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*Net debt (+8.4M) - dramatic increase
We all bought in when the company (pig in a poke) already demonstrated borderline cash/debt management .
In summary YoY 2021-2022:
Revenue £3.79M (+£70k).
Gross profit £1.83M (-1M)
Share-based payments £1.69M (+£280k)
Administrative expenses £8.70M (+3M)
R&D expenses £1.85M (+230k)
Loss after tax was £11.52M (+6.5M)
Gross cash balance £1.43M (-7.2M)
Net debt £9.2M (-£8.4M).
Additional €3.0M drawdown in December
The company's debt really needs to be reigned in. I am not sure how much lower this SP could possibly go but I sure hope that the long awaited material revenues are on their way. Encouraging to read about the success that the US operations are having with Biodesix. Hopefully we can celebrate similar successes within the UK.
The numbers at the top are definitely not screaming BUY. But the business opportunity is there and I would hope that most of the foundational work has been layed. When are ONC reporting half year results for the period ending September 22 - Mar 2023?
"Revenue for first 6 months of FY2023 expected to exceed the revenue generated in the whole of the 15-month period to 31 August 2022."
This should be good news, right? We should be at 3.7M revenue for the first half of 2023. If that were the case and we have a good H2 I really hope to see the SP move away from this depressing all time low level.
Won't be a takeover offer here until and unless finances are stabilised, i.m.o. After that, maybe.
Nobody wants to buy a pig in a poke in the present climate.
if the funder has line of sight to the disposal of non-core assets (which it almost certainly will have) then a covenant waiver might never be required. The auditors always insist a base case scenario is included in results for the going concern test, but this doesnt mean that it will be be hit. Market is chosing to overlook the fact that the ramp up has started and that the company will be cash flow break even this year. Also, why would the lender offer then an extra €3m in Dec if they are going to now pull the plug? Dont forget part of the last fund raise in Dec was to retire some of the existing debt. Company is arguably in the best place it has ever been in from a trading perspective with current revenue higher after this 6 month period than the previous 15 months that have just been reported on.
Funder says that if there is a problem, etc., 'it is prepared to consider a waiver' of the covenant.
That is a long way short of a commitment.
Just look at what happened to e.g. DDDD. You cannot mess around with covenants.
Glad I sold in advance of them.
Ops wise good progress as usual.
Balance sheet is awful but will imo turn at some point. There is just so much headway that ONC have made. I wouldn’t be surprised to see a bid but for now they need to close outs some volumes to honour the revised covenant….
“ Whilst the base case scenario indicates that resources would be sufficient to cover interest and debt repayments in the near term, it also illustrates that the growth in cashflow would be insufficient to meet the capital repayments currently due from September 2023. This forecast therefore indicates a possible breach of the financial covenant in March 2023. Following discussions, IPF Partners has confirmed that, in the event of a breach and subject to certain conditions being met, it is prepared to consider a waiver in respect of the requirement to submit a compliant financial covenant.”
I intend to buy back once it settles.
Usual caveats
Trek
Hi Ci, its pretty much on a support.
After the sharp rise to 71p the "obvious" retrace was around 63p but that was a short term high from around a more general 61p support level.
I thought it would bounce off 63p but it now wants to bathe in the relaxing comfort around 61p support level. (If that goes then 58p would be the next support target.)
In the great scheme of things its pretty tight (61-63p).
I am pretty relaxed about it and am trying to release funds from elsewhere to add a little at these levels. I used most today to buy into HARL so its going to be a bit of a juggling act but it looks to be worth a punt (imo, dyor etc etc)
Hi Wyn, what ur thoughts on the price action from a TA perspective now? I remember u mentioned, u may consider adding if falls to 63ish. What's your opinion now? Seems there is not much support right now. Thanks
I have taken a few out having had an excellent run from the 40’s. Like I said I didn’t want to risk the results again.
I would rather even pay more and forgo a bit of profit having been bitten here in the past.
Usual caveats
Trek
well, the RSi has dropped to 73 so ok ish. but for me I would not buy as its still close to an overbought situation.
Having said all of that I was not tempted to sell with spreads and the strength of the trend is does not look like a worth while risk/reward.
(If it does fall to say 63p, then I would look to add at that level.)
DYOR etc
The 1 week RSI is now 58 since the share price drops to 68p when RSI was 80 at 73p. Seems your prediction of short term pullback to 60s is quite accurate prediction. The RSI is quite a fascinating indicator...
I think to answer your question whether to sell and buy lower down or trend strong enough so hold, my answer is hold most and sell partially. I do believe it is only a short-term pullback and I do think it will only be a few days before rising back, and since the spreads are quite high, I am not sure how much margin I can make buy short-term sell and then buy back in so I figured it's not worth the risk to sell now during a strong trend up. I will start to sell when the peak of trend stablises IMO, DYOR.
Always remember CI, its an odds game, nothing is written in stone.
But almost always once the RSI hits 80 the SP falls. Given the SP is likely to fall, then the next question is: where to?
On a upward trend I would not expect the pullback to take long (2-3 days?) and it may not go all the way back to test a support if the sellers have got sticky fingers.
But this is all guesswork and really the whole point of TA is not to assume anything.
So odds are its going to fall. In that case do you sell to buy in lower down or do you decide that the trend is strong enough to make the exercise too risky?
Each to his own.GL
Thanks for sharing your thoughts Wyn. Seems RSI reached 80 which according to ur previous comments is overbought territory. Do u think it is temporary before we head higher in which case would RSI continue to be high or go lower first. if according to ur analysis it is currently a bit toppy and we head to low to mid 60s, what's your timeline expectation before we head towards 80s? It seems timing is everything. GL!
Ci, I use HL charts (as that's the platform I use to trade on), closing prices.
Between 23/12 and 30/12 it plateaued at 57.5p-58p before eventually falling back to 51p. so when it broke 58p on the 11/1 (closing at 61.5p that day), that 58p resistance then turns into a support.
Those few days of being stuck at 58p in december meant it was a stubborn resistance but once broken then becomes (in theory) a strong floor or support and is therfore less likely to be easily breached.
(None of this is written in stone (its just an odds game) and had it fallen back below 58p then 51p would be the next support.)
Anyway, it is now in a trading range between 58p and 76.5p but that next, then, low at 76.5p was last year and there is a more recent resistance of 84-86p.
In charts you normally go by the most recent support, so mid 80's, so its a fair argument that is in fact the next target to aim for.
So we will see but I try and be conservative with my targets so err on the side of the lower ones.
And remember this is all today. Close of play monday, depending on the price action may well likely call for a reassesment.
For people who don't see merit in charts they overlook that it is by its nature, such a fluid thing and get frustrated with what often looks like a flip flop approach form chartists, but it is simply part of the mechanical system they use. (Also because it is more mechanical than LTBH there is typically less emotion involved.)
It might be a poor choice of words but I only care about the SP. I don't care or am particularly interested in the company. The reason being its the current SP whenever I decide to buy or sell that will determine the profit or loss I make.
The merits (or not) of the company won't put an extra dime in my pocket on the day, so why get involved and distracted by that?)
So, right now strong day close but starting to look toppy and I expect little appreciation if any, before a drop back to mid 60's even 63p to make way for another move up to the mid late 70's and on to the mid 80's. (but a lot can happen before then! :0))
Nice prediction Wyn. It did move very quickly! How did u determine support level at 58p? and what do u think 76.5p is next target giving it a 4-1risk/reward. Fascinating... what u think will happen next? Will u buy more since the small bite last time. GL!
thats moved quicker than I expected :0))
Morning CI,
fwiw, I think 76.5p is the next target, which is a nice rise from here with a support level at 58p. So at 61.5p currently, a 3.5p risk for a 15p reward giving a very respectable 4-1 risk/reward ratio. Allowing for spreads etc its still 3-1 which is fine.
We are starting to see some momentum now with buys. Looking exciting over the next few days, weeks and months. Now that Biodesix (US distributor) has US Medicare and insurance payers covered, hoping this will increase sales royalties for Oncimmunes Early CDT earnings. GLA
No, not boring at all Trek. I think many miss the point of the objective of this game.
AVCT is back where it normally is, on the cusp of a transformational RNS but it is starting to run over into late territory time... so no change there. :0) atb
Hi wyn,
Re AVCT, no I am not in there. I made a transformational amount and averaged out selling the last at 120. I used the proceeds for some fun and to build a boring pension pot that pays divi income!
Still on my watchlist though and I intended to buy back after the raise which I had been waiting for but then I didn’t have funds at that time.
I am trying to discipline myself by keeping my income plays in tact and only assigning so much to higher risk as I don’t want to loose the high yield that I have achieved even at the risk of potentially gaining more!
So not pushing my luck. Boring hey!
Usual caveats
Trek
Hi Trek,
Thanks for the update.
it seems a few of my speculatives will report over the coming days and ncoming few weeks. (January could be an eventful month!)
(You still have any AVCT stock?)
Hi Wyn,
I go along with the chart analysis. All data should be in the mix.
Another data point to consider is the results end of month. Results have been a banana skin of late!
“ The Company will also report audited results for the 15 months to 31 August 2022 on or around 30 January 2023 in which it expects to report revenue of £4.2 million and losses which will reflect the incremental revenue for the additional three months and continuing operational spend at similar levels to the quarterly spend seen during the 12 months to 31 May 2022. Gross debt at 31 August 2022 was stable compared to 31 May 2022, while cash was lower reflecting the quieter summer trading months. As a result, net debt at 31 August 2022 was £9.5m compared to £8.2m at 31 May 2022.”
The guidance should look better this time with some debt retired with the placing. Gives an event to consider trading around and not too long to wait!
Usual caveats
Trek
That seems like a sensible approach. Right now I have no budget left for ONC although I would love to be in a position to lower my 1.6gbp average.
A recent online analysis of ONC stock performance could be the reason for some of it to drop. In that analysis they wrote concern about the companies debt and the stagnating revenue. Over the last 2 cycles with only marginal growth. They may not be fully aware of all developments at ONC. I am optimistic but worry to fall into the trap of buying into management optimism too much as I have done historically. Hopefully if 2023 is an inflection year for Biotech then this should bode well for ONC. Biotech sector has undergone a brutal year with companies restructuring, cutting operating costs and overheads and consolidating. Although layoffs have been very high in the past two months the in this sector , I am hoping that the bulk of it is done and the market has leaned down and Is ready to grow again.
I am excited for ONC's future as they have put so many catalysts for growth in place over the years. I think and hope they are now going to experience a more accelerated path to growth Thanks to the Biodesix partnrship, approaching NHS approvals, MSAs signed with major Pharmas (this should be big for repeat business l. Once the contracting is done you work on the basis of call offs and purchase orders that should be significantly faster path to revenue, further international partnerships with hospitals in US and Spain as well as research institutions.
I remain hopeful.
Ha! I hope I don't too!
I am quite Zen about buying and selling shares.
Nothing I do makes any difference. The paranoia I used to suffer from years ago has quietly disappeared now.
Every time I buy, I know the SP has two options.
Because I was not overly confident a bottom had been reached I bought an amount to reflect that. (About half my allocated budget)
So, 2 things now for me, I only look at close of play prices so it may yet pop back up but if it closes around 50-51p then I would expect a fall to around 48p and if it did would add some more at that price with the rest of the budget put by.
All the best
@wyndrum.... I hope you didn't jinx it. You should know that ONC does not tend to react kindly when private investors buy shares.