Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Well I have spent all day today trying to work this one out with the rest of you guys....
This is my conclusion.....
It was professor plum, in the conservatory with the candlestick.
but like always DYOR!!!!
We dont know the cost per unit but it could be as high as £5, with a 90p profit margin.
On 250,000 tests a week thats £225k gross profit per week. £11.7m GP fy.
Nice, considering last year they made a loss.
I do agree that the tweets are confusing...the humour is playful but we need hard facts at thus time. They ars messing with peoples investments which I dont think is that helpful.
“The margin in relation to orders will be 18% before deduction of the Funds”.
Funds is defined in 1.1 as the pre-production payment.
It’s entirely normal for margins on government contracts like this to be disclosed.
I suspect that the margin was accidently left in the contract but both Omega and GAD have the same margin.
Megatro,
I read it that phase 1 is used to calculated the costs which are then used to calculate the charge for phase 2 assuming an 18% profit margin. There could, I suppose, be something unusual in the blanked out cost model .
I don’t think that’s right megatro. The “Pre-production payment” is simply an advance on the payments under the contract. It’s nothing to do with the negotiated margin.
Star-not-so-bright please read the contract again it's not an 18% margin for the manafacturing stage. They will not disclose the margin it may not be in there and it's too commercially sensitive
A retained margin of 18% on a high-volume “foundation contract” from government feels like a reasonable outcome to me. Higher margins will be achievable on commercial sales through other channels. We have one big piece of the puzzle; the other key pieces missing are the % of capacity this contract will occupy (thoughts on this welcome) and the % margins achievable on the remaining (non-government) component. Fill in those blanks and we’ll have a basic financial model for ODX.
There is no reference to the margin aoplicable for phase 2 (the manafacturing stage).
That margin refers to 4.2 which specifies it's for for phase 1 pre production stage (see page 2)
https://bidstats.uk/tenders/2021/W18/750321856#top
And click on the omega signed redacted link.
Wolf76. Go away - adults are talking here.
I assume the margin is relatively low due to tje loan equipment.
Page 64 of the contract.
Wolf,
It states it under 4.4.3 in the contract.
Agreed StarBright,
That contract gives the margin which is all that is required assuming full contract value and someone who can calculate margin. :-)
My interpretation of the contract is that ODX will receive £374m over two years, on which they will make an agreed margin of 18%. This margin represents the gross profit derived from manufacturing the contracted volume of LFT’s. The contract therefore supports £374m x 18% = £67m of MCap (no real need to discount cash flows over such a short period). We can assume intent to utilise the remaining capacity at higher (>18%) margins, whether through domestic or international sales.
This is the missing piece in the jigsaw we’ve been waiting for. It makes it possible to build a sensible financial model for ODX, with assumptions underpinned by a contract with substance. Good news!
Fair point - I think my assumption of the margin was incorrect. Assuming we get the full contract we know the profit. I think test numbers would only be used to see what capacity there was for other products.
margin quoted would take into account all associated costs
JohnHenry - we are (I think) saying the same thing. Only your use of “revenue” isn’t right. The product of turnover (£the £374m contract value) and margin is usually referred to as ‘Gross Profit”. In an accounting sense, the £374m will be classified as “Revenue”.
I’m not sure how we should apply the 18% margin given the wording copied in the other thread. Convention is to apply the margin% to turnover, not cost of inputs, so £374m * 18% = £67.3m. Over two years that’s £33.6m pa.
Thoughts?
if the contract is worth X and they are on an 18% margin from that contract then revenue is 18% of X
JohnHenry,
I've assumed the cost of the making product +18% margin is the value of the contract.
Can you please explain where I have made an incorrect assumption and need the maths lesson??
Ella maybe a maths lesson needed divide by 100
Thatts how i see it. My view is the current mkt cap is underpinned
All we need are the overseas orders now. Together with cd4 and food tech te china