Half-time results from TyraTech Inc, for the six months ending on June 30 2017, which were released last week on September 12, were keenly awaited. This was probably because of expectations that the AIM-listed life sciences clean-tech company, focused on nature derived insect and parasite control products, would use the statement to update shareholders on progress with some radical changes that were afoot at the company.
When the company reported in April 2017 on its results for the year ending December 31 2016, it said that the group had made good progress in the year to the tune of a 13 per cent increase in gross revenue driven by largely by Vamousse, its break-through shampoo and head lice preventions products that gained a toehold in the important US market.
Following the end of the reporting period the company also introduced its first PureScience products in animal health, focusing on equine and poultry sectors as these were thought to have great potential. Gross revenue grew to US$8.4 million in 2016 against US$7.4m in 2015 and gross profit was US$4.8m against US$4.6m in 2015.
But the net loss for 2016 before and after taxes was US$2.3m, exactly the same as it was for 2015. Moreover, cash and cash equivalents at December 31 2016 were US$1.8m compared to US$4m the previous year and net cash used in operations decreased to US$1.8m against US$2.8m in 2015.
All this led the Board to decide that the company lacked the necessary resources from operating cash flow alone to fund the next phase of growth in both areas of the group’s activities. Accordingly, a strategic review on the way to unlock the future growth potential of the company’s assets and maximise shareholder value was announced in February 2017.
The first stage of this review concluded that the Board should divide the company’s intellectual property and products into two separate entities, focused on human health and animal health respectively. Initially, both entities would remain 100 per cent owned by TyraTech.
It was felt that the human health business, notably the Vamousse products, could be profitable as a stand-alone entity, with the available resources from its operating cash flow focused on expanding markets in the UK and US. But there were also hints and intimations that there could be further announcements emanating from the strategic review on how the other part of the business might be funded.
So what was forthcoming from the half time results release of September 12? Well, the statement did not really excite but nor did it disappoint either. There were no startling revelations from the strategic review. In fact, Non-Executive Chairman Jose Barella was rather bland about it.
He said: “We continue to work on our strategic review……… The process is progressing well and we intend to provide a full update to the market once we have a concrete conclusion as to the best outcome for all our shareholders.”
He added: “The company performed well in the first half of 2017………. the Vamousse product range continued to outpace the category and gain market share in the US where we concentrated our marketing efforts.”
Net product sales rose to US$3.6m, an increase of 12 per cent on the US£3.2m achieved in the first half of 2016. Gross profit increased 13 per cent to US$4.2m over the US$4m achieved in the comparable period in 2016.
But it was the news of a reduction in net losses which made shareholders perk up. The loss from operations more than halved to US$0.7m (2016: US$1.5m). The net loss fell sharply to US$0.3m helped by a gain of US$460,000 on a part sale of intellectual property to Envance Technologies.
The sale to Envance also provided the company with a cash payment of US$500,000, received after the period . Net cash at the end of the reporting period (June 30, 2017) was US$1.3m compared to US$1.8m as at December 31, 2016.
The £2.64m market capital company’s shares gained 5 per cent on the day the interim results were published to 1.08 pence. Since then the shares have made further advances. Last evening they closed at 1.75p an advance of 16.67 per cent on the day and almost double the 52-week low of 0.88p.