I don't see any mixed signals coming from the company, indeed they've started a new communications strategy that eliminates that!
Here is what the company have stated since its new communications strategy has been adopted.
Recent shareholders email.
"Dear Shareholders,
About three weeks ago, I gave you a general view as to how our Alexicool™ phase change material (PCM) product line evolved into a success story in bedding. We have continued to realize great success in the PCM market, so I want to update you all on our progress and give a few specifics.
In our distribution email earlier this month, I discussed an increase of business due to a successful product launch at the Las Vegas Bedding show and subsequent growth. The numbers bear out that success. From our initial account in bedding, we made our first substantial shipments in January. In February, we increased our Alexicool shipments to customers by 91%. By the end of this month, we will have increased our monthly shipments of Alexicool by 258% over January. Due to the increase in business for Alexium in the wake of retailing giant Mattress Firm altering its offering, the growth will only increase in April. In the month of April alone, we are building inventory with sales of Alexicool expected to represent a 440% increase over what we sold just two months ago in January, a sharp growth trend which will significantly impact our upcoming 4C. We have expanded our shipments from solely US-based to now include Eastern Europe. We anticipate orders in the UK and Western Europe as early as next month as new customers come on line.
In summary, the growth of our Alexicool has exceeded our expectations as it is quickly being recognized as the best-in-industry thermal regulation product. As the number of fabric producers which are applying Alexicool to their products continues to grow (we recently added a 5th finisher) and the range of products within each finisher expanding weekly, the future of Alexicool in the bedding industry is very bright.
I will update you all again on our PCM efforts in bedding as this exciting market for Alexium evolves."
From the **elli presentation.
$2.0M AUD recurring revenue per month and growing
FR
Alexium is able to meet and/or exceed market needs while hitting price points to
win business and achieve margins of 30-60%
ALEXICOOL
Alexium secured first Alexicool account with major bedding brand in October of 2016
Presently, Alexicool is being applied to ten different bedding programs
Current Alexicool shipments into the bedding industry exceed 20,000 lbs per week
with margins exceeding our average target of 40%
Recent disruptions in bedding supply chain will positively affect Alexium’s position
FROM THE HALF REPORT
Infrastructure, supply chain systems and purchasing strategy implemented during 2016 continue to drive gross profit sharply upward. Alexium’s top-line growth from 2015 to 2016 (from $1.0M to $13.3M AUD) was largely due to the success of winning new business not only due to the performance of Alexium’s chemistries, but by offering those chemistries at competitive price points to much larger competitors. As the scale of Alexium’s sales have increased, the company is now able to buy raw materials in bulk, a larger global footprint has dramatically reduced the shipping component of our COGS and air freight during scale-up is being replaced by far less expensive conventional ocean freight. The effect of these strategic efforts has resulted in a 14 percentage point increase in gross profit from the first half to the second half of 2016 and gross profit on new specialty chemistry sales since the beginning of 2017 have exceeded 30%. Over the course of 2017, as more product lines achieve the same economies of scale, Alexium is forecasting average gross prots across all product lines to exceed 40%.
GAVIN REZO INTERVIEW
From the 1:20 mark until the 1:40 mark mr Rezo speaks of margins north of 40% in the coming year.
I hope you now see the company are predicting great gross profit margins by years end of 40% plus, I think by years end they should achieve this milestone
I don't find any mixed signals there, absolutely great progress report with huge sales going forward, as everyone knows, we have to pay for products before we get paid ourselves and with this massive uptake in the bedding sector we will have increased costs associated with this 4C, I've spoken to management and the costs will be explained in the 4C to stop people saying they're getting "mixed signals", the company's performance is really starting to hit its straps.
Go Alexicool!!!!!
Cheers.
AJX Price at posting:
51.5¢ Sentiment: Buy Disclosure: Held
(20min delay)