Alice leaves the safety of the M25 to visit the north east.
I am sometimes chased down the street by Fools shouting 'please no more AGMs of life science companies'. All I can say is please turn away now.
Recently I travelled all the way from London to the glorious north east, specifically to the land of Catherine Cookson, in order to attend the 2009 AGM of Immunodiagnostic Systems (LSE: IDH) -- hereafter referred to as IDS.
Surprisingly, or possibly not surprisingly, there was a good turnout of private investors including the legendary ex-BBC news reporter, now full-time private investor, who also lives in the south east. Given the AGM was held at the company's Head Office a number of employees/shareholders sat very quietly listening to the Q&A session.
Why oh why?
The main reason for attending the AGM was to make sure:
- No fountain in the forecourt (confirmed).
- No Porsches in the car park (okay there was one Mercedes sports car, but the other cars looked 'sensible')
- A site visit was on offer (yes).
- And finally, and most importantly, a chance to meet up with Marvellous Martha (the highlight of the meeting, see below).
Background
For those who want to know more about IDS, I suggest my earlier review and the company's website.
In a nutshell (and very crudely, possibly too crudely) IDS is automating its existing best-selling analytes and the machine in question has been named iSYS (I am told the name has some connection to the sun, sorry I never took Latin at school so I have no idea whether this is correct). It was previously named the 3X3, but that has unfortunate connotations in certain cultures.
I call the business model the 'razor blade' model, namely the cost of the iSYS (the razor) to the customer should be similar to the cost of production to IDS. The money is made from the sale of the analytes (the razor blades).
So the steps to success are twofold -- get the iSYS into the labs and then sell lots of analytes (market expectations seem to start at over £50,000 per machine per year, gross profits are high).
Gordon Brown's more serious 'brother'
The AGM was held at Boldon Business Park on Friday 31 July at 3pm. Boldon is about 20 miles away from the football centre of the north east, namely Sunderland. Access to Boldon has to be by car, which means travelling on busy roads. Useless observation -- every quarter of a mile there is a roundabout, no idea why, possibly it is a way of creating jobs in the north east.
Having driven around about 100 roundabouts, I got to Boldon in good time. On getting through the security system, there were friendly handshakes from Roger Duggan and Ian Cookson, CEO & COO respectively. Relieved to see the lack of a fountain in the forecourt.
David Evans, the non-executive chairman, arrived just in time having foolishly taken a train trip from Scotland -- train late, stood for two and a half hours and then a hurried taxi trip. He looked tired, so possibly not ready for a number of questions fired straight away at the board about the absence of the other two non-executives -- Will Dracup and Eddie Blair. Eddie Blair only attended seven of the 13 board meetings last year. Not good enough for a company with a market cap of over £80m.
It is also surprising that the auditors did not make an appearance.
Turning away from the absentees, the executives were in attendance (with the exception of Alain Rousseau). Roger Duggan gave a spirited presentation and there was a lively Q&A. The shareholders asking such simple questions as how many iSYS (the flagship product) will be sold and when. The directors did well to answer the question without ending up hostages to fortune. I await with interest the next trading update, pencilled in for the end of September.
Marvellous Martha
Notwithstanding the Q&A session lasting much longer than the directors expected, there was still time for a site visit for those who had planned to spend all afternoon in Boldon.
Before speaking about the walk around the building, I should say that Tony Wilks, sales & marketing director, looking splendid in smart casual on dress-down Friday and gave the impression of a man who is excited about the future. Having said that, I have yet to meet sales & marketing director who is not excited about the future.
In charge of showing us around the labs was Martha Garrity, Technical Director, who took the decision a couple of years ago to swap dowdy (and now bankrupt) California for the excitement of living in the Tyne & Wear area.
Martha was relaxed, plus she is excited about IDS's future. Reading between the lines (and probably I am completely wrong) she was nervous when the machine was being launched in early 2009. She was very much part of the team who needed to demonstrate that analytes could be automated on the iSYS.
Summary
Was it worth navigating over a 100 roundabouts? The answer is yes.
Going forward IDS now has the very important job of ensuring that market expectations are in line with reality, no easy task given the long lead times involved and the fact that the employees involved are located in three different countries. Hopefully Ian Cookson's logistic skills will stand him in good stead.
I am also hoping that IDS begins to reach out to the investment community to explain the potential of the iSYS machine. Who knows, there may even be an iSYS presentation in London before too long.
And finally, if you are silly enough to turn up at an AGM having not shaved for a week, dressed in clothes that have seen better days, be prepared for a fair about of ribbing!
More of Alice's AGMs:
> Discussion board poster AliceInWonder1 is a serial AGM attendee and is keen to encourage other private investors to take a more 'hands on' approach with their holdings. He holds shares in Immunodiagnostic Systems.
