for more information about stanelco click on the links.

driver's research page link
http://www.moneyam.com/InvestorsRoom/posts.php?tid=7681#lastread
website link
http://www.stanelco.co.uk/index.htm

on another subject does anyone know how much corn is req. to make 1t of Starpol and if SEO are going the way of 20t quantities who does the corn sourcing? Or is it all done in some other way with the Starpol manufacturer taking the finished raw materials from another company that does the "corn conversion"? For the quantities of Starpol potentially talked about in future is corn a potential bottleneck?

The USA alone produse a surplus to demand of approx 1 to 2 billion bushells of corn per annum. The raw material is'nt a problem. In fact using it instead of dumping it on the world market can only be a good thing.

no he did not make a profit but could not afford to hold, but i am still in. I am holding my breath for the US update, news on the carclo jv, and further asda/starpol trials, the problems with tooling on the greenseal have now been resolved and both machines will be fully commercialised. SEO are concentrating fully on the US at the moment as it will be significant to gain wal mart and macdonalds as first customers, and as we know from the rns that trials are underway.

Did anyone else see a news item the other day about poisons in plastic bottles leaching from the pla into the bottled water?
Wonder if this issue is reduced or eradicated by using starpol.
Might be another bonus to using it, or pla may suddenly be a packaging anti-christ. Starpol is pla based and that would be an instant death for the product, if a poison free alternative is available.
probably the usual scare mongering nonsense but we live in an era where consumers are very easily scared.
Alan

nice to see the big sell yesterday mopped up by a buyer.

Alan,

Yes, I also saw an article re this about 6 weeks ago. I think if my memory serves me right it was relating to liquids such as bleach and similar. No doubt there are many such examples. I don't think it is scare mongering as it's not the first time I recall such info. As to wether Starpol would prove positive or negative re this I have no idea. Perhaps someone out there has some further info.
Dave.

Does anybody have any views on SEO's current cash situation? Blinger (now on FYB as Stainco) is making claims that they are short of cash and about to make a cash-call.

Based on nothing, as far as I can tell - as per normal for his posts. I seem to remember a while back Howard White saying they has enough cash for 18 months even if no further income was received.

ssanebs,

Are you 100% certain that the tooling issue has been resolved?

garyble
Looks like the tooling issue has been resolved I saw this leaving the factory.

sd: agree that it is a somewhat nervous time with the sp testing the support level of 14p. I have reduced my exposure as a defensive measure, although I doubt that the level will be decisively breached. I have noted that ssanebs seems to call it right. If the tooling issue has gone from 95% to 100%, then that is important because we can then pick up delivery speed. I noted the IC comment re 50 installations this year: at one time the sp needed the 200 but I think confirmation of 50 is OK with the balance in first half of next financial year. The approach to concentrate on the US whilst fulfilling the ASDA commitment makes sense even if that involves extending the period of exclusivity. So we need the ASDA news to hold the sp; we can then move forward with good news on Starpol related contracts in the US with these 20m ton licensing deals at the forefront.

However, oblomov, I am concerned with the cash situation. A cash balance of 3.4m at end-October was insufficient then, must be down to around 2m now. Its not a major problem if they do need to raise more cash even on the market. 15m is only 10% of cap and will provide a support level, say at 13p (the last funding level). To me the major problem is that the cash shortage is holding back development. They need to put more support into GreenSeal; clearly the US thrust is going to be costly; whilst the website is indicative of the lack of resources. Do they still have a small company mentality? If bought out by a dynamic and profitable concern, the division would be funded at many times the current level and the breakthrough would arrive much quicker. No, I don't want that because the potential for shareholders is huge but I am getting fed up of defensive closure of investment positions; the point that the market could lose faith is real, though the share could become undervalued and the opportunities greater. I suspect this is why the FD has gone; a good FD would have been taking the lead in building up the balance sheet and providing investment funds for expansion. Just look at the opportunities, like InGel, going begging. Come on Stanelco, get your act together and go for it in a properly funded, professional way!

Eric

At present debt is cheaper than equity issue if revenue is not far away. Looking through they appear to have extended their debt abilities to cover for short term requirements at the time of the Biotec deal. Therefore I would not see any immediate need for any cash calls. With 50 Greenseal conversions done by October, they probably do not even need to call on debt, especially if the short term is news of Starpol deals (and why the need for the microsites unless demand was strong). Thats what I think.

Thanks Driver,

Shame ssanebs couldn't confirm himself though!

papappower: as I would expect from some one with obvious authority, comments are very reasonable. I remember that they borrowed to cover the deal with Biotec and then raised equity taking advantage of a much improved sp. It depends wheterh deals can be front-end loaded. My point rather is that they are underfunded and sailing close to the wind. I would be much happier if they borrowed additional funds and really staffed up for the expansion ahead. Its well known that this is the most expensive part of the product life cycle and they should not be skimping and scraping.

Agreed EWRobson, the present stage is the most difficult for non commercial people. I have watched this happen with SCE, who for years tried to commercialise using their technical people, they have now learnt their lesson and changed. It cannot be done, you have to make the changes, strengthen the commercial side, and then drive it through. It would be nice to get an update on any lower level changes that have happened, some reference to an expanded commerical/sales side would be good, but the flip side is that this could be in place, but the products are not ready yet. Greenseal it appears now will not take off until all the supermarkets are involved and the producers can run single lines for all customers, so we must wait 3 months for the Asda deal to expire. This short term will effect Greenseal conversions, this is why now a target of 50 by October. So this could be simply a circumstances problem, and not a sales one. I do not know.
I think the short term upside will come from Starpol/Biotec, with the peripheries of the likes of FrogPack and PetalPack helping in a small way.
The bio filter patent could be a summer sweetener, I have looked into this and its possibly the "Holy Grail" of filter materials, so that could end up a large input of cash into the system in the summer months.
Not for widows or orphans at the moment, but for those looking for a long term play, with plenty of short term upside potential, measured against some short term risk, then its a good one to be in.

Obvious authority, no, not me :) wrong person ;)

Having just looked at this myself, I cant say I see any problem. In fact the cashflow looks very good in comparison the the previous year.

If you look at the ANALYSIS OF CHANGES IN NET FUNDS/DEBT in the profit and loss account for 31/10/2005 you'll see that the cash in hand and at bank is actually 4,396,000. This was due mainly to share placings, but is a far healthier position than for the previous year when the figure was 920,000.

I dont recall cashflow being considered a problem in the previous year.

Also, presumably income streams have increased since October, from the success of Quantum Finish if from nowhere else.

I'd have thought the financial position of SEO is better than its ever been, even without the expectedGREENSEAL/STARPOL income.

Well, this is a good debate. I resonate with papalpower's analysis. I suspect that both of your scenarios, product immaturity and under-resourced commercial side, are combining to produce an inertia which is difficult to overcome. Your suggestion that the exclusive contract is proving difficult for suppliers seemed to be indicated by earlier posts from those involved with the industry. I had been assuming that ASDA would want to extend the period of exclusivity to exploit leadership with the technology, but it seems likely that their suppliers may be hesitant to commit for this very reason. That would be much more positive as the suppliers would themselves draw in the other supermarkets and the volume could grow more quickly. Seems a healthy scenario.

Not so convinced by your argument, oblamov. My point is that the size of investment in marketing, commercialisation as they put it, should have increased many times during roll-out. It seems likely that cashflow is acting as a constraint. This would be reason enough for changing their FD who may well have been out of his depth.

But more healthy finish to the day; we have bounced off 14p yet again. Poor old Eric having reduced as a defensive measure fearing a break south. Never mind, happy with the current average weight holding until we see more solid progress.

Eric

Eric,

Much of the investment in marketing and commercialisation was already included in the profit and loss account at the end of October (unless you believe it only began after October). And still the cash flow was healthy. No reason, IMO, to believe anything has changed since then. If anything, it should have improved. An increase some fivefold in the cashflow account over the previous year would not prove to be a constraint - quite the opposite. It shows good financial planning.

the tooling problem was sent of to engineers at birmingham university where they have resolved the issue, and it is now working correctly under tested conditions.
sorry to see eric unload but understandable when the price broke 14, but someone mopped all the loose stock up today and it was not me!

Thanks, oblomov. I'll take a closer look at the financials. But they went through msot of the funds raised and the revenues hardly picked up which was the background to my concern. My view that there people costs are far too low in relation to the size of the opportunities remains a concern. But i will come back to you.

Thanks too, ssanebs. That's good, substantiated news. If I'd known. I might have constrained the sell finger! But I retain half my holding. I don't have a problem in reducing defensively as I can easily make good, whilst, with CFDs, you can't risk the sort of fall many of us experienced last year. The news does, in my view, sharply reduce the risk of a significant break S.

Eric

Thanks ssanebs...clears that up nicely....hopefully.

EWR, I'm not sure SEO borrowed to cover the Biotec deal, as PapalPower stated, they extended their debt facility around the time of the Biotec deal. This was approved at the EGM along with the issue of a certain number of shares etc.

The Biotec deal was funded by the 9m raised, that was in addition to the $1.23m paid upfront.

SEO only needed to pay $6.25m for Biotec last year. $3.125m later on this year, and a similar amount 12 months from then.