Allenby Capital said that Plant impact (AIM: PIM), the developer of technologies that improve crop productivity, has world-class products and its sales are growing. According to the broker, increasing pressure on arable land, coupled with a consumer driven shift away from synthetic chemical agricultural products is creating a mass market, worth US$105bn, for ecologically sound alternatives.
“With sales revenues poised to accelerate on the back of a licensing deal with Arysta Life Sciences and a £2m equity raise, we see Pi as undervalued against forecast future cash flow and against its closest peer” it stated.
According to Allenby, Plant Impact is at a similar stage to its peer Plant Health Care (AIM: PHC), which it currently values at £110m. The stockbroker estimates Plant Impact’s enterprise value (EV) at £26m based on future cash flows from sales of CaT, PiNT and BugOil technologies alone.
At 18.5p per share, Plant Impact’s market capitalisation is currently £8.4m.
The broker did not include the Speedo product in the valuation nor did it consider the products in its development pipeline, including Nematicide which is considered to have the greatest market potential of all Plant Impacts products, Allenby noted.
The research note also stated that the company’s lead pesticide BugOil will achieve further sales through its licensing deal with agrochemical major Arysta Life Sciences, once it receives regulatory approval which is expected in 2010. Allenby also expects an accelerated sales performance following February’s £2m fund-raising which is funding expended sales and marketing operations.
http://www.proactiveinvestors.co.uk/companies/news/14485/allenby-capital-sees-potential-in-plant-impact-14485.html
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