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Agronomics Limited
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=== Full-year results === ccc {| class="wikitable" |+Profit and loss ! !2021 £ !2022 £ |- |Income | | |- |Net income from financial instruments at fair value through profit and loss |10,669,991 |6,423,869 |- | |10,669,991 |6,423,869 |- |Operating expenses | | |- |Directors’ fees |(24,167) |(85,000) |- |Other operating costs |(795,131) |(1,753,868) |- |Foreign exchange gains/(losses) |(107,275) |6,513,031 |- |Profit from operating activities |9,743,418 |11,098,032 |- |Other costs Consulting fee |(7,394,360) |(4,562,548) |- |Recoverable / (Irrecoverable) VAT |(1,478,872) |1,478,872 |- |Profit after consulting fee |870,186 |8,014,356 |- |Interest received |149,655 |344,023 |- |Profit before taxation |1,019,841 |8,358,379 |- |Taxation |<nowiki>-</nowiki> |<nowiki>-</nowiki> |- |Profit for the year |1,019,841 |8,358,379 |- |Other comprehensive income |<nowiki>-</nowiki> |<nowiki>-</nowiki> |- |Total comprehensive profit for the year |1,019,841 |8,358,379 |- |Basic profit per share (pence) |0.22 |0.95 |- |Diluted profit per share (pence) |0.20 |0.91 |} {| class="wikitable" |+Balance sheet ! !2021 £ !2022 £ |- |Assets | | |- |Financial assets at fair value through profit or loss |38,770,676 |94,813,088 |- |Cash deposits |<nowiki>-</nowiki> |20,024,175 |- |Trade and other receivables |445,667 |102,659 |- |Cash and cash equivalents |62,436,497 |31,458,326 |- |Total assets |101,652,840 |146,398,248 |- |Equity and liabilities | | |- |Capital and reserves | | |- |Share capital |799 |968 |- |Share premium |91,278,407 |129,855,667 |- |Share reserve |7,394,360 |4,341,639 |- |Accumulated earnings |1,356,250 |9,714,629 |- | |100,029,816 |143,912,903 |- |Liabilities | | |- |Trade and other payables |1,623,024 |2,485,345 |- |Total liabilities |1,623,024 |2,485,345 |- |Total equity and liabilities |101,652,840 |146,398,248 |} {| class="wikitable" |+Cash flow ! !2021 £ !2022 £ |- |Cash flows from operating activities | | |- |Operating profit for the year |1,019,841 |8,358,379 |- |Purchase of investments |(11,839,007) |(42,032,410) |- |Proceeds from sale of investments |628,632 |696,456 |- |Interest income |(149,655) |(341,329) |- |Realised and unrealised gains on investments |(10,669,991) |(12,362,604) |- |Consulting fee to be settled in shares |7,394,360 |2,281,274 |- |Operating outflows before changes in working capital |(13,615,820) |(43,400,234) |- |Change in trade and other receivables |(427,457) |318,395 |- |Change in trade and other payables |1,687,123 |873,841 |- |Share issue costs settled in shares |187,000 |<nowiki>-</nowiki> |- |Net cash used in operating activities |(12,169,154) |(42,207,998) |- |Cash flows from financing activities | | |- |Proceeds from issue of shares |73,367,580 |32,057,951 |- |Proceeds from loan |1,900,000 |<nowiki>-</nowiki> |- |Share issue commissions paid |(3,451,026) |(861,791) |- |Cash interest received |<nowiki>-</nowiki> |57,842 |- |Net cash from financing activities |71,816,554 |31,254,002 |- |Cash flows from investing activities | | |- |Bank deposits not considered cash and cash equivalents (net) | |(20,024,175) |- |Net cash from investing activities |<nowiki>-</nowiki> |(20,024,175) |- |(Decrease) / increase in cash and cash equivalents |59,647,400 |(30,978,171) |- |Cash and cash equivalents at beginning of year |2,789,097 |62,436,497 |- |Cash and cash equivalents at the end of year |62,436,497 |31,458,326 |} ==== What are the assumptions used to estimate the financial forecasts?==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- | colspan="3" | <div style="text-align: center;">'''Revenue'''</div> |- |What's the estimated current size of the total addressable market? |$2,700,000,000 |Here, the total addressable market (TAM) is defined as the global agricultural market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (14th September 2023), in terms of revenue, is $2.7 trillion. |- |What is the estimated company lifespan? |50 years |Currently, Agronomics employs around five people, making the company a small organisation (less than 10,000 employees). That said, given the company's mission, we expect the company to grow to a large organisation, and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref> |- |What's the estimated annual growth rate of the total addressable market over the lifecycle of the company? |3% |Research shows that the growth rate of the global agricultural market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>. |- |What's the estimated company peak market share? |0.10% |The Stockhub users estimate that especially given the leadership of the company, the peak market share of Agronomics is around 0.10%, and, therefore, suggests using the share amount here. As of 31st December 2022, Agronomics's current share of the market is estimated at around zero%. |- |Which distribution function do you want to use to estimate company revenue? |Gaussian |Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so the Stockhub users suggest using that function here. |- |What's the estimated standard deviation of company revenue? | 5 years |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Agronomics's current revenue amount (i.e. £12.68 million) and Agronomics's estimated lifespan (i.e. 50 years) and Agronomics's estimated current stage of its lifecycle (i.e. introduction stage), the Stockhub users suggest using five years (i.e. 68% of all sales happen within five years either side of the mean year), so that's what's used here. |- | colspan="3" |'''<div style="text-align: center;">Growth stages</div>''' |- |How many main stages of growth is the company expected to go through? | 4 stages |Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref> In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub users estimate that with Agronomics's operating cash flows negative (-), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the first stage of growth (i.e. the 'introduction' stage), and, therefore, it has a total of four main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows. |- |What proportion of the company lifecycle is represented by growth stage 1? |30% |Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref> |- |What proportion of the company lifecycle is represented by growth stage 2? |10% |Research suggests 10%.<ref name=":6" /> |- | What proportion of the company lifecycle is represented by growth stage 3? |20% | Research suggests 20%.<ref name=":6" /> |- |What proportion of the company lifecycle is represented by growth stage 4? |40% |Research suggests 40%.<ref name=":6" /> |- | colspan="3" |'''<div style="text-align: center;">Growth stage 1</div>''' |- |Cost of goods sold as a proportion of revenue (%) |12.92% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |159.10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |(3.07)% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |56.26% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |8.59% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |50.93% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |21.75% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |0.06% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>''' |- |Cost of goods sold as a proportion of revenue (%) |0.00% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |41.11% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |15.23% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |79.52% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |1.13% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |52.01% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |0.27% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |0.41% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>''' |- |Cost of goods sold as a proportion of revenue (%) |0.00% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |55.16% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |19.91% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |18.93% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |2.21% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |(1.46)% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |(1.10)% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |0.31% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>''' |- |Cost of goods sold as a proportion of revenue (%) |36.13% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |174.39% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |(1.94)% |Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |47.29% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | 6.25% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | 2.13% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |0% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |0% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |}
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