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“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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https://www.nzx.com/companies/AFT/announcements/306565
What a great kiwi company.
Love the story, love the growth - only a matter of time these factors flow through to the bottom line (as we know, AFT has been profitable many years before... it ain't your usual unprofitable since day 1 and cross our fingers for profit one day WYN investment style thing with lavish new offices in Christchurch - quite the opposite)
Disclosure: although I'm a shareholder, I didn't get any invite to their 20th birthday party, probably to modest to hold one, keep expenses under control etc etc, or is 21 the big one? 
Last edited by trader_jackson; 01-09-2017 at 10:36 AM.
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https://www.stuff.co.nz/business/971...-as-penicillin
Not a good look really, hopefully some further clarification with an announcement to the stock exchange first thing Monday.
On another note, half year drawing to a close next week, half year results announced about two month from now.
October 24 last year saw Operating Revenues of $29.8m with Operating Loss of $8.4m... I will be looking for an improvement in both, but particularly in revenue growth.
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Member
https://www.nzx.com/companies/AFT/announcements/308588
I am surprised that this announcement is not marked as "price sensitive"! It should be in my view.
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 Originally Posted by RRR
Even more surprising was how the share price actually went down (briefly) this morning!
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Member
T_J Im debuting on ST and have a question for you.
a) I'm assuming the suppressed SP and its inability to respond to good news is due to the very low liquidity. If this is the case how is this likely to change (the liquidity) and will lack of change stall future SP growth regardless of inevitable (I hope) improved financial results?
ta
petty
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Sorry petty I only just saw your question!
Liquidity is an 'issue' in the sense you get wild jumps and not alot of 'big' investors coming on board (as they can't get their orders filled)... in AFT's case it is bit of a double edged sword in this case - great that the founder owns 75% ish (not private equity) of the company and CRG Capital (a specialist US phama investor, who has been there for many, many years and described it as one of the best investments, top 2% or something) is unlikely to sell till AFT becomes profitable again (which could be very soon!), so basically 88.77% (as at 2 May) of the shares are unlikely to be traded... meaning that just over 11% of the shares on issue can be traded.
In the future, which may be months or years away, CRG Capital will probably sell down several percent of their stake, and the founder may also reduce his holding, possibly by bringing on other institutions (who I would think would be comfortable investing in a profitable growth company, like AFT is turning out to be - and something I have said it will be from day 1). Neither are likely to sell down until what they deem to be a reasonable price can be received for their shares. Something tells me this will be a fair bit higher than the IPO price (of $2.80). Increased liquidity will no doubt help the share price 'stabilize' and reduce common wild ups and downs, will likely also see AFT enter the NZX 50. (it was interesting attending the AGM - the founder, who is also the CEO, really didn't care what the share price was doing [despite owning a sizable number of shares!] and he spoke for an hour ish without glancing at any notes... quite impressive and shows he really is the best person for the job and knows exactly what is going on in every aspect of the business, that confidence, among other things, prompted me to put a buy order in for more shares the next day, which, to my delight, I got)
On another note, Half year financial results today have shown AFT is a true growth company with revenue up 23%, gross profit increasing by 33% (and gross profit margin expanding nicely) and expenses (namely Selling and distribution expenses, and General and administrative expenses) stabilizing and not increasing more, as a percentage, than what revenue (as a percentage) has increased.
The interim report makes for nice reading (and even more comforting when you consider AFT always have a stronger 2nd half). The 2nd half will also include the elusive re-scheduling of codeine based painkillers from over-the-counter to prescription only (from 1 February 2018) which could provide a even larger than 'usual' boost to this coming 2nd half - possibly enough to push AFT to profitability in the 2018 financial year (they have indicated they expect to return to profitability in 2018/2019 - I would consider a return to profit in 2018 a 'beat' ...and I say 'return', because they have been profitable for many, many years).
The market is asleep at the wheel when it comes to AFT and this will only be truly 'realized' when CRG or the founder make a placement to an insto, who conveniently cover the stock with a favorable rating, and subsequently offload AFT shares to their clients.
To summarize, the best times are ahead for AFT and the first 'signs' haven shown in this interim result.
Last edited by trader_jackson; 23-11-2017 at 04:46 PM.
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Originally Posted by trader_jackson
Sorry petty I only just saw your question!
Liquidity is an 'issue' in the sense you get wild jumps and not alot of 'big' investors coming on board (as they can't get their orders filled)... in AFT's case it is bit of a double edged sword in this case - great that the founder owns 75% ish (not private equity) of the company and CRG Capital (a specialist US phama investor, who has been there for many, many years and described it as one of the best investments, top 2% or something) is unlikely to sell till AFT becomes profitable again (which could be very soon!), so basically 88.77% (as at 2 May) of the shares are unlikely to be traded... meaning that just over 11% of the shares on issue can be traded.
In the future, which may be months or years away, CRG Capital will probably sell down several percent of their stake, and the founder may also reduce his holding, possibly by bringing on other institutions (who I would think would be comfortable investing in a profitable growth company, like AFT is turning out to be - and something I have said it will be from day 1). Neither are likely to sell down until what they deem to be a reasonable price can be received for their shares. Something tells me this will be a fair bit higher than the IPO price (of $2.80). Increased liquidity will no doubt help the share price 'stabilize' and reduce common wild ups and downs, will likely also see AFT enter the NZX 50. (it was interesting attending the AGM - the founder, who is also the CEO, really didn't care what the share price was doing [despite owning a sizable number of shares!] and he spoke for an hour ish without glancing at any notes... quite impressive and shows he really is the best person for the job and knows exactly what is going on in every aspect of the business, that confidence, among other things, prompted me to put a buy order in for more shares the next day, which, to my delight, I got)
On another note, Half year financial results today have shown AFT is a true growth company with revenue up 23%, gross profit increasing by 33% (and gross profit margin expanding nicely) and expenses (namely Selling and distribution expenses, and General and administrative expenses) stabilizing and not increasing more, as a percentage, than what revenue (as a percentage) has increased.
The interim report makes for nice reading (and even more comforting when you consider AFT always have a stronger 2nd half). The 2nd half will also include the elusive re-scheduling of codeine based painkillers from over-the-counter to prescription only (from 1 February 2018) which could provide a even larger than 'usual' boost to this coming 2nd half - possibly enough to push AFT to profitability in the 2018 financial year (they have indicated they expect to return to profitability in 2018/2019 - I would consider a return to profit in 2018 a 'beat' ...and I say 'return', because they have been profitable for many, many years).
The market is asleep at the wheel when it comes to AFT and this will only be truly 'realized' when CRG or the founder make a placement to an insto, who conveniently cover the stock with a favorable rating, and subsequently offload AFT shares to their clients.
To summarize, the best times are ahead for AFT and the first 'signs' haven shown in this interim result.
Agree T J but I see a C R this year as there is only $7.2 mil cash to cover this years loss of approx what $5.0 mil , I know this is a growth company but AFT is still coming out of the " valley of death".
This year will be a very interesting one in the companies history, they are not too far away now .
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Originally Posted by whatsup
Agree T J but I see a C R this year as there is only $7.2 mil cash to cover this years loss of approx what $5.0 mil , I know this is a growth company but AFT is still coming out of the " valley of death".
This year will be a very interesting one in the companies history, they are not too far away now .
I'm not so sure, you could be right, they seem to like mentioning that "In addition we have a US$10m facility available with the CRG Group."... they seem to have about a years worth of cash left, which could be enough to get them to positive operating cash flows... all depends on timing, and my thinking would be that if they are 'close' to cash flow flow break even, they may draw down a couple million from this facility rather than going to the market. Of course if they see a 'material opportunity (or equivalent words to that effect) they may be tempted to raise significantly more capital (ie tens of millions), where I imagine the founder may not participate (the first step to increasing liquidity), of course this is pure speculation, and would likely be a bit of an eyebrow riser given they had not previously signaled such a move to Mr Market.
Originally Posted by winner69
Hey t_j whatsup - expenses growing at a much faster rate than revenues. Not good?
But 8% revenues increase is pretty pathetic isn't it? To echo your own words about EVO 'I hought this was a growth company'
Sorry, couldn't resist this - but has some truth eh
Not sure if EVO achieved 23% growth in their revenues recently...
23% growth is above their 10 year CAGR 21% mentioned in the prospectus released nearly bang on 2 years ago.
Some 23% growth in revenues and operating expenses getting more under control every minute - was this a surprise to you?
23%, I've not mentioned it 4 times, and it is also nearly 4x better than 8% just 6 ish months ago... wow
Great stuff, roll on profitability in the near future.
Last edited by trader_jackson; 25-11-2017 at 05:03 PM.
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Edison has some brilliant insight into AFT - http://www.edisoninvestmentresearch....&ID=20059&LANG=
Edison have made me plenty of money, when they say something is undervalued I tend to agree.
Bullish for the business long term... too bearish a stock to buy in right now for me.
Perhaps one for next years portfolio... unless fomo
Last edited by hardt; 05-01-2018 at 07:31 AM.
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