LON:BYOT | BYOT - A Winner From CV19?

18th May '20 by Berksbee

15 comments 1005 reads

£BYOT I am starting this discussion as I have a feeling this share may be about to take off and has a similar profile to Tristel, which has been by far my most successful investment in terms of absolute gain.

I would be interested in the views of anyone else who owns BYOT or has it on their Radar. From a screening viewpoint they don't stand out but IMO they are a long-term winner from CV19 and they have recently announced 3 critical licensing deals (one with Tristel) that will go straight to the bottom line.

Disclosure : I have made a modest investment @5.5p

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Berksbee

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15 comments

Berksbee

20th May '20

Done a bit of analysis on £BYOT.

H1 2019 £2.2m £0.51 loss

H2 2019 £3.9 £.76 profit (based on full year )

H1 2020 £6 £.75 profit (not sure how one off license fees are counted) - based on Q1 update.

H2 2020 £6 - £.75 profit (my projection)

Brings me to calculate a p/e of 17 based on the current share price and some conservative growth rates. Note CV impact on business only started to appear in March.

andrewjames

20th May '20

I also became aware of Byotrol (LON:BYOT) through being a shareholder in Tristel (LON:TSTL). They have the same broker (finncap) and their research notes on the healthcare sector are generally well worth a read. For those people who subscribe to research-tree, Proactive have just posted an interview with the Byotrol (LON:BYOT) CEO that gives useful background information.

Byotrol (LON:BYOT) is obviously tiny and it has hitherto been loss making, so some crystal ball gazing is required. The company is clearly in the right place at the right time, but I am inclined to see how things develop under its various partnering agreements before deciding whether to invest. For now, it is on my watchlist.

andrewjames

27th May '20

There was quite a flurry of reader comments concerning the investment case for Byotrol (LON:BYOT) on the SCVR yesterday, despite the fact that the company had not actually announced anything. As this share specific thread exists, I thought that I would post some further thoughts and queries, as I continue to keep an eye on the company.

First, there was quite a lot of comment in the posts yesterday on the collaboration with Tristel (LON:TSTL) that was announced in late March. Actually, Byotrol (LON:BYOT) first announced a collaboration with Tristel (LON:TSTL) in its 2019 Preliminary Results last September, but it must have been very much a fairly loose framework agreement, as Tristel (LON:TSTL) made no mention of it at the time. Byotrol (LON:BYOT) had hoped that the sanitising product involved would be launched in late 2019, but that obviously did not happen.

I have lots of questions concerning the March 2020 collaboration, where there was quite a contrast in the RNS' issued by the two companies. The most interesting part of the deal is the proposed new long lasting surface disinfectant which it is planned to market as "Tristel 8" and which incorporates the Solvay SA ACTIZONE technology. Incidentally, I am assuming that Byotrol (LON:BYOT) has all the necessary IP rights and that Solvay (a much larger company) will not be able to extract further payments in order to allow this technology to be used. Who knows?

Assuming also that the combined chemistry works (and that is what Tristel (LON:TSTL) satisfied itself about in the period after the initial September agreement was entered into), we do not know if further regulatory approvals are required before the product can be marketed. Even then, there is the further step of persuading the NHS and other parties that the product is appropriate. Tristel (LON:TSTL) sounded a note of caution in their RNS as to how long the whole process of launching the product would take. We also have no feel for as to the level of the contracted payments that Tristel (LON:TSTL) has agreed to make. Byotrol (LON:BYOT) talked about meaningful minimum guarantee payments, but then again it is a very small company. Tristel (LON:TSTL) has said nothing at all so far about payment terms. So, it sounds promising, but it is impossible to value at the moment.

Byotrol (LON:BYOT) is also licensing other biocidal formulations to Tristel (LON:TSTL). My guess is that those products are already approved and can be marketed (part of the Cache range) much sooner. Otherwise, why bother with stuff that looks like an interim solution? Again, we don't know the detail.

There was also some speculation in the posts yesterday that Tristel (LON:TSTL) might acquire Byotrol (LON:BYOT). I cannot see why it would bother. Securing commercial arrangements over the key assets makes much more sense. Tristel (LON:TSTL) has a lot on its plate at the moment. Why would it want to acquire a loss making company with a weak balance sheet and which really struggled last year to have its preliminary results audited (it had to switch auditors and its shares were temporarily suspended). I fear that it would be a huge distraction to £TSTL's management team at precisely the wrong time. That is not to say that the terms of the collaboration might not be extended, which I imagine could happen if things progress well.

Byotrol (LON:BYOT) has also announced other deals with Integrated Resources International LLC (US market -Byotrol24 product) and SC Johnson Professional (extending an earlier arrangement for its hand sanitiser product). Again, both look potentially promising, but we don't the quantum of the payments under these deals and finncap have not provided FY 2021 forecast figures.

That is what I meant by the reference to crystal ball gazing in my earlier post. For me, it is simply too early to invest. Unless you are happy to ink in materially increased revenues for the next few years (not just the next few months), the share price is getting ahead of itself. Of course, it could take off (and I wish it well, not least as a Tristel (LON:TSTL) holder), but that is speculation.

andrewjames

11th Jun '20

This thread is pretty moribund. If anyone is sufficiently interested, they might want to look at the much more active lse share chat BYOT thread. I have posted there as james188, although I have not yet invested in the company.

Berksbee

15th Jun '20

Andrew, Thanks for the tip. Think things may liven up when the next update/results come due. Apologies for the tardy reply but Stockopedia doesn't notify one when one has a reply to a thread - bit frustrating really - or have I misunderstood the alerts process?

Berksbee

15th Jun '20

PS had a look at the LSE site - see what you mean!

Berksbee

17th Aug '20

The latest trading update indicates that the boost in sales may well be sustainable and a big hike since it was tipped this weekend by the Mail I believe. Was going to top up - now might take some profit.

Bluesky Ventura

17th Aug '20

yes this look like another bagger

Snowbum

17th Aug '20

I work on a Tier 1 COMAH site in the U.K. and was interested to see Byotrol wipes have recently appeared all over the Plant for use by employees to sanitise work and recreation areas!

Looks like a bagger indeed!

Benson

17th Aug '20

This company looks in fashion at the moment but it is a small company and at times will be difficult to trade That said l like what I see and I am looking into it further 8p today

Berksbee

18th Aug '20

Based on the latest trading update this may be an under estimate.

stock_Hunter

28th Apr '21

https://www.investegate.co.uk/...

Insiders sold at market....Is it bad news ? can any one help ?

Berksbee

10th May '21

Not sure it's much to worry about. Directors selling their share options.

stock_Hunter

10th May '21

that means they are booking profit right ?. they don't expect that much upward potential?

Berksbee

10th May '21

Not so sure. Most already have decent holdings and it is difficult if not impossible to sell outside select windows. If it were me as a director I'd be taking some profit. BYOT is one of my conviction shares for what its worth.

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BYOT - a winner from CV19?

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Berksbee

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