Byotrol (LON:BYOT) issues a "Commercial & Trading Update" - surely they are the same thing? Semantics aside, there is some good news and some bad. They have secured an agreement with Marks & Spencer for them to use Byotrol sanitisers across its UK stores, which are for surface hygiene. Overall revenue growth in the first 10 months (to date, since they run a 31 March year-end) have grown 15%.
On the negative side, this is slower growth than expected, due to delays in obtaining European regulatory approvals. It looks to me like this company is near the last chance saloon, as they are resorting to invoice discounting and cost control to take them to anticipated breakeven in H1 of 2013/14 (i.e. towards the end of this calendar year).
I note that the number of shares in issue has risen by a material amount each of the last 6 years, and that the company is permanently loss-making, so it is of no interest to me. A £12m market cap appears very generous, given the company's long-term commercial failure to date. Having turnover of £2m every year, and making a £2m loss every year is not business, it's charity. Expect a continuation of the 3-year down-trend shown in BYOT's price chart, once investors have got over the excitement of the M&S contract.
In a similar vein, I note that Imaginatik (LON:IMTK) shares plunged over 50% yesterday on news of it considering de-Listing its shares, reducing its market cap to just £2.4m (although that's still generous in my view). This is the reason I don't usually invest in sub-£10m market cap companies, or anything small which is trading very badly. The risk of a de-Listing is just too high, especially if they are loss-making, strapped for cash, and there is little liquidity in the shares.
We've seen in several cases how an intention to de-List will at least halve the share price, as many investors get out at any price, not wanting to hold unlisted shares. I have mixed feelings on this. Generally speaking, once a company has Listed, it should remain Listed in all but the most extreme circumstances. However, once it has become blindingly obvious that the business is going nowhere, then…
