Byotrol – a bit of DYOR
Contents
- Background on why I’m interested.
- The Bear and Bull cases
- Conclusion
- The RNS feeds with a couple of comments from me
- Nov Pessimistic Outlook
- Sep 27 CEO “resigns”
- Sep 7 Optimistic Outlook
Why am I interested?
Byotrol has a profile very similar to Tristel before it took off (far and away my most successful investment). I’m already invested and think maybe some market pointers have been missed by investors. Ideally, I would have asked Paul to review it but it’s (now) too small for the SCVR, doesn’t seem to have a following and always seems to publish an RNS on a busy day. So, in DYOR mode I took the initiative of calling the Company and the CEO David Traynor very kindly scheduled me 45 minutes of his time. If nothing else the exercise has given me an appreciation of what Paul and the Team need to do to provide an insight and also the frustrations of running a small, listed AIM company. I thought I’d share my observations.
What do they do?
Byotrol focus on Biocidal surface Cleaners – they kill stuff! In the Human and Animal Health Markets this is becoming an increasingly regulated market with a high barrier to entry. Traditionally they sold IP but more recently they’ve created a set of products with a seemingly reliable revenue stream. Especially so in the Animal Biocide Market which is regulated separately from Health and where “there are few competitors”.
Downside
- Jam tomorrow Company – albeit did very well during Covid. Was as high as 70p in 2007 now ~0.6p! Down 90% in 3 years. A share that went down 80% and then halved!
- Too small – only PIs interested
- New CEO Departure very bad news – followed very quickly by a far less optimistic trading update – Break even to loss and needed to give reassurance about cash burn.
- Cash is tight and without strong management they may need to seek extra funding
- Growth has gone – trading flat for 3 years.
- Just about every shareholder is nursing a big loss and there are lots of other great opportunities in UK small caps.
- So cheap and small could get bought out for well under true value
Upside
- Back in safe hands with ex-CEO
- Has RNS moved from overly optimistic to overly pessimistic? Typical IMO when a new broom arrives.
- (Just) Enough cash – helped by exiting non-profitable lines. Minimal debt.
- Strong moat…
