with Sipcam and Sumi-Agro to service 50% of the world's wine production through Italy, Spain and FranceSurely a round of talks with the Supermarkets and the Guardian on this occasion would be very worthwhile for both profiling and spreading the wordA Great British Bio-tech success story? We could be, but we need to be more proactive with these things.Organic is a choicePesticides is now an option, but not a necessity thanks to Eden's 3AEYOrganic means no pesticides and minimal and sometimes no sulphates. No sulphates (for those that may be allergic) means better health. So Eden is also contributing to the health of those drinking wine around the world.What a story!
investingisatrickygame
15 Mar 2017
Nematode Control - Eastman [link]
investingisatrickygame
31 Jan 2017
The World's Biggest Flower Market [link]
nicam
24 Jan 2017
Re: Holding on to SP increases they are also starting to manufacture themselves and you will see from their AGM presentation slides 10 and 11 how much the margin can increase when they contract out production. This is their new business model which probably means less money to start with but much more later on.
Michaelhighbar
24 Jan 2017
Re: Holding on to SP increases OK have picked up the phone and spoke to a helpful PR contact who actually was making sense with no disrespect to others in PR 
. I put to him the questions as per my previous post which as it turns out, have been raised by other investors too.The company is pursuing a royalties business model. I asked the question as to the level of those and a rough guidance would be somewhere in the 10 to 15% of sales. Therefore, even if the company was to get 5-10% of the market then ER would receive a fraction of such sales in terms of revenues.The ecological aspect is indeed an advantage though not each client would see it as such and could be price driven. The good news here is that ER's products aren't expected to have a huge premium compared to the market.The milestone payments are of the order of hundreds of thousands rather than millions. In a couple of weeks time in early to mid Feb, the broker should give some visibility into 2017 numbers. So that would be the next piece of info to look out for.Have raised the issue of giving the opportunity to investors to meet up with management in order to get a much better appreciation of the company and its prospects and that is something that the PR firm seems keen to organise.The story has some promising elements though still a lot of questions to be answered!
Michaelhighbar
24 Jan 2017
Holding on to SP increases A big market (France) has just been opened to the company which is worth a multiple of its market cap on an annual basis. Ok it won't win it, or even a large chunk of it, straight away though the product seems to have a noticeable competitive advantage i.e. claims to be ecological.Global market is worth $350m. The nematicides market (I take their word for it .. ... is worth another $550m. OK sales won't kick in before 2019 but still there will be an upfront fee and milestone payments. Even if they win 10% of those markets by say 2020 that's $90m worth of revenues per annum. 5% gives $45m. Their cost base is small, comparatively speaking.There are probably more applications for ER's products across sub-sectors within agriculture.The question is: why does the SP struggle to hold on to any gains? Why isn't the market giving the company the credibility that at first sight, it deserves?Any thoughts would be appreciated.
