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

And now for a long post on margins - sales - revenue and what to look for -

Negotiation or Commercial discussion ?

From the results:
"At the time of writing we are in advanced negotiations with Asda Stores."

Yet from the latest statement:
"These trials are producing benefits well beyond OUR expectations and we look
forward to the imminent commercial discussions that are now being arranged."

I thought they were in advanced negotiations. Which is it?!
If they are not, then all the broker note figures/ predictions are complete rubbish, pure fiction and made up by someone sitting in a back room.

An interesting comment from someone else and one that leads to many questions

1/ IMO the negotiations were with Asda to allow SEO to run trials on Asda products this following the trials direct with suppler Oscar Mayer which went nowhere ? obviously Oscar Mayer did not see any benefit or it there was some it was too small to cover increased costs (conversion + license fee). The commercial discussions are with the suppliers who are the ones who hand over the money and convert machines. It was spin that confused people they failed in going direct to suppliers so tried via Asda to show them the benefits (less leaking + better seal against poor condition and very old heat sealing machines) and then get Asda to sign a contract making the suppliers change IMO.

2/ IMO the commercial discussions are with suppliers - we have tipsters and brokers quoting figures of sales and margin and license fees however there appears to have been no commercial discussions yet so how do they know ? With the tipsters and brokers stating that 100 machine conversions is worth 2.5p on the price (up from 4p starting line) , then how do they know these figures. Is it normal for a company entering into its first commercial discussions to have sales - cost margin - revenue like information posted everywhere before the negotiations and the detail being on a machine by machine basis ? If I were the buyer or the head of the commercial side of the buyer I would love it as you can be sure there would be big discounts on these figures leave them with say 5% margin and minimal license revenue. How is it possible for these to be posted on broker reports on a machine by machine basis ? Do Ford advertise their build cost of a new Focus giving details of margin selling price profit per car I think very much not that is simply pathetic.

Or not saying it is but it could be these figures were generated to support the price after those first real negotiations will we see greatly reduced margin and greatly reduced license fees will this mean that not 100 machines = 2.5p up from a 4p base share price but indeed 500 machines = 2.5p - or maybe 1000 machines = 2.5p.

This could change the present way of looking at the SP which is they must get 1000 orders to support the 22.5p price to - they potentially could need 5,000 orders to support the 22.5p price ?

We also see a steady rising of the conversion cost and license fee as new broker reports come out to justify the price per share now it was a 25K license fee now the share price has risen they are saying its a 35K license fee trends like this ??

Why should suppliers change and if you change you want the best price you can so could the figures be 10K to change the machine and a 5K per machine license fee per year for 5 years ? Or might it be 5K to change the machine and a 2K per machine license fee per year for 5 years.

IMO the figures banded around have been manipulated and made up to try to support the SP on a minimal amount of machines basis the real margin will not be more IMO it could well be a lot less though and put those forecast in severe doubt.

And as I love to point out its still pending trial completion before even the Asda contract comes into effect and even then they say Asda suppliers will convert where practical meaning some may and most likely will not

The KBC Peel report shows 72 machine conversions sales in 2005 with a gross profit of 1.2M. KBC Peel is the official one and only company broker so we must take their figures as near but probably in best case highest region as they are the company broker.

Are Asda suppliers willing to pass their money over to SE0 to give them a gross profit of 1.2M on 72 machines or perhaps they might let them have 400K gross profit after 72 machines or if their negotiator wants to save the suppliers money and make the suppliers more profit then maybe giving SE0 a gross margin of 150K for those 72 machines forecast for 2005.

The gross margin comes from the license fee only the stated figure being 25K per machine per year license of which 100% is gross margin meaning machine conversion is done at cost ? Or was the margin on the proposed 72 conversions the other 0.2K sales in the KBC Peel report ?

The trouble is the spin has been on the better sealing and longer shelf life the same as you will get from CPET laser sealing or a decent new heat sealing machine or Cryovac systems or whatever.

The real only way this moves forward is IF suppliers can see a saving in running RF sealing.. If the supplier does their OWN sums and works out that any possible saving from using RF sealing is 5K pound per year then maybe they will not accept a license fee as the cost of conversion is 25K so it takes them 5 years to get Return on the Initial 25K cost of converting no room for a license fee.

If the suppliers see a saving of 15K per year then taking out initial conversion cost of 25K they might agree to lets say a 5K per year license fee allowing them to recover ROI and split the small benefit between them an SE0 over a 5 year period eg converting cost to supplier is 25K, saving over 5 years is 75K. License fee for 5 years of 25K.

Over 5 years lets say total of 75K saving 25K conversion cost = 50K real saving 25K license fee of 5K per year = Supplier saves 25K and SE0 gets 25K over the 5 years plus SE0 getting the 25K initial conversion.

The savings figures are all estimated and from the pro RF sealing side Oscar Mayer saw very little saving IMO it appears from their trials end of 2004 and I am quite sure that nobody will be willing to pay 25K per year license fee might be wrong but I do not see it.

If SE0 are happy with the margins - then when they announce any machine contracts they will publish them for all to see (eg this contract is for 72 machines and is worth 10.8M in sales over 5 years) if the margins are much less than KBC Peel forecast they will be kept hidden and you will not know until its too late.

Going on KBC Peel figures of 150K in sales (25K conversion + 125K (25K license per year for 5 years)) per machine this equals sales of 10.8M if suppliers order 72 machine conversions in 2005. Any number of machines and the contract amount must follow that ratio if its lower then there has been big discounting.

EG if they announce that 72 machines are to be converted in 2005 with sales of 6M over 5 years then the forecasted ratios are well down and this is bad news.

If they just announce a number or machines or just a contract value over 5 years and not both it would point to hiding the real figures and that could mean margin well below expectation.

The present KBC forecast shows sales of 3.8M in 2005, this means 72 machines (25K conversions and first year 25K license) x 50K = 3.6M + 0.2M from SEO core business and all others ???

So what to look for if KBC Peel are right on margins then ratios

72 machines = Initial order value of 3.6M (or 10.8M over 5 years).

Each machine conversion must = 50K GBP in the first year or 150K over 5 years.

EG 100 machine conversions = First year 5M sales or 15M over 5 years.

Any variation from that formula will show discounting (or better margins) and any hiding of the contract values or number of machines will point to potential much lower margin than forecast no need to hide it if its good. Will it be spin or will it be come clean time ?

Now no doubt people will come back that the savings for suppliers are massive and some hype artist reckons there is a 100K saving per machine per year I do not think so only in the most extreme of circumstances could that figure come in part of the UP TO spin classification rather than FACTUAL average value. But savings may be more than lets say 15K per year but yes the factor missing above is what the financial gain Asda want from this they will want cheaper purchasing price from the supplier based on the supplier savings too if there is any so that is a another potential negative factor which will drive the margin down. Asda will no doubt want the largest slice of the supplier savings followed by SE0 with their license fee and the supplier gets the little bit left not so attractive is it ?

Expect the suppliers to hit back hard when doing commercial negotiation IMO and expect the forecasted margins to go down on discounting if orders ever happen of course.

And now for the accelerated roll out why well yes there is competition and probably the most important factor is that when people start to use it suppliers can in 3 months or 6 months start to find ACTUAL savings figures and if the suppliers are not happy with their savings level after 3 or 6 months you can be sure they will make loud noises over it which could spell the end of it (or at least the license fees) sooner rather than later and of course the other thing said earlier - competition !

What stood out to me most of the RHPS report (apart from the could-maybe-might be-possibly type of wording) was the final few lines now I can find no reference to RF tray lidding patents and as RF sealing has been around since 1945 it would be very hard to apply a patent to an application of it with many many companies in the world doing RF sealing how long from now before someone else has a kit for tray lidding 1 month 2 months 3 months (not forgetting Laser and Cryovac and all the others and other things going on in the industry ) the final few lines of that report said it all changes if there is competition now is that putting into place the exit call rather than have to justify the rest of the report and any failures to achieve figures or margins the moment someone else comes along just say competition and exit (read that last update in May final few lines mate saw it coming time to get out). I would say those lines are pre empting what will be an avenue of leaving with no accounting for the figures IMO.

Any views ?

You really do need a girlfriend !!its Sunday...

I haven't even read Don Q 1st stuff its far to long I have been to work to day but I am sure he is bashing again.
Why can't you just put SEO is a load of crap or some thing similar DONT BUY SEO.
It will have the same affect, the sp will rise it always does.

BASHERS NEVER Bash A BAD STOCK

II,

Do you own SEO? Have you ever owned SEO? Are you planning to buy SEO? Are you "short" on SEO? Are you hoping that by bashing, it will help the sp to slide even further so you can buy at a lower price?

WHY are you bashing it so much and what's in it for you? If you hate the Company that much then WHY are you spending so much of your time and energy in posting, at all? I don't understand your position? What's innit for you?

Please explain your festering hatred for such a promising new young Company..........................? Is the CEO your ex-father-in-law or something? If not, then what is YOUR PROBLEM?

now i am really looking forward to tomorrow!!!! jimmyb , driver , markus , just filter it. i am pretty sure it's all crap and when it's filtered you don't have to read it. brilliant!!

Insiderinside, the man using this id is allegedly Barry Muncaster.

Some will instantly realise that Barry Muncaster is now a paid consultant of Bioprogress. He has in the past been a paid advisor during the infamous seo V bprg legal case and was allegedly a major influence in bringing the case against Stanelco, having a personal interest in the case.

Whilst it is quite reasonable for any poster to provide an alternative perspective on a bb thread regarding a particular company, it is quite another to do so if you are in the paid service of another company directly involved in a legal dispute and your posts demonstrate a persistent and deliberate intent to cause harm/damage.

A legal court order etc will provide the conclusive proof and if it is you Barry the Lid will go on for a long time, RF sealed.

bos
I did decide to monitor Don Q 1st but like you say it is so much crap and so much of it my eye lids start to drop then I give up, he must spend hours living, breathing, and writing about SEO a bit like us really. Yes here we go again tomorrow onward and upwards Donny here we come.

GOTYA
Quite a serious allegation you are making there GOTYA, if it is the case that Don Q 1st is who you say then may be some one should contact him.

So Walmart posted a profit warning, GOOD. They'll be looking at cost-saving measures and reducing waste and little 'ol Asda know just the folk. In fact they can deliver the goods in Frogpack too, delivered safe and sound without damages and they biodegrade the outer pack and recycle the meat pack.
What a company SEO is turning out to be. Bioprogress my arse, what progress, oops, 131p to 31p!!! SEO 4p to 23p, and I agree with Driver, if you are brave enough to hold for 2-3 years >150p could be the reward.
Of course, be good boys and girls and DYOR!!!!

Interesting comment, GOTYA; this does provide an explanation for the distorted posts. When you listen to a defending lawyer, acting say for the Ripper, he sounds very plausible; he takes a particular point, distorts it, turns it round so that truth appears false and false appears truth. The lengthy arguments sound like a lawyer: one who is willing to argue anything if he is being paid for it. I have made the point before: I accept anyone who is prepared to give a balanced argument and comes to a different conclusion to me. This poster is in no way balanced and, in my view, thorughly dishonest in the way he twists an argument on unsound foundations. I will give examples from the above posts.

(1) In post 4047 he quotes KBC Peel Hunt's figures for 2006 (Prelims 2007) as Sales 15.4m, pbt 5.6m PER 50. "So even in 2007 ... if they get all their orders - the price of 22p in 2007 at prelims would give a PER of 50". He takes the projected figures for 2006 and transfers them to 2007 because the prelims will not, he assumes, be announced until February 2007. He does not mention the projection for the year to Oct 2007 (when the royalties will be much increased in significance) and the corresponding figures are Sales 31.6m, pbt 16.7m, PER 16.9 (which will be clear at the time of any announcement with the 2006 prelims). Note also that he tries to plant a negative idea in the mind with the phrase "if they get all their orders" as if 1000 orders by 2007 is the maximum potentail number of orders. Peel Hunt are at pains to say that the global market is 50,000 machines and points out that their figures used "equate to 2% of the world market and only 3x the ASDA contract".

(2) "KBC Peel is the official one and only company broker so we must take their figures as near but probably in 'best case highest region' as they are the company broker." He then goes to some length to "prove" that the Peel Hunt figures are completely impractical because SEO will never make their licensing policy stick. Note that he acknowledges that the figures are 'near' but then seeks to dismantle them. He claims that, because they are the current broker, they will give 'best case highest region'. In other words, they are not honest. Again, he ignores the fact that KBC Peel stress how cautious their estimates are (Evolution state their estimates to be 'conservative').

(3) Then we get the argument that because SEO are shortly to enter commercial discussions with the suppliers that the parameters for these discussions have not been set by the contract with ASDA. I look to andysmith, or one of the other posters involved in the packaging industry, to clarify the extent to which the parameters will have been defined in the ASDA contract and what room for manoevre the suppliers will have in their commercial negotiations with SEO. However, it is clear that the parameters are defined to the extent that ASDA can say to the suppliers that savings will be made by the suppliers, whilst ASDA will reduce the contract price to them; the supplier savings must have been after allowing for SEO charges.

Now it may be that the lengthy negative arguments have fallen on deaf ears. Many have squelched this poster. My comments here are addressed to occasional visitors who may start from the premise that this poster does not have an axe to grind. I am not prepared to enter into any dialogue with him but I am prepared to attempt a balanced positon if I am requested to do so.

Eric

Still think there is a case for him to be banned or at the very least given a warning by Moneyam.

aldwick: I have written to this effect to Ian Taylor and will report his reply.

Buy Stanelco
Argues Rob Cullum, editor of Trendwatch.co.uk
The share I'm about to recommend is a company pioneering several potentially highly successful new technologies that look as though they are on the verge of acceptance in the marketplace on both sides of the Atlantic. It's also a company with falling turnover, operating in difficult market conditions; currently making losses; and fighting a legal battle over a patent, which looks set to run for some time yet and may not have a favourable outcome. So I would categorise this as a high risk but potentially very high reward share.

The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. UK-Analyst is owned by t1ps.com Ltd which is regulated by the FSA and can be contacted at 49 Rivington St, London EC2A 2QB or on 0207 033 9389

The company is Stanelco.

Stanelco is a world leader in the development of radio frequency (RF) heating technologies - sophisticated and powerful but not so different in principle from your domestic microwave oven.

Its current core business is the manufacture of optical fibre RF furnaces that heat materials quickly and to the high degree of accuracy necessary for the production of fibre optic cable.

However, optical fibre equipment is now a highly competitive market. Consequently, Stanelco decided to cast around to see if it could capitalise on its RF expertise to develop different but related products.

Perhaps rather surprisingly, it decided to take on the packaging industry.

Its leading development is a new packaging system called Greenseal that could revolutionise the global cooked and raw meat, fish, salad and dairy packaging industries. Recall that, when you buy your meat from a supermarket, it generally comes in lidded plastic trays covered with a clear plastic film to seal it. Stanelco utilises its radio frequency (RF) sealing technology in conjunction with conventional plastics so that the lidded trays require no laminated or coated plastics for sealing.

Greenseal offers major environmental and cost saving benefits for the end user. By doing away with the sealing layers and specialist sealing coatings that current sealing films require, waste film can be recycled in the food tray manufacturing process instead of being scrapped. Total adoption of this technology in the UK would result in the saving of over 10,000 tons of scrap plastic going to landfill each year. This alone produces at least a 20% saving. Additionally, the RF process is significantly more energy-efficient, saving up to 70% of the power used by the packaging machines. And, not least, the integrity of the seal is higher.

Stanelco reckons this translates into an average cost saving per packaging machine of more than 0.1 m pounds a year.

A couple of months ago, following successful trials, Stanelco signed a binding contract with ASDA, under which ASDA will exclusively use Greenseal in the UK and Ireland for 12 months. Stanelco will retrofit several hundred packaging machines used by ASDA's suppliers. The cost of retrofitting is in the order of 40,000 pounds per machine, borne by the end-user. Thereafter, the user will be charged an annual licence fee of around 35,000 pounds per unit. There are currently more than 400 machines within the UK and over 2,000 machines in Europe.

The costs associated with conversion will be greatly outweighed by the financial and other benefits. The agreement with ASDA will generate a revenue stream for Stanelco of over 5 m pounds in the first year alone.

If you shop at ASDA, you may have noticed that the new packaging first appeared on ASDA's shelves from 1 March. Already, ASDA has found that customer sales of salmon in the new packs is up 21%, mainly because the Greenseal packaging looks more attractive and has virtually eliminated leakage. Independent microbiological analysis also indicates that the salmon's shelf life could be extended by one day. All of these factors exceeded ASDA's expectations. The two companies are already looking at all sorts of other ways to exploit the technology.

ASDA is, of course, owned by Wal-mart, the world's biggest retailer. The hope is that Wal-mart itself will come on board in due course.

Even if it doesn't, Stanelco has already gained a foothold in North America for Greenseal. It announced just a few days ago that it has entered into a binding agreement with Premier Technology Inc., a leading US engineering and support company, which will enable rapid roll out and adoption of Greenseal in a number of markets in the US, Canada and Mexico. This avoids the expense of Stanelco building its own marketing infrastructure in North America.

We also understand that Stanelco is in talks with many other potential customers here in the UK.

Other new, patented packaging products being developed include:

FrogPack, a lightweight, highly impact resistant, lower cost and greener replacement for padded envelopes and boxes with polystyrene inserts. The product has the added advantage of being tamper-evident. FrogPack is intended for to protecting items such as electronic components, car parts and compact discs. Tests have proved that even champagne glasses packed in FrogPack suffered no damage when dropped from 200ft. A Stanelco subsidiary, Aquasol Ltd, has signed its first two distributors for the FrogPack product, which is being manufactured under licence. An aggressive North American rollout is now under way.

Water-soluble tape. The tape substrate is coated with a unique pressure sensitive adhesive that is 100% water-soluble and 100% biodegradable. It can be made in a variety of grades from cold-water-soluble to hot-water-soluble. The face material can also be top coated to provide splash resistance if required. Potential applications include protecting highly polished surfaces against abrasion and corrosion, masking tape for the automotive industry, tamper-evident tape and wash-off labels for reusable food trays, crockery & glass.

Biodegradable containers, initially targeted at the food industry, made from starch foam by using RF technology. Stanelco has demonstrated that it can mould these containers ten times faster than using conventional heating technologies. Sainsbury is taking a close interest.

Water-soluble polymers for use in fine tolerance injection moulded applications. The primary application here is drug capsules manufactured by injection moulding from the water-soluble polymers. The capsule has unique features which provide improved control over the release of drugs

This last technology is the one that his given Stanelco its biggest problem. AIM-listed BioProgress is disputing one family of patents. It won the first round, but Stanelco has been granted leave to appeal. Knowing as we do the unpredictability of M'lud's pontifications, we wouldn't wish to comment further on that.

Apart from the legal spat, the main risk for Stanelco is that its new products won't catch on. That risk appears to be diminishing fast, now that ASDA has signed up for Greenseal. In any case, Stanelco isn't a one-product company - it's developing a whole portfolio of packaging products.

You might find it a little disconcerting that Stanelco's share price has already risen substantially. Have you missed the boat? Probably not. It generally isn't wise to invest right at the bottom. Better to wait until some of the fog has cleared, which it's now starting to do.

Admittedly the shares do look highly rated at present, on an eye-watering forward P/E of about 80. However, if the new products are as successful as Evolution Securities believes it will be, there should be plenty more upside to come. The broker reckons that sales will grow from 1.86 m pounds to 4.8m this year, and will then soar to 34.2 m pounds in 2006. By that time, it should have moved from a loss to a profit of 11.2 m pounds. At the current share price, that brings its present sky-high forward P/E down to earth with a bump. BUY.

Key Data

EPIC: SEO
NMS: 50,000
Spread: 21.25p - 21.75p
Market Cap: 187.4 million pounds

Apologies do not have time to pick and choose what to post here - thus the whole article. p/271

eric, i really don't know why you bother trying. anyone can see he is full of shite. andys, i had similar thoughts when i saw walmarts loss. what better way to please your shareholders than by announcing something that will save money and increase profits!! gotya , i hope you can back up your post and are not just going to hide behind the word "allegedly" like a wuss! we like to keep this thread free of false rumours. driver, i am really looking forward to next week.

GOTYA - 15 May'05 - 20:40 - 4059 of 4067

Insiderinside, the man using this id is allegedly Barry Muncaster.

Some will instantly realise that Barry Muncaster is now a paid consultant of Bioprogress. He has in the past been a paid advisor during the infamous seo V bprg legal case and was allegedly a major influence in bringing the case against Stanelco, having a personal interest in the case.

Whilst it is quite reasonable for any poster to provide an alternative perspective on a bb thread regarding a particular company, it is quite another to do so if you are in the paid service of another company directly involved in a legal dispute and your posts demonstrate a persistent and deliberate intent to cause harm/damage.

A legal court order etc will provide the conclusive proof and if it is you Barry the Lid will go on for a long time, RF sealed.



Gotya - I can hereby confirm that I am not the said Barry Muncaster.

EWR - as KBC are the official company broker and not like tipsters - it is a good starting point to base discussion on.

A SEO 2003 (Prelim 2004) Sales 1.9M Reported Pre Tax Loss 0.6M PER x -339.5
A SEO 2004 (Prelim 2005) Sales 1.3M Reported Pre Tax Loss 2.8M PER x -67.3
E SEO 2005 (Prelim 2006) Sales 3.8M Reported Pre Tax Loss 0.4M PER x -566.3
E SEO 2006 (Prelim 2007) Sales 15.4M Reported Pre Tax Prof 5.6M PER x 50

http://www.kbcpeelhunt.com/pdfs/Stanelco22Apr05.pdf

My long post on margins is very relevent - I even missed out the pending BPRG court case appeal as not wanting to be seen as too much against SE0 - rather just put a view on negotiation - what potentially Asda will want - and how things may well change.

Opinion is opinion - and everyone under their own freedom of speech is entitled to it - I make no accusation.

I encourage that people should not believe anyone on a BB - especially you and me - they should Do Their Own Research and look into the figures themselves - not rely on a bull or a bear to make judgement for them and put into it a nice little summary. Always should DYOR.

Some tipsters say buy and some say sell SE0 - this makes the case even more so for anyone to DYOR.

morning all. here's hoping for an interesting week and not a big yawn!!!

Morning bosley, im afraid im yawning already

Morning all - glag to be back from visiting my Brothers place near the Slimbridge wild fowl trust near Bristol.

Spent all weekend moving heavy rocks and climbing up trees to cut them down - should not be doing that at my age. Will need the rest of the week to recover.
Came back to another 60+ messages on this thread - this is getting really boring - although an excellent well balanced summary of where we are from Trendwatch.

Anyway - I see that SEO is already up - lets hope she just moves along steadily until the next bit of news - it does appear that more and more private investors are starting to realise the enormous potential of this little Gem.

Baza

morning baza. it does seem that way looking at trades. buys are mainly odd numbers which suggests private investors. also , there are some chunky sells today but the price hasn't been affected . price is up too, so it looks like the tit has done it again!! keep it up, fella!! whatever it is that you are posting, keep on doing it cos you are making us all money!!!!