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Ok, ok, at 10.58am, 11.02 & 11.04 " we have a major US distributor" we've got it allready and we are still 6% down today. Jeeeeez and I'm annoying?!
It even states it clearly in the rns 'As a result, there is expected to be greater cash generation in the second half of the year'. Lets say 30m cash in 3m so far (20m in bank plus debt payments, may be more as don't know amount paid on materials to meet 2H demand), higher in the second half, so lets be conservative and say 40m cash every 3m for remainder of 2020. that means come end 2020 it will have 20m + 80m 2H 2020. that gives it cash in the bank of 100m come the end of the year. Im no financial expert, but with a mcap of 150m right now that screams take me over.
some of have seen the selling as an opportunity to get more shares before more US news
Well summed up Bluelight. Essentially the company is bearing the costs now (first half of the year) to benefit from the fruits later. The second half of the year will see significant cash growth imo. From that point and going into 2021 the company can then consider acqusitions and divi’s etc. The strategy they are on is the right one and the market will realise this over the coming weeks/months
The markets driven by fear and greed, rarely values anything correctly (just look at how overvalued the US is right now, inversely correlated to covid indeed, lol). The real valuation will be come takeover time, when actual financials are evaluated. What is worth today or tomorrow in share price moves is irrelevant, that's just the likes of you and me driving small moves on emotional decisions.
The RNS mentioned the strong cash position is after significant investment to meet expected demand in the second half of the year so I am mainly in agreement with Bluelight. However they will still have cash going out during the rest of the year for further future expected demand.
That sales revenue was up month on month for the 6th month in a row, so its clear sales are ramping up along with their production. The cash position is after theyve front loaded all their costs, and paid off all of their debt. What the situation is now is massive orderbook, paid for materials, and no debt payments. Translate that into meaning that for the rest of the year and at least 2021 (and I personally think testing will be around for many years to come) they are basically going to be pulling in cash with virtually no costs. Its basically a cash cow for at least the next 12m. Seems to be missed by many people, but I doubt it will be missed by their peers as regards a takeover target. No debt, highly cash generative, whats not to love.
Brod they Openly state their profit margins are 65% at the moment. They could easily spend the money which is 14.3 million, on upscaling sales, releasing the new test, R and D. None of this is free hence they state they expect a significant increase in profits for the second half of the year.
Fail
I'm no shorter, but no ramper either. The 22m is sales revenue not profit or extra cash flow so has nothing to do with r&d spend. Cash in bank went down when if no r&d/expansion expense it should have been up at least 7m. I can only read between the lines and hope it a load of cash has been spent on r&d in a month, but to be honest struggle to see how they have spent the extra cash so quick. I expected to see cash reserves increase not decrease
I hope we don’t have another RNS like this again.
Out in force. De-ramping and scaremongering. Like i said yesterday. I was fireworks with the half yearly update as most of it was priced in. People assuming we made £22m in June have not got a clue. That figure includes the spend for R&D and that is what is most interesting as the market does not know/expect what is to come. I am looking forward to the next month or so. It is no coincidence the company mentioning multiple new products and innovations at the same time the government are putting out a £5bn tender to laboratory based diagnostic companies. The new saliva test and multiplex winter test will win a hige chunk of that. Patience will pay off, it almost always does!