Accsys Technologies (AXS) has come a long way in the past five years, from building a distribution network and gaining market acceptance to selling its advanced wood processing technology.
Accoya virtually eliminates all water ingress into softwood, and there is a similar process for wood chip, called Tricoya. Initially, Accsys planned to build licensing agreements to generate royalty payments, but having built a trial Accoya plant in Arnhem, it now has plans to double output funded by a combination of loans and fees from its development partner, Solvay. Under a new agreement, Accsys will be paid considerably more by Solvay, and the latter is also committed to buying 76,000 cubic metres of Accoya over the next five years.
Crucially, economies of scale and higher prices have helped to drive gross margins up from 23 per cent to 36 per cent, while the cash outflow of €0.7m (£0.5m) in the previous first half has been turned into a €1.8m inflow, and there is still €7.5m of cash on the balance sheet. Progress continues with funding, building and operating the first Tricoya plant, with plans to have this operational by 2018.
Analysts at Numis have upgraded their forecasts to pre-tax losses of just €0.9m for the year to March 2016 and a loss per share of 1.78¢, from a €5m pre-tax loss and 6.37¢ loss per share in FY2015.
| ACCSYS TECHNOLOGIES (AXS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 68.5p | MARKET VALUE: | £62m | |
| TOUCH: | 68.5-69.3p | 12-MONTH HIGH: | 82p | LOW: 56p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 46¢* | NET CASH: | €7.5m | |
| Half-year to 30 Sep | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 21.8 | -3.1 | -4.0 | nil |
| 2015 | 26.3 | -0.1 | nil | nil |
| % change | +21 | - | - | - |
Ex-div: - Payment: - *Includes intangible assets of €11m, or 12¢ a share £1=€1.42 | ||||
