Itaconix - Trading update
Itaconix (LON:ITX) has issued a trading update for the financial year to 31 December 2019. The company is in an important commercial ramp-up phase for its sustainable speciality polymers used as functional ingredients in household and personal care products.
Main features of the update include: (1) Revenue growth of 78% for the first three quarters (to 30 September); however, delays in some customer projects mean that full-year (FY) revenue growth is expected to be below previous market expectations. We interpret this to mean growth no longer exceeding 100% year-on-year. (2) Underlying earnings (EBITDA) for the second half (H2) of the fiscal year to be in line with H1. (3) Year-end net cash expectation unchanged, as improved working capital position offsets a slower improvement in EBITDA.
Our revised FY 2019 revenue forecast of £1.2mln represents a growth rate of 72%. Although this is not as high as we previously forecast, we believe that it demonstrates a tangible growth trajectory. Specific commercial developments in the current year have included:
We are forecasting revenue growth of 100% per year in 2020e and 2021e, and convergence to profitability, with potential for significantly higher profitability in the years to follow.
Quick facts: Itaconix PLC
Price: 1.5499 GBX
Market Cap: £4.17 m
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