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@RBM
Yep. That's the daddy!
We never really talk about it but they have an OTC listing in the states:
https://www.bloomberg.com/quote/NVYTF:US?sref=egrC1SC3
Would they want to go list on a main exchange there, uff no clue. If you want big exposure and growth then that is the place to go though. We'd love that no doubt but are they ready for the headache, maybe not this year. I could totally see a play for main market. I've a feeling GM is sick of AIM already. Having to deal with AIM's NOMADs.. I mean who really wants to deal with that sort of slime. You're under their wing too, your AIM NOMAD/Broker is toying with your share price for their gain, and at the same time they're supposed to be holding your company accountable. Total joke.
Agree with this CCK. One additional one though - they get bought.
CCK, Do you see NCYT listing in USA, and if so when?
@Trendz
That's really solid, and don't see anything contentious there, nice work.
Personally I think NCYT gets 3 shots at a proper re-rate
1. Big sales, contracts, production update
2. Acquisition & move into main market
3. R&D update on non-covid diagnostics growth and expansion (ambition to grow into another Qiagen pulling in over $1 billion a year)
Second two are more permanent and likely to attract big investors long term. I think that gives Novacyt a mega share price - tell the market how you will spend your war chest. Even add to it with a placing if you have to later in the year or next year to help with an acquisition (investors hate placings but in this case it will be better for them in the long term - especially if shares are offered at a discount to existing holders). All this cash coming in needs to get spent wisely one the next 12 months pushing into new areas. Full on growth phase, lay it all out, 5 year plan. Get an investor presentation going.
This is the one I think...
Dexamethasone
Its a double edged sword, Novacyt's secretive nature has me fully invested here (no more top ups) than if it was all in the open. There is risk, but at least the big investors are sweating along with the private investors atm..
I think it was didohedrotridecahedramynoxinol...could have missed an x out somewhere.
and the first country to find a cheap drug that works! (can't remember how to spell it!)
demoxtryahsleonlone whatever it was called
Yep good post, it's hard to warrant a big p/e, or any at all, with the unique opportunity that Covid presents, however, Han**** and the conservatives are all about 'Levelling up' the country.
This means they want to build infrastructure, IT, upgrade the NHS frame work. One place they also have shown a desire for, is a world class diagnostics industry. - Primer Design and AstraZeneca will be at the heart of this, with the latter being the biggest company in the UK by Market Cap.
The Govt have invested a lot with private firms, but also with Universities - That are the best in the world when it comes to science - and they will want Oxford/Cambridge to become the Diagnostics Silicon Valley. - We've all seen the job adverts for the 200 scientists wanted at the mega lab in Cambridge with the PrimerDesign High Throughput Test.
The UK Media and Public (without wanting to get into a political debate) are so downbeat on the UK due to Brexit, but we have some of the world leading Education, Healthcare and Research facilities in the world.
There's no surprise that the UK is leading the charge to fighting Covid, with Antibody, Antigen and Vaccines (without factoring in the Treatment that SNG and University of Southampton are working on).
This Company is here for the future and will have a large cash balance to work with AZN and the Govt to allow it to generate future recurring revenues and become a pillarstone of a UK Diagnostics Leader.
I will try and keep this short and to the point.
Without going into the specifics of the company's testing capabilities, it is market leading and has managed to gain a classic 'first mover advantage' in the market. The AstraZ tie-up evidences this. Overall market conditions are very supportive. Low interest rates will keep equity prices high and this is, to some extent, a counter-cyclical company - i.e. if there is a significant second and/or third wave of Covid, this should hold up well. In my view, Covid testing will end up being a 2 years (from February 2020) windfall and will then dramatically tail off, as vaccinations are rolled out to most of the world. There is potential upside that testing will go further but I don't assume that.
Right, some figures for you:
Contracted sales revenue (including received cash revenue and contracted future revenue) to 1 June - £120m
We know that June was another month of growth with circa £20m additional sales
EBITDA margin - 60%
So, as of end of June, NCYT has generated c.£85m contracted cash profit, over essentially a 4 month period.
If this is merely repeated from 1 July to 1 November, we are looking at £280m revenue and £170m cash profit.
The current market cap is £230m, so is likely currently 75% underpinned by my forecasted annualised cash profit.
If you prescribe to the view that sales growth will continue growing at its current growth rate, then the entire current market cap is potentially underpinned by its annualised cash profits. This is crazy and something I can't get my head around. Please let me know what i'm missing!
Factoring in slightly reduced margins from competition (of which i'm sceptical because of the huge demand and the fact that scaling up production is outsourced and not too capital intensive) and on a conservative basis this company is very undervalued. Using my above calculations, the forward p/e is 1.35!
So, what is a fair valuation? -This is tricky, as it's quite a unique business opportunity. To me, the company's valuation should be at least double and more reasonably, triple. If the company can re-invest its substantial profits well and demonstrate future revenue streams and profits to the market (which is no mean feat and will require some good strategic decisions and diversification), then long term this company could re-rate to a normal p/e valuation. There is no visibility on this yet, and so I can't begin to guess the market cap.