Ocean Harvest Technology Group PLC (AIM:OHT), one of AIM’s very few debutants in 2023, took a light battering on Tuesday in the wake of its first interim earnings report as a publicly listed company.
The group, which specialises in researching, developing and selling seaweed products for use in the animal feed industry, reported a delay in onboarding new customers in Europe due to surging feed ingredient prices.
Furthermore, “this shortfall in Europe had been expected to be compensated for in the second half by volume from a recently onboarded new customer in another region which is now opting for lower initial volumes before moving to full use in future”, the company noted.
Despite the cautious outlook, Ocean Harvest’s interims showed decent growth, with product revenues increasing 66% to €1.6 million (£1.4 million) with a 36% increase in gross margins.
AIM’s burdensome listing costs were on full display, with €800,000 million in IPO expenses logged, covering legal, professional, and advisory costs.
Hence total reported losses increased from €1.3 million in the first half of 2022 to €2.2 million in this half, equating to losses per share of €0.023.
Following these results, Ocean Harvest shares fell to 12.17p, nearly 15% lower against Monday’s close, while the group’s valuation has fallen 31% since its April flotation.
But this reactionary response belies the long-term horizon of Ocean Harvest’s investment pitch.
Existing revenue streams aside, Ocean Harvest is still largely in the R&D phase, with capex concentrated on trials of its OceanFeed seaweed products.
The World Bank stated in its recently published Global Seaweed Report 2023 that it views seaweed as a high-growth industry potentially worth $11.8 billion by 2030.
“Yet, despite this projection, much of the seaweed sector’s additional value remains untapped - it has clear growth potential beyond its current markets,” the report said.