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@Soder.
Your part post,:
It’s odd the dhsc have continued to pay other parts of the same contract and not netted off when they paid us 47m in q1 21.
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That is because under contract law you are not allowed to net of disputes. You have an obligation pay your invoices under contract and the disputed amounts are separate from that.
Believe me, I've been on the receiving end of that and always got my right.
MS
Thanks everyone.
Maddock, that was my interpretation of the £129m vs 19.8m figures.
Interesting that they say 'a specific product' implying only one type of assay is in dispute? I wonder is it exsig or winterplex? Find it hard to imagine they orders £129m of winterplex kits..... but the again, ya never know.
See wording in page 3 from the RNS below, my take is the £19.8m provision made is relates directly to the disputed q4 revenues of £129.1m. The £19.8m being the maximum cost of sale to replace goods rather than refund revenue billed.. Using these figures would arrive at a gross margin of c85%. (Revenue £129.1 - Cost of sale £19.8m (provision) = £109.3m gross profit. £109.3m / £129.1m = 85% gross margin.
Wording from
Post balance sheet event / DHSC Dispute
On 9 April 2021, Novacyt announced it was in dispute with the DHSC in relation to its second supply contract and made a further update on 21 May 2021. The dispute primarily relates to Q4 2020 revenue totalling £129.1m in respect of a specific product supplied to the NHS. The Company has taken independent legal advice and a provision has been made in the financial statements with the Board's estimate at this time in respect of this claim with DHSC.
The Board has formed a judgment that, in accordance with the contractual terms, and if required, it should be possible to replace the product in dispute and a product warranty provision has been made accordingly. The Board's best estimate of the cost to replace is up to a maximum of £19.8m, the timing of any outflow is dependent on settlement of the dispute. If no settlement is achieved and legal action is required, the timing of any possible outflow will be extended.
bobminor,as a previous poster stated earlier,todays RNS was one of if not the best he has known on AIM,Once GM pressed the button he had no control on the SP.GLA.
NOT another month of this ridiculous state of affairs - then what if not that tkr234 - what then ??
Ive a feeling by the end of July the SP will start to really climb,we should have 2021 Sales info,and lo and behold a possible solution to DHSC scenerio,news on LFT test,USA position.onward and upward.I am now confident GM has the situation in hand along with the rest of his crew.GLA.
Shearclass - Sorry to hear that - hope you will be back soon!
Inventories at year end looks pretty high at 29.88m. Especially versus trade payables and accrued invoices of 8+5 = 13m (note 31). So it looks like they were still building up inventory for the dhsc for q1 sales.
I would think these inventories will be lower now but we have had to pay for the goods (this a cash outflow for our trade payables) and we know we have not received money from dhsc for these inventories via invoiced q1 sales.
Full disclosure that I sold my holding this afternoon for the same fundamental reasons as Bluelight. I feel that this company has a great future however it is currently being played by a combination of the French exchange & DHSC. As soon as either a delisting from Euronext happens or the DHSC dispute is settled in full, I'll be back in a heartbeat. In the meantime, good luck all holders & I'll hopefully be back posting on here in the very near future.
Also trying to get my head around it. In the management report (not the accounts) note 2.9 it says “if the claim under the limited assurance warranty is successful then management best estimate of the settlement cost is up to a maximum of 19.753, the timing of any outflow is dependent on settlement of the dispute”
So I think you are right.
I think this means the dhsc are saying they want some money back for paid invoices and also refusing to pay for some part of invoiced goods.
I think we are saying that’s BS and not only do we not owe you 19m but we want our 23m on top plus what we invoiced you in 2021.
It’s odd the dhsc have continued to pay other parts of the same contract and not netted off when they paid us 47m in q1 21.
Hey Soder, so if it is simply unpaid invoices that are in dispute, why would the RNS be saying,
"It is possible, but not probable, that the DHSC's claim for a refund under the limited assurance warranty will be successful."
That is, they are asking for money back.?
Thanks Soder! I haven't had a chance to put the RNS numbers into a spreadsheet so I can get my head around them.
So do you think the DHSC declared payment in Feb was for Q4 invoices and, as such, are still due to pay for Q1 invoices?
Actually this is it
At year end the dhsc owed us 71.883 million. This was invoiced but sits in trade creditors in the cashflow statement. Of this 71.883m, 23.957m was past due and forms the disputed items. Since year end the dhsc have settled the remaining balance and paid us 47.926m. That’s not too shabby!!
As such the overdue balance the dhsc have not paid for (from 2020 invoiced revenue) is 23.957m. Of this amount, ncyt have taken a provision of 19.788m.
That’s pretty positive as shows that it’s only a small portion in dispute and they still paid us 47m for other parts of the contract.
I would as such expect the current cash number to be very healthy.
Page 25 provisions. “At year end 23.957m of the year end receivables we’re overdue due to the contract dispute. Management expects to recover these balances in full, this is a significant judgement”
Is the difference between the 19.788m provision and the overdue balances the impact of VAT?
I’m not an account rant but know my way around them. I’m just going through now as only looked at the rns earlier. Are their any accountants that can go over also or maybe answer some questions as they come up on this thread.
Some things that instantly stick out.
Note 6: page 29. “Management considers it to be more likely than not that the year end balances are recoverable. £47.926m of the year end receivables balance of £71.883m has been rescued in 2022”
We saw that payment but it’s reassuring that a payment has been made which should further boost cash. Although the Q1 invoiced product has not been paid so net net is it right to assume maybe cash neutral rather than a butn year to date?