What about the cannabis BP
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What about the cannabis BP
I don't agree with the sentiment of most of you here, strong growth in Australia and much of the regulatory costs behind them I think this report will be stellar.
Hard to value though with such little liquidity and breaking even. Using a multiple of revenue is hard to swallow. Lots or room for error.
I purchased shares last week for $1.90. Gains made are mostly imaginary until Wednesday.
Just when sum of us were saying nobody likes AFT (and I was very confused as to why it simply continued to go down for no apparent reason), bang on 3 weeks since AFT hit 'the bottom' of $1.70, it is now $2.48 - up 46%, and a rise supported by very good volumes (for AFT)
Almost starting to look too good to be true
wowee up 16.7% today! Now at the highest point since mid 2017 I did not see that coming in exactly 3 weeks from when AFT finished on $1.70... someone clearly very keen to get in 'at any price', and even if you exclude the $2.80 trade, buyers still lining up at $2.60 (still a big increase on yesterdays $2.40) but I suppose it is just more exciting to talk about sum other companies...
Well done you guys.
Jumping from 1.70 to 2.80 in less than a month is absolutely amazing given there has been no official price sensitive news!! Although I am not holding, I would be very very interested in seeing the result soon and what direction SP will move then. Well done to you holders!
volume is so low it is almost meaningless.
we saw what happened when there was a large seller.
of course it is positive to have a few buyers lined up, but todays value was less than 10K. Hell , even tiddly old me could be a major mover and shaker with this stock lol.
Quite of lot of positive numbers this year eh t_j
Pretty good ....but not exactly stellar for a company with $0.25 billion market cap.
Share price might be hyped up to $3.00 plus on this though
http://nzx-prod-s7fsd7f98s.s3-websit...841/300213.pdf
The first time AFT has showed its operating profits as well (slide 9), it is good to see a return to profitability, and a very strong uplift of nearly possibly 100% growth on operating profit in the next year.
We all knew it was going to be operating cash flow positive as well - so nice to see this (and again, this will only continue to grow bigly).
Nice to see also that they have shown they can keep virtually all expenses under control - achieving 14% underlying top line growth, whilst keeping costs of goods sold, selling and disti expenses and admin expenses under control (in fact, they have reduced them) is very impressive.
Good underlying revenue and profit growth, although people might get not so excited when they look at actual profit growth of 5% (and don't bother reading any further). 'Other income' payments should also grow strongly.
Rest of world growing strongly as well - in fact looks like countries outside of aussie and NZ will be the real drivers of growth going forward, as I previously mentioned on this thread.
Finance costs was a killer, in fact if they had a similar finance cost as FY18, they would have made a NPAT of $4m ish. I believe debt has been a concern previously for AFT, and it is great they now have the cash flow/good feeling to make a separate announcement to go out to local banks and get an interest rate at probably half what they are currently paying (13.5%).
It would not surprise me to see AFT make a NPAT of $10m in FY20, putting a growth company on a PE of 26x in FY20, and probably a PE of 10-15 in FY21 - not that bad given the strong growth earnings growth ahead.
Then in FY22 when NPAT is $30m+, the founder might be ok with selling out at $5 a share ;) I certainly wouldn't mind my investment doubling ish in the next 3 years, might get a dividend then as well.
In conclusion, if you couldn't be bothered reading the above, or anything related to AFT, the headline says it all: AFT Pharmaceuticals poised for strong earnings growth
Hi Team,
Ive been in and then out of AFT at a small gain. I'm keen to understand how you can value this as a growth company with only 5% uplift in revenue? The operating earnings seems to be driven by reducing costs (R&D). A business cant continue to reduce cost year on year and so Id expect further earnings gorwth to come through increases in revenue. I didnt see alot there in terms of slid increases in revenue over the next couple years?
Appreciate your insight into this ?
The 'muted' 5% actual revenue growth was largely because they divested a product line fairly recently... in the future, operating revenue will likely grow at about 15% (underlying revenue growth - ie growth when excluding the now divested business was 14% in FY19)... it is very impressive that they are able to growth revenue at double digit rates, yet reduce expenses (in reality, it would even be ok if expenses grew - just as long as they grew less than revenue)
Operating profit in FY20 of up to 12 million (a 100% increase from FY19!) won't be achieved by cutting costs that is for sure.
So they are not just growing the bottom line by reducing costs, although this is unfortunately what alot of companies are having to do in this low growth environment I suppose.
What I say when FY19 was announced earlier today:
- Operating Revenue was $85.1m, total income was $87.4m - not too far off my numbers above
- Gross profit was $40.7m, again, in the ball park
- Underlying operating profit of $6.1m - was about double what I expected
- $1.1m Operating cash flow positive - another tick
- Bonus: first NPAT - would have been an NPAT had finance and interest costs not quadrupled from the prior year
So I am fairly pleased, and a further bonus was seeing them address the finance and interest costs 'issue', and providing operating profit guidance for FY20 - the first time they have done such thing.
I look forward to enjoying some caramel slices in August at the AGM in Milford.
Well ...
If we ignore all the hype about the future - revenue growth was less than analyst consensus (is 85.1m vs 88.9m expected) and loss was larger than analyst consensus (is 3 cts/share loss vs an expected loss of 1 cts / share).
Balance sheet is a shocker: Total liabilities $58.5m; total assets: $63.6m; That's an equity ratio of 8% (or a debt ratio of 92%: - I guess this ratio would be ok for a large bank, but for a manufacturer?
Did I forget to mention that they have as well roughly $8.2m intangibles on the balance sheet? if we remove them, than their NTA is negative.
Maybe a bit too early to start the victory dance ...
Your above points, both of which are valid (I'm not arguing that): Balance sheet 'shocker' and larger loss than analyst consensus (how many analysts cover AFT?) are due to the very thing they are addressing: debt and finance/interest costs (reducing EPS).
Significant earnings growth will support paying down debt - reducing the balance sheet 'shocker', and changing from USD to a NZD loan will reduce foreign currency exposure, whilst probably having interest costs as a result of AFT becoming significantly less risky due to a huge turn around in earnings.
So yes, if AFT's underlying business, which I note you have yet to comment on, wasn't so sharp, then I would be concerned about debt (eg EVO), AFT IPO'ed and borrowed to grow the companies product line, capabilities and geographic reach - they have delivered on all of these points and now at a point it can now repay that (rather expensive) loan with a very scalable operation.
Winner is right - the story is more important when it comes to a growth company (eg XRO) that the numbers
It is to early for a victory dance, but the victory dance is now a question of when, not if (and that when is a mere year away)
No doubt - the story is crucial,particularly if the numbers don't impress :); History shows that of 20 companies with great stories 18 fail one survive and one win.
I could see them as survivor, but am not yet convinced that they ever will be worth as much money as the share is currently traded for. I just don't see the growth a "growth" company would need.
But hey - that's what the speculation game is all about ... different people do see different aspects ;) and some win and some lose;
Still talking about medicinal cannabis
Cool .....should keep the interest up
http://www.sharechat.co.nz/article/f...viable-yethtml
Mr Market doesn't like it, share price down over 4%
Not enough believers in the story today... headlines not helping... gone from "Kiwi drug company AFT looks at medical cannabis opportunities as referendum nears" a month ago (when share price was just $1.70) to "AFT interested in medical cannabis but says its not commercially viable yet"... almost reads like a u-turn (share price still waay higher at least than $1.70)
Share price keeps pushing higher - $2.90 now - its highest point since November 2016, and only 10% off a record.
Almost hard to believe a mere 7 weeks ago it was down in the dumps at $1.70, a record low.
And ever since the mighty rebound in that 7 week period, volumes have been (and continue to be) substantially higher than any point in AFT's listed history... momentum and interest is certainly building, although won't rocket up (along with a rocketing share price) until the founder decides to make a placement to a broker(s) (who'll then turn around and publish research reports with $4 price target or something)
They say management pretty pleased and confident with AFT's recent results and position going forward, maybe that's why the share price has kept rising...
AGM 2nd August, as with every year, I'll be there... aside from the usual annual general meeting stuff (eg nice finger food), should get some free maxigesic as well
yeh some good buying interest into which I reduced one third, which was my speculative holding.
I thought it would be $3 by weeks end, but I was wrong, it is $3 now (a day early) and they still lining up at the $3 mark with just 1 guy left selling 230 shares at $3.20... in fact nearly 13.4k shares lined up above yesterdays closing price (of $2.90)
That's now alot, but it is alot for AFT, a company which had an average turn over of only a few thousand, until 7 ish weeks ago that is.
Imagine how nuts this is going to go when the brokers get some from the founder (in an orderly sell down) and need to push to their clients... might be higher than $4 price targets issued... but I'd be ok with a 12 month price target of $3 - that is 33% higher than todays price, and 135% higher than the price a mere 7 weeks ago.
I'm really not sure where re-rating came from. Business as usual without any surprise and it has to be a cannabis story they mentioned. If something goes wrong from the parliament with the weed, then what would happen to AFT SP?
It seems alot of people believe the share price has gone up solely because of the weed story posted 8 ish weeks ago... I don't believe this is entirely the case... AFT actually started talking about medical cannabis way back in August last year (maybe Mr Market missed this?)... instead I believe the share price has continued its rebound as a result of annual results... showing that if it can get its finance costs under control (which they say they are now addressing) it would have already been profitable to the tune of a few million... combined with the fact that top line is going to grow strongly over the coming year, margins probably expanding, gross profit growing in double digits, finance costs waay down... this will go from a small loss to a rather large profit (by AFT standards) which will likely continue to grow strongly... what I am saying is the medical cannabis stuff is just a bonus - their key product lines are going great, especially overseas, and Mr Market only just beginning to see the potential now.
Totally agree TJ
https://www.nzx.com/announcements/337220
So virtually $0 cost to AFT, with potential millions and millions in upside? Sounds good to me!
Reading between the lines, they are also saying the $9-$12m FY20 operating profit guidance is an absolute worst case scenario.... it could in fact be double that bottom ($9m) figure.
The excitement continues!
and (still) nothing to do with medical cannabis
Mention of the famous Mayo Clinic worth a bit to the share price I reckon
I keep a very good product in my car and medical chest .
It is "Crystaderm" a first aid cream.
Brought more the other day, and noticed it is distributed in NZ by AFT.
https://www.stuff.co.nz/business/ind...y-worth-us300m
Market cap is only $300m, they just signed a deal that could be worth that (on top of the $85m+ in annual revenues they already have)... Shares should definitely go up Monday, and with results due in 2020, $3 could be dirt cheap come this time next year (and if you got in at $1.70 a couple months back... well that was really stupidly cheap!)
Worst case (ie the deal is a complete failure), AFT has spent $0 and still has its existing product line (with double digit revenue growth since founding pa, and increasing margins)... best case... well the sky's the limit!
Substantial earnings growth in FY20, potentially game changing contract beginning in FY20/FY21 (with $0 cost to AFT), AGM in less than a months time... exciting times ahead!
The $300m is the market opportunity in USA for that disease, the deal struck is not anywhere near that kind of money. The deal is good. But the $300m number thrown around by media is sensationalist lazy reporting of the press release.
I think we will see some modest gains next week. Maybe to the 3.30 level or so we have already had great gains since the 1.70 level a few months ago. Just my thoughts
Share price up again, now at $3.15... less than 1.5% from an all time high now. Wow.
Probably will slip back to somewhere between $3 and $3.15, but after AGM will be probably be $3.30+... one thing is for sure: the naysayers probably still in denial.
BP , naysayer is someone who says no when you say yes.
Nothing perjorative there - unlike calling someone insecure or Trumpesque. Of course being like Trump could be a positive depending on your views.
I had an order in to sell a few more , but I've removed it now... still looks like someone is accumulating.
Nice try, but maybe your English is not as good as winner seems to imply. Merriam Webster defines "naysayer" as "a person who habitually expresses negative or pessimistic views". Clearly name calling of somebody who just has a different view than the poster in question.
BTW - the correct spelling of the difficult word you tried to use obviously would be "pejorative", coming from the Latin word "pejorare" (making worse) ... :p;
To answer Monty Python's famous question: this is something the Romans have done for the English ... they gave them amazing words they unfortunately find too difficult to properly use ;);
nothing worse than a spelling Nazi on the internet mate
I'm just making the point you should play the ball not the man and not be such a nitpicker which you just seem to love doing and taking to a ridiculous extreme. chill dude, its the internet
Yes , please thicken that skin a little BP. We dont want this site becoming a snowflake one.
Having a little chuckle visualising a snowflake pirate.:)
some very weird price depth on this stock recently.
buyers at 309 for example but only bidding for tiny amounts of stock
with next buyer way down at 271
and yet trading is going through in minuscule volumes at the 309 levels.
it seems to me one person is wanting stock and prepared to drive price higher but not prepared to declare how many they want so they dont get hit (I guess).
anyone else have a view on why this is happening?
https://www.nzx.com/announcements/342252
Exciting stuff they say.
No rumors winner - Hartley mentioned a year and a half ago (perhaps even longer ago) that AFT were interested in this sort of stuff.
Nobody was listening back then I suppose... wonder if they will sit up and take notice now.
Agree with your $10 forecast... and this will be within 5 years they say.
They have the experience and understanding to add real value to commericalisation of medicinal cannabis.
https://www.nzx.com/announcements/343669
Exciting stuff... NPAT for sure this financial year now they say.
oh come on you guys they just doubled forecast
(I'd certainly rather have one off valuation adds than negative extraordinarys)
https://www.nzx.com/announcements/342252
"The company recently purchased a 26-hectare greenfield site overlooking Lake Taupo to house its new facility, which is targeted to enter production in 2020 with an initial annual scaled production capacity of circa 17,000kg of dried flower for processing. SETEK recently acquired a cannabis genetics company and a horticultural LED lighting company,and seeks to become one of the world’s first carbon neutral indoor cannabis operators."
!7000 kg @ say $5000 a kg = $85,000,000. $5 a gram retail . How many grams will a person need in a dose?
17,000 kg @ $7500 a kg =$127,500,000
17000 kg @ $10,000 a kg= $170,000,000
With LED lighting what 3 crops a year? makes it $255 to $510 mill in sales.
Still if the referendum for marijuana use passes people will be able to grow it themselves with free sun , soil and water.
Yes but there will be alot of "Reefer Madness" misinformation going on which needs to be dispelled, the facts are all out there. amongst the spinners.
Cann group in aus are building a $130 mill 34,000 sq m greenhouse facility to produce 70,000 kg of dried flowerheads annually fetching $220 t0 $280 mill on current prices =A$ 3143 to $4000 a kg.
I'm seeing AFT operate more as the gatekeeper for the true cannabis producers in the sense that it helps them jump all the regulatory hurdles rather than growing plant material themselves.
Not that I know how they see it themselves just thinking out loud.
Jeez only a small percentage of a US$1billion market is BIG for AFT
Can’t seem to do anything wrong these days
http://nzx-prod-s7fsd7f98s.s3-websit...395/311993.pdf
share price pretty cheap really they say... Mr Market not only putting a value of $0 on the medical cannabis potential, but also not factoring in fantastic growth opportunities like this, all whist a NPAT is on the way, and operating cash flows are skyrocketing...
I'm not really a fan of using the whole market as a valid statistic though, I've noticed Pushpay and other companies using it to hype things up
Just coz I sell some thing there is a lot of demand for doesn't mean people are going to buy mine.
However the steady ongoing achievement of leaping over regulatory hurdles in many different part of the global market are what provides AFT with great potential in the future there is no denying that.
https://www.nzx.com/announcements/344670
wow NPAT (even without the one off gain) bigly revenue rise as well... Wow, great stuff all round.
All of a sudden AFT probably on a PE of 13 this financial year... cheap for a company growing revenues and profits by dozens of percent.
Real profit looks to about $120K to me.
Should I be running the ruler over the future of this company?
A fresh all time high for AFT today - and the buyers have to keep lining up.
Great stuff.
I'm still trying to figure out why it was nearly half the price it is today in mid April of this year.
no one really wanting to sell today.
500 available at $4
and someone with 50 who will sell at $7.50 !!!
Big climb today on the back of the codeine news.
Its funny to see the share price climbing so fast - on the back of no share trader ramp, insto pump or even price sensitive announcement... shows how conservatively priced AFT must be? (for a non price sensitive announcement to send the share price up over 6% - in fact this announcement was signaled a while back...)
Imagine what will happen when there is insto's on board... hartley probably won't sell out till 5 bucks + so free float won't increase much prior to then (CRG might sell out prior? but this would be only 13% or so increase in free float)... so assuming insto's and sharetrader and Mr Market in general will continue to largely ignore AFT till the free float increases, rather than buy now at $3.40 ish (or back in April at $1.70), I suppose Mr Market etc will wait for another year or two for the share price to get to $5+ (and then have the free float increase, hypothetically speaking) and then will buy in?
With positive operating cash flows and NPAT, I'm happy to wait... will be $10 in about 4-5 years from now they say and I'm happy to wait till then as well.... if I get a chance and it isn't taken over at $7 in 3-4 years time, but then again doubling one's money in a 3-4 year time frame wouldn't be a terrible outcome either I suppose.
Doing aussie and nz themselves and licensing the rest of the world out...what peb should have done for cx bladder....
the touting by the brokers (see 2020 predictions thread) certainly wont do the share price any harm this year.
It looks like buying depth a lot more solid than it used to be.
Not much left at 3.70. Then nothing reasonable. Lots of holders not letting any go.
Finished reading all the 2019 announcements and their results. Quite amazing achievement in 2019. Back in profit..a lot of contracts will benefit 2020 result ..am I missing anything here? Looking to buy in....I know years ago ipo at $3.10....
TJ ..are u still a holder?
I'm a holder in this.
Not many shares on offer at the mo. So should have a upward push on prices. Plus the results that will come out should help as well.
I have been a holder since IPO (which was at $2.80)... and have topped up almost every year to the point my average price is now in the low $2.
After 4 years of R&D an various other changes, 2019 was the year it all started to come together (in a big way) and that momentum will likely continue into the future.
It wasn't an instant success, falling all the way down to $1.70 not even a year ago, but I didn't buy a small parcel for a quick buck or for the new found 'weed potential'... I brought into AFT as it had a great product and product road map... the fact it was also a North Shore success story, had been profitable in the past, and had a stringent focus on keeping costs down (far from a start up that was going to blow it all and hope something works) were all 'nice' things as well (it really is one of the few actual growth companies on the NZX these days as well)
The only thing you're missing is action ;)
Thanks TJ....I saw if Setek canabis products go through...then would be billion dollars company..heaps of potential this year.... looking with interest and good timing to get in
Was the company really "in profit" though.. the "profit" was quite minimal once you remove "one-off non-cash gain of $9.8 million following its previously-announced acquisition of full control of its Pascomer assets"
Pascomer assets could be worth nothing commercially. I see this aspect of AFT as a gamble. Just my opinion though.
If Pascomer passed the testing the it will be a different story..expect it comes to fruition this year
Tj, do u think AFT will pay dividend in the next result? I see a lot of deals will benefit 2020 revenue. I think 2020 will be the year for AFT...
Thanks...do u know how many %of share that Dr Atkinson owns? I see they committed to hold the shares because they believe the future of the company....
Somewhere in the 80% ish range I think
Atkinson interests own 74.98% at last balance date, according to the Annual Report.
Wow...not many shares on the float then...that is great.....
Great report eh TJ...from independent research company that AFT not aware when it conducted...