Agronomics (ANIC) describes itself as “a leading listed investor in alternative proteins with a focus on cellular agriculture and cultivated meat… these technologies are driving a major disruption in agriculture, offering solutions to improve sustainability, as well as addressing human health, animal welfare and environmental damage”. So, very green shite... but very in tune with market sentiment currently, with recent news which suggests this sector is starting to take off...
This Jim Mellon-backed company (22.7% shareholding), Chaired by Innocent Drinks co-founder Richard Reed, has established an investment portfolio of 14 companies in its sector and recent activity highlights the growing interest in the sector. In October, capitalised at just over £21 million and at a nil share price discount to prior to it, the company was “pleased to announce that it has completed (subject to certain conditions) an oversubscribed equity fundraise of approximately £10.0 million… at a price of 6.0 pence per ordinary share… Identified… pipeline investments that it expects will close in the next 6 months… Following the receipt of the net proceeds of the fundraise, the company will have approximately £8.15 million cash available for investment”.
It has already followed with a $5 million (£3.8 million) convertible promissory note investment in existing investee (book value £2.7 million) company BlueNalu, Inc., a cell-based seafood company based in San Diego, California. That is the single biggest investment Agronomics has made to date, with other significant investments being; Meatable (Dutch cultivated meat company), Mosa Meat (“Netherlands-based food technology company, pioneering a cleaner, kinder way to make real beef”), Livekindly (US, plant-based chicken alternatives), Tropic Biosciences (UK developer of varieties of tropical crops), VitroLabs (US-based lab-grown leather) and Solar Foods (Finland, novel protein Solein). Broker Cenkos estimated NAV per share here of 5.7p following the recent fund raise, but also noted, for example, the BlueNalu note would “convert at a discounted price to a subsequent qualified Investment round. We estimate that such a round would deliver a significant value uplift for Agronomics initial investments in BlueNalu”.
That overall momentum is with the company’s investment strategy is also shown by its latest news being that Finnish government organisation for innovation funding and trade, travel & investment promotion, Business Finland has provided Solar Foods €4.3 million of new funding. There is still clear risk in Agronomics’ investments being in early-stage, unquoted businesses but we believe the management are suitably experienced and expect further upside as investors seek exposure to a sector which it is difficult to get it to, enhanced as further investments continue to be made here. At 8.5p and up to 9p, targeting 12p+ as increasing investor interest pushes the shares to a bigger premium to NAV combined with further investment and investee news flow driving the NAV sharply higher in the coming months, Buy.
Filed under: Agronomics, UK Oil & Gas, US Oil & Gas, Ascent Resources, Union Jack Oil, HotStockRockets
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