PAZ Pharma Zen

[Sideshow Bob]

Couldn't make the meeting but just had a read through the preso deck.

Echo Percy's comments - very disappointing to hear of a poor FH23. I had also expected some good flow-through from new freeze-dryers, but staffing has seemed to be a handbrake.

Having visited the Port Hills plant previously, from a layman's perspective it is some achievement what they've done, especially with Covid/lack of expertise from overseas in installing and commissioning equipment. They now have that capability in-house, but expect has taken longer, cost more than what was originally foreseen. There is little doubt that technically PAZ can produce these products.

Good they have their Chinese listing/approval for pet treats - which will be a key aspect for the new plant. My concern is that they are a little late to the party. My understanding is a bit of the gloss is coming off that Chinese business, and established brands are having to work harder to maintain sales - plus already lots of new entrants. It has attracted alot of investment in NZ already in recent years, and the market is maturing. The boom times or easy wins seem to have gone? Economic conditions and drop in consumer spending meaning less on treats?? Don't know. I would see treats as more discretionary, vs food as a 'need to have'.

The last couple of slides touch on the crux for me (page 31) - tolling compared to own ingredients is a 1 to 7 multiplier. Ingredient to consumer 1 to 4 multiplier. ie the closer you get to the consumer, the more the margin.

I would expect much of the capacity would be for tolling initially (??). Nothing wrong with that as it provides a return - but not what it was invested for.

The key is to move up the value chain and get close to the consumer. Ingredients are a big step for this, but PAZ's own brand is the key. This is a long, difficult journey which takes time, (alot of) money and expertise. But to me the jury is still out whether they can execute on this. Alot of PAZ's stuff is specialised, but freeze-drying is pretty common and not proprietary - expect PAZ have some advantages with capital & running costs of freeze-dryers.

I've mentioned it before, but the big value is in the brand. Why did PE pay $1.5b for Ziwi? Go Healthy to Nestle for $375m? Wasn't for bricks and mortar. The prize is getting closer to the consumer.

AiOra is relaunched, but doesn't seem to have been an initial success. DOT gone nowhere and logged into their website just now and there isn't a website.

Can PAZ do this? Don't know but sincerely hope so. Time will tell. I just hope they have further updates to the USX through the year to keep SH's updated.

Back to the bottom drawer again......

[Sideshow Bob]

Someone didn't like the AGM update - latest trade through at $0.30.

[Rocky145]

I would have been more impressed if the new factory was operational, yes Percy it was big and lots of expensive stainless steel, electrics and plumbing etc. But still along way from making product/money. And yes good open discussion, but unfortunately didn’t fill me with any more confidence.
Disappointing period the last couple of years has been, they have lost their way with this development at Rolleston.I’m not against the growth, they just have not managed the growth well or in a sustainable manner.
I would guess the past 6-12months they have been heavily constrained by lack of working capital / cashflow. They have been bridging the property sale for most of that period. This would have impacted work at Rolleston and maybe production as well.
They purchased 2ha at Rolleston, “Price was to good” - but really half that would have been enough.
They have started building the second building at Rolleston, yet the first is not operational, “we do not have a set plan for the second building - fluid” . All during high and uncertain building costs.
Selling of the first building is the correct measure to help the balance sheet, but this has been delayed and they were “surprised by council request for development contribution”

The next couple of years are going to be make or break really, continued organic growth will require more skill than they have demonstrated over the past couple of years. 2023 off to a bad start. Probably I would like to see a capital raise reduce debt and get both the Rolleston buildings completed, and see where it takes us, if that demand is really there.
The brand - been well discussed, but was hopeful when that was launched a few years ago But…..

Like most shareholders, my shares will be in the bottom draw for a while.

[Bluebell]

What about all the automation talked about in the previous AGMs presentation? Wasn't this supposed to reduce work load and make the work environment better and more attractive to be in.

[iceman]

Thanks Rocky145 for a well considered post

[percy]

I would have been more impressed if the new factory was operational, yes Percy it was big and lots of expensive stainless steel, electrics and plumbing etc. But still along way from making product/money. And yes good open discussion, but unfortunately didn’t fill me with any more confidence.
Disappointing period the last couple of years has been, they have lost their way with this development at Rolleston.I’m not against the growth, they just have not managed the growth well or in a sustainable manner.
I would guess the past 6-12months they have been heavily constrained by lack of working capital / cashflow. They have been bridging the property sale for most of that period. This would have impacted work at Rolleston and maybe production as well.
They purchased 2ha at Rolleston, “Price was to good” - but really half that would have been enough.
They have started building the second building at Rolleston, yet the first is not operational, “we do not have a set plan for the second building - fluid” . All during high and uncertain building costs.
Selling of the first building is the correct measure to help the balance sheet, but this has been delayed and they were “surprised by council request for development contribution”

The next couple of years are going to be make or break really, continued organic growth will require more skill than they have demonstrated over the past couple of years. 2023 off to a bad start. Probably I would like to see a capital raise reduce debt and get both the Rolleston buildings completed, and see where it takes us, if that demand is really there.
The brand - been well discussed, but was hopeful when that was launched a few years ago But…..

Like most shareholders, my shares will be in the bottom draw for a while.

Wish you posted more often.Your posts are always right on the money.
In PAZ's defence Covid, logistics and their Kril customer's new ship build being behind schedule were beyond their control.
Port Hills Road appears to be now fully operational,and will be very profitable from now on.
All of us want to see the first factory at Rolleston in production as soon as possible.
Port Hills Road and Rolleston One fully operational should see healthy profits.
Then may be the time to develop Rolleston Two and look to list on either ASX or NZX,

[Southern Lad]

Big sell off today with 270,000 shares crossing at 20 cents. Buy side of the order book looking a bit thin so will be interesting to see where the share price settles at. Some larger long term holders appear to be spooked!

[whatsup]

Back to where I bought my last shares right on 4 years ago, if it goes too much lower I will double my 250 k holding !

[Sideshow Bob]

A trade last week back up at 25c, but someone wanted out first thing this morning with 130k through at $0.20.....

[winner69]

A trade last week back up at 25c, but someone wanted out first thing this morning with 130k through at $0.20.....

Plenty of loyalists just waiting to pick up more cheap shares from disillusioned sellers