SeaDragon

[Balance]

The fact is they have just announced they are exiting the only business they have ever sold anything in - thats $5.6m of revenue off next years books already.

This is the business that was constrained by supply - that they raised the money for is now non viable?

Exactly, Apathy. This company makes Rakon look good!

This is what the company stated a year ago to a day : "SeaDragon's Squalene operations are in a strong position following the conclusion of new raw material supply agreements, which should see a further growth in sales. Existing customers have indicated a strong desire to enter into new agreements with increased volumes and prices. The Squalene operations performed well in the 2015 financial year despite a backdrop of intense competition for raw material supply."

[ari]

So is the old plant now mothballed? New plant was going to be a nice add on.

[Apathy]

So is the old plant now mothballed? New plant was going to be a nice add on.

No - they are keeping that for 'boutique lines'. Its a pretty desperate play but consistent with their track record.

No stock has been disposed of its just been heavily discounted by way of impairment. They take the big hit and put it down as exiting a business/discontinuing a line. Next year they have product that is saleable sitting undervalued that they can sell at a profit which will be shown as evidence of the 'added value/ higher margin' return from the new plant. It is exactly the game they played with the Snakk holdings - revalued it to cost(Not market) took a hit and then proceeded to sell at a profit the following year. Obviously all netted out but they manipulated the normalised numbers.

What is more incredible is that they are exiting a business that had gross margin in first half of 32% but when 'corrected' for year end was actually contributing 48%!? On what basis do you want to exit that business? and on what basis can you justify a 50% impairment!?

[Balance]

What is more incredible is that they are exiting a business that had gross margin in first half of 32% but when 'corrected' for year end was actually contributing 48%!? On what basis do you want to exit that business? and on what basis can you justify a 50% impairment!?

Talked to an industrial chemist in the beauty care industry whose firm sources raw materials like jojoba oil from South America. He said that Omega 2 and 3, derived from fish, are very unstable and prone to spoilage unless properly handled, stored and used. Beauty care companies require very high quality omega 2 to mix in with their other ingredients and all ingredients are tested for quality and content before mixing.

Wondering if SEA had to write off their Omega 2 due to spoilage? Which begs the question whether they know what they are doing!

BTW, the chemist cautioned that most of the omega 3 capsules on sale in shops have bugger all nutritional value as the omega 3 content has long been compromised by inappropriate storage and handling - heat, light etc.

[enzed staffy]

yes there was a news item in January well publicised regarding and Auckland Uni study that demonstrated very little active omega 3 in the supplements sold in NZ due to degradation and instability to light and temperature. this was seen across a range of tested brands. this was suggested to occur enroute from south America and via poorly managed storage in ports etc.
discl- never owned Sea dragon shares

[kura]

WOW, share price unchanged, despite yesterdays announcement.
Mr Market sure can be irrational, or maybe I need psychiatric counseling ?

[ari]

WOW, share price unchanged, despite yesterdays announcement.
Mr Market sure can be irrational, or maybe I need psychiatric counseling ?

More buyers than sellers this morning, can't get my head around it either....

[Apathy]

More buyers than sellers this morning, can't get my head around it either....

Some people have a very very big incentive to make sure there isn't a collapse given timing and content of announcements... just saying...

Controvertible note actually looks reasonable - last one was 18% this is at 12% and drops to the heartland rate once approval in.

Doesn't change the fact that the conversion price stays at .8.

CVT will be happy enough though - given entry price it will still be sitting on their books well in the black. Maybe its like the jousting sticks - "tell him he's dreaming and offer them half' ... ' what do we want with jousting sticks hun?' .... ' be silly not to at half price'

[ari]

Some people have a very very big incentive to make sure there isn't a collapse given timing and content of announcements... just saying...

Have to agree Apathy......

[Apathy]

Either that or Dentie is doubling down ..