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Itaconix – Q1 trading update, ‘More cash please, Neil’ indeed!

By Steve Moore | Monday 16 April 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Self-styled “a leading innovator in sustainable performance polymers”, Itaconix (ITX) has announced a trading update for the first quarter of 2018 trumpeting “despite adverse currency movements, group revenue has increased 8% year-on year in the first quarter of 2018”. Sounds decent enough so far…

The first quarter performance is “including a sale of Itaconix CHT into a new automatic dishwash formulation for the US private label market (“hopeful of repeat orders based on success of this new format on the retailer's shelves”), plus expanding sales in Revcare NE 100S (hairstyling), and initial minimum royalties from the tremco-illbruk licence”. Additionally stated is that “we continue to work tirelessly in support of our partnerships with AkzoNobel, Croda and Solvay”.

This tireless work and that it considers “the company uses an established proprietary process with break-through economics” saw quarterly revenue of, er… £149k!

Additionally, cash burn saw cash down from £6.9 million a year earlier to £2.5 million, with the board “confident, subject to the availability of further funding, that the company is well positioned to continue to deliver revenue growth through 2018 in line with expectations”.

Hmmm – this is with a track record outlined HERE, with Cynical also then noting ‘More cash please, Neil’. Looks like it indeed attempted fundraising ahoy. “Break-through economics”, you say? Natch, re. this stock it remains bargepole ahoy. Sell.

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