PAZ Pharma Zen

[percy]

There we are,front page of The Chemist Warehouse mailer,right hand side' Aiora Bone -Joint 60 capsules $19.99 100% Natural New Zealand Ingredients.
Pharmazen NZ Ltd,Christchurch.

[Beagle]

Well with not a lot of buying support,and only three weeks until their 7th August announcement I put in an opportunist bid at 35 cents this morning. Woke someone up, who then topped me at 40 cents.Last sale price was 45 cents.Be interesting seeing what the next sale price will be.Even more interesting will be seeing whether the 7th August announcement will see the share price over 60 cents.?...lol.

SP and announcement not that far off now. Eight more sleeps to go. You've got heaps of these puppies so I suppose you feel a bit like a kid waiting for Christmas day ;)

[percy]

SP and announcement not that far off now. Eight more sleeps to go. You've got heaps of these puppies so I suppose you feel a bit like a kid waiting for Christmas day ;)

Yes ,however mixed emotions,from excited to very excited.
Great result ..............Happy.
Not so good...............Happy.
Very poor...................Will be happy waiting for the full year's result in February/March. knowing their 2nd half is always better than their first half.Will be interested in their commentary and outlook.A lot going on with expansion and new products.
Made a mistake in an earlier post.Said the equipment for a third extraction plant was sitting in their yard.Wrong, it is the new Marine Collagen plant.
Interesting noting PAZ's share price was 19 cents on 31st July 2019.Today 55 cents..Increase of 189.47%.Wonder what it will be on 31st July 2021.?
Yes my bid at 35 cents was opportunist.But some times it pays to be the highest bidder.

[whatsup]

Back to ATH @ .55, next cab is at .60, next results should be interesting .

[iceman]

Back to ATH @ .55, next cab is at .60, next results should be interesting .

The 55c all but cleaned out today

[Sideshow Bob]

The 55c all but cleaned out today

Oh, some of that would have been me.....

[iceman]

Oh, some of that would have been me.....

Well done :-). Not much on offer at all now

[Sideshow Bob]

Well done :-). Not much on offer at all now

Nothing through from my broker, and not sure but may have just missed them....;)

[macduffy]

Oh, some of that would have been me.....

And a few of them are me. But it's been a slog to accumulate a modest holding!

[percy]

Welcome onboard.
Gee Whiz PAZ's share register will be looking like a list of Sharetrader members.
Just need Vince on board, and then the train can leave the station.Toot toot....lol.

[Sideshow Bob]

Welcome onboard.
Gee Whiz PAZ's share register will be looking like a list of Sharetrader members.
Just need Vince on board, and then the train can leave the station.Toot toot....lol.

I am on board now.....a little belatedly considering been on the radar since ages ago....or at least since a much, much lower price!

But I did feel last year that Sharetraders were definitely response for the increasing price! I'll resist making fun of Sharsies and BGI - but absolutely no comparison between companies!!

[Apathy]

[QUOTE=percy;832879]Yes ,however mixed emotions,from excited to very excited.
Great result ..............Happy.
Not so good...............Happy.
Very poor...................Will be happy waiting for the full year's result

So......... what makes a not so good result and whats a Great result??

[percy]

EPS Growth back over 50% and increasing.New products already hitting the market .
EPS Growth over 40%.New products not hitting the market for 3 months.
EPS Growth under 40%.New products not hitting the market until next year.
Getting close to their result, one looks for things to worry about.My major concern is new equipment may not up and operating, as Chinese technicians may not have been able to travel because of Covid 19.If his is the case new products production will be delayed.
At a share price of 55 cents, I think we are all expecting a great result.
All of a sudden Friday seems a long way away.?..lol.

[Beagle]

For me its clear they are investing for major expansion in FY21 and beyond. I think taking into account the effects of Covid 19 and them gearing up significantly with capex and investment for major new growth initiatives and launching new brands and products I foresee FY20 as a year of consolidation building upon what they've achieved to date and looking to put in place the plant, equipment and infrastructure to massively expand in FY21.

I'm really excited about the future for PAZ. The pet supplements and treats sector is a truly massive total addressable market world-wide and with 100% clean and green N.Z. natural ingredients...

[percy]

For me its clear they are investing for major expansion in FY21 and beyond. I think taking into account the effects of Covid 19 and them gearing up significantly with capex and investment for major new growth initiatives and launching new brands and products I foresee FY20 as a year of consolidation building upon what they've achieved to date and looking to put in place the plant, equipment and infrastructure to massively expand in FY21.

I'm really excited about the future for PAZ. The pet supplements and treats sector is a truly massive total addressable market world-wide and with 100% clean and green N.Z. natural ingredients...

Excellent post....

[iceman]

For me its clear they are investing for major expansion in FY21 and beyond. I think taking into account the effects of Covid 19 and them gearing up significantly with capex and investment for major new growth initiatives and launching new brands and products I foresee FY20 as a year of consolidation building upon what they've achieved to date and looking to put in place the plant, equipment and infrastructure to massively expand in FY21.

I'm really excited about the future for PAZ. The pet supplements and treats sector is a truly massive total addressable market world-wide and with 100% clean and green N.Z. natural ingredients...

This is a good summary Beagle and they way I see it too. 2020 is the year we're dealing with COVID related issues, setting up factories for further growth and getting new products initial placements into the market. 2021-2023 (and beyond) is when we will see the big and exciting growth and moving onto the NZX

[percy]

https://usx.co.nz/uploads/paperclip/documents/2070/original/PharmaZen_H1_2020_Press_Release_.pdf?1596659417

A day early.
A cracker.
Incredible.

[iceman]

Thanks for posting this Percy. I wasn't even checking it as I expected this tomorrow. This result is absolutely outstanding. What is even more exciting is the bullish outlook and drive for further growth with new and increased production capacity for current products and others "still under wraps" !!

Despite great profits to fund the growth, clearly they will need to get more funding. They talk about a "strategic partner" in such a way that one has to assume this is already well advanced !
Hopefully they will also come to SH for some more cash. I most certainly would be happy to help in a small way to fund this great business.

[whatsup]

https://usx.co.nz/uploads/paperclip/documents/2070/original/PharmaZen_H1_2020_Press_Release_.pdf?1596659417

A day early.
A cracker.
Incredible.


Thank you Percy, one can read so many positives into this announcement all very good for the future.

[macduffy]

Yes, thanks, percy. A brilliant result and a great outlook!

[Beagle]

A truly outstanding result that exceeded my best expectations. Its well worth noting that PAZ has a history of very conservative forecasting, last year at this time they forecast $2.8m NPBT and did over $4m so their full year sales and EDITDA forecast for FY20 looks very conservative to me.

Net profit up 57% to $2.9m encompassing the full period of the Covid 19 lockdown...that's truly remarkable ! This company has such an exciting future.

[iceman]

A truly outstanding result that exceeded my best expectations. Its well worth noting that PAZ has a history of very conservative forecasting, last year at this time they forecast $2.8m NPBT and did over $4m so their full year sales and EDITDA forecast for FY20 looks very conservative to me.

Net profit up 57% to $2.9m encompassing the full period of the Covid 19 lockdown...that's truly remarkable ! This company has such an exciting future.

I agree about them being conservative in their forecasts. If we assume they achieve 57% increase in NPAT for the FY, then we are looking at a current PE of about 24-25 I reckon. Still pretty cheap for such a fast growth company !

[stoploss]

In Percys hands we trust :t_up:

[Beat the Bank]

How do we access this stock? Cannot find it on my ASB. I see it is on the unlisted site. Any help for a newbie would be appreciated. Thanks

[stoploss]

How do we access this stock? Cannot find it on my ASB. I see it is on the unlisted site. Any help for a newbie would be appreciated. Thanks
Only a broker can access the trading system for this site. With DB you have to sign a disclaimer first that you appreciate there are more risks involved with stocks on the unlisted market . Then orders are via phone !! Old school love it .
I might add, maybe with more risk there is more reward ....

[Beat the Bank]

Thanks so much stoploss

[iceman]

How do we access this stock? Cannot find it on my ASB. I see it is on the unlisted site. Any help for a newbie would be appreciated. Thanks

Here are the brokers that deal on the USX:
https://www.usx.co.nz/brokers

But I do note DB is not on that list but I use them. You can reach their broking desk on 0800 805777

[Beat the Bank]

Thanks Iceman. I phoned ASB and they do not offer it. I will try DB

[RupertBear]

WOW sensational! Thanks for bringing this wee gem to our attention Percy :)

[Joshuatree]

Up 9% to a new high 60c, expectations largely priced in atpit. Little vol, looks like many have this one tightly held, i sure have, imo one of a select few to ride through these covid times and come out on top and to sleep easy with.:t_up:

[iceman]

Up 9% to a new high 60c, expectations largely priced in atpit. Little vol, looks like many have this one tightly held, i sure have, imo one of a select few to ride through these covid times and come out on top and to sleep easy with.:t_up:

At 60c we're still only on fwd looking PE of 23-25 for FY21 in my view. Still a very good price for such a fast growth company that has doubled profit 2 years in a row and looking at a very good FY21 with the increased production capacity fully operational.

[macduffy]

Up 9% to a new high 60c, expectations largely priced in atpit. Little vol, looks like many have this one tightly held, i sure have, imo one of a select few to ride through these covid times and come out on top and to sleep easy with.:t_up:

Agree. Yes, tightly held, only 218m shares issued and directors, collectively, hold around 100m of them! I hold a miniscule number!

[Beagle]

At 60c we're still only on fwd looking PE of 23-25 for FY21 in my view. Still a very good price for such a fast growth company that has doubled profit 2 years in a row and looking at a very good FY21 with the increased production capacity fully operational.

I have normalized this result for Covid by assuming they simply broke even during lockdown in April. 6/5 x $2.9m gives $3.5m, i.e. (Estimated Covid effect $600K before tax)
Last year second half profit was 22% higher and I think with new product ranges coming on stream its quite conservative to forecast 2H profit for FY20 as $3.5m x 1.22 = $4.3m which gives a forecasted FY20 net profit before tax of $2.9m + $4.3m = $7.2m or more importantly looking at profitability going forward from there a normalized FY20 result for Covid effect of $7.8m before tax or $5.6m after tax which on 218.8m shares gives eps of 2.56 cps, approx 95% gain on FY19.

On that basis at 60 cents the shares trade on a forward PE of 23 so I concur with your workings and I also agree that the prospects for growth going forward in FY21 and beyond are very encouraging to say the least. For a company growing earnings per share at around 100% per annum (assuming they meet my profit expectations for FY20) and having superb growth prospects going forward I think a PE of 23 is on the cheap, bordering on very cheap side and I would think if this was listed on the main board the market would accord them a PE considerably higher than 23, possibly 40+.

Prior to today's result I had been modelling eps for FY20 of 1.8 - 2.0 cps and thought about 50 cents was fair value. This result taking into account all the effects of Covid (not just the specific lockdown effects in April), significantly exceeded my expectations. How many companies do you know of that can grow earnings per share in the six month period of Covid 19 at 57% !...for goodness sake that's absolutely remarkable !

Disc: Topped up a few more today at 55 cents because I think they're worth at least 60 cents.

[percy]

I have normalized this result for Covid by assuming they simply broke even during lockdown in April. 6/5 x $2.9m gives $3.5m, i.e. (Estimated Covid effect $600K before tax)
Last year second half profit was 22% higher and I think with new product ranges coming on stream its quite conservative to forecast 2H profit for FY20 as $3.5m x 1.22 = $4.3m which gives a forecasted FY20 net profit before tax of $2.9m + $4.3m = $7.2m or more importantly looking at profitability going forward from there a normalized FY20 result for Covid effect of $7.8m before tax or $5.6m after tax which on 218.8m shares gives eps of 2.56 cps, approx 95% gain on FY19.

On that basis at 60 cents the shares trade on a forward PE of 23 so I concur with your workings and I also agree that the prospects for growth going forward in FY21 and beyond are very encouraging to say the least. For a company growing earnings per share at around 100% per annum (assuming they meet my profit expectations for FY20) and having superb growth prospects going forward I think a PE of 23 is on the cheap, bordering on very cheap side and I would think if this was listed on the main board the market would accord them a PE considerably higher than 23, possibly 40+.

Prior to today's result I had been modelling eps for FY20 of 1.8 - 2.0 cps and thought about 50 cents was fair value. This result taking into account all the effects of Covid (not just the specific lockdown effects in April), significantly exceeded my expectations. How many companies do you know of that can grow earnings per share in the six month period of Covid 19 at 57% !...for goodness sake that's absolutely remarkable !

Disc: Topped up a few more today at 55 cents because I think they're worth at least 60 cents.

Thank you for sharing.
Yes their growth rate makes their PE ratio look ,[do not know the words I am looking for,] either modest or very reasonable.
Growth rate higher than their PE is great safety factor for investors.

[Beagle]

Thank you for sharing.
Yes their growth rate makes their PE ratio look ,[do not know the words I am looking for,] either modest or very reasonable.
Growth rate higher than their PE is great safety factor for investors.

eps growth rate FY19 111%, my forecast growth rate FY20 95% = average growth rate of 103%.
Forward PE is 23 so they are on a PEG ratio of 23/103 = 0.22.

(Anyone who doesn't understand PEG ratio's should google the term and do some homework)

A PEG ratio of 1 is very cheap in this market with interest rates at historic lows. A PEG ratio of 0.5 is an extraordinary opportunity and a PEG ratio of just 0.22 is just absurd value (wake me up I must be dreaming)... which is why I bought more today and very gladly contributed to volume being 11 times the daily average (the highest volume in many months) :D

[Rocky145]

Thanks for posting this Percy. I wasn't even checking it as I expected this tomorrow. This result is absolutely outstanding. What is even more exciting is the bullish outlook and drive for further growth with new and increased production capacity for current products and others "still under wraps" !!

Despite great profits to fund the growth, clearly they will need to get more funding. They talk about a "strategic partner" in such a way that one has to assume this is already well advanced !
Hopefully they will also come to SH for some more cash. I most certainly would be happy to help in a small way to fund this great business.

I see the strategic partner as a positive move, I am hoping this partnership should help with building a moat around the business. I am curious as to who this may be, my guess is a supplier of raw materials. With the margins being made from what is basically other businesses waste material they need to secure this supply and reduce potential competition. Speaking to Craig at the AGM a couple of years ago he saw JV's as one of there options for growth and securing supply.
The manufacturing is capital intensive, therefore sharing that load and guarantee supply is a win win, while focusing on the marketing and brand.
As for the results. - very happy exceeded my expectations, I like others didn't expect this strong for the 2020 year.
Yes Percy - we did meet at the AGM last year - pretty sure next years meeting will be more than the 10 of us sitting around the table in a BNZ meeting room. I am pleased to see this company getting the attention it deserves.
Disc. Wish I owned more and have no interest in selling anytime soon.

[iceman]

I see the strategic partner as a positive move, I am hoping this partnership should help with building a moat around the business. I am curious as to who this may be, my guess is a supplier of raw materials. With the margins being made from what is basically other businesses waste material they need to secure this supply and reduce potential competition. Speaking to Craig at the AGM a couple of years ago he saw JV's as one of there options for growth and securing supply.
The manufacturing is capital intensive, therefore sharing that load and guarantee supply is a win win, while focusing on the marketing and brand.
As for the results. - very happy exceeded my expectations, I like others didn't expect this strong for the 2020 year.
Yes Percy - we did meet at the AGM last year - pretty sure next years meeting will be more than the 10 of us sitting around the table in a BNZ meeting room. I am pleased to see this company getting the attention it deserves.
Disc. Wish I owned more and have no interest in selling anytime soon.

A good post and welcome to the forum.
I have also been thinking that it would be great if a new strategic partner is a reliable raw materials supplier. With the growth forecast in production, the raw material supply will potentially be a weak link. It would be great if they can secure this supply and as you say, focus on production, marketing a development of further products.

[percy]

I see the strategic partner as a positive move, I am hoping this partnership should help with building a moat around the business. I am curious as to who this may be, my guess is a supplier of raw materials. With the margins being made from what is basically other businesses waste material they need to secure this supply and reduce potential competition. Speaking to Craig at the AGM a couple of years ago he saw JV's as one of there options for growth and securing supply.
The manufacturing is capital intensive, therefore sharing that load and guarantee supply is a win win, while focusing on the marketing and brand.
As for the results. - very happy exceeded my expectations, I like others didn't expect this strong for the 2020 year.
Yes Percy - we did meet at the AGM last year - pretty sure next years meeting will be more than the 10 of us sitting around the table in a BNZ meeting room. I am pleased to see this company getting the attention it deserves.
Disc. Wish I owned more and have no interest in selling anytime soon.

I remember you.
Welcome to the forum.
Look forward to you posting often.

[stoploss]

Anyone want to test some of the company product ,it is on sale currently . Going to try some of the Blackcurrant and bone joint ones personally.
https://www.chemistwarehouse.co.nz/shop-online/4467/aiora

DISC : Holding

[Beagle]

Anyone want to test some of the company product ,it is on sale currently . Going to try some of the Blackcurrant and bone joint ones personally.
https://www.chemistwarehouse.co.nz/shop-online/4467/aiora

DISC : Holding

Thanks, I'm going to do the same. I reckon blackcurrants are an awesome super food. In an ideal world I'd have some fresh ones every day.

[iceman]

Anyone want to test some of the company product ,it is on sale currently . Going to try some of the Blackcurrant and bone joint ones personally.
https://www.chemistwarehouse.co.nz/shop-online/4467/aiora

DISC : Holding

Haha. I put in an order yesterday. Thought it timely to sample some of our products.

[Sideshow Bob]

Glad I bought into PAZ last week - thank you Percy. Probably paid about 40 cps more than should of but long-time lurker on this stock and I had some confusion with Botryzen.

Great result and very pleased to see continued traction. My feeling is that the forecast for FY seems a little on the conservative side - but happy with that and the under-promise/over-deliver mantra.

Seems they have their ducks in a row with production and future proofing for capacity - which is excellent, and obviously have the knowledge & capability in their processing.

Linking back into the supply chain seems wise - and think I have an inkling on the red meat side, but important especially if seeing continued growth in volumes - need raw material to process. Probably more importantly is the marketing, and has to be best in class (no judgement on this). I look to Blis and believe undoubtedly would have been alot more advanced had their marketing been better. If they have raw material, can process it then just leaves selling it - and those margins will start to get even juicier as volumes increase......

[whatsup]

Very impressive buying since the last report was released , 146,000 shares traded today on top of the 350,000 shares traded yesterday, word is getting out that PAZ has a substantial business and one for the future.

[Beagle]

Good to see good healthy two way business being done. Makes price discovery for any possible placement a lot easier.

[Arthur]

Bought some stuff to help with the algorithm, be a bonus if it works.

[percy]

Bought some stuff to help with the algorithm, be a bonus if it works.

Shares will hit $5.00 if it does....lol.

[Sideshow Bob]

From todays ODT. Nothing new and their "staff reporter" didn't have to work too hard, but good publicity.

https://www.odt.co.nz/business/record-half-year-profit-dunedin-founded-pharmazen

[iceman]

Very impressive buying since the last report was released , 146,000 shares traded today on top of the 350,000 shares traded yesterday, word is getting out that PAZ has a substantial business and one for the future.

Another 120k shares traded today. Looks like 60c is now well established

[Beagle]

300,000 changed hands today at 60 cents. Agreed, that's the new price benchmark...for now ;)

[100101]

All good but I am a little confused by the statement:-
We’re actively reviewing funding options to accelerate the process. The ability to maintain a very strong balance sheet through the growth and reinvestment stages provides multiple opportunities and while bank debt will form an important part, the option to bring in a strategic partner is one of several under consideration.”

I am far from knowledgable on these matters and wonder if anyone can enlighten me:-

What would such a partner contribute in product and or financials?
Would it cost PAZ's freedom so to speak?
And of course would the share price go up or be watered down?

Happily I stumbled on Paz years ago at $0.055 cents and after asb killed off the unlisted account, they just sit in the bottom draw.
Cheers

[percy]

Until any deal is announced it is hard to guess the answers to your questions.
I would guess they would want a major supplier onboard, to secure supply.Owning shares in PAZ would give the supplier a good incentive to keep supplying them.Paying a good price for that pleasure they will know it will be used by PAZ for expansion,,which will mean they can supply more product to PAZ..Who that supplier is, or what they will supply we will have to wait and see.
Meat processor,Green lip mussels,Blackcurrants,Kiwi fruit.Could be one of them.
With the directors and their families owning so many shares, they will not want their holdings diluted for no good reason.

[macduffy]

Could it be a partner with access to a more extensive distribution network? I admit I don't know enough about PAZ to know whether or not this would be a priority. percy's guess seems more likely? Any thoughts, percy or others?

Disc: Modest holding.

[percy]

Could it be a partner with access to a more extensive distribution network? I admit I don't know enough about PAZ to know whether or not this would be a priority. percy's guess seems more likely? Any thoughts, percy or others?

Disc: Modest holding.

Possibly.
PAZ's AiOra and The 5th Quarter products, are I think, really designed for the Asian market,particularly China.
So a Chinese distribution partner would work.But it does not tie in with them being a NZ manufacturer of NZ sourced ingredients.
Other thoughts.
I am aware of ANZCO's partnership with Ziwi Pet Foods.
"Ziwi has also partnered with ANZCO Foods to form a new joint venture operation producing pet treats and oral health products. The New Zealand Natural Chews and Treats Company will also operate out of the Burnham site.
It was ANZCO's first foray into the pet food segment and will be providing Ziwi with grass fed products."

And Scales Corp joint venture with Alliance Group.
https://stocknessmonster.com/announcements/scl.nzx-331627/

Talleys would work for PAZ,as they are meat,seafood and vegetable processors.

And ever hopeful me.I hold shares in Silver Fern Farms CoOp so should they turn out to be PAZ's supplier/partner...lol.

[macduffy]

Thanks, percy. Such possibilities! But would having a Chinese distribution partner need to clash with being a NZ manufacturer of NZ sourced ingredients if China is a major target market?

[percy]

Thanks, percy. Such possibilities! But would having a Chinese distribution partner need to clash with being a NZ manufacturer of NZ sourced ingredients if China is a major target market?

I guess not.

[Beagle]

Hey Percy, how many shares do the directors and their family trusts and interests control ? What percentage of the total shares is that ?
Without knowing the exact answer to that I know enough to be very comfortable conclude that its fair to say we can count on them to have a very strong vested interest in engineering the very best outcome of any possible placement or capital raise to supercharge this companies growth going forward.

[Tony Two Gloves]

Hi All - First time on this post and whilst late to the party still see a lot of run way here. I am in the strange position of being totally cashed up at present and was looking at opportunities yesterday to enter some of my favourite stocks but alas they are all more expensive now and my cunning plan of well priced entry on Monday has failed dismally. So am now keen to cast the net a bit wider and reading this forum this looks to be a great opportunity especially on the forward PE for a company with so much potential. Just a quick query......I look at BLT with a market Cap of $94M compared to PAZ at $125M and not sure if its a good comparison but I see a lot more potential with PAZ although not listed on the NZX or the same liquidity - would appreciate any thoughts?

[percy]

Hey Percy, how many shares do the directors and their family trusts and interests control ? What percentage of the total shares is that ?
Without knowing the exact answer to that I know enough to be very comfortable conclude that its fair to say we can count on them to have a very strong vested interest in engineering the very best outcome of any possible placement or capital raise to supercharge this companies growth going forward.
Total shares on issue are 218,779,344.
Directors and their families just over 107 mil shares,close to 49%.
Add in The Paterson family and a former director, say another 15.3 mil shares approx 7%
So the answer is approx 56%.However I would figure I have missed some so lets settle at close to 60%.

[percy]

Bid 28, no stock on offer, again. Lack of liquidity is kind of annoying as I watch the volume that BlIS trade in every day, that have a lower EBITDA.

Here's a real conversation starter that I have been keeping to myself for a couple of weeks. I compared the EBITDA multiple of BLIS with PAZ, noting PAZ is growing both their top line sales and EDITDA faster that BLIS and if PAZ were trading on the same EBITDA multiple as Blis, (this comparison was done when Blis were 8 cents) fair value for PAZ if listed on the main board would be...wait for it and this is definitely not a typo, $1.35 !!

Now Blis is 9.4 cents fair value for PAZ is $1.59 on a comparative basis. Right after I did this comparative I hoovered up the 50,000 at 30 cents that went through a while back. Anyone like to put some more up at 30 cents for sale and see what happens ?

Its time for PAZ to list on the NZX. Shareholders deserve the vastly better liquidity and to see their shares valued more appropriately. I hope the Directors act on this sooner rather than later.

Brought up Beagle's post #649 on page 33 posted 12/5/2020 for Tony Two Gloves.
Perhaps Beagle would be kind enough to update it.?

[Tony Two Gloves]

Brought up Beagle's post #649 on page 33 posted 12/5/2020 for Tony Two Gloves.
Perhaps Beagle would be kind enough to update it.?
Thanks Percy - that is very helpful info and thanks Beagle also for doing the calcs. Do many on here hold both?

[stoploss]

Can we rename the thread ?
Percy
Appreciation
Zone

TTG, plenty on here.......

[Beagle]

Brought up Beagle's post #649 on page 33 posted 12/5/2020 for Tony Two Gloves.
Perhaps Beagle would be kind enough to update it.?

60% vested interest in getting a great deal is quite something isn't it !

Updated situation on Blis is they grew profit very nicely by 320% for the year, (really have now built to a level of critical mass) and are now on a historic PE of 59 times v PAZ on an historic PE of 46 times.
Blis shares went backwards since that post in May but PAZ has doubled which I think underscores the value of my thinking that went into that post.

In relative terms the two shares seem much more sensibly aligned in terms of relative pricing now.

Blis's outlook statement at their recent annual meeting contained the following "Moving through the year we will continue to invest in both new market opportunities
but also our R & D pipeline to ensure this growth is sustainable into the future. In
line with this investment our full year guidance is to deliver sustained profitable
growth and an EBITDA similar to FY20". (EBITDA for them was up 130% last year and sales were up 29%).

Blis quite possibly not a bad bet now but I need to do a LOT more work on that one to see if its as robustly positioned as PAZ to cope with any possible future Covid issues.

[Tony Two Gloves]

60% vested interest in getting a great deal is quite something isn't it !

Updated situation on Blis is they grew profit very nicely by 320% for the year, (really have now built to a level of critical mass) and are now on a historic PE of 59 times v PAZ on an historic PE of 46 times.
Blis shares went backwards since that post in May but PAZ has doubled which I think underscores the value of my thinking that went into that post.

In relative terms the two shares seem much more sensibly aligned in terms of relative pricing now.

Blis's outlook statement at their recent annual meeting contained the following "Moving through the year we will continue to invest in both new market opportunities
but also our R & D pipeline to ensure this growth is sustainable into the future. In
line with this investment our full year guidance is to deliver sustained profitable
growth and an EBITDA similar to FY20". (EBITDA for them was up 130% last year and sales were up 29%).

Blis quite possibly not a bad bet now.
Thanks Beagle - I'm now officially a shareholder in PAZ and looking forward to hopefully a long term ride

[Beagle]

Thanks Beagle - I'm now officially a shareholder in PAZ and looking forward to hopefully a long term ride

Welcome aboard mate. The key here is to have lots of patience and simply let the compound annual growth in earnings build your wealth over the years ahead. I type this post just as much for your benefit as mine as sometimes I can be a very impatient dog...It goes against a Beagle's instincts to wait a long time for a big feed ;)

[couta1]

Topped up my last big lot at an avg price of 46.9c about 3 weeks before results come out courtesy of what appeared to be an estate sell down. PS-Beagle just keep your dirty paws off that sell button for at least 3 yrs, repeat to yourself, I must not sell over and over whilst looking in a mirror.

[Tony Two Gloves]

Welcome aboard mate. The key here is to have lots of patience and simply let the compound annual growth in earnings build your wealth over the years ahead. I type this post just as much for your benefit as mine as sometimes I can be a very impatient dog...It goes against a Beagle's instincts to wait a long time for a big feed ;)
Thanks very much - I believe it is customary to wait seven days before proceeding to commence ramping or does this not apply on Unlisted?? :p

[Beagle]

Thanks very much - I believe it is customary to wait seven days before proceeding to commence ramping or does this not apply on Unlisted?? :p

:lol: :lol:

[stoploss]

Thanks very much - I believe it is customary to wait seven days before proceeding to commence ramping or does this not apply on Unlisted?? :p

To be able to trade on unlisted you generally have to sign your life away first, so anything goes :t_up:

[percy]

Topped up my last big lot at an avg price of 46.9c about 3 weeks before results come out courtesy of what appeared to be an estate sell down. PS-Beagle just keep your dirty paws off that sell button for at least 3 yrs, repeat to yourself, I must not sell over and over whilst looking in a mirror.

Good buying, and sage advice we should all take on board.

Tony Two Gloves.Welcome a board.
History on this PAZ thread shows all ramping has been too conservative,so shoot for the moon.!!!...lol.

[Beat the Bank]

I joined the team yesterday at 56c after the run at 60c seemed to have stopped. It took a while to get up and running with DBroking as Paz not offered on ASB.
A good volume went through today at 55c so someone was keen to sell. Now to consider Silver Fern Farms and Beagle, we would love to hear further thoughts on Blis (or any other ideas) I have MET proceeds to invest and have enough OCA. Thanks to those who keep us well informed. (acknowledging DYOR)

[Beagle]

Beat the Bank - I love your user handle, well chosen and welcome on board with PAZ. For what its worth I bough more GNE yesterday, expected gross yield 7.5% and got back into HLG today at $4.12, expected gross yield 9%, both bought for yield with term deposit money that had matured that the bank "kindly" offered to reinvest for me at 1.5%.

Speaking of beating the bank, (which won't be hard in this instance), I have some more money maturing next month of Kiwibonds and was "completely blown away" by their "outstanding" reinvestment rate offer of 0.25% per annum (that's not a typo !!!!!)...so I need to come up with some more idea's and will run the ruler over Blis in due course.

Those coming on board at ~ 55 cents with PAZ have got themselves a real bargain in my view. My forecast is for eps of 2.4 - 2.5 cps this year up 90-100% on last year which itself was up over 100%. Forward PE at 55 cents is just 22 times for a company growing earnings at 100% per annum. That's quite frankly ridiculous, (normal for a market PE of over 50 for a company growing at 100%) and I expect the shares to hit $1 before the end of 2021.

[Beagle]

Topped up my last big lot at an avg price of 46.9c about 3 weeks before results come out courtesy of what appeared to be an estate sell down. PS-Beagle just keep your dirty paws off that sell button for at least 3 yrs, repeat to yourself, I must not sell over and over whilst looking in a mirror.

Dirty paws I love it :) You're quite right me ol mate. It might also be useful to tell myself while looking side on to the mirror with my fat belly fully extended, you don't need another big feed anytime soon :lol:

[percy]

Half page advert in today's Mainlander section of The Press ,for PAZ's AiOra range.
All 50% off at The Chemist Warehouse.

[Beagle]

Thanks for the reminder mate.
I just ordered a couple of the blackcurrant vascular, calcium and gut and brain ones and a bunch of other supplants and other vitamins from other manufacturers because I am fat and lazy and need all the support I can get :) Its not hard to spend $200+ at the Chemist warehouse !

[stoploss]

Half page advert in today's Mainlander section of The Press ,for PAZ's AiOra range.
All 50% off at The Chemist Warehouse.
Pity we can’t get 50% off the share price :t_up:

[Beagle]

Pity we can’t get 50% off the share price :t_up:

They ran that sale last year lol...sorry couldn't resist.

[Beagle]

Beat the Bank - I love your user handle, well chosen and welcome on board with PAZ. For what its worth I bough more GNE yesterday, expected gross yield 7.5% and got back into HLG today at $4.12, expected gross yield 9%, both bought for yield with term deposit money that had matured that the bank "kindly" offered to reinvest for me at 1.5%.

Speaking of beating the bank, (which won't be hard in this instance), I have some more money maturing next month of Kiwibonds and was "completely blown away" by their "outstanding" reinvestment rate offer of 0.25% per annum (that's not a typo !!!!!)...so I need to come up with some more idea's and will run the ruler over Blis in due course.

Those coming on board at ~ 55 cents with PAZ have got themselves a real bargain in my view. My forecast is for eps of 2.4 - 2.5 cps this year up 90-100% on last year which itself was up over 100%. Forward PE for FY20 at 55 cents is just 22 times for a company growing earnings at 100% per annum. That's quite frankly ridiculous, (normal for a market PE of over 50 for a company growing at 100%) and I expect the shares to hit $1 before the end of 2021.

Looks like the NZX is compromised for a while. Pretty sure the unlisted market is still working...might be worth revisiting the above post...some very nice gains I've had on GNE and HLG in just 9 days since that post...PAZ next ? If a company is growing earnings at 100% per annum then the shares are worth about 8% more each month. Hmmm...maybe we should be thinking about FY21 and FY22 earnings ?

P.S. Box from Chemist Warehouse arrived today choc-a-bloc full of PAZ goodies. Took one of everything with my lunch and I'm feeling super pumped !!

[Beagle]

https://www.aioranz.com/ These things really work !
I felt super yesterday afternoon...was almost bouncing off the walls and couldn't get my mind to stop thinking until just after midnight.
So effective its probably best to take them in the morning with breakfast so you can get to sleep at your normal bedtime.

[Beat the Bank]

[QUOTE=Beagle;839875]https://www.aioranz.com/ These things really work !
I felt super yesterday afternoon...was almost bouncing off the walls and couldn't get my mind to stop thinking until just after midnight.

Thanks for your comments Beagle. I hear that the Cannasouth product can assist with dealing to both the medicinal and financial highs you get from PAZ

[iceman]

[QUOTE=Beagle;839875]https://www.aioranz.com/ These things really work !
I felt super yesterday afternoon...was almost bouncing off the walls and couldn't get my mind to stop thinking until just after midnight.

Thanks for your comments Beagle. I hear that the Cannasouth product can assist with dealing to both the medicinal and financial highs you get from PAZ

Post of the week :-) Have a good weekend !!

[percy]

[

Thanks for your comments Beagle. I hear that the Cannasouth product can assist with dealing to both the medicinal and financial highs you get from PAZ[/QUOTE]

Agree with Iceman.
Post of the week.

[iceman]

Quite a few parcels of 20-25k shares been snapped up when offered over the last couple of weeks. Percy has given a likely explanation for this on the Skyline thread. Clearly shows that 53-55c range being a current floor on the SP that will hopefully hold until we get more announcements in March-April next year.

[Caribbean]

Beagle I would like to query you on your FY20 EPS estimates, would you care to share your assumptions?

To get an EPS of 2.4 cps they would need Revenue of circa 25million, assuming EBITDA and NPAT margins were inline with HY20 results and no dilution. Given guidance is "At least" 21million and EBITDA of 7.4 million giving an implied EBITDA margin of 35.2% which indicates a softening of margin for the second half I can't see 2.4 cps as being realistic.

My estimate for FY20 EPS ranges from 1.7 (conservative) to 2.1 cps (Bull case) so 30-62% EPS growth

Conservative
Revenue 21,000,000
EBITDA 7,400,000 (Implied margin guidance)
NPAT 3,549,000 (NPAT margin 16.9%)
EPS 1.7 cps

Bull case
Revenue 22,000,000
EBITDA 8,333,800 (margin inline with HY20)
NPAT 4,466,000 (margin inline with HY20) EPS 2.1 cps


Of course I'm happy to be proven wrong (On the upside)

[petty]

[QUOTE=Caribbean;844790]
giddaye.

I agree with you that Beagles revenue estimates might be a little optimistic. Although I hope he is right. I’m certainly not as bullish. I would however challenge your assumption that overheads and direct costs will remain proportionally the same. In my model I have further GM% growth and further ebit% growth.

GM % growth has been growing nicely over past three years and I wouldn’t be surprised to see this increase another 3%. Further I don’t expect overheads to grow at a proportionally same rate as revenue. I’d have a re-think of this and then play with revenue ‘scenario’s’ to get an estimate of EPS.

I’m really excited about the prospects for this company, just perhaps not as optimistic as the beagle. Woof woof.

[whome]

Finally completed induction into PAZ. Took a good few weeks but in now and have completed my 7 day non-ramping stand-down! Reporting for ST sled duty! Got burnt with a business venture in biologicals back in the 80’s so have been a bit gun-shy about entry. The extraordinary long lead times to get regulatory approval, like 5 years Min for FDA approval and no guarantees of success are the bane of this sector. PAZ has had this part for their collagen functionals sewn up now for many years and appear to supply a Very stable market demand, no mean feat. NZ’s bio disease free status ie no FMD, no mad cow disease (the worst for human use functionals), no rabies, no blue tongue - and on it goes, and long may we be free of these diseases. All this is a great moat for PAZ now they appear to have reached critical mass, I say ‘appear’ as I still have some past report reading to do, mainly comparing margins by year. I was given comfort to join after going over the latest reports and seeing the diversification into non animal origin products that considerably de-risks PAZ while still utilising their expertise in freeze drying and the Industrial scale they have reached with this. Talk of strategic partners throws up many names. I thought of NZ Pharmaceuticals who are Just south Of Palm Nth from where they export animal origin cholines and steroids. No idea who owns them now but there wouLd be market synergies when dealing with pharma customers when selling from lil ‘ol NZ way down under! However there are lots of other non animal origin options if the derisking strategy is followed. Here’s hoping the time has come for PAZ to shine - they deserve it. Look forward to a main board listing in time!

[Beagle]

Hi Austen,

WOW !!

I am modelling up this stock's eps for FY20
What do you think of these two assumptions ?

1. During the lockdown of April when sales reduced 45% for the month they probably only broke even for that month so the first half normalized profit would be 6/5 x $2.9m = $3.5m.

2. Last year second half net profit was 22% higher than first half. Considering new product launches then second half should be at least 22% higher than the normalized first half so second half profit should be normalized first half $3.5m x 1.22 = $4.3m so I get a full year profit forecast of $2.9m + $4.3m = $7.2m, which if we normalize this for the effects of Covid in the first half gives a normalized profit for FY20 of $3.5m + $4.3m = $7.8m.

$7.8m less tax = $5.6m = 2.6 cps, just on double last year which was more than double the year before that.

At the last traded price in decent volume of 55 cents PAZ appears to be on a forward normalized PE of 55 / 2.6 = just 21.

That seems very cheap considering their growth rate and outlook. Whoever bought more at 60 cents this morning is brave but probably very clever as FY21's profit could be an absolute cracker !!

Thanks again for putting me on to this stock, HUGELY appreciated.

Cheers
Roger
__________________________________________________ _______________________________________
I can not understand how they keep the momentum up.

"we
have also faced supply chain challenges, exchange rate volatility and difficulties accessing technical
support from our international network of equipment suppliers,”

I appreciate your figures.I think you are spot on taking the right approach of their April downturn.

As you noted second half is always a lot higher.

Funny although 22% to 23% higher seems a lot it could be even higher.

I think your looking more at next year and the following year is right.

Welcome aboard to the new young pups and please take your position at the rear of the dog sled pack and listen up carefully to the barking that went on behind the scenes between the big dogs up front on 6 August 2020.

The fact is I have taken no account of how well their new pet treats products might sell and yet the directors were very enthusiastic about this at their half year presentation. I think this is a pretty conservative approach and in Percy's reply he clearly thinks along similar lines.

PAZ has a history of being extremely conservative with its forecasting e.g. last year they forecasted $2.8m and did $4m.
I'm quite comfortable with my forecast whilst acknowledging its a very difficult company to create estimates for so probably best to call it an estimate. Its well worth noting that my estimate of 2.6 cps is normalized for the effects of Covid on their operation in April 2019. Take this normalization out and I am estimating reported eps of about 2.4 cps.

What is clear is that this company is building a base for strong growth in the years ahead.

[Beagle]

Just want to add a couple of extra thoughts to the above initial thinking, events that have evolved since 6 August and other factors additional to the above.
Above analysis was back of the envelope stuff and essentially made an assumption with the effects of Covid 19 they merely broke even during April 2019, so the gross up of profit 6/5 to get to normalised profit of $3.5m for the half (which would have been up 90% rather than the reported 57%) took no other account of the Covid effect. That's a pretty conservative position as its clear upon further thought that the company shuttered its operations on 23 March and wouldn't have been 100% operational in May either, (were operating at 80% under Covid protection protocols).

Its clear there were impacts to March and May 2019 as well as April but further to that its clear they delayed the launch of the 5th Quarter brand due to Covid.

With the 5th Quarter brand now scheduled to be released in the current half, production in full swing, new pet treats range being released, Aiora range released late in 2019 and hopefully building brand awareness and momentum and assuming we can get a full six months production without further Covid interruption, despite the higher currency which will have some effect on margin in the second half I remain comfortable with my estimate of 2.4 cps reported or 2.6 cps Covid adjusted.

I think eps growth of 57% in the first half when one considers all the unprecedented challenges of coping with the Covid 19 is quite remarkable.

[iceman]

Quite a few parcels of 20-25k shares been snapped up when offered over the last couple of weeks. Percy has given a likely explanation for this on the Skyline thread. Clearly shows that 53-55c range being a current floor on the SP that will hopefully hold until we get more announcements in March-April next year.

They just keep on coming and being snapped up. Interesting to watch

[Entrep]

What’s the best way to buy these? If I have a direct broking account, maybe through Jarden?

[stoploss]

What’s the best way to buy these? If I have a direct broking account, maybe through Jarden?
Yes, you need to place the order over the phone with them .
Firstly sign your life away on this form and send it to them .
https://www.directbroking.co.nz/DirectTrade/Downloads/DirectTrade/DL1%20Investor%20Information%20and%20Disclaimer%20 Form.pdf?version=20200924

[iceman]

What’s the best way to buy these? If I have a direct broking account, maybe through Jarden?

DB 0800 805777. Easy, once you’ve signed up

[percy]

Mr McIntosh said these opportunities had led the company to accelerate expansion plans. In June it
started construction on a 1000sqm facility on its Christchurch site.
“By the end of 2020 PharmaZen’s manufacturing operation will have transformed from the original
800sqm factory to facilities encompassing more than 4000sqm of production.”

Just driven past PAZ on my weekly inspection.[lol]
After weeks of work on the new factory's ground work foundations, it is pleasing to see the big concrete floor pour is now completed.Think things will move along quickly now.

[Beagle]

Sounds good Percy. If they keep doubling profit every year it won't take all that long for the share price to be $2. :t_up:

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12370955

[percy]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12370955

Thanks to ChCH Library "Press Reader" I managed to access the article.
Certainly would make it very easy for PAZ to shift to NZX.

[Beagle]

Thanks to ChCH Library "Press Reader" I managed to access the article.
Certainly would make it very easy for PAZ to shift to NZX.

Yes it certainly does. Time for PAZ to do the placement deal they have been rumoring and list on the NZX I reckon.

[Beagle]

https://www.chemistwarehouse.co.nz/buy/98709/aiora-vascular-vision-blackcurrant-30-capsules

I think of the new Aiora range these are my favorite and I reckon they really make a positive difference to my eyes. Lot less eye strain and issues with eye focus and eye tiredness and I'm not getting the problems I occasionally used to get with my eyes in this regard https://www.mayoclinic.org/diseases-conditions/subconjunctival-hemorrhage/symptoms-causes/syc-20353826.

Not cheap at nearly a $1 a tablet but really worth it in my opinion.

Wouldn't surprise me in the slightest if this new range is going gangbusters but I guess we have to wait until late March or early April 2021 to find out more.

[whatsup]

Lazy me but when are we expecting the next release of the financials, early next year ?

[percy]

Lazy me but when are we expecting the next release of the financials, early next year ?

As Beagle posted late March or early April next year.

[stoploss]

Beagle I know you like a bargain
https://www.chemistwarehouse.co.nz/search?searchtext=Aiora&searchmode=allwords

[Beagle]

Beagle I know you like a bargain
https://www.chemistwarehouse.co.nz/search?searchtext=Aiora&searchmode=allwords

Thank you I do. I like the Vascular + Vision and the Gut and Brain ones in particular, (ordered some more). As well as those I have been taking Micro Genics 10,000 mg odorless Garlic tablets on the recommendation of Couta1, thanks mate, and Swisse wild oil fish tablets, (take 10 a day, don't muck about with smaller quantities of those, took me years to learn that), as well as Blackmores executive B stress tablets. I feel like a supplements junkie lol

Got a really good blood pressure reading from the Doctor yesterday, (for a somewhat fat, older and stressed dog) but I am now confused as to which of the above is doing the trick so have to keep taking them all :t_up:

[percy]

Progress is being made on the new additional factory at PAZ's Port Hills site.
Concrete floor finished, and the steel frame work is in place.
Today when I drove past I was expecting to see the roof being worked on,but instead I see they are well under way on one of the walls.Going by the number of cars, staff numbers have increased.

I have recently started using AiOra Bone + joint capsules.My worn out hip is a lot better and walking is a lot easier .Still early days,but so far I am impressed with the results.Taking two a day.

[stoploss]

Progress is being made on the new additional factory at PAZ's Port Hills site.
Concrete floor finished, and the steel frame work is in place.
Today when I drove past I was expecting to see the roof being worked on,but instead I see they are well under way on one of the walls.Going by the number of cars, staff numbers have increased.

I have recently started using AiOra Bone + joint capsules.My worn out hip is a lot better and walking is a lot easier .Still early days,but so far I am impressed with the results.Taking two a day.
Percy do you have a new job , site foreman ?

[Beagle]

Progress is being made on the new additional factory at PAZ's Port Hills site.
Concrete floor finished, and the steel frame work is in place.
Today when I drove past I was expecting to see the roof being worked on,but instead I see they are well under way on one of the walls.Going by the number of cars, staff numbers have increased.

I have recently started using AiOra Bone + joint capsules.My worn out hip is a lot better and walking is a lot easier .Still early days,but so far I am impressed with the results.Taking two a day.

Thanks. Good to know. Might get Mrs B on to them...both her knees are not the best. Appreciate the update on construction. It would seem we're "building" a promising future.

[percy]

My right hand hip will most probably need replacing at some stage.Since stopping selling books it has improved

3 years ago Xrays showed it will need to be replaced at some stage.Doctor said they do not replace until it needs to be done ,even going private.

I was told to try Glucosamine tablets.You start with 2 a day then go onto 1 a day.They seemed to help.

I started taking 2 Aiora Bone+ Joint tablets a few days ago.

I have 1 glucosamine tablet first thing in the morning and two Aiora tablets at lunch time.

The results so far with the Aiora tablets have been out standing.

Walking freely without any discomfort.

Early days,yet I think they are really doing the trick.

[Beagle]

That's really awesome news Percy. I am really happy for you. A bad hip can really undermine one's quality of life. I just ordered some for Mrs B. Really hoping it makes a big difference for her. My new shipment of 2 x Vascular and vision and gut and brain tablets arrived this afternoon. I can really notice the difference with eye strain and vision clarity with the Vascular + Vision tablets.

[macduffy]

Now, if I wasn't a shareholder too, I'd swear that you two were in cahoots running a snakeoil game!

;)

No, just kidding. If I didn't take so many "conventional" drugs and wary of the side effects I'd be trialling some of the PAZ pills too.

[percy]

I sent basically post #855 to Craig McIntosh, CEO of PAZ.and below is his reply.The AiOra product I am using is their Bone + Joint.capsules

"This is great to read – it’s a really good product and what I like is most people see the results pretty quickly in terms of hair and nails – nails especially you can see get stronger and grow faster and I always say if it does that for the bits you can see then its got to be doing good for the other bits.
Normally for pain we point people to greenshell mussel but the bone and joint is I think a repair and lubricate job – 3 types of collagen plus calcium."

macduffy;I would suggest you order some from The Chemist Warehouse, and when they arrive show the ingredients label to your doctor,before you start on them.If he does not want you on them, give them to a friend who has either a dodgy knee or hip.

[Caribbean]

How many more shares does that large holder have who has been selling down?

[couta1]

How many more shares does that large holder have who has been selling down? Percy has an awful lot.:cool:

[percy]

How many more shares does that large holder have who has been selling down?

If it is the person I think it,and he is selling for estate reasons [his wife died recently] he has a long way to go, as he held just over 6 million shares in three separate entities.He brought in at 7 cents and topped up at 14 cents.If it is not him, there are a few holders who hold 500 thousand shares,so could be one of them. If it is one of them, they have not many more left to sell.We know it is not one of the directors or any of their family.I doubt we will see another full shareholders list until April next year,so until then I am only guessing.
couta1.I have only ever brought PAZ shares.

[peat]

remember Promisia tho... supplements can work well and then regulators have a hissy fit.

[couta1]

If it is the person I think it,and he is selling for estate reasons [his wife died recently] he has a long way to go, as he held just over 6 million shares in three separate entities.He brought in at 7 cents and topped up at 14 cents.If it is not him, there are a few holders who hold 500 thousand shares,so could be one of them.We know it is not one of the directors or any of their family.
couta1.I have only ever brought PAZ shares. Yes the good times have only just started for this company. PS-I picked up quite a few during the last estate sell down in July and got my holding over that 500k mark.

[percy]

Yes the good times have only just started for this company. PS-I picked up quite a few during the last estate sell down in July and got my holding over that 500k mark.

Must admit somehow I feel you are "well positioned"...lol.

[Caribbean]

Appreciate your thoughts Percy, cheers. In the meantime ill keep doing my part.
A lot to look forward to in 2021 for PAZ

[petty]

Not sure if others have views on this but I would love to see PAZ increase (double) their marketing as % of sales from currently 4.2% to 8%ish. I would suspect their product category, previous growth and future growth aspirations would warrant additional spend in this area. Consider ATM, (and let this not be about ATM. Jeez enough of a debacle on the ATM thread at the moment) but they spend circa 10-12% of revenue on marketing. 2.5 times PAZ. Now I'm in now way comparing companies nor suggesting they are like ATM but I would have thought additional spend in this area would be capital well invested?
Thoughts?

[percy]

https://www.usx.co.nz/uploads/paperclip/documents/1822/original/Gregory_Paul_Shepherd_Bio_-_MF.pdf?1559179894
Above is director Greg Shepherd Bio.
Pretty experienced.

[iceman]

Not sure if others have views on this but I would love to see PAZ increase (double) their marketing as % of sales from currently 4.2% to 8%ish. I would suspect their product category, previous growth and future growth aspirations would warrant additional spend in this area. Consider ATM, (and let this not be about ATM. Jeez enough of a debacle on the ATM thread at the moment) but they spend circa 10-12% of revenue on marketing. 2.5 times PAZ. Now I'm in now way comparing companies nor suggesting they are like ATM but I would have thought additional spend in this area would be capital well invested?
Thoughts?

I don’t think there is any need for that at the moment. We’re currently building increased production capacity and securing sufficient and stable supply. Increased marketing spend may be required when
new production lines are fully up and running

[Beagle]

https://www.usx.co.nz/uploads/paperclip/documents/1822/original/Gregory_Paul_Shepherd_Bio_-_MF.pdf?1559179894
Above is director Greg Shepherd Bio.
Pretty experienced.

Very impressive indeed. Very rare for a small company like PAZ to be able to attract that sort of highly experienced talent !!

I can't help wondering how their new pet treats division is starting to ramp up ? Many people are totally crazy about their pets and no treat is too good for their family member. Of course I can't say I am unbiased so I could just be projecting my own love of dogs. Owning dogs is so much more rewarding than having kids, (oh my goodness did I really say that out loud) :blush:

[whatsup]

https://www.usx.co.nz/uploads/paperclip/documents/1822/original/Gregory_Paul_Shepherd_Bio_-_MF.pdf?1559179894
Above is director Greg Shepherd Bio.
Pretty experienced.

What a great coup in
a) attraction Greg and
b) hiring him ,
I expect good achievements from this appointment, well done management.,

[iceman]

Just to be clear Greg has been a Director for 18 months, so not a new appointment

[McPussPuss]

There is a lot of volume going through on a regular basis. The price is holding firm nicely against this possible estate liquidation.

Obviously some astute investors are getting 'well positioned' for the promising 12 months ahead.

[Arthur]

Very impressive indeed. Very rare for a small company like PAZ to be able to attract that sort of highly experienced talent !!

I can't help wondering how their new pet treats division is starting to ramp up ? Many people are totally crazy about their pets and no treat is too good for their family member. Of course I can't say I am unbiased so I could just be projecting my own love of dogs. Owning dogs is so much more rewarding than having kids, (oh my goodness did I really say that out loud) :blush:

Is he related to Dr Max Shepherd? (founding chair)

[percy]

Is he related to Dr Max Shepherd? (founding chair)

Yes ,son..............................

[Mr Slothbear]

I was just having a look on the Christchurchnclinical studies trust website and came across results of a very new study relevant to PAZ

The study compares effectiveness of greenshell mussell oil vs powder vs half shells mussells. Must say looks good for PAZ’s GSM powder

https://www.ccst.co.nz/new-ccst-publication-bio-availability-of-lipid-compounds-in-dy-in-greenshell-musselsof/

https://www.ccst.co.nz/wp-content/uploads/2020/10/marinedrugs-18-00524-v2.pdf

[Beagle]

I was just having a look on the Christchurchnclinical studies trust website and came across results of a very new study relevant to PAZ

The study compares effectiveness of greenshell mussell oil vs powder vs half shells mussells. Must say looks good for PAZ’s GSM powder

https://www.ccst.co.nz/new-ccst-publication-bio-availability-of-lipid-compounds-in-dy-in-greenshell-musselsof/

https://www.ccst.co.nz/wp-content/uploads/2020/10/marinedrugs-18-00524-v2.pdf

Dog gone it...no way I am going to run my sniffer over all that. I'll take you word for it. Got to have patience with this one. Don't think there will be any major announcement before the annual result in late March / early April 2021...which in the overall scheme of things isn't that far away.
Radius healthcare coming to the main board without forecasts and without new shares being issued provides an interesting precedent though !

[percy]

A friend of mine was talking at HLG's, agm to the person I thought was the big seller.No not him, so I remain in the dark.

[stoploss]

A friend of mine was talking at HLG's, agm to the person I thought was the big seller.No not him, so I remain in the dark.

Can you get hold of another shareholders list ?

[percy]

Can you get hold of another shareholders list ?

Not until it is updated at the companies office.
Most probably be available at the end of March.

[iceman]

I've noticed for the last couple of days that the USX is showing an equal number of shares (18700) at 53c on both the bid and offer sides. Why has this not been matched up ? https://www.usx.co.nz/symbol/paz

[Southern Lad]

I've noticed for the last couple of days that the USX is showing an equal number of shares (18700) at 53c on both the bid and offer sides. Why has this not been matched up ? https://www.usx.co.nz/symbol/paz

There are also unmatched buy and sells on PAL and TVV, which suggests to me their trading platform is down. It was very slow yesterday. Haven’t seen any comment or announcement but I have my suspicions.

[Sideshow Bob]

There are also unmatched buy and sells on PAL and TVV, which suggests to me their trading platform is down. It was very slow yesterday. Haven’t seen any comment or announcement but I have my suspicions.

Announcement from USX this morning:

We have put the USX market in halt this morning while we complete some final checks in relation to the issues experienced over the last two days

[iceman]

Announcement from USX this morning:

We have put the USX market in halt this morning while we complete some final checks in relation to the issues experienced over the last two days

I see USX is running some dummy trades today testing their platform. I wonder if they've come under attack like the NZX some weeks back. Interestingly when I recently traveled to Argentina, I could not look up the USX from here, despite always having been able to do that in the past. I contacted them and got a quick reply telling me they did notice suspicious overseas activity recently and shut down access from many countries. They opened access for me within minutes from my current location !!

[sampson]

Yeah, I'm overseas and they introduced some extra security a week or so ago. Can still access but have to go through the CAPTCHA process - click all the boxes with traffic lights yadda yadda.

[iceman]

Yeah, I'm overseas and they introduced some extra security a week or so ago. Can still access but have to go through the CAPTCHA process - click all the boxes with traffic lights yadda yadda.

Yep the bloody bicycles and trains just to get to this:
"This website is under heavy load (queue full)
We're sorry, too many people are accessing this website at the same time. We're working on this problem. Please try again later."

[percy]

Some are getting through, as the buy side for PAZ and SFF is growing..
Looks to me as though a number of savvy investors want to be "well positioned" for Christmas, and the huge year both companies are going to have in 2021....lol.

[iceman]

Surprising to see a trade go through at 55c this morning when we've had a standing bid for 56c for several days and it is still there. I wouldn't be happy as the seller !

[percy]

Surprising to see a trade go through at 55c this morning when we've had a standing bid for 56c for several days and it is still there. I wouldn't be happy as the seller !

I would be less happy if I was the buyer at 56 cents.
This happens far too often on USX.

[peat]

This happens far too often on USX.

there is a reason one signs an extra disclaimer!

[percy]

there is a reason one signs an extra disclaimer!

Agreed.
However I have sent them an email pointing out they devalue their market in my opinion.

[iceman]

Agreed.
However I have sent them an email pointing out they devalue their market in my opinion.

Well done Percy. We need to stay on their case to fix this. It's no good and unfair on both buyers and sellers and, as you say, devalues their platform.

[percy]

Well done Percy. We need to stay on their case to fix this. It's no good and unfair on both buyers and sellers and, as you say, devalues their platform.

Pleased to get a prompt reply from David Wallace;
"Thank you for your email.Your comments are noted,and we will talk with the broker involved."

[Beat the Bank]

Sorry iceman and Percy. You can relax. I had an order in for 53c before their platform collapsed. I was the highest Buy order. I saw someone post on here that sales weren't going through and kept an eye on it. Thanks. When their platform came back up there were three sales at the same time, one for my price of 53 and two for 55c. I phoned Direct Broking and they said they had not been notified and my order was still on the market. I insisted that no one should have had a sale at that price except me as I was the top of the queue. Offer prices had since increased. They looked into it and said it wasn't me but should have been. They sorted it for me somehow and a transaction was made giving me the number of shares that went through today, at my offer price of 53c. I think the price shown of 55 c was them sorting me out and using the last price traded so as not to distort the market. Two parcels in now. Hope it goes well. Thanks Percy for your input. Yes the platform is confusing. And Jardens has the share price on my portfolio at 50 c not 55c.

[percy]

Pleasing knowing Jardens sorted it out fairly for you.Interesting exercise you went through.
Do not think USX would like to upset Jardens.
The 50 cents.Hope they don't know something were don't...lol.
And yes it must have been hard for USX sorting out the issues they had.
Everything there seems to be back to normal.

[Beat the Bank]

Yes. All well sorted for my trade. Hopefully Iceman content too. Go the share trader community. (Well this part, not HLG forum!). Problem solved. Good that we can keep everything transparent and that there is no conspiracy

[iceman]

Thanks Beat The Bank. Great to know it was sorted but clearly shows they have some issues. I've contacted USX on a few occasions with small glitches and they have been very quick to attend to them, so I suppose we are being listened to, which is good.

With regards to Jarden, I normally mention to them when I place orders on the phone with them on the USX that it would be good if they regularly (such as monthly) update the SP on their website. They've told me they have to do this manually in their system as the USX does not have an automatic interface and on several occasions they have updated the price when I've asked them. So I suggest others do the same and ask them to regularly update prices in our portfolios.
Sharesight is the same and will record only your last purchase price and they have not been as willing to adjust prices manually despite several requests. Annoying.

On another issue, I read today about the expansion of Chemist Warehouse in China and now opening first store in Ireland with more European stores planned. Lets hope Pharmazen products will be on this bandwagon and get an easy & cheap boost to our export sales.
https://extra.ie/2020/12/16/business/jobs/chemist-warehouse-30-jobs-blanchardstown/amp

[stoploss]

I Wish I got a free share for everyone I purchased ....
https://www.chemistwarehouse.co.nz/Shop-Online/4467/AiOra?utm_source=edm&utm_medium=email&utm_campaign=BoxingDayCat_1

[iceman]

I Wish I got a free share for everyone I purchased ....
https://www.chemistwarehouse.co.nz/Shop-Online/4467/AiOra?utm_source=edm&utm_medium=email&utm_campaign=BoxingDayCat_1

You beat me to it. Just stocked up for the year for the family :-)

[percy]

Thanks Stoploss and Iceman I brought a good supply of my AiOra Bone + Joint tablets.
Interesting seeing ongoing buying support at 56 cents for 100,000 shares and pleasing seeing 25,000 traded this morning at 59 cents.

[iceman]

Thanks Stoploss and Iceman I brought a good supply of my AiOra Bone + Joint tablets.
Interesting seeing ongoing buying support at 56 cents for 100,000 shares and pleasing seeing 25,000 traded this morning at 59 cents.

Yes we continue seeing those 25,000 shares parcels pop up on the sell side as they have for a few weeks now. But good that support has held at current level despite that. 2021 should be a good one for PAZ with the new factory in production (and us SH also loyal customers :) ) at some stage during the year. The big question is, will we see work starting on a move to the NZX !!!

[Langara]

$14 million just raised through a European investment fund at 40 cents a share. Interesting they didn’t come to their current shareholders. I guess they must get access to solid expertise to manage the huge growth potential ahead.
Ramp up of new facilities will be on a very large scale by the looks.

[iceman]

This is an interesting development. We've been pondering here that they may raise capital by bringing onboard one of their large suppliers, not a European investmend fund. I suppose we have to do a bit of reading up on the Cibus Fund now.

I am a bit surprised they are issuing the new shares at such a large discount to market price but have full faith in the management and Board to do the right thing.
The announcement is very bullish and I find these paragraphs of particular interest;

# Christchurch biotechnology company PharmaZen has raised $14.0 million from an international agri-technology fund to expand its operations amid surging global demand for its nutraceutical products. Its portfolio of ingredients covers joint, bone, muscle and digestive health, along with marine and bovine collagen and animal nutrition.

# PharmaZen is issuing the Cibus Fund 35 million new shares, equating to a 13.8% stake in the company, at 40 cents a share. The issue price, which represents a 13.1% discount to the volume weighted average price of the last 12 months, recognises the size of ADM Capital Europe’s investment and the significant expertise ADM Capital Europe offers in helping PharmaZen achieve its ambitions. (and a Board member)

# “Building capacity from cashflow and additional debt has made it a challenge keeping up with growth in demand. These funds provide us with the capacity to make transformative investments that will future-proof existing business growth opportunities while enabling us to accelerate future projects.”

# The Cibus capital will go into building a new 3,000 sqm production facility on PharmaZen’s recently purchased 1ha property in Rolleston. Construction of the facility is planned to begin in February and be operational August 2021. Once complete, it would house three more two tonne freeze dryers as well as new extraction facilities and an expanded marine collagen plant.
PharmaZen is also planning to exercise its option to purchase another hectare alongside the existing Rolleston site with plans for a further 3,000 sqm factory currently being designed with a scheduled build date of mid-2021. This new facility will be purpose built to house six two tonne freeze dryers specifically for high value pet products.


The last paragraph says they intend to build 2 new facilities at Rolleston and install 9 new two tonne freeze dryer. Holy crap is all I can say !! They sure are planning for some serious growth in the near future.

[Mr Slothbear]

Thanks for alerting me to this Iceman.

well sounds like things are going very well and happy with the capital plans but not so sure theres much benefit from having that fund on board unless theres synergies available they’re not telling us. Would have been happy with a supplier or distributor taking a position but would have prefered they asked us before just offering discounts to a fund.

[Baa_Baa]

Thanks for alerting me to this Iceman.

well sounds like things are going very well and happy with the capital plans but not so sure theres much benefit from having that fund on board unless theres synergies available they’re not telling us. Would have been happy with a supplier or distributor taking a position but would have prefered they asked us before just offering discounts to a fund.

Agree, first blush am disappointed with the choice of new shareholder, the raise discount to market and the dilution, the amount raised would appear to be within reach of existing shareholders. Is this showing a lack of experience in capital management/raisings? Bear in mind 2019/20 saw a significant run up in SP, clearly signs of confidence and some substantial money, surely they should've come to existing shareholders with a cunning plan and given the opportunity to further support the company, or avoid the dilution.

Keen to hear what other shareholders think.

[iceman]

For the record I agree with you Baa Baa and Slothbear. I think existing SH should have been offered to participate pro-rata to avoid dilution. But I want to find out more about this fund and what it is that PAZ management and Board have taken into account that we do not know about and is not at all clear in the announcement.

p.s. Interestingly the only sell offer on the USX that has been sitting there for awhile, has disappeared and no offers available now.

[Beat the Bank]

Agree, first blush am disappointed with the choice of new shareholder, the raise discount to market and the dilution, the amount raised would appear to be within reach of existing shareholders. Is this showing a lack of experience in capital management/raisings? Bear in mind 2019/20 saw a significant run up in SP, clearly signs of confidence and some substantial money, surely they should've come to existing shareholders with a cunning plan and given the opportunity to further support the company, or avoid the dilution.

Keen to hear what other shareholders think.
As a newcomer at around 55cents, I am very disappointed at the price. I hope they are bringing something else to the table. A local fundraising would have lifted their profile and brand awareness. Time will tell. I will stick with it but am more cautious now

[whatsup]

With todays ann I wonder who would be game to put up any shares on offer and @ what price?

[percy]

The capital raised together with retained earnings will see production triple over the next couple of years.
Strengthens the balance sheet,and means PAZ can get on with all their capital projects.
Cibus Capital have spent a lot of time [about a year] doing audits,not just financial.They have access to expertise and good world wide contacts.
Exciting being in the right company, in the right sector, at the right time.

[whatsup]

The capital raised together with retained earnings will see production triple over the next couple of years.
Strengthens the balance sheet,and means PAZ can get on with all their capital projects.
Cibus Capital have spent a lot of time [about a year] doing audits,not just financial.They have access to expertise and good world wide contacts.
Exciting being in the right company, in the right sector, at the right time.

Could there be an outside chance that we could be offered a SPP.

I asked at the virtual meeting of the chance of a C R , answer was not at present, I guess that was then and this is NOW !! DAMM !.

[percy]

Could there be an outside chance that we could be offered a SPP.

I asked at the virtual meeting of the chance of a C R , answer was not at present, I guess that was then and this is NOW !! DAMM !.

I very much doubt it.
This capital injection,together with retained earnings, will fund PAZ's capital program,which I take will be approx $25mil.
Freight inwards and outwards remains a world wide issue.
Had PAZ not raised the capital they would have had to take on a lot of debt.With freight issues, such as 12 containers for one imported freeze drier, and other factory equipment being held up, it would have possibly put them under financial pressure.
I think they did look at either raising capital from shareholders,debt or bringing in a supplier.However they did see a lot of benefits having Cibus onboard.
As we know the directors own nearly 50% of the company,so have the owner's eye.

[macduffy]

Yes, it's a shame that shareholders aren't participating in this capital raising but at least there's the comfort of having a big - and presumably well-informed - new shareholder. My biggest concern has been, and remains, access to an adequate, increased quantity of raw materials.

[percy]

https://www.stuff.co.nz/business/123958927/14m-investment-in-pharmazen-nutraceuticals-nets-two-new-factories

[macduffy]

Thanks, percy. It seems the supply of raw materials is under control.

[percy]

Thanks, percy. It seems the supply of raw materials is under control.

GMP (Good Manufacturing Practice) certification – Approved to manufacture an
“Active Pharmaceutical Ingredient” under a “Licence to Manufacture Medicines”
authorised by Medsafe (New Zealand Medicines and Medical Devices
Safety Authority.
The above tells us that PAZ no longer produce just "commodity" products,but up to and including" pharmaceutical ingredient" grade.
The closer you get to pharmaceutical ingredient grade the higher your margin, and the price you sell your product gets.
A few years ago there was a shortage of mussels.The price of them went sky high.I asked how this affected PAZ."No problem,as we make the most out of each mussel, if need be we can pay top price for our supply."
I guess it goes for all or most of the raw materials PAZ use.Just a pity they are not doing anything [as far as I know ] with Central Otago Cherries.

[petty]

I understand some commentary here regarding share dilution and being sidelined as a retailed investor. It’s a bummer. With that in mind, I hold the view that this was not a ‘capital raise’ in its pure form. This was about on boarding ‘smart money’. How smart or strategic this money will be is going to be interesting but I thinks it’s a great move. The reason I don’t think it’s purely about capital is I think with the price of money and capital available domestically I think they could have raised that amount easily at .50c or at least mid 40’s from the domestic market.

instead I think this is about ‘networks’ and ‘’know how’ within the European market.

Psyched about the update.

[Beat the Bank]

I understand some commentary here regarding share dilution and being sidelined as a retailed investor. It’s a bummer. With that in mind, I hold the view that this was not a ‘capital raise’ in its pure form. This was about on boarding ‘smart money’. How smart or strategic this money will be is going to be interesting but I thinks it’s a great move. The reason I don’t think it’s purely about capital is I think with the price of money and capital available domestically I think they could have raised that amount easily at .50c or at least mid 40’s from the domestic market.

instead I think this is about ‘networks’ and ‘’know how’ within the European market.

Psyched about the update.
I hope you are right there. In the meantime, pop down to the Chemist Warehouse and pick up some AiORA at $6 off and buy one get one free.

[Tony Two Gloves]

I understand some commentary here regarding share dilution and being sidelined as a retailed investor. It’s a bummer. With that in mind, I hold the view that this was not a ‘capital raise’ in its pure form. This was about on boarding ‘smart money’. How smart or strategic this money will be is going to be interesting but I thinks it’s a great move. The reason I don’t think it’s purely about capital is I think with the price of money and capital available domestically I think they could have raised that amount easily at .50c or at least mid 40’s from the domestic market.

instead I think this is about ‘networks’ and ‘’know how’ within the European market.

Psyched about the update.
I tend to agree with this, they could have quite easily raised this amount from existing shareholders at $0.50 a share or in my opinion quite easily transitioned to the main board and raised more capital at the same time. From memory they have mentioned partnering with the right people in the past and getting someone like this on board I believe is extremely smart and will eventually be a great benefit to all. Saying that would have filled my boots to buy more at $0.40 :)

[whatsup]

What happened to all of the postings between 30/12/2020 on page 45 and 15/1/2021 page 46?

Next postings were yesterdays re 16/1/2021, I was looking to review some of this years comments but there are none recorded yet there were lots posted during this period ?

[iceman]

What happened to all of the postings between 30/12/2020 on page 45 and 15/1/2021 page 46?

Next postings were yesterdays re 16/1/2021, I was looking to review some of this years comments but there are none recorded yet there were lots posted during this period ?

You are right whatsup. We should ask Vince ¨whats up". This is no good and makes you wonder if it has happened on other threads too.

[Swala]

[QUOTE=iceman;867042]You are right whatsup. We should ask Vince ¨whats up". This is no good and makes you wonder if it has happened on other threads too.[/QUOT

[percy]

[QUOTE=iceman;866822#


The last paragraph says they intend to build 2 new facilities at Rolleston and install 9 new two tonne freeze dryer. Holy crap is all I can say !! They sure are planning for some serious growth in the near future.[/QUOTE]

Add to this their new factory on existing Port Hills Road site will be coming on stream in a couple of months time.
So year ended 31st December 2020 turnover will come from existing factory.
Year 2021 will include about 9 months of new Port Hills Road factory,and aprox 4 months of the first Rolleston factory.
Fun year 2022 will have the above, and perhaps 6 to 8 months from PAZ's second Rolleston factory.
Rough guess of revenue.2020 approx $21 mil.....2021 .$30mil...2022 $45mil and 2023 $60mil plus..
I also note on increase revenue PAZ's margin increases.I also expect the new factories will be more efficient,and therefore more profitable.

[Mr Slothbear]

Great post thanks Percy. I also anticipate as higher proportion of sales come feom PAZ’s consumer ready products should also lead to much higher margins too. Plenty to be excited about.

also liked the emphasis on pet treats / pet food. Booming industry.

[percy]

Yes noting the space supermarkets give over to pet supplies and products, it is a booming industry.PAZ's 100% traceable NZ ingredients will be welcome by caring owners.
As a side bar, when I was last talking to Craig McIntosh PAZ's ceo ,he told me he had brought one of those lollie machines that produces snakes...................Ideal for pet treats.lol.

[Beagle]

Add to this their new factory on existing Port Hills Road site will be coming on stream in a couple of months time.
So year ended 31st December 2020 turnover will come from existing factory.
Year 2021 will include about 9 months of new Port Hills Road factory,and aprox 4 months of the first Rolleston factory.
Fun year 2022 will have the above, and perhaps 6 to 8 months from PAZ's second Rolleston factory.
Rough guess of revenue.2020 approx $21 mil.....2021 .$30mil...2022 $45mil and 2023 $60mil plus..
I also note on increase revenue PAZ's margin increases.I also expect the new factories will be more efficient,and therefore more profitable.

Thanks for sharing. Like others I am a little disappointed that existing shareholders were not offered a further opportunity to increase their stake at 40 cents, however I can understand that what the directors have done is in the best interests of all shareholders and the rapid expansion will generate new opportunities in the pet treats market which is growing very, very strongly strongly.

With Covid stresses we have seen an explosion in demand for companion animals all around the world, (source CNBC), and I have observed for instance that it can be extremely difficult to get popular breeds of puppies at any price and when you can they can be 2-3 times the price prevailing before Covid. I expect the baby boomer population, (empty nesters) are taking on board all things companion animals and ostensibly treating their fur babies like children...no pet treat is too good for their new babies !!
For me the most exciting prospect is the huge expansion for pet treats manufacture. I think our new European shareholders will bring considerable experience and expertise with marketing and distribution and with both new products and new distribution channels we are on for a very exciting future indeed. Thanks for your sales projections. For what its worth I think your numbers are very conservative.

I continue to use a couple of the new Aiora supplements including vascular and vision, (have noticed better eyesight and less eye strain) and the gut and brain ones, have been thinking more clearly and making too much money since taking them I am too scared to stop lol.

I was going to bid for a small top up at 60 cents today but I see I am too slow, now bid 65 cents. Very happy holder.

[whatsup]

Buyers today@ .60 and .65 buy no offers , Im picking that there wont be any short of $1-00 !

[whatsup]

Buyers today@ .60 and .65 buy no offers , Im picking that there wont be any short of $1-00 !

There you go shares now available @ $1-28 Percy your a Millionaire several times over, well done patience does it !

[iceman]

Buyers today@ .60 and .65 buy no offers , Im picking that there wont be any short of $1-00 !

First seller out of the blocks at $1.28

[Swala]

First seller out of the blocks at $1.28
Exciting times. Will get really exciting when somebody buys at $1.28!

[stoploss]

70-1.00 50,000*20000

[Swala]

Very good to see you back Mr Beagle. I was hoping to see your thoughts on this exciting new development.

[Beagle]

Fascinating watching the price discovery evolve. Now bid 70, offer $1.00.
Honestly I am not sure how to value the shares now. A while back I guessed they could double normalised* eps again in FY20 to about 2.5 cps (*adjusted for Covid effect).
Since then the currency has worked against them and freight costs so maybe at a wild guess, (which is all it is) normalised eps might be 2.2 cps for FY20.
What I think investors should be focused on is eps for FY23 and if the company can triple sales by then I would think earnings will also at least triple, possibly quadruple.
Really hard to value high growth companies that grow eps at a phenomenal rate. Might have to mull that over for quite a while (but will definitely not be selling) !

[Joshuatree]

Re $147 mill mkt cap already plus ops etc. At $1 mkt cap re $208 mill.

[Sideshow Bob]

also liked the emphasis on pet treats / pet food. Booming industry.

I wouldn't get too excited too fast on the pet treats/pet food. While there has been tremendous growth in petfood/treats (Tux biscuits or Jellymeat anyone??), it is also a hugely crowded market and will take significant resources and marketing to get to some critical mass. PAZ are also relatively late to the party, and doesn't appear to be a bolt on to any business with existing customers or channels.

Presumably will be freeze-drying? Makes sense as makes for a high-quality end product, with excellent attributes - albeit at a relatively high cost of production. The positive aspect will be through their own facilities - as contract FD capacity in NZ is heavily tapped out at least currently. So PAZ can manage production, cost etc, and an advantage over some others. The only small issue may have is managing inedible product and technical/pharmaceutical/edible grade product through their factories - albeit not insurmountable with time/physical separation. I would imagine relatively simple product to process, with a regular/frequent freeze-drying cycle.

It also leverages off current raw material relationships - another positive. However at the same time, some of these suppliers will have existing (pet) business for this material - and some of these suppliers are starting their own forays into petfood market and going downstream - ie Meateor/Alliance, Progressive etc.

Believe me, there are many, many companies in and outside NZ who are producing pet treats/food in NZ. Many are small-fry, contract processing in NZ - and focusing on the marketing/sales, and some are overseas entities. At Pet Fair Asia for instance, there would have been at least 6 mainly Chinese companies, who are all processing in the same factory in the Bay of Plenty, and probably another 10 all processing through a canning plant in Gisborne. That would have been amongst the probably 800+ petfood/treat brands that were there.

Now I'm not poo-pooing the idea, just trying to temper expectations. There is potential out there, that takes time and investment, and probably a little luck. I just can't see what their competitive advantage is (freeze-drying isn't enough) - or whether trying to fill up their capacity while they can. I would think they've also probably looked at Aroma and them starting pet treats a couple of years ago. NUTREATS - 100% natural animal nutrition from New Zealand (https://nutreats.co.nz/) Ziwi and K9 have been success stories, but also have been a slow burn over a long time that has needed plenty of investment along the way.

For my mind, their existing nutraceutical products are where they have much more of an advantage, can add more margin and can build more differentiated consumer products. Pet treats/food are more challenging to get above the noise and carve out a niche - a challenge but doable.

[macduffy]

Thanks, Bob, for that reminder that pet foods/treats is a crowded and competitive space.

[stoploss]

" Pet treats/food are more challenging to get above the noise and carve out a niche - a challenge but doable."
Don't worry we have a vociferous Beagle on our side :t_up:
In all seriousness thanks for bringing some reality to the challenges. I think they have said that one of the new sites and plants will be used for the petfood so maybe it will be exclusive
and that way avoid contamination.
Another entrant to the market recently as well
https://www.rnz.co.nz/national/programmes/afternoons/audio/2018766633/icebreaker-founder-enters-pet-food-market

[stoploss]

50,000 Through @ 70 cents
Left
.65/1.00 75K*20K

[Sideshow Bob]

" Pet treats/food are more challenging to get above the noise and carve out a niche - a challenge but doable."
Don't worry we have a vociferous Beagle on our side :t_up:
In all seriousness thanks for bringing some reality to the challenges. I think they have said that one of the new sites and plants will be used for the petfood so maybe it will be exclusive
and that way avoid contamination.
Another entrant to the market recently as well
https://www.rnz.co.nz/national/programmes/afternoons/audio/2018766633/icebreaker-founder-enters-pet-food-market

They can produce out of edible product - but would be more costly. Makes sense to have some standalone/separate facility, especially with MPI. They manage meat products/shellfish etc now, so not a major.

Indeed, another new entrant. Partnership includes an Entrepreneur of the Year, and it isn't Moon or Achten......

Progressive that I referred to, so own the raw material, own the primary production, own the freeze-dry process etc. Then they have what the likes of Moon & Achten can bring to market the product. Between them, sure would have deep enough pockets to have a decent crack.

Not to mention Nood, which is another of the Mowbray's business - to go along with nappies, vitamins as trying to shake up the sector.

But noted on a vociferous Beagle, who will no doubt bark wildly until we all feed our pooches PAZ products!! :p

[percy]

But noted on a vociferous Beagle, who will no doubt bark wildly until we all feed our pooches PAZ products!! :p

Should PAZ add the same ingredients, I am achieving with their Bone +Joint AiOra tablets,to their pet food, I think it will not be just the Beagles,but all the Worlds' Labradors who will be barking with joy...
Is it true Labradors have a loader bark than Beagles?

[peat]

The market has responded unusually to the issue of up to 45 million convertible redeemable preference shares at 40c
Normally the market price would move towards the new issue price

And what are the terms of convertibility etc. I guess its a bit unclear - and we will have to assume 1:1

[percy]

The market has responded unusually to the issue of up to 45 million convertible redeemable preference shares at 40c
Normally the market price would move towards the new issue price

And what are the terms of convertibility etc. I guess its a bit unclear - and we will have to assume 1:1
Yes 1;1
35 mil at 40 and [option] balance of 10mil between 40 and 45 cents.[Not sure the term of the option].
Lock up is for 3 years.
Not mentioned is the fact directors have also agreed to lock up their shares for 3 years, with a max of 5% of their holdings being able to be sold.
This means 50% of PAZ's stock is locked up.

I would point out there are a number of large shareholders who are unlikely sellers.

[Beagle]

Should PAZ add the same ingredients, I am achieving with their Bone +Joint AiOra tablets,to their pet food, I think it will not be just the Beagles,but all the Worlds' Labradors who will be barking with joy...
Is it true Labradors have a loader bark than Beagles?

Perhaps we need to run a Lab experiment to find out :D
I agree and was wondering the same thing myself. One wonders whether with PAZ's pharmaceutical accreditation whether they might look into pet supplements in due course ?
Can't help noticing that Chewy listed in the US market is up 400% this year. Some of their pet supplements are here https://www.chewy.com/b/vitamins-supplements-374
Gargantuan sized market...plenty of room for a clean green producer from good old N.Z. Many people treat their pets as just as important as any other member of the family.

[iceman]

Exciting times. Will get really exciting when somebody buys at $1.28!

Yes it will but I think we are a long way from that, but we will get there. First sale post announcement is up 20% on proce before announcement which is pretty healthy.

Percy thanks for your further exxplanations. It seems material to me that they disclose the full detail and terms of the option and also important that the Directors have agree to a 3 years of no substantial selling. That is a great vote of confidence from them, as expected.

I agree with Sideshow Bob that we need to temper our enthusiasm with the pet food plan. I´ve watched both SAN & SEK enter this market. While SEK has had some success, it has been a slow hard slog for both of them.

[whatsup]

Todays sales @ .70.

[Beagle]

Yes it will but I think we are a long way from that, but we will get there. First sale post announcement is up 20% on proce before announcement which is pretty healthy.

Percy thanks for your further exxplanations. It seems material to me that they disclose the full detail and terms of the option and also important that the Directors have agree to a 3 years of no substantial selling. That is a great vote of confidence from them, as expected.

I agree with Sideshow Bob that we need to temper our enthusiasm with the pet food plan. I´ve watched both SAN & SEK enter this market. While SEK has had some success, it has been a slow hard slog for both of them.

Genuine question mate. Do you think the pet treats and pet supplements market is different to generic pet food ?

[iceman]

Genuine question mate. Do you think the pet treats and pet supplements market is different to generic pet food ?

I would expect so. But freely admit I have never studied the pet food/treats business at all so no point asking me much about it :-)
May have to start looking into it, now that PAZ is heading there in a reasonably big way, if I get back to NZ for a holiday later this year sometime !!

[Beagle]

I would expect so. But freely admit I have never studied the pet food/treats business at all so no point asking me much about it :-)
May have to start looking into it now that PAZ is heading there in a reasonably big way, if I get back to NZ for a holiday later this year sometime !!

Hope you do make it back mate. 2020 was a very tough year for you.

I feel like a bad parent now lol (Although I have really loved all the dogs I have owned I have never got into giving them pet treats and supplements). That said whenever they needed to go to the vet there was never any hesitation and one dog was on arthritis medication for quite some time.

I think a lot of older dogs end up on arthritis meds so Percy mate, you may be on to something suggesting Aiora bone and joint tablets be mixed in with pet treats ! Could be a huge market for that so please be sure to mention that to Craig.

[percy]

I think a lot of older dogs end up on arthritis meds so Percy mate, you may be on to something suggesting Aiora bone and joint tablets be mixed in with pet treats ! Could be a huge market for that so please be sure to mention that to Craig.

No need to.
In my experience Craig is 3 or 4 years ahead of us with his thinking....lol.

[winner69]

Genuine question mate. Do you think the pet treats and pet supplements market is different to generic pet food ?

Ours get through a bottle of Omega King Salmon Oil at $22 every couple of weeks

Lamb Puff treats go down well .... 8 bucks for 80 grams

Supplements and treats (cats and dogs) big earner for pet related businesses on top of regular food stuff

But yummiest of all is Possyum. Go broke if that is all they ate so a sprinkle over top of regular food. Possyum guy has turned 70,000 possums into 100,000 kg of Possyum ...in total his business Fond Foods sells 3,500,000 kgs of dog food out of a factory in Paeroa ..and he only a small player

[winner69]

NZ King Salmon sell $1.6m of their Onega oil

Sales growth slide 28
https://198i9o1t5qhfqwhf2z86x4y1-wpengine.netdna-ssl.com/wp-content/uploads/2020/08/Investor-Presentation.pdf

[stoploss]

Ours get through a bottle of Omega King Salmon Oil at $22 every couple of weeks

Lamb Puff treats go down well .... 8 bucks for 80 grams

Supplements and treats (cats and dogs) big earner for pet related businesses on top of regular food stuff

But yummiest of all is Possyum. Go broke if that is all they ate so a sprinkle over top of regular food. Possyum guy has turned 70,000 possums into 100,000 kg of Possyum ...in total his business Fond Foods sells 3,500,000 kgs of dog food out of a factory in Paeroa ..and he only a small player
We saw that segment on the news or whatever it was about that factory. I have been buying it ever since feed my dog 50 % Possyum and 50 % dried dog food.
The local supermarkets here are often sold out of possyum, Dog loves it and I note it's very high in protein compared to a lot of the dog rolls.

[stoploss]

Wow 80 cents , and the bonus is Jardens decided to update the portfolio price so the gains are actually reflected....

[Beagle]

Ours get through a bottle of Omega King Salmon Oil at $22 every couple of weeks

Lamb Puff treats go down well .... 8 bucks for 80 grams

Supplements and treats (cats and dogs) big earner for pet related businesses on top of regular food stuff

But yummiest of all is Possyum. Go broke if that is all they ate so a sprinkle over top of regular food. Possyum guy has turned 70,000 possums into 100,000 kg of Possyum ...in total his business Fond Foods sells 3,500,000 kgs of dog food out of a factory in Paeroa ..and he only a small player

I take my hat off to you and your wife. You've done fabulous work over many many years taking in rough old abandoned strays that nobody wants and have looked after them extremely well. You guys are good people.

[Beagle]

Wow 80 cents , and the bonus is Jardens decided to update the portfolio price so the gains are actually reflected....

Oh my goodness...4 times my money on my original investment just 17 months ago at 20 cents. I think I owe Percy a beer or three !

[iceman]

Wow 80 cents , and the bonus is Jardens decided to update the portfolio price so the gains are actually reflected....

It makes a bit of a difference to the portfolio position on the website when they change the recorded price from 50c to 80c :-)
It is a real shame brokers' websites and sites such as Sharesight can not automatically update from the USX.

Great to see the SP reacting so favourably to the announcement.

[Sideshow Bob]

While probably got to 80c a little too fast/too easily, it would make the 55c unloader a bit sick.....

[RTM]

Oh my goodness...4 times my money on my original investment just 17 months ago at 20 cents. I think I owe Percy a beer or three !

Same. I would not have had any visibility of PAZ had it not been for Percy; huge thanks from us up north fellas.
18c entry for me.

[RupertBear]

Same. I would not have had any visibility of PAZ had it not been for Percy; huge thanks from us up north fellas.
18c entry for me.

Same here. Thanks for bringing this wee gem to our attention Percy! It was very generous of you to do so and it is very much appreciated. You are a legend :)

[iceman]

While probably got to 80c a little too fast/too easily, it would make the 55c unloader a bit sick.....

The unloader was very quick to pull their offer when the announcement was made. I think he/she may have turned up again, this time at 85c !!

[RTM]

Wow 80 cents , and the bonus is Jardens decided to update the portfolio price so the gains are actually reflected....

For myself I would rather Jardens were quite conservative with the share price they load, especially if they are not going to update often. Not sure how many sales there were at 80c (is it only 2 ?) ....but last couple at 70c and our portfolios are now overvalued perhaps. Maybe they need a strict policy....price at start of month ? Volume weighted average price for last week of the month ?

[percy]

For myself I would rather Jardens were quite conservative with the share price they load, especially if they are not going to update often. Not sure how many sales there were at 80c (is it only 2 ?) ....but last couple at 70c and our portfolios are now overvalued perhaps. Maybe they need a strict policy....price at start of month ? Volume weighted average price for last week of the month ?

I do not know why they do not just value them at $1.00 like I do.Would save them a lot of time mucking about changing the price,and their clients would know what PAZ shares will be sometime soon in the not too distant future.!!...lol.

[Sideshow Bob]

I do not know why they do not just value them at $1.00 like I do.Would save them a lot of time mucking about changing the price,and their clients would know what PAZ shares will be sometime soon in the not too distant future.!!...lol.

You are extremely "well positioned" Percy!! :t_up:

[RupertBear]

You are extremely "well positioned" Percy!! :t_up:

And well deserved :)

[Beat the Bank]

You are extremely "well positioned" Percy!! :t_up:
Yes. Thank you Percy for bringing this share to our attention . As a later comer I am glad this looks to have turned out well.

[percy]

Beat the Bank.Thank you and others.I would have to have left town if PAZ had not worked out.!!..lol.
Hard to know what is current fair value for PAZ shares.55 cents appears to be too low,while 80 cents appears to be too high.We may get a better idea when we see their latest result late February or early March,but I think more likely when they give their outlook statement at their agm in May.
A lot of challenges,with shipping in and out of NZ.Getting overseas skilled technicians into the country to install new equipment.Just getting getting new plant here.
Then it is getting the plant up and producing.These freeze driers are huge,about the size of a milk tanker.PAZ have two of them at Port Hills Road with another there and about to be installed .[and they also have a couple of smaller ones]
Then we have a new factory at Rolleston being started on,and after that a second factory at Rolleston.
Offcourse the strength of the NZ $ makes selling overseas hard, as does the fact PAZ can not call on their customers.
Yet with The Cibus Fund coming onboard PAZ can progress with all their expansion plans.
Going back to the current share price.I do not know fair value is .What I do know is that in 2 or 3 years time it will be substantially higher,as PAZ have a record of doing what they say they will do.

[Beagle]

Good post Percy. Agree its very hard to put a value on these but for what its worth I will opine on the matter. I last topped up in August 2020 at 55 cents and clearly at that time I thought that was good buying.

I think the issue of a modest number of shares has very seriously accelerated their growth prospects and we should see earnings growth continue at a very fast pace for the next few years. Months ago I was of the opinion we would be looking at something like a covid adjusted eps of 2.5 cps for FY20. I've trimmed those expectations back a bit with the exchange rate and freight and logistics challenges and expect something more like 2.2 cps. I'd be very surprised if we're not looking at around 3.0 cps earnings for FY21 and a forward PE of 30 is not unreasonable for a company growing earnings at a very fast pace and forecast to do so for the foreseeable future. I see fair value at 90 cents subject to confirmation of not less than eps of 2.0 cps for FY20, up from 1.31 cps in FY19. I am awaiting confirmation of strong earnings growth in FY20 with a view towards adding to my position.

[iceman]

Good ponderings Beagle.
You are correct it is quite hard to value these at the moment. As you said, PAZ has raised capital to fund the huge capacity increase they have planned. But this could have been funded locally so my interest will be to see what the Cibus Fund will bring to the table in addition to the cash. Clearly the Directors hold high hopes for this "partnership" so we need to wait and let the results of them being onboard do the talking. Clearly the increased product quantities need to be sold so hopefully this is where they will show us their worth !
One thing is clear though, the growth plan is very significant and if they can prosecute it well, the current price will be regarded as very cheap in the next couple of years. I think for now we are in a "wait & see" mode and I don;t expect any big upwards movement in the SP until we have confirmation of their plans actually working.

[Beagle]

Fair comment Iceman. I can't help myself trying to see around the next corner though, (an occupational hazard for me).
One thing I have noticed in the past with other companies is the economies of scale that can come with a major expansion of product lines, (head office and management costs for example amortized over a much greater sales base), can lead to quite startling eps growth.

Sifting through the very few tea leaves that exist, one could very easily be forgiven for thinking that with such a major expansion of the pet side of things planned they must have got some very positive customer feedback from their China Trade show. Pet Supplements apparently a fast growing industry. https://www.nzherald.co.nz/sponsored-stories/new-products-for-pets-taking-off/TQU443PVGIO4UE4BI7DRAEPLNQ/

[Sideshow Bob]

Further announcement re capital raise:

Additional_Market_Information.pdf (usx.co.nz) (https://www.usx.co.nz/uploads/paperclip/documents/2207/original/Additional_Market_Information.pdf?1612298553)

[peat]

Sifting through the very few tea leaves that exist, one could very easily be forgiven for thinking that with such a major expansion of the pet side of things planned they must have got some very positive customer feedback from their China Trade show. Pet Supplements apparently a fast growing industry. https://www.nzherald.co.nz/sponsored-stories/new-products-for-pets-taking-off/TQU443PVGIO4UE4BI7DRAEPLNQ/

That link is sponsored so is actually advertising not journalism. (Just sayin)

Note that major holders can reduce their holding within escrow period. 5% of what exactly? - 'their own holding' would be the correct answer - presumably not 5% of shares on issue though the statement Sideshow Bob links to isnt explicit.

[percy]

https://www.avenues.net.nz/all-stories/2021/2/26/looking-after-yourself
This article is in today's Avenue magazine, which came with our "Press" newspaper this morning.
Going to aiora.com I see aiora range is now being stocked by not only The Chemist Warehouse,but also Pharmacy Direct and Bargain Chemist.
All positive.

[Beagle]

Thanks Percy.
Website https://www.aioranz.com/
Stockists https://www.aioranz.com/stockists/
Blackcurrants benefits - https://www.aioranz.com/research/blackcurrant-research/
I found this study very interesting https://www.aioranz.com/evidence-builds-that-nz-blackcurrants-assist-blood-flow-and-reduce-blood-pressure/
Feedback - I have been taking the vascular and vision blackcurrant supplements for a few months now and I have found significantly reduced eye strain and clearer vision and the other day on my check up at the doctor he remarked that my blood pressure was the best its been in years !

Its great to see them spreading their distribution network and I am looking forward to the annual result and outlook in the next month or so. Their website and supporting articles looks like top class work to me. Very impressive stuff.

[Beagle]

Must be getting very close to reporting now. Holding long term and really looking forward to hearing about the progress they are making.

[iceman]

Must be getting very close to reporting now. Holding long term and really looking forward to hearing about the progress they are making.

Excitedly waiting for a progress update. Should be this week.

[101nick101]

On my watchlist but unsure of how to buy it's not available through Sharesies. Help!

[percy]

On my watchlist but unsure of how to buy it's not available through Sharesies. Help!

PAZ trades on www.usx.co.nz
Go to the site to find out which brokers trade on Unlisted.
You have to deal with one of them.
At present time PAZ have a 20,000 minimum shareholding requirement,which means at 70 cents $14,000.
This 20,000 minimum was brought in when their shares were trading at around 7 cents [ie $1,400].I think directors will be asked at the agm to reduce the minimum.

[petty]

Anyone bold enough to make some predictions. Without going into specifics I think announcement will disappoint for the following reasons,
a) Logistics disruptions and costs increases
b) I think the cap raise at 46c maybe be reflective of real value. Institution would have had good scan of the real time PnL and value at 46c was where they came in.

For the long termers we can look through this but short term I think the update will disappoint. Fingers crossed I am wrong

[Sideshow Bob]

PAZ trades on www.usx.co.nz (http://www.usx.co.nz)
Go to the site to find out which brokers trade on Unlisted.
You have to deal with one of them.
At present time PAZ have a 20,000 minimum shareholding requirement,which means at 70 cents $14,000.
This 20,000 minimum was brought in when their shares were trading at around 7 cents [ie $1,400].I think directors will be asked at the agm to reduce the minimum.

There are a good number of holders on their extensive shareholder list under 20,000. Not sure how this works unless bought >20,000 and sold a portion to sit under 20,000?

[percy]

The 20,000 minimum was only brought in a few years ago,so I would guess the small holdings go back to earlier times.
They did buy back a number of small holdings a few years ago at 7 cents.

[percy]

Anyone bold enough to make some predictions. Without going into specifics I think announcement will disappoint for the following reasons,
a) Logistics disruptions and costs increases
b) I think the cap raise at 46c maybe be reflective of real value. Institution would have had good scan of the real time PnL and value at 46c was where they came in.

For the long termers we can look through this but short term I think the update will disappoint. Fingers crossed I am wrong

I have had the same thoughts for the past 3 years or so,just before the result announcement.
Every year I have been pleasantly surprised.
The real fun is their May agm presentation projections.

[Beagle]

I have had the same thoughts for the past 3 years or so,just before the result announcement.
Every year I have been pleasantly surprised.
The real fun is their May agm presentation projections.
Might come down for the fun this year if I have enough of those stupid air point thingies I can't be bothered using elsewhere. I think Whome is pretty keen to come down too.

[percy]

I would recommend attending the agm.You seem to learn so much more talking to the directors than just reading the presentations.
If I am on deck, I will be running an airport collect and drop off service.

[stoploss]

I would recommend attending the agm.You seem to learn so much more talking to the directors than just reading the presentations.
If I am on deck, I will be running an airport collect and drop off service.
Keep me in the loop plse Percy

[percy]

Keep me in the loop plse Percy

Will carry over your last year's booking to this year..lol.

[percy]

PAZ board meeting next Tuesday,so result most probably next Wednesday.

[Beagle]

Thanks for the update Percy, much appreciated.

[Mr Slothbear]

There are a good number of holders on their extensive shareholder list under 20,000. Not sure how this works unless bought >20,000 and sold a portion to sit under 20,000?

i placed the first order for my partner at 30k shares but only roughly half got filled. The SP has since over tripled since that purchase less than a year ago and we haven’t chased it higher so her holding is still only about 15k shares. One example how it can happen

[Sideshow Bob]

PAZ board meeting next Tuesday,so result most probably next Wednesday.

Nothing so far.....

[percy]

Nothing so far.....

Awaiting with bated breath both PAZ's and SFF's results.
Glued to my computer.

[macduffy]

Awaiting with bated breath both PAZ's and SFF's results.
Glued to my computer.

Stick with it. percy. Your persistence is appreciated!

:)

[Sideshow Bob]

Awaiting with bated breath both PAZ's and SFF's results.
Glued to my computer.

Keep pushing refresh Percy.....that will make the announcements come sooner!! :p:t_up::lol:

[whatsup]

Not tonight Josephine !!

[Sideshow Bob]

Announcement out:

Announcements (usx.co.nz) (https://www.usx.co.nz/market_announcements)

[Sideshow Bob]

Highlights


Sales rise 24% to $21.5m with strong international demand for nutraceutical ingredients.
EBITDA rises 23% to $6.7m despite margins being impacted by COVID-19 disruptions.
Net profit before tax rises 30% to $5.2m.
Expansion programme continues with the construction of new manufacturing facility at Rolleston, Christchurch underway.
Cash reserves lifted post balance date with $14m equity placement to Cibus Fund.
COVID-19 disruptions to global supply chains and the stronger NZD continue to dilute performance in the first quarter of FY2021, however international demand and growth remains strong.


Christchurch biotechnology company PharmaZen (USX.PAZ) has today announced a strong rise in full year revenue and earnings amid strengthening international demand for its portfolio of nutritional supplement ingredients.

Revenue for the year ended 31 December 2020 increased 24% to $21.5m from $17.3m in 2019, while pre-tax profit increased 30% to $5.2m from $4.0m and EBITDA increased 23% to $6.7m from $5.4m. All figures are unaudited.

Board Chairman Ken Fergus said although EBITDA was slightly lower than initial expectations, the result represented a significant achievement considering the challenges the business continues to face as a consequence of COVID-19 and the stronger New Zealand dollar in the last half of the year.

“We are delighted with the progress we have made. Despite the considerable disruptions of the pandemic and associated impact on global supply chains, we have significantly expanded our ingredients business and grown both revenue and earnings. We have also continued to develop the capacity of the business in line with our goals to meet the significant global growth in demand we are experiencing.

“Meanwhile, in January and in a strong endorsement of our business model and strategy, we introduced a new strategic investor Cibus Oscar Limited to the business. The partnership has brought in $14m of new capital to help accelerate our growth. It has also given us access to the considerable expertise of ADM Capital’s Cibus Fund, a specialist international food and agriculture investor.
“Were it not for the pandemic we believe we would have delivered a better result. Disruptions to travel and the global supply chains have delayed manufacture and delivery of key product lines. These pressures have been compounded by the challenges of sourcing overseas engineers to our manufacturing sites.”

Managing Director Craig McIntosh said the company’s capital investment programme including the development of a new 3,000sq m factory at Tawhiri, Rolleston was proceeding well. However, the global supply chain, travel and freight restrictions could push out the planned commissioning date of August 2021. Meanwhile the construction of an additional 3,000sq m factory on a neighbouring site in Rolleston is due to commence shortly. This investment, along with a newly built premises on its original Hillsborough site, will significantly boost the company’s freeze drying capacity.

“This increase in capacity will go from the current two freeze dryers to three within the next two months, with a further four planned to be installed over the next year. This will enable us to progress both the consumer and pet food ranges.

“As with previous expansion builds, existing operations are always impacted to some extent but we minimise these disruptions with workarounds. Overall capacity in both the final quarter of FY2020 and the first quarter of FY2021 have been reduced, however, the company remains well positioned to build on its record of strong growth,” Mr McIntosh said.

“Demand for international nutraceuticals markets remains strong and we have seen nothing in the current environment to challenge our long-term confidence in the market.

“Despite the constraints of the past year PharmaZen has delivered a strong result for investors. As we look forward to a time when COVID-19 vaccinations have been rolled out domestically and across our major markets, we anticipate a gradual return to more normal trading conditions.

“We look forward to providing an update with our half year result in August.”

Further information:
Craig McIntosh
Managing Director PharmaZen
+64 21 372 069

[percy]

Can not ask for better.

[whatsup]

Well done PAZ team, I for one look forward to this years AGM, it will be interesting to see if these latest numbers are reflected into the share price.

[Beagle]

Excellent result in very challenging conditions. PAZ has excellent prospects for strong growth in the years ahead. Happy holder.

[iceman]

Well done team PAZ. I think we can all be very satisfied with this and not surprising we will see some product delivery and factory building delays, given the extra ordinary World situation and challenges with transport and getting specialists in to setup the equipment.
Onwards & upwards.

[petty]

Beagle I would like to query you on your FY20 EPS estimates, would you care to share your assumptions?

To get an EPS of 2.4 cps they would need Revenue of circa 25million, assuming EBITDA and NPAT margins were inline with HY20 results and no dilution. Given guidance is "At least" 21million and EBITDA of 7.4 million giving an implied EBITDA margin of 35.2% which indicates a softening of margin for the second half I can't see 2.4 cps as being realistic.

My estimate for FY20 EPS ranges from 1.7 (conservative) to 2.1 cps (Bull case) so 30-62% EPS growth

Conservative
Revenue 21,000,000
EBITDA 7,400,000 (Implied margin guidance)
NPAT 3,549,000 (NPAT margin 16.9%)
EPS 1.7 cps

Bull case
Revenue 22,000,000
EBITDA 8,333,800 (margin inline with HY20)
NPAT 4,466,000 (margin inline with HY20) EPS 2.1 cps


Of course I'm happy to be proven wrong (On the upside)


Not far off mate, your revenue estimates were pretty damn close. I had a forecast of 23m with a net profit before tax of 5.3m. They didn't quite meet my revenue growth but just about bang on net profit before tax.

[Beagle]

Classic long term growth story. If one thinks about where this will be 5 years from now listed on the NZX and one also considers the amount of new production capacity coming on stream in the next two years, the ol Percy special saying of "well positioned" springs readily to mind :)

[RupertBear]

Can not ask for better.

What a cracker! Thanks again for bringing PAZ to our attention Percy, feeling very well positioned :D