As of December 2025, ANIC had 1,015,905,830 shares outstanding. The investment portfolio’s carrying value was £138m. They show £2.2m in cash, so they are basically fully deployed. They are debt-free, so net assets were £140m.

As of December, NAV of 13.8p compares with ANIC shares trading at 6.2p, or 45% of book value.

Position & Transparency Report

• Ticker: AIM:ANIC

• Current Position: No Position

• Recent Activity: None

• Blackout Status: The author certifies that no trades have been executed in this security within the one-day pre-publication window. Per the Facts + Logic protocol, a two-day post-publication blackout is now in effect.

• Post-Publishing Edits: None

Why Look?

• Agronomics screens as negative EV, i.e., equity < net cash. This is because the investment portfolio is included in cash and investments.

• In reality, assets total £140.2m, substantially all of which is the investment portfolio. There is no debt. The market cap of the equity is £63m gives a P/B of 0.45.

• The Executive Chairman, Jim Mellon, seems to be running the show. He recently purchased 2.16m shares at 6p, putting £130k more of his own money at risk. His holdings total 15% of the company.

• The last time Mr. Mellon bought shares was Feb 4th 2025 (RNS) at 3.7p. Just days before, ANIC had made a follow-on investment (RNS) in their largest holding, Liberation Bioindustries Inc. The stock was up 130% over the next 5 months (below) before dropping back from 9.2p to 6.2p.

• This makes me wonder what Mr. Mellon is up to this time. The last announcement was a £1.5m follow-on investment (RNS) in Australian cultivated dairy protein company, All G. ANIC has put in £8.9m and owns about 5% of the company, which isn’t significant to ANIC’s valuation. Hmmmm…?

The Business

Agronomics is a listed venture capital firm investing in private businesses in the precision fermentation and cultivated proteins niches. Agronomics Limited is a Company domiciled in the Isle of Man and listed on the AIM. They position themselves as a leading investor in Clean Food. Economically ANIC is a set of interests in early stage businesses with a common theme: using cellular agriculture to monetize the increasing demand for protein ingredients.

FY25 Annual Report: The Company’s strategy is to create value for Shareholders through investing in companies that operate in the nascent industry of cellular agriculture, which are environmentally friendly alternatives to the traditional production of meat and plant-based sources

Some portfolio companies are in production technology, like Liberation Bioindustries. Others are developing innovative proteins, like Blue Nalu and SuperMeat.

The top 10 investments make up 85% of the £140m portfolio value at December 31, 2025, with Liberation Bioindustries Inc (biomanufacturing/precision fermentation) constituting 25%, Blue Nalu Inc (cultivated tuna) constituting 12%, SuperMeat (cultivated chicken) constituting 11%. Solar Foods constitutes 5% and IPOd at the end of 2024 (HLSE:SFOODS).

Agronomics’s assets are substantially all investments. They are more or less fully invested at this point. Agronomics has no debt or other material liabilities. Investments are carried at the most recent transaction value, i.e., the last funding round valuation. They are not re-marked for operational progress or setbacks. Therefore, the portfolio carrying value masks both upside and downside value differentials.

So investors will make money if the portfolio turns out to be worth more than market implied value, which is 0.47x carrying value, after deducting the ongoing management costs of the fund.

TSRs and ROICs

Agronomics has not delivered for investors so far. Book value has compounded at 4.2% CAGR over the past decade. With the decline in P/B, the stock has returned 1.2% TSR:

The big run up in 2021 was when plant-based protein companies, like Beyond Meat (NASDAQ:BYND) and Impossible Foods (private), were having a moment. We were going vegan. But then we actually tried the expensive burgers and promptly stopped buying them. Investors have thrown up their meat alternatives and tossed ANIC into the compostables bin.

BYND has not been able to scale profitably and the stock has been a wipeout:

The Opportunity?

This much negativity is usually a good thing. Impossible Foods and Beyond Meat may be nothing-burgers but there is high demand for protein-enhanced… everything. I can imagine that there could be as-yet unmet demand for sustainably-produced protein ingredients. So maybe there’s something tasty hiding in here.

When I look at ANIC, the first thing I think is, “what do I get if I buy this thing?”

Here’s the latest portfolio disclosure:

Investments in Liberation Bioindustries Inc constitute 25% of ANIC’s portfolio. Given the multi-bagger or nothing nature of early stage investments, such a large allocation to one name could determine the performance of the whole portfolio. It’s entirely conceivable that Liberation could be a 10-bagger for Agronomics. All else equal, that would triple the value of the portfolio, making ANIC a triple.

Rather than producing novel animal protein alternatives, Liberation is a firm of facility engineers and operators. There is (supposedly) a lack of industrial capacity to produce novel proteins at commercial scale. The start-ups inventing the proteins can’t fund manufacturing facilities large enough to reach commercial viability. There’s a chicken-alternative or egg-alternative problem.

Liberation intends to fill that gap. Their model is to design, build, and operate industrial facilities that produce specific classes of novel protein (e.g., dairy or egg alternatives, pharmaceutical or industrial products, etc.) at a scale that brings price parity with animal protein. They will operate these facilities as a contract manufacturer.

They are in the late stages of building a flagship facility at Midwest Industrial Park in Richmond, Indiana. Their website claims 600,000 litres of fermentation capacity and operations commencing in 2026. You can find progress pictures on their LinkedIn here. They claim that 50% of that capacity is presently or soon to be contracted:

Press Release: The company has made significant strides in customer acquisition, with well over 50 percent of nameplate capacity at the Richmond plant under contract or in late stages of agreements. The company has announced it will produce commercial scale volumes of Vivitein™ BLG, a dairy protein for Dutch ingredients startup Vivici. In addition, Liberation Bioindustries announced a strategic partnership with Topian, NEOM’s food company, to design and develop an advanced precision fermentation facility in Saudi Arabia. Planning for this project is underway.

The issue is… I have no idea how to value an early stage investment in a private company without any access to their accounts.

What matters at 6.2p?

6.2p could be an appropriate price for ANIC if:

1. The true value of the investments ANIC made in prior years (during a meatless-future hype cycle) is ½ the carrying value posted on the balance sheet, OR

2. The PV of fees due to ANIC’s fund managers will consume half the value of the portfolio.

Conversely, 6.2p could be the wrong price for ANIC if:

1. ANIC’s 25% investment in Liberation Bioindustries Inc worth 10x its carrying value. The rest of the portfolio could go to zero but the NAV would still be 70% more than the current price.

Bottom Line: For Agronomics to be an investable opportunity, I would need to believe that ANIC’s 25% position in Liberation Bioindustries will soon be worth much more than their entire £138m portfolio. That means it needs to be at least a 4-bagger in fairly short order.

I don’t know how to research the economics of Liberation’s private business, especially in an unproven industry. So that’s a non-starter. Additionally, I doubt it’s worth my time. Valuations of capital intensive manufacturing businesses are constrained by the ROIC of their manufacturing capacity, which is rarely anything to get excited about. Manufacturing is not scalable like software where product-market fit can be established and then you sell, sell, sell to produce vast amounts of FCF. Sudden, massive increases in the EV of manufacturers are rarer than… plant-based cows.

What next?

If you can figure out the true economic value of ANIC’s Liberation investment, this could be a winner for you. I can’t. I can only speculate on why Mr. Mellon is buying right now. He knows things I don’t and can’t easily find out.

I’m moving on to other things.

1. Is their competitive advantage going away?

2. Is there a structural decline in industry margins?

There is a third question, which I should have included:

3. Will the cash on the balance sheet be reinvested at below-historical ROICs?

This research note attempts to answer the last of these. I will address the others shortly in a follow-up.

Position & Transparency Report

• Ticker: AIM:JET2

• Current Position: Long

• Recent Activity: Bought on Feb 2nd, 2026 at £12.51

• Blackout Status: The author certifies that no trades have been executed in this security within the one-day pre-publication window. Per the Facts + Logic protocol, a two-day post-publication blackout is now in effect.

• Post-Publishing Edits: Adjusted valuation (down) for increased maintenance

Takeaways

1. Jet2’s distributable cash is less than previously hoped

2. Operating cash brings estimated ROIC down to ~13% vs. the ~15% previously identified

3. I think Jet2 earns ~9% ROIC on new A321neo deliveries out of the gate

4. Base case Economic EPS of £2.25 implies yield of ~18%

In the first post, I noted that Jet2 is sitting on roughly one fuck ton of cash. What they do with this matters. Simply put, is that fuck ton is worth more or less than a fuck ton?

Will the cash be reinvested at lower than historical ROICs?

In short, sort of. The accounting ROICs are inflated by an aged fleet. There is an extensive capex plan to add 155 A321neo planes through 2034, largely replacing the aged 737-800NG fleet. At current profit levels and plane prices, these new planes generate ~9% ROICs out of the gate.

That seems low. Does it matter? Not much. They plan to finance half the A321neo program with debt, currently available at <5%. That gives a WACC of ~7.5%, so the neos are still value-additive for shareholders and the thing is trading close to asset value. However, given the low returns, stratospheric future valuations probably depend on declining interest rates and/or moderating competition.

Distributable cash & current ROIC

On their last call, Jet2 provided a minimum yearend liquidity requirement: £600-700m in cash plus £500m in undrawn revolver capacity. They don’t expect this to grow with the business. I think they’ll end the year in March 2026 with ~£3.8bn in cash on the balance sheet and net tangible asset value over £13 per share:

Allocating £700m to operating cash, that leaves £700m in excess cash at yearend (below). That’s enough to buy back 28% of the business at today’s prices. I don’t think they will buy back that much stock straight away. They have deliveries of planes coming up and they’ll want to keep their financing options open.

Including operating cash in invested capital, ROIC looks more like 13% (below) than the 15-17% noted in the Situation Brief. 13% ROIC isn’t bad for a hyper-competitive industry.

These reported returns are somewhat inflated by the age of their fleet, however. Sub 13% ROIC isn’t exactly the most exciting thing I’ve ever seen. Will the new planes be better or worse than that?

What’s the ROIC on the A321neo investments?

Jet2 is bringing in £450m in Net Income per year. Where’s it all going? Planes! Their fleet pipeline provides for 146 new owned and 9 new leased A321neo (neos) deliveries. The B737-800NG fleet will be phased out. Here is the latest disclosure:

A321neos have 232 seats vs. 189 on the 737-800s, so they create meaningful growth in seat capacity. I modelled this out and came up with the same Average Seat Gauge disclosed above, so I’m confident in these numbers. The fleet seat growth CAGR over the 7 years above is 4.4%.

The list price for neos is about $129m. Per Jet2’s Annual Report, they have a contract worth $16.7bn for 135 remaining neo deliveries--at list price. Only suckers pay list. Ballers pay £48m per plane. We can roughly triangulate this from Jet2’s disclosures.

Firstly, the slide above implies £55m per neo delivery, but it also includes all their maintenance and non-aircraft capex. So it’s less than that. We can look at gross adds to Aircraft PP&E, which was £740m in FY24 + FY25. Of this, £139m was pre-payments on future aircraft. £10-12m was for a new CFM LEAP engine. Take off another ~£50m or so on maintenance (guess). That leaves £540m for 14 deliveries, or £38m per plane. Assuming 80% of the total is due on delivery, that’s £48m per plane delivered.

Also, in 1H25, 2H25 and 1H26, they took out new JOLCO loans of £48, £99, and £191m to cover aircraft deliveries. JOLCO loans typically cover 100% of the purchase price of the planes. These are oddly close to exact multiples of £48m. It looks like they financed 1, 2, and 4 deliveries. So that triangulates.

Unit Economics

I wanted to know if these planes are good for shareholders. I calculated profits per passenger, passengers per flight, and flights per year for each neo. I’m not including all the fugly spreadsheets here.

In summary, it looks like a 9.1% ROIC per neo per annum. Accounting ROICs will improve over time, as revenue and opex are subject to inflation while the plane depreciates.

Assumptions

Depreciation: This ROIC assumes a £48m purchase price, with the £2.8m annual depreciation, as below:

Revenue and costs: For the purposes of analysis, I disaggregated profits into Airline and Holiday profits. (This nets out to total profits, so the division isn’t critical to the conclusion). Airline EBIT per passenger assumes current flight-only ticket prices for all customers. Direct costs per passenger include the neo’s fuel and carbon savings of £10 per passenger. I came up with £16 EBIT per airline passenger. The rest of the profits are attributable to the holiday package customers, who make up ⅔ of passengers. They add an extra £23 EBIT per flight per passenger from their holiday booking.

Flights per year: Their fleet size and average seat gauge shows that each seat makes 900 flights per annum (below) .That’s 2.5 flights per day on average - more than one return trip.

Here’s the flight log for one Jet2 A321 (tail: G-HLYF) stationed at Gatwick (below). On Feb 1st, it flew from London to Turin and back, and then London to Grenoble and back. 4 flights per day is doable when you’re only doing short haul. I pulled several planes’ tail codes and got the same result each time.

Updated Valuation

UPDATED: Valuation to include increased maintenance capex 

I don’t really focus on the value of individual stocks. I’m more interested in whether I’m getting a healthy economic yield, counting both the cash/distributable income today plus the economic value of reinvestments in growth. I intend to write a separate piece on this approach, but for now you’ll just have to trust that it reconciles with a traditional DCF or residual earnings model.

Updated: Jet2’s fleet plan includes a plan to replace the aged 737s with A321neos. The neos will, at least initially, produce lower ROICs than the depreciated 737s they replace. The capex plan implies that 6.5% of capacity will be scrapped annually for the next 8 years.

This capacity will be replaced with neos. As such, depreciation understates the upcoming “maintenance capex” required to maintain current production levels. Replacing depreciation with the capex needed to replace 6.5% of the EBIT with neos

Based on my analysis above, my base case for Jet2 indicates that the current £12.60 price offers ~18% economic yield. Fully valued, this is a price of ~£24. Depending on the competitive environment, I can see DCF valuations ranging from £9 to £30. However, I think there is liquidation value support below £12.

At what price would I be a seller? I’m not a fully diversified investor, so my required return is higher than the market. For a business like this--competitive, economically sensitive--I would require a 12% return. So as long as everything is going according to the base case, I’d likely hold until around £19.

I believe that a loss from current prices would necessitate a permanent decline in Jet2’s competitive position or industry-wide margins. We identified key two questions in the Jet2 Situation Brief:

1. Is their competitive advantage going away?

2. Is there a structural decline in industry margins?

I have some thoughts on these, but this post is getting too long. I will address them in a follow-up shortly.

If you enjoyed this post and want more, do me a favour and subscribe below. Please don’t make me beg. It’s very unattractive.

According to Koyfin, the largest stock on the AIM by market cap is Jet2 plc (AIM:JET2). There are currently 197.8m shares outstanding, trading at £12.60 per share, giving a market cap of £2.5bn.

I see Jet2’s grey and red planes whenever I travel home via Leeds Bradford Airport. That’s as good a reason as any to take a look.

Position & Transparency Report

• Ticker: AIM:JET2

• Current Position: No Position

• Recent Activity: None

• Blackout Status: The author certifies that no trades have been executed in this security within the one-day pre-publication window. Per the Facts + Logic protocol, a two-day post-publication blackout is now in effect.

• Post-Publishing Edits: Edited out a couple of typos.

Jet2 is the largest package holiday operator in the UK, capturing 20% share of the market. It is generally loved by both customers and employees. The business is vertically integrated, owning its airline but not the hotels/resorts.

Jet2 has spent 20 years growing their market share, reinvesting basically all cash flow at 15%+ ROICs, and created 15% TSRs in the process.

JET2 currently trades around £12.60, which is 6x consensus FY26 earnings (yearend March 31st). It peaked at £19.40 in June 2025.

Risk/reward

Bottom Line: ~0% downside; +80-120% upside.

Jet2 appears to have ~£5.80 in distributable net cash (net of debt) per share on the balance sheet. Excluding net cash, the stock trades at £6.80 or 4x unlevered EPS of ~£1.70.

The balance sheet also shows £8 per share in owned planes, so the business is trading below the depreciated value of the owned fleet. The combo of a holiday booking business and an airline fleet has delivered mid-teens ROICs for Jet2 in the past.

At present, this fleet is expanding and getting more efficient. Jet2 has 135 planes in service. 23 are Airbus A321neos. The rest are mostly 737-800s. Jet2 has committed to owning 146 neos and leasing 9 more by Summer 2035. They are retiring 737-800s as the larger, more fuel efficient neos come online. A 1:1 replacement of Airbuses for Boeings would grow available seat capacity 4% CAGR over the next decade.

This capacity growth will be somewhat frontloaded: it is set to rise ~9% from Summer 2025 to 2026. This year’s expansion will be focused on expanding their presence at London Gatwick Airport. However, this new inventory will not be fully utilized at full price until the 2027 summer season. Mr. Market is treating this temporary margin pressure as a permanent state of affairs.

Netting off various assets and liabilities, liquidation value appears to be ~£12.50. Downside looks limited.

A business earning 15% on its capital with a 4% growth rate and a 9.4% cost of capital produces a stock worth ~13x unlevered EPS plus net cash. For Jet2 that’s £28 (+121%). In the past, Jet2 has averaged a 10x P/E, so that’s £23 (+80%).

What matters at £12.60?

£12.60 is about right if:

1. The competitive advantages (and excess returns) enjoyed by the existing fleet and holiday business are going away completely, and future investments in capacity-led growth will add no value, OR

2. The industry is undergoing a structural decline in margins that participants cannot rectify through price adjustments.

If research gives reason to believe in one of the above, we’ll just move on to something else.

Key questions

If the answers to the questions below are is “no”, then Jet2 is definitely mispriced:

• Is their competitive advantage going away?

  • Are new / growing UK package holiday competitors driving down prices?

  • Are new / growing competitors stealing market share?

  • Are competitors’ customer satisfaction scores improving, indicating declining competitive position?

  • Are Jet2’s customer satisfaction scores declining, indicating current brand damage?

  • Are employees highlighting falling operating standards, indicating future brand damage?

  • Are resort vendors demanding higher prices, indicating declining take rates?

  • Is Jet2 more exposed than peers to fuel, regulatory, or other cost increases, so that raising prices to maintain margins would cause declining volume?

• Is there a structural decline in industry margins:

  • Are marketing and advertising costs accelerating across the industry, indicating excess capacity?

  • Are peers’ management’s also talking about “temporary” margin pressure as they absorb new aircraft deliveries?

  • Do peers’ management’s also expect aircraft deliveries to accelerate faster than volume growth?

Does it all hinge on improving capital allocation?

Even with the same capital allocation and shitty airline multiples, the total value would be ~£14.70 (+17% upside)

If management doesn’t make a dent in the cash balance, then the cash is negative leverage. Equity holders pony up cash pound-for-pound and it diminishes their returns.

Assume Jet2 can earn £1.70 in operating EPS sustainably, and the market thinks that’s only worth 6x, or £10.20. (This is where the market is pricing European airlines at the moment).

Assume also that Jet2 will perpetually carry £2.8bn in net cash earning 4%, which adds £0.43 in EPS. Equity holders finance that cash balance, so the market values it at the required return, or 9.4%. That’s adds £4.50 in value.

Even with no change in capital allocation policy and a perpetually low airline multiple, the total value would be ~£14.70 (+17% upside). If that’s how this goes down, fine; we live to fight another day.

What next?

First stock reviewed and it’s worth doing some proprietary digging. That’s fortuitous.

If you want to keep up with the story as I attack these questions, go ahead and subscribe below.

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AIM listed businesses are regulated by the London Stock Exchange, and not subject to the national and international standards imposed by the FCA. It’s a nursery for growing businesses, some of which will graduate to the Main Market (as did Domino’s Pizza Group, Entain, Melrose, and ASOS). Given the light touch regulation, it also houses plenty of shite and probably a few scams.

The plan

Running a screen on Koyfin, I get 586 securities with a primary listing on the AIM. The average market cap is £99m. The average EV is £105m. The average trailing 10Y ROIC is a staggeringly shit -2%.

That reminds me of an old joke:

An investor was looking out of his window into his garden, where a huge pile of manure sits steaming and ready for spreading. To his dismay he sees his young daughter on hands and knees scrabbling through the turd with her bare hands. Alarmed, he runs outside and pulls her from the filth, screaming “Sweetie, what the hell are you doing!?!?!’’ To which she replies calmly, “Daddy, there’s so much shit here, there’s just got to be a pony.”

The plan is to go through this pile of shit and see how many ponies we find.

Care to join me for the ride?

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“The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”

―Benjamin Graham, The Intelligent Investor

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