BLT - Blis Technologies

[simla]

There are one or two background questions to ask here.

Firstly, we have to ask ourselves how real this all is. It's a silly question to have to ask, but Blis has for many years issued two sorts of communications. Those in the annual reports are detailed and never grim. Those that get issued otherwise seem almost invariably to be pretty downbeat in tone. God knows why, but a different writer seems a possible explanation. We have been pretty depressed by this sort of announcement before (remember the one where half year sales just stopped dead a couple of years ago with virtually no explanation or discussion?) and yet things have just carried on afterwards as if nothing happened. The other hallmark of the two types of statements are the level of detail. The downbeat statements usually are not big on detail. This one endlessly discussed negative detail, but didn't mention the current prospects for an issue or current sales revenues, which is surely the central thrust of the question.

Secondly, then, we have to ask ourselves whether other information fits with this. Ice cream is rolling out well and ads are on TV. I think we can take it the company is still pressing ahead with Europe and China and R&D etc. How does all that square with a need for this small level of cash? Especially if Emearg is right that this may even be negative cash flow in year one?

Thirdly, as has already been asked, what are we to make of shareholders panicking so often at present? I have no answer to that, but I do have difficulty reconciling this major move for a small amount of money with the last report that had the company engaging in major work on every front. It's pretty obvious that every poster here tonight is worried this is the end, and yet did a single sentence in there actually say that?

Fourthly, we have to ask ourselves whether to just trust the Board regardless. There is no doubt that the company's management has steered the company through a very large number of obstacles over the last few years, pretty well always with success. I recently posted why I believed the cash did not flow in the last two years, and it wasn't anything Blis could have anticipated. Yes, it is possible that other decisions might have produced better outcomes, but we have no evidence of that at all. The Gourmet decision last year chewed through cash we could do with now, but they almost certainly did not anticipate the huge impact on sales of changing distributor, and who would have? In the end it looks like that will generate good cash soon. So maybe we just trust them to do something reasonable whichever way the vote goes.

So, I don't know what to make of that. But I reach out to previous events with this company to help guide what we might make of this. Yet previous disappointments boil down to only this: sales did not take off over the last two years, although they have held their own and steadily grown on an apples to apples basis; there was another issue last year; support for the share price is always very disappointing, but mainly because nobody every buys or sells as they just pointed out, there hasn't been much trading at all; regulatory hurdles for the company have been incessantly expensive and slow, but overcome. Maybe we just panic easily. Or not!

[simla]

We might remember that the last report said on page 40:

"The Directors believe the going concern assumption is valid and have reached this conclusion having regard to the circumstances which they consider likely to affect the Company and Group during the period of one year from the date of these financials are approved, and to circumstances which they believe will occur after that date which could affect the validity of the going concern assumption. The cashflow forecasts prepared by the Directors support the carrying value of the Property, Plant and Equipment, Goodwill and Intangible assets."

That report was issued only a few weeks ago, and the latest missive did not suggest any retraction that I saw. All the last missive said was "The Company has been listed on the NZSX since 2001, and the Board believes that it is appropriate at this time to re-assess the value of continuing as a listed company". (p4)

[Chippie]

It could be worth while sending Barry a few emails. He is pretty good at responding to them. I think we have a reasonable voice here as it looks like I am not the only one with a heap of shares.

I will send him one today raising my concerns.

[percy]

I would think you have nothing to worry about if the company delists and moves to the unlisted market.I have shares in PAZ which is traded on unlisted market and I have also owned Rangatira which is on unlisted market.Rangatira has a market cap of $36.9,PAZ $7.2mil while Skyline Enterprises is $213mil

[THEONE]

After further consideration I think I will actually vote infavour of the delisting. It sounds terrible not being on the NZX, but there must be good reasons for it. The management has a significant shareholding and they know more what is happening. Even though sales have been poor in the last few years. I think allot has been acomplished. Hopefully it would make it easier to communicate with the shareholders being delisted. We are in the same position as the board so if they do well so should us shareholders.
I cant really see any major issues with being delisted. A large shareholder mopping up shares cheaply would be good for us shareholders I think.

[neopoleII]

""A large shareholder mopping up shares cheaply would be good for us shareholders I think.""
it will depend on how many shares they want to mop up without having to disclose under delisting rules. does anyone know when the compulsory takeover comes into effect percentage wise on delisted shares?
this would give us an indication of the difference between what they have and what is needed to complete a buyout for the majority share holder.

the reason i am weary is because i just got a cheque from the new plymouth council because they achieved compulsory take over on tasman farms limited which i have been a holder of for 12 years. it was a nice sly take over....... to be honest.... im happy with that.
but blt is still a company that has huge potential...... but also huge risk.
i would rather see the company go bust on the nzx and all holders take a hit, than have it stealthily taken over by one or 2 newish holders who then make it their own and succeed.
i guess the pessimist is coming out in me...... maybe even jealous over "johnny come lately" pumps in a relatively small amount of cash and walks off with a potential goldmine.
blt was once a co worth 10 to 15 million, now that lots of hard work has been done, at the expense of long term and original shareholders it would be very sad to see it taken by a newcomer for peanuts.
having said that....... i supported this co with a sum that....... relative to my income..... would make eyes water...... made mine water anyway........ i just have nothing left to invest in this company under the situation..... whats that saying about catching a falling knife?
and management.... current and before....... have never been shareholder friendly.
which is why i stopped investing in this co.
but....... still hold a vested interest, and dont want to give it away or let a covert takeover happen.

ps.... im sure those that "earn an income" from blt will still be doing so under private ownership.....

too many folks lost too much money in this co to let it slip away in this fashion.
better to sell it.... than do this.

ok....... time for a drink.

[simla]

A large shareholder mopping up shares cheaply would be good for us shareholders I think.

I'm not sure that I agree with you there. All that achieves is them getting a lot of shares cheaply, which doesn't seem to do the rest of us much good. I'm prepared to trust that the Board will do their best, but that doesn't mean I think they never make wrong moves. I think delisting is an error of judgement myself, more in the short term interests of the company than long term interests of the shareholders. I don't see how benefiting a company is much use if it doesn't benefit the shareholders, so I will vote against.

I'm also with NeopoleII in wanting the company to do things the straight and open way. It's how it got where it is now, by daring to do things the classical and correct way, and I don't want it to abandon that aspect now.

[winner69]

I'm also with NeopoleII in wanting the company to do things the straight and open way. It's how it got where it is now, by daring to do things the classical and correct way, and I don't want it to abandon that aspect now.

Jeez - lost nearly $30m by doing it the 'classical and correct way' and you want them to continue down that path

[simla]

Yep. You are quite aware that the current management haven't lost anything like $30m. They have spent about $5m over about 3.5 years and have set up an international business on the back of that while introducing another product to the marketplace and developing the technology for yoghurt and ice cream, as well as paying for an awful lot of intellectual property, and acquiring an ice cream company that looks likely to generate good cash flow from here on in. Keep doing that? Yep.

[skid]

I noticed last night an ad on tv for bliss products-Is this a new strategy?