BLT - Blis Technologies

[emearg]

I'm pretty optimistic on Blis's future, but I'm keeping a very careful eye on the world economic forecast. Less optimism there!

Interesting how successful 2009 was for Blis despite the global financial turmoil.

Interesting point about deliberately increased investment in expansion, Emearg. Could be. They have been talking positive cash flow as the highest priority for a while now, though. There has been an awful lot of investment anyway, so I don't see that it has to threaten future growth.

The AGM presentation stated:
"When BLIS achieves positive cash flow we will need to return to undertake more work on strategic developments to ensure the future product pipeline"

I based the first part of my comment on that. I don't see them making huge profits in the next year or two as I think they will make sure they stay in the black (once they get there), but invest excess cash back into the business.

It is good to think that there is not only room for global and market expansion of the existing probiotics, but potentially more probiotics. Q24 seems pretty likely to be next but what else? And who knows how many more?

[Steve]

Will 2010 be the year Blis gets rid of its penny dreadful status?

Or will Blis fail like BotryZen and Certified Organics to name just two that had similar beginnings?

It is interesting times...

The problem with BOZ was that even when it produced at full capacity, there wasn't enough volume to generate enough sales to cover costs/produce positive operating cashflow.

My understanding is that BLT has farmed out production, so shouldn't be subject to a similar constraint?

[fungus pudding]

Thanks Brucea, but my optimism on Blis is just because that's how I see the facts. My quote might be: "The pessimist tells you how bad the wind is, the optimist tells you it will get better, and the realist just adjusts his sails." I'm probably more of a realist at heart than anything else. I'm pretty optimistic on Blis's future, but I'm keeping a very careful eye on the world economic forecast. Less optimism there!

Interesting point about deliberately increased investment in expansion, Emearg. Could be. They have been talking positive cash flow as the highest priority for a while now, though. There has been an awful lot of investment anyway, so I don't see that it has to threaten future growth.

So, Emearg and I have had a guess, Fungus Pudding. Care to have a stab yourself on revenue size and when it might happen?

No sorry. I haven't got the faintest idea. That's why I asked.

[Cannibal]

I will have to stick with my previous guess below. Sales could be anything but we know it will be a huge increase on anything previoulsy. I will stick with a $500k full year profit (minimum) and a share price closer to 40 cents (with a lot of future growth to be factored in) than the 11 cents that it is now.

40 cents is a good number - one that I don't disagree with...

The latest Costco newsletter has just arrived in my in box - ~25 products featured including BioGuard - all good.

Here's a look at the Top 10 largest U.S. retailers and how they performed in 2009:

1. Walmart: $404.54 Billion
Earning nearly five times more than the second largest retailer, Walmart won't relinquish its position as the number one retailer anytime soon. Its every-day-value-based prices continue to win customers in search of a bargain, especially in tough times. The retail giant is focusing on global expansion, green initiatives and a store refresh program called Project Impact to ensure it stays on top of the retail heap with solid growth.

2. Kroger: $75.35 Billion
In a year when consumers were forced to trade down and cut discretionary purchases, Kroger benefited by providing must-have grocery staples for the household. As the operator of more than 3,550 stores nationwide, Kroger maintains its strong comp-store sales and solid growth through use of sophisticated customer segmentation analytics and offering competitive prices and private label products.

3. Costco: 71.42 Billion
As the largest membership discount warehouse operator in the U.S. Costco is well positioned to maintain and even grow market share in a recessionary economy. Store openings continue to rise and profits remain healthy for this steadily growing giant.

Lemme spell that out - US$71,420,000,000!!!!

Full list here - http://www.risnews.com/ME2/dirmod.as...51E12DA16D752A

[simla]

Is there a certain buzz in the air here? Are people waiting around for the share price to go up, by any chance?

Well, certainly we expect/hope things to be going pretty well by 2011: America, Asia, chewing gum, Nestle on the market probably, maybe China, maybe Europe, M18, toothpaste perhaps, chocolate milk drinks perhaps, ditto yoghurt perhaps. possibly another probiotic - all combined we hope with a growing marketing presence.

So logic would dictate that sometime this year the share price will have to move from where it is now to where it might be then. We have the results in May and in November, and who knows what news besides that.

But for myself, I'd far rather see the dividend stream start, if only at a trickle at first. High share prices that are not underpinned by any dividends may be a nerve racking situation for shareholders choosing between taking their profits with relief or holding on for what may be a long term situation.

It should certainly be an absorbing year to watch in any case.

[Steve]

Just thinking about how the conversion rate of preference shares to ordinary shares works...

From memory, there was a conversion rate that must fall between 25 - 100 ordinary shares for each $1 preference share (making the ord share price between 1c & 4c which was reasonable at the time of issue).

With the current shareprice say 12c, then the conversion ratio would be 25 ordinary shares for each preference share which equates to a preference shareprice of $2.80 which it is.

So if you expect the BLT shareprice to increase, would you not be better off to buy the preference shares and lock in some dividends until conversion?

Or am I missing something?

[emearg]

Hi Steve

We have had this discussion before.

Personally I think the answer is yes. Generally the preference shares are trading at a discount to the ordinaries. The discount becomes even greater when the dividend is taken into account. This dividend is guaranteed (via cash or shares (at what are now very very favourable terms))

Others are less convinced as they feel it may be possible a dividend will be paid on the ordinaries. This is certainly possible but not guaranteed. The amount paid may or may not make them a better option when compared with the preference shares.

It is a tough call and much will depend on your expectations of profits over the next two and a half years, and the potential for distributions to occur.

I don't expect a dividend for the next 18 months, but maybe they will start in what is the final year of the preference shares life?

I do recognise that Blis may decide to reward its long suffering shareholders with a dividend earlier than this. I would expect it to be small...more a token than anything.

So, do you choose a sure thing, or take a punt?

Personally I have bought preference shares over the past few months as they have been (ranked in order of importance to me):
1) Better priced (without even taking the div into shares)
2) Have been available in adequate numbers
3) They pay a small (not imputed) dividend (3% - 4% depending on my recent buy prices)
4) Rank higher should Blis go under
5) I had enough ordinaries and should they start paying a dividend I will benefit from that

It is a tricky one...

[emearg]

ihealthtube.com have posted four videos interviewing the Technical Health Manager of Frutarom USA, Jocelyn Mathern, M.S., R.D.

Oral Bacteria Blis K12
http://www.ihealthtube.com/aspx/view...9163bba4d54588

Blis K12 Research Explained
http://www.ihealthtube.com/aspx/view...c0ce6d9141c5e9

Benefits of Blis K12
http://www.ihealthtube.com/aspx/view...b3388f322c8cc2

What is Blis
http://www.ihealthtube.com/aspx/view...c50624c9a048e6

[brucea]

Forgive me if the link below is old hat - it is so hard to keep up with the news on Blis K12 products hitting the internet stores in the States. I found it from emearg links in the previous post.
http://www.swansonvitamins.com/SWU519/ItemDetail?n=0

[svez01]

Firstly I would like to say hi to all on this thread. I spent a bit of time reading through the old posts and enjoyed the banter.

With the current shareprice say 12c, then the conversion ratio would be 25 ordinary shares for each preference share which equates to a preference shareprice of $2.80 which it is.

So if you expect the BLT shareprice to increase, would you not be better off to buy the preference shares and lock in some dividends until conversion?

Interestingly, BLT currently has today's biggest gain on the NZX (+7.14%) while BLTPA has the biggest loss (-6.67%)

The preference share price of $2.80 equates to a share price of 11.2c at a conversion ratio of 25.

The preference shares currently seem like good buying to me.