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The Scandal is the DHSC approved Nova's products and continued to be supplied by them?
imo?
No honourable Judge, is going to back a Gov that clearly lies to stay in place and is IMO delaying the GE as they know the outcome is going against them, hence dragging it out!
Full payment Full Interest Full Compensation... IMO and why I wait hold and sometimes buy a few more on the drops!
dyor all imo
LondonWatcher, the risk/reward is hugely affected by Novacyt's valuation at any given time. We all know that come July Novacyt have somewhere between £0 cash and possibly bankrupt all the way up to a £130m NET cash position, with YG fully integrated into the business at that point. At £30m mcap it makes the risk/reward far more compelling than if, say, the share price was at £1 right now.
But there's clearly no scandal, even what the DHSC is claiming for the case would not make huge news.
This is not the PPE scandal, this is not even Randox, whatever the outcome.
Agreed and especially one that was HELPING and indeed was asked by DHSC to CONTINUE to supply... ?
I think you talk a lot of sense Harchris. But possible not on this occasion.
The Post Office Scandel was only small fry in the scale of things.
If the media or an election campaign wants to expose the case it it could become big news.
As the Post office scandal highlights it., no one likes an underdog to be "kicked in the balls"
It's discussed on here every day with many of us holders still here for that explicit reason, because we are confident that everything points to the DHSC losing this case and paying out an enormous sum to Novacyt. And that those on the sidelines will be locked out from the main bulk of the rise.
If you're implying that the risk of going bankrupt is ignored on here well it isn't, it's constantly alluded to and it's a risk one has to accept if they are 'in it to win it' so to speak - for those preferring not to take on that risk that's fine!
Yes it is in my opinion... :)
Roll on June and a POSITIVE outcome :)
Also, this court case is a big thing for ncyt. If they loss the case and have to pay what DHSC claimed for then bankruptcy is the only option.
So, is it worth taking a risk on a company which can go bankrupt or one should look at other AIM companies to grow their investment? And everyone here is knowledge enough to see this.
Well if that is your point it's a good job Novacyt has such a sound balance sheet, I'm pretty sure with £44.1m cash and no debt they'll be able to handle it dragging on longer if (and I think it's rather unlikely) that turned out to be the case - and hopefully all of that would eventually be factored into the end result re compensation.
The point is not who will loss rather how long this is gonna drag. As lot of companies are forced to sell their business due to long court battles
A bit of research would show you that the government loses case after case. And again, this is the DHSC against Novacyt, it's going to make zero difference to the election result - the only people that will even know are those that read the financial section of The Times.
Since we are in the election year, I think either they will delay the court case or fight tooth and nail to show the tax payers how they are protecting their money.
The whole covid contracts is thing of the past where general view is they were handed out to friends or some corners were cut in giving those contract. Not sure how ncyt can win this case.
This won't even be on the government's radar, it is not a huge case whatsoever. The total healthcare budget is around £180B, if they end up paying £0.08B to Novacyt it won't even register.
I'll give you some further context.
At the weekend I was reading through the last Yourgene broker note in late 2022 before they were forced to do a deeply discounted placing. The market cap of YG at that time was £60m with a target of £100m. Now the target price is a bit irrelevant but before they ran out of cash the market was still placing a value of £60m on YG.
Is it therefore farfetched for the combined entity of Yourgene-Novacyt, debt free and with £47m cash (your example) to be valued a little above what YG was valued alone not so long ago? Of course not.
Pi 100
No I don't think this government particularly cares. I'm not sure that they really think they will be re elected. If this costs them money it will become Labours problem. Bit like when labour deliberately left the coffers empty when the Tories took over.
A win in Novas favour is not guaranteed but I feel reasonably confident.
Yes. Like you keep repeating the dhsc dispute is a risk that’s weighing heavily on the company, have it removed and a a doubling from 50p is reasonable.
Further cash added from a win or partial win and start to show some positive results from all the investment and cost cutting measures that have been taking place and it’ll go far higher than that.
HC - you really think it would take us to over £70m marcap? £44m in the bank at year end, less say £5m cash burn by June add £8m VAT rebate and we're up to £47m with a massively loss making business. £1 is pie in the sky.
Gladiator - this is a huge case compared to others. Do you think the government want this hassle 3-4 months before the election?
My thinking is that the BOD are 100% sure they will win the case and be awarded full amount of money claimed as well as interest added . Why else would the BOD leave it so late and jeopardize bankruptcy of the business ? Around 250 people are employed by Novacyt and the Judge will have to consider his verdict seriously , will he really want these people to lose their jobs: I think this will go to court unless the DHSC back down .
70% of litigation cases get settled before court
So we are entering the end game..a game of chicken to see who really believes they have the "strongest" case.
So rns could drop any day with news..or the worst case scenario ..we have 3-4 months or whatever it is until the court date. I don't believe it will be postponed .
More importantly...ncyt really should come up with some reason to keep existing holders from exiting ..and soon.
However my gut says this will not happen.
GLA
It's not definitely going to court, everyone here pretty much agreed from a year ago that a settlement, if it were to happen, would come in the months running up to the court case. Which is now, and over the next couple of months.
I'm still confident of a settlement being reached.
Pi100
What the hell are you talking about. "The Government wouldn't go to court if it didn't have a watertight case".
Have you completely missed previous court cases?
In my opinion this is a corrupt Government. Can't wait until this is resolved.im not foolish enough to think we will definitely win. Judges will have an option either way.
That all said, this share only has a limited sweet point even if we win as I believe many of us are sick of how we are treated and just wish to get out on any high that might be gained.
Well CS no matter how those scenarios eventually play out the immediate term effect will be a considerable rally in the share price, to £1+ as GLTader pointed out so that’s the most relevant thing for those at 40p taking the risk and holding for the outcome.
How it actually plays out longer term is far harder to predict.
agree cs, scenario 3 is nailed on for me. this is a tiny, weak company who do not want to be fighting the behemoth that is the corrupt uk government. any hint of a nil liability settlement will be snapped up because they can’t be ****d, like they can’t be ****d with the actual business. it’d be a massive massive disappointment but that would sum up this investment for most. it’s a tiny tiny company wanting to stay that way, talk of mid cap was just bluster to shut up shareholders in times when it looked like they should be doing more.
the government wouldn’t go to court if they didn’t have a watertight case so if it goes to trial i think we lose, but likely that’ll we’ll just settle at nil to get the monkey off our back. if so, may get a 10p uplift but nothjgn more as hardly any cash coming in and that £8m wouldn’t even cover a years loss.
still convinced the government won’t want to do the case prior to the autumn election so that’s 2024 out and a new date will be for the next government to deal with.
CaptainSwag , I agree . It's clear the BOD do not care about shareholders . The question is when will it be when they actually need shareholders ? The only reason I can think of is when they need to raise cash . But let's hope they don't ever need to raise cash as they will have enough.
Scenario 1: Goes to court, Novacyt wins > under this scenario, I fully expect Novacyt to return cash to shareholders (versus buyback).
THINK THIS IS SHEER FANTASY. NCYT DO NOT CARE ABOUT SHAREHOLDERS UNTIL THEY NEED THEM. THEY WILL KEEP CASH - SOMETHING I DONT HAVE A PROBLEM WITH
Scenario 2: Settlement in favour of Novacyt, but not full amount. Depending on settlement amount, I also expect a one-off distribution. Cash position ~£65m-£85m
PERSONALLY I THINK IF NCYT WIN IT WILL BE FULL AMOUNT. THE DECISION OF THE COURT WILL BE BINARY - WIN OR LOSE
Scenario 3: Settlement at NIL liability both sides. This will still mean a circa £8m VAT reclaim, improving the cash position of the company. With the clarity, I still expect a small distribution, perhaps 10p, with the remaining cash used to deliver the growth needed to become profitable. Cash position ~£48m
I THINK THIS IS MOST LIKELY. BOTH SAVE FACE AND SAVE CASH.
AS ABOVE DO NOT EXPECT ANY CASH TO SHAREHOLDERS
Scenario 4: Settlement in favour of DHSC. Novacyt will not settle at any values that will compromise its going concern. So, I imagine it will be max £8-10m, countered by the VAT reclaim. Even so, it will pave the way to a clearer future. Cash position ~£35m
Scenario 5: Goes to court and Novacyt loses. Subject to appeal, game over.
ALWAYS A POSSIBILITY BUT UNLIKELY IN MY VIEWSP
I agree that most likely outcome is more cash for ncyt and a rise in SP
unfortunately due to poor management the SP is on its harris....and the reslt will not be as good as it could/should have been