Zoono, ReNerve, Stealth Group & Havilah
The Australian unicorn’s revenue rose 48 per cent to US$743 million last financial year; EBITDA reached 100 million US dollars, becoming Australia’s third largest unicorn after Canva and Airwallex.
And finally, gold and silver, the little hat fan favorite, are back on their merry march. After a 3-week break, precious metals rose more than 5 percent this week; gold is once again above $6,400 per ounce, while silver is just shy of its record high, touching $54 per tonne.
This week, other than our Bulls N’ Bears Runners list, the market’s favorites were limited in a difficult week. Only one resource company stood out, a rarity for Runners; instead, biotech, wholesalers and packaging partnerships dominated our list during red week.
Mpact, Africa’s largest packaging provider, signed an exclusivity agreement with Zoono group for its product that extends shelf life.
ZOONO GROUP LTD (ASX:ZNO)
178% increase (6.3c – 17.5c)
The Bulls N’ Bears Runner of the Week is New Zealand-based antimicrobial provider Zoono group. There was no news to start the week, but last week the eco-friendly antibacterial provider announced an exclusive agreement with Mpact Operations and its partner in the food supply chain sector, OSY Group, to use its patented Zoono shelf life extension packaging across its range of products.
The stock got the party started the week with a bombshell that included a five-year exclusive deal with the South African packaging giant, the continent’s largest paper and plastic recycler, which generated R13.3bn (NZ$1,339bn) in revenue last financial year.
Once the first order is received in December, Mpact will deploy Zoono’s patented shelf-life extension adhesive onto its corrugated board lines, with a commitment to purchase a minimum of NZ$5.1 million (A$4.4 million) to maintain the exclusivity.
Globally, food waste wastes US$2.6 trillion annually; which means trillion with the letter “t”; 25 percent of this is due to fruits and vegetables rotting before they even hit the plate.
The combination of Zoono-OSY transfers the antimicrobial magic to packaging before it moves into the product, ticking all international food contact regulatory boxes.
This has already been proven in the UK and EU, and now looks set to storm Africa’s doorsteps on a new substrate.
The stock fired up late last week, climbing from 4.6c to 6.3c, then going full parabolic Monday-Wednesday, rising as high as 17.5c, and then the good guys and gals at the ASX issued an explanation please to understand why things continue to heat up.
Zoono answered questions by Friday with another exclusive packaging deal, this time with Australian fresh produce group Multisteps. The company confirmed that the details of this latest deal had not been determined before Wednesday’s enforced trading halt; there are just too many new deals to deal with.
Zoono’s pivot from spray-and-wipe disinfectant excitement to recurring revenue-generating packaging behemoth during Covid appears to be a masterstroke.
Years of R&D, supermarket trials and exporter verification finally pay off. If Mpact’s volumes pick up (which early orders suggest they will) this could be a runway.
ReNerve’s flagship NerveAlign nerve cuff has landed a massive contract with the US Department of Defense and Veterans Affairs.
RENERVE LTD (ASX: RNV)
120% increase (10c – 22c)
Sliding into silver with clinical precision is nerve-repairing ReNerve, a homegrown medical technology that has cracked the networks of the U.S. Department of Defense and Veterans Affairs, one of the world’s largest healthcare purses.
The company announced Thursday that its flagship NervAlign bioabsorbable nerve cuff product has been given the green light at 51 Department of Defense hospitals and 424 clinics, as well as 170 Veterans Affairs medical centers.
The ink was almost dry before the first and repeat purchase orders arrived; which is earmarked for immediate release of the nerve rejuvenator NervAlign in select facilities, with wider distribution in the coming months.
The share price soared on Thursday’s announcement, reaching an intraday high of 22c, up 120 per cent from last week’s close of 10c, on an eye-catching turnover of $3 million.
For a company chasing recurring revenue in the multibillion-dollar nerve repair market, U.S. government contracts are the golden ticket.
ReNerve says its NervAlign product wraps severed or traumatized peripheral nerves after surgery, protecting them during the delicate recovery period. The company says it is bioresorbable and dissolves harmlessly, avoiding secondary removal operations.
An expanded randomized clinical trial will enroll 240 patients in two groups after interim data showed reduced pain and jumps in functional recovery compared with standard care.
The DoD/VA approval caps a global push into addressable markets for ReNerve, which is building a nerve-to-skin ecosystem that already has footholds in India, Taiwan, Hong Kong, the Middle East and Mexico.
With US military surgeons now writing prescriptions and VA reimbursements kicking in, the revenue wheels are turning.
Stealth Group Holdings acquired Hardware & Building Traders for $22 million.
CONFIDENTIAL GROUP HOLDINGS (ASX: SGI)
114% increase (69.5c – 149c)
Coming in third place was diversified wholesale hardware dynamo Stealth Group Holdings after locking in a $22 million transformational acquisition of Hardware & Building Traders, Australia’s largest privately owned national buying group for the hardware and industrial sector.
Stealth says this bolt-on catapults the company into a $93 billion addressable market as a lean, mean alternative to big companies like Bunnings and Total Tools.
Hardware and Construction adds 1,165 independent stores, 490 supplier partnerships and $700 million in annual purchasing to Stealth. The new beast represents a total wholesale purchasing power of $800 million and retail sales of $1.3 billion, with 1,300 suppliers and 1,200 stores nationwide.
Stealth says its advantage comes from excluding the capital-sucking owned infrastructure of big-box Bunnings rivals, and the deal offers a once-in-a-generation platform to extract profits from independent operators.
The market hit the buy button on the partnership on Monday as the shares rose throughout the week to $1.49 from last week’s close of 69.5c; That’s up 114 percent after nearly $5.5 million in stock trading.
Instantly profitable, cash-generating and scalable partnerships are music to the market’s ears.
With an increased national footprint, distribution optimization, and promising cash flows, Stealth could be the dark horse that will re-grade the hardware supply chain industry.
Havilah Resources’ flagship Kalkaroo copper-gold project in New South Wales has signed a massive $240 million deal with Sandfire Resources to go into production.
HAVILAH RESOURCES LTD (ASX: HAV)
64% increase (27.5c – 45c)
Receiving a well-deserved honorable mention was South Australian copper sleeper Havilah Resources, which signed a $240 million path to production in partnership with midstream copper power plant Sandfire Resources.
The binding agreement allows Sandfire to acquire 80 per cent of the giant Kalkaroo copper-gold project through a $105 million upfront – 70 per cent scrip, 30 per cent cash – contribution, followed by a post-PFS contribution of $105 million, supported by around 20,000 million new drilling, plus $30 million in regional exploration.
Kalkaroo has been around for some time and has a large ore reserve of 100 million tonnes containing 0.47 per cent copper and 0.44 grams per tonne (g/t) gold, and a sulphide resource of 224 million tonnes containing 0.49 per cent copper and 0.36 g/t gold.
This is one of Australia’s largest untapped open-pit copper deposits and has been compromised by classic BHP foresight following BHP’s takeover of OZ Minerals.
Two years have passed and the project now has a suitor with sufficient budget and deeper expertise.
Havilah shares jumped on Thursday’s news and closed at a high of 45c on Friday; It was up 64 per cent on last week’s close of 27.5c, with nearly $5 million worth of paper traded to close out the week.
The company said it would retain a 20 percent free carried interest on the final investment decision and Sandfire would retain the right of first refusal.
The PFS is expected to be completed within 24 months and is set to eliminate the risk of extensions across and in depth, potentially inflating the reserve before a dollar of Havilah cash is spent.
The 2019 PFS pegged 13-year production at 30,000 tonnes of copper and 72,000 ounces of gold annually, with capex of $332 million.
At a time when copper is flirting with around $11,000 a tonne and gold has tripled in value since then, Sandfire will attempt to make Havilah Australia’s new darling.
For Havilah, it means vindication after decades of discovery torture. Kalkaroo, Mutooroo is now funded by a partner who knows how to turn rock into revenue in the copper-gold landscape that shows no signs of slowing down.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
