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Got to admit I didn't wade my way through that note!
So with annual revenues at at least 20% from the service charge, and with over £5m of production going out this H2 alone, it guarantees an additional £1m of revenue immediately next year.
Sorry T.RAT - you beat me to it - great minds and all that :-)
This should help your query - from TP research note
Based on an estimated purchase price of £50,000 for a single Microtox® PD unit, with initial small batch production is considered capable of returning a gross margin of c.50%, the economics stack up well. DeepVerge’s recent AGM presentation cited initial batch build of Version 2 units is due to take place between August and December 2021 with production of 100+ units
incorporating motorised optical alignment. This is due to be followed in Q1 2022, with 100+ units of a Version 3 that offers additional facilities including auto chip/flow cell feed. Anticipating the build-up of an order backlog from Q2 2022, new units with integrated hardware and software design are expected to enter mass manufacture with production of up to 200 units/month; this implies prudent production of just c.9000 units over the next five years, although the Board considers this could rise substantially subject to demand from other jurisdictions. Operating on such a scale, TPI sees potential to lift gross margins to around 70% based on contractual 5-to-8-year monitoring agreement, with installations likely to be billed on a lease plus maintenance agreement plus set charge per test. An estimated £10,000 annual service charge for the unit is also seen providing a similar return.
Argylerich, quote from and link to August broker note:
"Based on an estimated purchase price of £50,000 for a single Microtox® PD unit, with initial small batch production is considered capable of returning a gross margin of c.50%, the economics stack up well. DeepVerge’s recent AGM presentation cited initial batch build of Version 2 units is due to take place between August and December 2021 with production of 100+ units ncorporating motorised optical alignment. This is due to be followed in Q1 2022, with 100+ units of a Version 3 that offers additional facilities including auto chip/flow cell feed. Anticipating the build-up of an order backlog from Q2 2022, new units with integrated hardware and software design are expected to enter mass manufacture with production of up to 200 units/month; this implies prudent production of just c.9000 units over the next five years, although the Board considers this could rise substantially subject to demand from other jurisdictions. Operating on such a scale, TPI sees potential to lift gross margins to around 70% based on contractual 5-to-8-year monitoring agreement, with installations likely to be billed on a lease plus maintenance agreement plus set charge per test. An estimated £10,000 annual service charge for the unit is also seen providing a similar return."
https://www.deepverge.com/wp-content/uploads/2021/08/Deepvergeplc_Research_Update_3August2021__FINAL_BGv2.pdf
Argyle
Morning - Good question, I have no clue.
Are you trying to determine repeated revenue stream for consumable etc per unit sold? (on average) then x that by units in the field?
ATBA
GB has spoken from the very beginning of building the economic relationship with the clients and future revenue streaming.
So for each £1m of PD sales, what was the envisaged annual revenue stream for consumables and data services?
Can it be expressed as an approximate % of the sales price p.a.?