Research: Industrials
Ocean Harvest Technology (OHT), based in the UK, produces animal feed additives products using a composite of blended seaweed. Its patented products have been shown to enhance growth rates in livestock, increase feed efficiency and improve egg quality and quantity for laying poultry. As OHT operates in an attractive market, there is significant potential for its proprietary technology to drive volume growth as awareness of its product benefits increases, along with improving financials.
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Ocean Harvest Technology |
Harvesting the power of seaweed
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Agricultural products |
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11 April 2024 |
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Ocean Harvest Technology (OHT), based in the UK, produces animal feed additives products using a composite of blended seaweed. Its patented products have been shown to enhance growth rates in livestock, increase feed efficiency and improve egg quality and quantity for laying poultry. As OHT operates in an attractive market, there is significant potential for its proprietary technology to drive volume growth as awareness of its product benefits increases, along with improving financials.
Proprietary technology delivering beneficial solutions
The feed additive market represents a $40bn total addressable market, presenting a significant revenue opportunity for OHT. Its products serve the key animal markets of bovine, aqua, poultry, equine, swine and pet verticals, offering varied nutritional benefits by category. The group secured a broad ranging patent in February 2024, which covers the claims of the core benefits of its seaweed blend products, making it the sole patent related to seaweed blends. The group’s products not only enhance animal nutrition but are also an attractive return on investment due to lower mortality rates and greater feed efficiency. OHT estimates its sustainable OceanFeed solution saved 12k tonnes of animal feed and 6k tonnes of CO2 emissions globally in 2023.
FY23 results show improving momentum
OHT’s recent FY23 results showcased the rapid growth of the company’s proprietary OceanFeed product, which grew by 28% in the year. Product revenue grew by 21%, driven by an impressive 18% increase in volume, resulting in reported revenue growth of 12% to €3.4m (FY22: €3.0m). During 2023, the company signed 15 new customers and made its first ventures into India, Taiwan and Korea. Gross margin improved to 38% (FY22: 31%), driven by gains in volume, pricing and cost of goods sold efficiency gains, including supply chain initiatives to improve the quality of seaweed sourced and the efficiency of its processing facilities. Despite the 5% increase in operating expenses, the adjusted EBITDA loss improved by 8% to €2.2m (FY22: €2.4m). The £6m gross proceeds raised at IPO supported the group’s cash flow after a build-up of working capital ahead of its 2024 growth plan. Consequently, OHT ended FY23 with a net cash position of €2.6m.
Valuation: Year-to-date share price rise
Since IPO in April 2023, OHT’s share price has seen a resilient 6% decline in a tough year for new London IPOs. In recent months, however, the share price has risen by 58%, although still below the IPO price of 16p. Using the sole estimates on LSEG, OHT trades on EV/sales multiples of 2.7x for FY24 and 1.5x in FY25.
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Consensus estimates
Source: LSEG |
EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: TMT
There has been a lot going on under M&C Saatchi’s operational bonnet, so delivering FY23 results a shade above market forecasts is a good result, especially given the difficult market backdrop. Earlier issues regarding outstanding put option liabilities are in retreat, with minority interests in FY23 down to 13% from 25% in FY22, and most remaining liabilities are expected to be settled in FY24. The focus is now firmly on optimising the operational structure. There has already been good progress, simplifying and achieving greater coherence on a regional-first approach, with better alignment to how clients (and potential clients) want to utilise the group’s global capabilities. The incoming CEO, Zaid Al-Qassab, who starts in May, should be taking on the group’s navigation in less stormy waters.