Why we invest in AJX FR, page-21

“How much of that $24m do you think was FR Taurean?”

I would guess a large proportion of that figure would be FR related. For reasons that it has stated the Company doesn’t release detailed distinctions between its Alexiflam and Alexicool sales figures, so it requires a guess.

That distinction became more complicated last October when it developed its multifunction product that combines both chemistries. Management explained at the time that some of its expected large FR orders would be delayed because bedding clients wished to change to the combined product that had just become available. This would have seen that expected revenue spill over into the following half year.

More complicated regulatory issues apply to the FR chemistry, a significant contributor to its longer sales cycle, so I assume the same would hold for a product in which it is a component.

In fact there appears to me that not a lot of the revenue would have derived from pure Alexicool sales. A large proportion comes from mattresses, where the combined chemistry is clearly favoured. The Pegasus pillows deal might be pure Alexicool, but that is only just kicking in now.

The margin on Alexicool is stated to be significantly higher than Alexiflam, so if the multifunction product were to contain them in equal proportion the cooling component could be the major contributor to revenue with the FR component being the major contributor to a delayed sales cycle.