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This tweet prob explains why Nova pumping the LFT. The middle East trade show.
https://twitter.com/NewFormsResearc/status/1483435039950094339?s=20
I think film sets and large corporates may well still test for a period of time because of associated costs with workforce absences and remember this latest variant is still spreading dont focus on UK where we can't sell it anyway which makes the tweets bizarre. Not even posted on linked in which has a much larger following.
At the moment, LFT demand in the UK is driven by Travel (paid) and mass testing (free). When the free tests stop where do you see the demand coming from. Are people going to be expected to pay for a test to go to work? I don't think so. I'm not convinced there will be a huge amount of demand once free tests go. Correct me if I'm wrong
Nicksmith123, "The best we can hope for is NCYT have a solid strategy outside of the covid remit with a clear revenue stream" That, imo, is the crux of the matter.
Looking at SourceBio's RNS log and their shareholders were pretty much in the same boat as us until today. Their previous RNS of any substance was back in September which was their H1 results. So it's not just us.
SourceBio set revenue guidance as 70% above FY20 which equates to approx £86m. They delivered £92m which was approx 7% higher than guidance. It is possible that ncyt could exceed guidance by a similar amount.
Looking at the revenue split that they provide you can see that they are pretty much a covid stock but probably have a bigger non covid business than we do.
Assuming their PAT is £19m based on what they've said then they are currently valued at 6 times PAT. Take off cash and they are a little over 4 times PAT.
Ncyt on the other hand excluding the one off DHSC adjustments make approx. £35m PAT which means we are currently valued at just under 6 times PAT. Take out the cash which I will assume is £100m and we're valued at just under 3 times PAT.
In a nutshell, we can make loads of profit in. FY21 and even FY22 but with a P/e ratio of less than 3 it won't make much difference to the mcap. We need to establish long term consistent earnings which will then justify a higher p/e, say 20. All we need to secure long term is £20m PAT and we would be valued at £400m or £5.63. We have £100m cash and a global market to make it happen.
A rather big difference between ncyt and SourceBio is the operating margin. We have 70%+. They have 43% based on their H1. This obviously means that to get our PAT target we don't need as much revenue as the likes of SourceBio which should allow us a bigger p/e ratio.
Unfortunately, SourceBio went with the approach of 'its too difficult to forecast Covid revenues for FY22' This is a huge no no imo. Basically what it says to the market is that should PCR testing fall away in FY22 then our revenues will drop dramatically back to pre covid levels. Investors invest based on future revenues not on past. If DA delivers something similar then, well we all know what happened last time.
SBI reports numbers significantly ahead of market expectations. There’s been much debate upon here that NCYT would have had to update the market before now if we were to announce numbers ahead of previous guidance, I’m thinking not, next weeks numbers shall provide the update ahead of the Full Year results, nothing to stop NCYT doing the same next week and announcing numbers 40% ahead of expectations.
To be fair if NCYT had been trading upon the same multiple as SBI the NCYT share price would have been well North of £15.00!
Sourcebio gave little detail and no real forward guidance. Hopefully we will give both. As for the re rate, who knows if and when that will happen but I'm still hopeful (perhaps unwisely) of a positive run up to results and beyond.
EBITDA and Revenue Up and ahead of broker guidance - and yet their down.
This goes back to my point made a few days ago... if anyone is expecting a re-rate on results day, i believe they will be in for a nice surprise.
The best we can hope for is NCYT have a solid strategy outside of the covid remit with a clear revenue stream. This will then lead to an increase in share price as the strategy comes to fruition.
The only way i can see a major re-rate would be if the revenue/profit margin was so exceptionally past the guidance (over 20%) - which i feel is unlikely.
Very strong trading statement this morning
Revs up 92% and ebitda up 70%. That was ahead of broker guidance by 7% and 15%