Pharmazen

[Basil]

Director Greg Shepperd resigns today with immediate effect. Nothing much else in the release about it other than the usual "wish him well" statement. Makes me a bit nervous. Year end accounts will be know to Directors by now. Why the rush out the door?

I agree the overall substantive financial situation would have been known to Greg Sheppard by the end of February.  Minority shareholders have to wait more than two and a half months to find out the reason he resigned.  Hmmm...how is that fair and reasonable to them?  How does such behavior engender trust or respect ?  Earlier today you said the below and I couldn't agree more

...PAZ are rapidly losing credibility...

[winner (n)]

Wonder if Shepherd wasn't on the Audit Sub-Committee ...that might have held things up a bit

[lorraina]

 AGM.Monday 19th June.
Sorry I put Friday..

[lorraina]

https://usx.co.nz/uploads/paperclip/documents/2826/original/FY22_PharmaZen_AR_FINAL_.pdf?1684113808

[winner (n)]

https://usx.co.nz/uploads/paperclip/documents/2826/original/FY22_PharmaZen_AR_FINAL.pdf?1684113087

Lots of pretty pictures ...and numbers not too shabby

Onwards and upwards from here

[lorraina]

Numbers made better by;
December also saw us negotiating an
agreement for a sale and lease back of
our first building at Tawhiri for $9 million,
releasing funds to commence Tawhiri
2 and further investment in plant and
equipment. These negotiations were
completed after year end.

[Minimoke]

So we can perhaps see where some of the delay comes from

"While covered in the financial statements, I will draw attention to the impact of a change in interpretation of year end revenue recognition as approved by our new Auditors, Grant Thornton. In previous years revenue recognition was based around when our product was ready for shipment and had been QC cleared.

After further consideration and input from our auditors, revenue is now recognised at the time goods are shipped which has required a restatement in prior year results. This has meant that some goods sold and paid for but still on-site were not included as sales for the year."

This interpretation is how I would have thought it was done in the first place. So not sure what the prior auditors were up to.

And I guess that see the new year with a $694k in sales head start.

I see they have also announced their capital raise which I've discussed in prior posts below.

[Minimoke]

Numbers made better by;
December also saw us negotiating an
agreement for a sale and lease back of
our first building at Tawhiri for $9 million,
releasing funds to commence Tawhiri
2 and further investment in plant and
equipment. These negotiations were
completed after year end.

I see they have transferred value from fixed asset to current asset. Good thing is they will have more cash in hand to continue with Rolleston 2 build.

[Breezy]

Lots of pretty pictures ...and numbers not too shabby

Onwards and upwards from here

You had better buy some over the next year while they are still cheap as chips then, your 4c value when compared to SML is not going to happen.

[Minimoke]

Initial thoughts on numbers
Sales up $3.4m - good
Cost of sales up $1.86m - inevitable
Gross profit up $1.54 good

Admin expenses up $ $274 k - not good
Marketing down $230 k. Not good (but may not need it.)

Net financial position $16.6M worse off - now at $48.35m. So what has changed. Cash on hand significantly reduced ($1.55m)- no surprise. Has to be construction cost to pay for . Bank overdraft increased $4.2m. Again I presume this goes to construction costs. Accounts payable up 1.7m - this is a bit of a concern. And secured borrowings up $6.7m

Seems they only netted $8.5m from sale of Rolleston 1.

Total equity has increas$2m between 2020 and 2022. So that is a lot of debt paddling to increase sales by a gross profit $1.54m


All in all I am reasonably happy with this report. I would much prefer they now focused on maximizing sales out of Christchurch and Rolleston 1 before any more money is spent on Rolleston 2. I'd like to see that debt position reduced since I don't want another Cibbus type capital raise to happen again to further dilute my shareholding.

Given the VERY LONG delay in the report, which shoudlnt have been if it was just a matter of when to account for finished goods, (where are the prior auditors on this!!) we should have pretty much a full half year update by the time we get to enjoy all the Airoa samples and tasty scones at the AGM

(and wasn't the the report strangely silent on Aiora? Not mentioned once)

[Breezy]

The Financial overview summed things up pretty well for me, extremely strong demand outstripping supply and the issues around that, once those issues are sorted and supply can start to meet demand, then boom.

[Basil]

Genuinely pleased for shareholders that nothing untoward has happened.
2022 massively challenging for a lot of business's including PAZ.
As Minimoke has noted, their balance sheet is quite "stretched".
Breezy quite correct that once they get their ducks in a row the level of quacking will be much louder.

For mine, significant risks remain in terms of execution and staffing, and they are not in a robust financial position.  I feel many years of growth are already baked into the current share price with a FY22 PE of 119. It may seem cheap at 43 cents but tech and biotech companies halving their share price from levels of irrational exuberance they once hit is the norm, rather than unusual overseas.

[lorraina]

Notice of Meeting;
https://usx.co.nz/uploads/paperclip/documents/2827/original/Notice_of_Shareholder_Meeting_2023_with_Bio's_attached.pdf?1684116433

[Breezy]

65% down from its high now with Rats and Mice seller/s giving in, expect this to continue over the next few months but fortunately no one with any substantial sized holding can do much even if they wanted to, thats what long term investing is all about if you believe the story.

[lorraina]

Hybrid Annual Meeting

This is a reminder that the Annual Meeting of PharmaZen Limited will be held at the Te Pae Christchurch Convention Centre, 188 Oxford Terrace in the Bealey 3 Room and online at www.virtualmeeting.co.nz/paz23 at 12:30pm (New Zealand time) on Monday, June 19, 2023.

If attending online, Shareholders will be able to hear and view the meeting, vote on resolutions and ask questions. If you will attend the Annual Meeting online, you will require your CSN/Holder Number for verification purposes.

More information regarding online attendance at the meeting (including how to vote and ask questions virtually during the meeting) is available in the Virtual Annual Meeting Online Guide available here.

Shareholders who wish to participate in the online Annual Meeting are recommended to log-in to the online portal at least 15 minutes prior to the scheduled start time for the meeting.