BLT - Blis Technologies

[simla]

So how are they going to manufacture it without any staff?

That's the point of "under licence", Emearg! However, we don't know whether they already have it in place or just hope to later, although "maintain supply" would seem to imply it's ready to roll. We don't know whether they will just get someone else to do the manufacture for them, or hand over all the rights off and just take a fee back, although "licence" might imply the latter. We don't know if the licence fee would be a one-up or an ongoing fee. And we don't know how profitable any such deal is expected to be. It could be anything from Fonterra having taken the Gourmet brand into it's structure to some small company tacking it on to the side of it's operations. Questions.

[emearg]

That's the point of "under licence", Emearg! However, we don't know whether they already have it in place or just hope to later, although "maintain supply" would seem to imply it's ready to roll. We don't know whether they will just get someone else to do the manufacture for them, or hand over all the rights off and just take a fee back, although "licence" might imply the latter. We don't know if the licence fee would be a one-up or an ongoing fee. And we don't know how profitable any such deal is expected to be. It could be anything from Fonterra having taken the Gourmet brand into it's structure to some small company tacking it on to the side of it's operations. Questions.

Still wondering why you think revenue will continue with all those questions. Until we are told otherwise it would be wise to assume there won't be any revenue. Don't you think?

[simla]

Being logical, Emearg, we can conclude some things surely. They have made a change, so the new situation will be more profitable than the old situation. And they have decided to maintain supply, which implies that it will be profitable rather than loss making. And they do have a market position, implying the brand has some intrinsic value now (I certainly think it has from looking in the shops) so they have value to sell. But yes, we know very little. I guess we will at least be able to look at the address on the back of the packets in a bit to find out who's doing it.

[emearg]

Being logical, Emearg, we can conclude some things surely. They have made a change, so the new situation will be more profitable than the old situation. And they have decided to maintain supply, which implies that it will be profitable rather than loss making. And they do have a market position, implying the brand has some intrinsic value now (I certainly think it has from looking in the shops) so they have value to sell. But yes, we know very little. I guess we will at least be able to look at the address on the back of the packets in a bit to find out who's doing it.

Doesn't logic usually involve facts as well as reasoning?

Will they be more profitable? Only if they sell the product. At least they will stop bleeding.

They have decided to maintain supply is different to having licensed it to somebody willing to pay them.

Their market position will be lost if they run out of product. Which they will when they cease manufacture.

Surely if they had sold the brand and concluded licencing agreements they would have told us in bold uppercase text. They haven't so my only conclusion is, at least in the short term, once current stocks and inventory runs out we won't be seeing the products in the supermarket anymore.

What do others think? Has Simla got it right and I have gone mad?

[CJ]

2 cents by the end of the week. Speculators fleeing. Mr Market doesn't like this announcement...

I am surprised no one has dumped yet.

"The launch by Gourmet of the BLIS probiotic ice cream has however been a successful proof of concept and it is therefore intended to maintain supply under license."

The more I read it, that quote raises more questions than it answers.

"Maintain supply' so someone will be making it. I originally read as if it was being stopped.
"License" suggests license fees. If not fees, they will at least need the K12 so there will be sales income from that.

It is not a contract manufacture as the wording would have been different so someone has decided to take on the risk so who is it. If they put "Fonterra" or "Nestle" in that announcement, the shareprice would be 5c by now. Therefore it obviously isn't but without that piece of information, we have no idea how stable they are and what potential they have to throw money behind marketing.

Therefore not as bad as I originally thought and probably why the shareprice is in a state of shock, not knowing which way to go.

[GR8DAY]

2 cents by the end of the week. Speculators fleeing. Mr Market doesn't like this announcement...

.......GOOD RIDDANCE TO THE SPECULATORS THEN MOOSE......leave this company to the "believers". Oh MR. MARKET sure doesnt like this does he? (yea right)...$750 worth traded and SP steady as she goes??? I read the latest release as GOOD NEWS. We have a company that tried something (for good reason)....it didnt pan out......make the call and move on. Precisely what they have done ie be proactive, take it on the chin.....move forward. That's what we do in life and business. Gotta be better than continuing with the cashburn.......hard call but good on them I say.

[simla]

Yes, but the curious thing is that we don't know if this wasn't good news.

We don't know that they've taken it on the chin at all, or whether they might actually be winning. We do know that the launch was "successful" and that they intend to "maintain supply". Another way of reading this definitely includes this: "the ice cream is selling fine thank you, but our small manufacturing facility can't make it cheaply enough so we're getting someone else to make it cheaper who has better facilities." I probably have a different perspective since I go to the supermarkets from time to time and what I see is they are willing to stock it very visibly and it turns over fairly steadily (and it is by far my family's preferred ice cream already.)

CJ, you ask if they will throw marketing behind it. The announcement said they would cease with the Gourmet branding. Well, if it's to be another brand then there is presumably already marketing in place.

Yes, Emearg, I agree that there are other ways of looking at it, but they don't all have to be negative. For example, if a bigger company is to take this on, maybe they'll launch the yoghurt too. Or the M18. And don't we normally get pleased when a bigger company takes on Blis products? Why should it be different this time?

And the increase in forecast loss is described as "as a consequence" of the relocation and restructuring involved. So we don't have to read that as the situation getting worse than it was.

Maybe they called it "Moving Forward" because they were trying to say this is genuinely useful progress?

Other companies have focus groups to see if a product is attractive. Perhaps this company needs focus groups to see how many different interpretations can be made from its statements! They do so many other things so well, that I don't understand why they don't also work harder on unambiguous statements. BUt I'm certainly glad they're still beavering away though.

[Stu]

Was there attempt to sell Gourmet as a going concern to recover some costs?
If not it is possible that it was wound up due to a licence being granted to a much larger entity.

The restructuring costs, increased insourcing, and move to a dedicated manufacturing site imply a move to meet increasing demand?

[winner69]

just noise today .... all back to normal tomorrow

wonder who sells the most this year .... the corner dairy or BLT

[simla]

just noise today .... all back to normal tomorrow

You may be right, Winner. They're stopping manufacture of ice cream but intend continuing to sell it. They're cutting back for costs, but talking of having more space to process the product. There is no discussion of future prospects, except that the GRAS sales in NZ have been well received. A cut back in revenue stream, but one that was making a loss. It's hard to make anything too concrete of all that put together. Maybe CJ is right that they were just obliged to make a statement under the rules. And maybe it doesn't add up to any great gain or loss.