21st Aug 2015 09:46
LONDON (Alliance News) - Liberum says HaloSource's new agreement to supply cartridges for Panasonic's drinking water business in India is a "small positive" ahead of the company's first half results, and supports its view of the strategic value in HaloSource's drinking water technology.
"In our view this announcement confirms the strategic value that major consumer goods companies place in HaloSource's drinking water technology, allowing companies to manufacture low-cost, simple water purification devices for the mass market," Liberum says.
Liberum is not expecting any surprises in HaloSource's first half results, scheduled to be released on September 15, but said that the deal with Panasonic is "another helpful step in bringing the company towards profitability".
The broker recognises that there is upside risk if sales from the deal grow to the level of some of HaloSource's other drinking water customers. As an example, Liberum notes that Perfect Water sold 500,000 units in its second year after launch and, were Panasonic to do the same, it estimates this would add around USD2 million to HaloSource's sales.
Liberum has a Buy rating for HaloSource with a price target of 40 pence.
Shares in HaloSource are trading up 8.9% at 24.50 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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