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Fertiliser company RLF Agtech reaps $1m in new forward sales

Thu 02 Jun 22, 3:29pm (AEST)
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Key Points

  • Key OEM customer places forward sales order of $1m
  • In May the company secured $1.2m in forward annual sales contracts for FY23
  • Funds raised at IPO are expected to be used to help penetrate more international markets

While microcaps find it hard to capture the market’s imagination at the best of times, usually a company’s loyal cohort can often ensure that genuinely good announcements find their way to the share price within short order.

Not so, it appears, when it comes to RLF Agtech (ASX: RLF) with trades in the fertiliser company virtually non-existent after today announcing a new contract with a key OEM customer, Hebei Veyong Bio-Chemical Co with a minimum forward sales order of $1m.

Veyong has been operating in the field of agricultural pesticides for more than 60 years and has an extensive product line which is used in more than 80 countries throughout the world.

Recent wins

The microcap received a moderately better market reaction to an announcement early May that it had secured $1.2m in forward annual sales contracts for FY23, with the share price up 2.7% on the day.

Commenting on today’s announcement, Ken Hancock, RLF’s managing director said:

“The growing support from groups like Veyong in RLF’s plant nutrition products, demonstrates how our existing customers with significant worldwide agricultural operations are onboard with the Company’s journey of growth and expansion.”

Lurch to renewables

The company has combined plant science with advanced chemistry and manufacturing to create plant nutrition products for commercial agriculture.

The company is also working on commercialising its carbon project.

With commercial agriculture expected to play a significant role in sequestering carbon, RLF could be one of those companies more likely to benefit from the new Labor government’s renewed commitment to renewables.

Future plans

The stock has a market cap of $13.4m and raised $8.5m during its recent float.

Funds are expected to be used to help penetrate more international markets and help establish strategic hubs in these jurisdictions.

The company expects its technologies to support the global trend towards integrated crop nutrition and carbon management systems to capture and store carbon dioxide by boosting organic matter in the world’s soils.

The technology-driven plant nutrition company floated on the ASX 21 April 2022 at an issue price of $0.20, went as high as $0.25 and has since bounced back to $0.17.

The top 20 shareholders in the company hold around 70% of the shares on issue.

Consensus does not cover this stock.

 

Written By

Mark Story

Editor

Mark is an investigative financial journalist and editor who started his career working for Marathon Oil in London. He has a degree in politics/economics and a diploma in journalism. Mark has worked on 70-plus newspapers and financial publications across Australia, NZ, the US, and Asia including: The Australian Financial Review, Money Magazine, Australian Property Investor and Finance Asia. Mark is passionate about improving the financial literacy of all Australians through the highest quality content. Email Mark at [email protected].

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