BLT - Blis Technologies

[CJ]

Here is one interpreation of the announcement:

http://www.nzdoctor.co.nz/news/2013/february-2013/19/blis-heading-for-a-$18-million-los.aspx

I like it how they refer to the ODT rather than the announcement. Looks a bit like chinese whispers with the message getting mixed up along the way.

[simla]

Getting slapped around the back of the woodshed like the unfavoured redhead child of the family today!

I asked this before but nobody answered. How do you traders know when you're following the trend and when you're creating it? After all, someone has cheerfully picked up about 2 million shares today at a pretty handy price. Why aren't they selling too in the trader's view? Are they out of touch or what?

[GR8DAY]

........perhaps they're NOT a trader SIMLA.......to state the obvious??!

[simla]

book any profit they may have before it disappears

But that's what I mean. Doesn't that mean you have to get out before the other traders? In which case there can be no net gain at all, if it's just a bunch of traders trying to outguess each other.

So what happens in 12 weeks when Blis makes its next report? They have Europe opening, the dog product was last predicted to go on the market in 8 months, China may open this year, sales overseas must actually recover at some point, Asia must be up to something, they may have licenced the NZ ice cream etc. All those things would require forward orders and if so Blis would have some good news to announce. Then the guy buying today makes way more than the traders, doesn't he?

I suppose I'm saying this: If Blis shareholders basically just hold, then most of extra trading is probably just traders. So where can the net gain be? Other shares are different because a wide range of investors move in and out at all times, but that is not my experience of Blis.

[simla]

So I'm not asking why you trade in general. I understand that you either believe in that or you don't - ironically just like Blis! - but I'm just musing out loud why the traders feel there is money to be made on BLT since my feeling is that there's nobody to trade with except the other traders. BLT shareholders are different on the whole, which is why the share price so seldom moves. That's all. No criticism intended.

[GR8DAY]

........well it sure as hell has been moving today SIMLA and you can thank (or NOT) the traders for that!!

[simla]

Actually, I think an appropriate mindset when dealing with BLT is to think of the Mainland cheese ads. Good things take time. Appropriate, since my understanding is that Saatchi's came up with that slogan, but that one of the people now associated with Blis was the one to adopt it and drive it to success. Useful person to have on board, I'd have said. Not a wonder the ice cream has been kicking down doors. Who? DYOR, as I was just reminded?

[simla]

Thanks, Moosie.

I've just been enjoying eating the ice cream while it's still available. The FSANZ have agreed on new rules for health claims on food, which transition over 3 years but start now too, so anyone starting a new probiotic ice cream would be wise to meet them. But they don't allow health claims on food high in salt, fat or sugar, so the next ice cream will be one of the low fat jobs for sure. So it's goodbye to the only genuine ice cream on the market, I fear. http://www.foodstandards.govt.nz/con...relatedclaims/

The good news is that they seem to allow full health claims about Blis starting right now, so long as they've notified FSANZ for most claims, or also got FSANZ approval if they mention a health marker (blood tests etc) or serious illness (one you'd normally get a doctor to treat). There are a few other restrictions too. One is that you can't claim to cure or alleviate a disease or condition, which Blis will have to tip toe around a bit maybe. "Keeps breath fresh" is probably okay but "cures bad breath" probably isn't. Interestingly, I wouldn't have thought a common cold counted as a serious disease, but the "alleviation" problem would be there. I'll bet a lot of people would like taking a yoghurt that said "keeps breath fresh" though.

As I read it, this makes Blis ice cream, yoghurt etc able to make quite substantial claims right on the label and in advertising starting now, in NZ and Australia. If that is true, and that's just my reading, then yesterday's announcement could yet be the precursor to an interesting future, remembering too my earlier comment on the industry heavyweight BFF have on their side. Also, the company has said it has problems getting Blis into Australia under health laws, but this would appear to give them an open door now.

I hope I'm right in my reading of this, the link takes you where you need to go to decide yourself. As this is quite an interesting development, I would be very interested to hear if anyone agrees with my reading on this. It appears to open the door for Blis K12 and M18 to be used in ice cream and yoghurt and gum, with pretty full health claims on the label and also in advertising, in NZ and Australia, starting now.

As the inability to legally advertise has been a real archilles heel, this would appear to be a pretty positive development. Has anyone got the time to see if they agree with my reading?

But meanwhile I am mourning the loss of the only real ice cream on the market. The ODT article in the earlier link said they would be moving Blis into the Gourmet premises in 8 weeks.

[simla]

ps. If - and it's a big if - but if this context is part of yesterday's announcement, then maybe Mr Market isn't quite as clever as he thinks. After all, nothing in the announcement came out and said, "this is terrible."

And did anyone notice this curious sentence in the ODT article: "when asked if capital-raising may be brought forward to 2013, he said there was at present ''no change to guidance'' that capital-raising was likely in 2014." (The last half report used the phrase 2014 financial year, to be clearer, so the interviewer and he may have been meaning different times.)

I can't help feeling we were told something interesting yesterday and we haven't worked it out. Good or bad, don't know.

[simla]

It is not a contract manufacture as the wording would have been different

Maybe, and maybe not. You can licence the intellectual property (K12 in this case basically) but you can also licence a brand. We know they are dropping the Gourmet brand, and starting another one would seem expensive. But on the other hand, the company talks of "finished products" quite a bit these days, as they did in the last announcement. We still don't know their grand plan for BFF, but we might assume exporting a branded food would be much more profitable than exporting raw K12 in the end (or manufacturing elsewhere). The FSANZ stuff allows advertising so starting a new brand maybe needn't be completely bankrupting? And all their capital raising is always linked to developing the market, so doing so here would not be inconsistent.

I don't think we can assume anything much about their intentions yet. More news to come on this front maybe, I'm thinking.