BLT - Blis Technologies

[emearg]

But that price equates to more than $10 for a trumpet. Somehow I doubt that you've ever tried the stuff. It makes KFC a delight.

I haven't tried it. Me liking it or not isn't the key thing though is it. As long as others do!

I don't like KFC or Pizza Hutt pizzas but I have made a fortune out of RBD shares because others do (well, at least KFC!)

Cheers

[simla]

Actually, I have tasted some (non-Blis) and, yes, I found it in a supermarket. It's quite rich by my standards, but the women in the house thought it delicious. I don't know if that's what you've tasted, of course, Fungus Pudding.

Don't forget that the company has apparently bought an entire ice cream company here. It's not just selling K12 ice cream, but mainly ordinary ice cream. One reason they bought it was for cash flow https://nzx.com/companies/BLT/announcements/211826 so this might prove helpfully countercyclical if business conditions do indeed get a bit tough now. I'm guessing they saw a business which could benefit from Blis's management firepower and dairy industry knowledge, and which would be cash flow positive from day one. Plus a showcase for Blis dairy products thrown in. The idea has been growing on me since the initial surprise.

[brucea]

Well Emearg, I for one am willing to give the Blis K12 ice cream a go when it becomes available in Auckland and will post my taste bud experience on here. I am expecting the taste to be not that different to other low fat ice creams which though not as nice as the full fat versions, are less likely to stick to the waist line and artery walls!! A big plus for me will be the added advantage of it containing Blis K12. I rarely buy KFC or pizzas either and try to stick to foods with the big red tick. I had quite a few Charlies shares but never bought the stuff as I thought it was overpriced and not that great tasting - but the power of clever marketing made it a hit with the younger set. If only Blis could use the same strategy!

[Bobby_Fischer]

I'm guessing they saw a business which could benefit from Blis's management firepower and dairy industry knowledge

But that is precisely what is wrong with the whole idea! Blis is supposed to be a Biotech not a Dairy product manufacturer/innovator, and whatever management "firepower" (!!) Blis has, should be in the Biotech area - if it really is, then we are in big trouble buying an ice-cream company - if it isn't then why not? and no wonder we've been running at a loss and burning so much cash. The link with Barry's prior experience simply has me thinking he feels out of his depth on the Biotech side and has thrown in the towel there having seen an opportunity in an area he understands better. If the board has agreed to this then the independent voices are in a very weak position. Barry must have convinced Edinburgh to support him - hence the 500,000 - so Edinburgh and Barry are now calling the shots - with our company. How much of Barry's time will now be distracted trying to grow this new play-thing: an ice-cream business? And what impact will that have on the real value proposition in the Biotech area? The idea that the cash-flow from an ice-cream business will support Blis' operations in any meaningful way is simply laughable - if it was such a great investment in it's own right, then it could not have been obtained at a realistic price. I don't buy the argument that the synergies with K12 based dairy-products will add that much value - you don't need to buy your own dairy company to extract those synergies if they are real.

By the way - I am not saying this ice-cream venture won't pay off somehow - Barry may be some kind of Dairy product genius who can pull the proverbial out of his hat - but I reckon it's much more likely to end in tears of some kind.

[simla]

I see where you're coming from, Bobby, and it's certainly a very old adage: stick to the knitting.

But you could look at it from the other direction, too. Blis said in their last release "we ... definitely see ourselves operating within the global dairy industry in the future" https://www.nzx.com/companies/BLT/announcements/213865

Why? Well, if GRAS is the far bigger market ("the massive food industry in the United States") then where do probiotics fit naturally? Obviously yoghurt is the big one to date, but ice cream has been a target of many too. Here's one in India recently. http://itsmymarketing.blogspot.com/2...probiotic.html And Gourmet make both ice cream and yoghurt anyway.

Either way, it's dairy as the likely main outlet via GRAS, the most established market that consumers associate with probiotics. Well, Blis do surely need somewhere to try formulations out, or otherwise they are relying on their overseas food business partners to come up with formulations, which is probably not a really good strategy.

So acquisition of a small company to try out the products which at the same time provides cash flow? It surely beats doing it at a loss. And there is an existing staff, so we hope not too much of Blis's time will be needed running it. I doubt this was a sudden decision, and I'm perfectly sure the Board will have all looked hard at such a major decision, too.

As to firepower, yes! Blis has achieved amazing results over just a couple of years. I think we forget that the rights issue was just 2 short years ago. What a massive difference since then.

Sales revenue has lagged, and we're all keen to see that change. But the Board have all fronted up hard cash in the recent issue, and I think we can be confident that that has reminded everyone quite firmly of the advantages of positive cash flow!

Anyway, it's a done deal. So we'll just have to wait and see how it pans out.

[simla]

Actually, Bobby, the most likely explanation is surely the obvious one: that the ice cream acquisition is a really good idea that fits in well with future plans.

[THEONE]

Hi Simla, thankyou for your posts we think alike. I think Blis is doing a great job. have you found any news lately? I would like to find out more about the dog product. Another probiotic company which has done well is biogaia. Check out their growth. Hopefuly Blis can replicate. Looks like they have a similar model

[simla]

Thanks for the Biogaia idea. Here's their own website on their financials for 5 years. http://www.biogaia.com/investors/financial-statistics

Essentially their revenues seem to have grown about 30% compound from 2006 to 2010, as I calculate that. (Their profit figures in that time have grown somewhat fast than that though, which I assume is what encourages you!) Well, Blis's US revenue has gone 325k, 760k, 976k for the last three years, which is about 75% compound. NZ sales have gone 146k, 192k, 217k, which is about 20% compound. And other markets have been flat.

The main things that those Biogaia figures might demonstrate for us perhaps is that there is definitely a probiotic market out there, and that compounding at 30% can get you a long way, and that profits flow once you get through the challenging startup stage?

Overall, I remain cautious however. There's no doubt that the world is in a bit of a panic at present, which affects sales. I'm hoping the world crash is rather like a property market crash: the provinces crash first while the big cities keep going, then the big cities crash, but meanwhile the provinces have started the slow recovery already. As we wait for the big cities to crash (America, Europe, China), the rest of the world (and individuals) have all crashed long ago and are busy trying to mend their cash flows and balance sheets already. It'll still be a long process though.

But yeah, the company really continues to pump out the work. It was all quite a punt when the rights issue came out in 2009, but the situation is very significantly advanced since then. Nevertheless, we'd all be pretty happy to see the crop safely harvested and in the barn, with so many storm clouds in the sky!

Much seems to lie in front of us yet, with the outcome still unknown. Probably about 4 weeks to the half-year report, I imagine.

[THEONE]

Interesting, Throatguard available in Singapore ?
http://singapore-promotions.com/wp-c...gen-Avalon.jpg.

NaturesFarm has 26 stores a bit expensive though.
It all helps

[simla]

Here's the General Manager of Food Standards ANZ saying proposal 293 is still on track to be approved in NZ "early 2012" (ie not long now?). The aim is to allow advertising of health claims with food. It would still require Blis to satisfy it's requirements (time? cost?), and want to spend money on advertising, but presumably it would let them make actual claims on the food labelling regardless of an advertising budget, which would be a major step forward for all of us frustrated that Blis cannot claim the product does what it does! I suppose we'll find out some time next year whether Blis are in a position to benefit from this - and if it does actually pass into law. Ironically, as I read it, they could then make claims on food that they could not make on the supplements. http://www.ausfoodnews.com.au/2011/1...n-the-way.html

Proposal 293 is a complex read, though, so I cannot promise it will benefit Blis. That's just my reading. I'm not even providing a link to it as I'm not sure which is the final draft! But it's here somewhere: http://www.foodstandards.gov.au/food...aims/index.cfm

By the way, here's an interesting on-line sales site forming in Germany. It says "not currently open". http://www.blis-k12-shop.de/

ps. Belatedly I realise that this would apply in Australia too, and what's to stop them exporting ice cream there? Just a thought.