Advance Zinctek reports major boost to 1H sales

Advance Zinctek (ASX: ANO) was in rare company in afternoon trading, with its share price defying today’s sell down, up around 1% after the zinc oxide supplier provided the market with a favourable update.

The small-cap Brisbane-based company announced receipt of $1.309m in firm sales orders from US distributor, Deveraux Specialities, and reported a 57% lift in half-year sales over the previous period.

Today’s market update also coincided with the departure of director Laurie Lefcourt and the appointment of non-executive director Linda Barr, who has more than 30 years of accounting and management experience.

What does Advanced Zinctek do?

To the uninitiated, Advanced Zinctek, which publicly listed in 2005, is Australasia’s largest supplier of cosmetic and pharmaceutical grade zinc oxide powder.

The company manufactures aluminium oxide powder, and zinc oxide dispersions that are used in sunscreens and personal care products in Australia, the US, Canada, Europe, and internationally. 

NASDAQ listing

The company is aiming for a dual listing on the NASDAQ early 2023, is debt free and had NTA of $33.75m as of 31 December 2021.

It’s always encouraging when insiders are buying stock, and in what appears to be a demonstration of their bullish outlook on the business, management recently bought $700,000 worth of stock, at $2.26, a premium to today’s price.

At the full year the company reported $3.682m profit before tax, still well below the FY20 result.

Highlights from the full year FY22 result included:

• Website is generating increasing enquiries and sample requests are 300% up on FY21

• Zinc sales in Europe up from $0.87m in 2020 to $1.2m in 2022

• Sufficient stock of raw materials and finished products to accommodate expected growth

• Current sales and sales orders in the system for FY23 are at $5.145m, 20% up on previous year

• 15% improvement in manufacturing costs

Looking forward

Management expects to generate sales revenue for FY23 to levels above FY20 before the full impact of covid and notes a further four European companies are considering the company’s products for customers.

Consensus does not cover this company but based on Morningstar’s fair value of $3.17 the stock appears to be undervalued.

Advance Zinctek’s share price is down -42% over 12 months and has been losing ground since hitting a year-to-date high of $2.70 mid-August.

Advance Zinctek share price snapshot.