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Millionaire maker increases share price 28 times in FY20

Zoono Group Ltd (ASX: ZNO) has seen more explosive share price growth than any company on the S&P/ASX All Ordinaries (INDEXASX: XAO) in FY20. In one financial year, it has grown by more than 2,788%! Dreams are made of this stuff. It’s even greater than Afterpay Ltd’s (ASX: APT) success story.

Zoono produces a new formulation for anti-bacterial hand sanitiser and disinfectant. The product is packaged in individual, bulk and industrial sizes and can be used for both hands and surfaces.

 It is a product tailor-made for our current times. Accordingly, the company’s share price tracked the progress of the pandemic

The Zoono share price year in review

January

Towards the end of the 2019 calendar year, the company saw its share price increase substantially due to a series of announcements.

First, a global distribution agreement on a product built for the poultry farming sector. In addition, the product was used successfully to disinfect against the African Swine Flu. This led to a deal with a group of Chinese industry leaders for exclusive distribution in the animal health and agribusiness sectors.

By the end of 1H FY20, the share price had already risen by an impressive 600%. Then came the coronavirus. On 30 January the company mentioned the coronavirus for the first time revealing its products had been successfully tested against similar viruses in the past. They also disclosed that they were starting to see an unprecedented level of sales, primarily from China and Hong Kong.

February

Zoono enters into an exclusive distribution agreement with a Beijing company for the childcare and hotel sectors in China. A 5-year deal guaranteeing escalated sales volumes to NZ$3 million in its third year of the agreement. Then increasing by 10% in every year following. All payments to be prior to shipping. 

This was followed by 2 additional distribution deals. The first with Singapore under similar conditions to the Beijing deal. Then a deal with Eagle Health Holdings Limited (ASX: EHH) for distributing Zoono’s products in China.

On 28 February, Zoono announced its product tested positively against COVID-19. By this stage, its share price had risen by 2,011% since the start of the financial year.

Zoono’s current situation

As well as all of the distribution deals previously signed the company has signed additional deals in an exclusive arrangement for the Middle East and Africa. Moreover, they signed an additional deal with Johns Lyng Group Ltd (ASX: JLG), for the business to business (B2B) market in Australia.

By 5 May the company announced further distribution deals. In its company update, it announced further deals in the UK and Europe. It also disclosed revenue in April alone was in excess of NZ$11 million. This was only for B2B sales. 

In the entire first half of FY20, the company had a total revenue stream of a mere NZ$1,714,980. This by itself was an increase of 144% on the previous corresponding period.

Foolish takeaway

This company was a golden ticket for anybody who invested in it on 1 July of last year. After a 2,788% increase, the share price appears to be still going strong. The product was ideally suited to the pandemic, yet that alone was not enough.

Zoono was agile enough and wise enough to rapidly pull together distribution deals covering most of the globe. In addition, it ramped up production to levels the management could not have dreamt of in December 2019. No matter what happens from this point forward, large-scale sanitisation of workplaces is likely to continue.  

The company’s FY20 report release in August will be very interesting, in my eyes. 

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Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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