Roundtable Discussion; The Future of Mineral Sands. 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.
WildStar, I’ll have a go for fun!
If Avacta were to supply the bulk of the Government LFTs then potentially £10 billion at say 25% margin would give a gross profit of 2.5 billion. Depends what PE ratio you would apply, and I suppose that in turn would depend on the perceived longevity. It could be argued that worldwide there will be demand for several years for a high quality test.
So off the top of my head a forward PE of 1 based on those figures (approximate as gross profit) would be roughly £10, PE of 2 would be £20 and so on.
As unlikely as it seems that Avacta could make these quantities through UK and overseas manufacturers, albeit with Government help on scale up, AS did use the words, when speaking about affimer production “If we get to that 120 million per month or even higher numbers by accessing markets around the world then that will require some third party contract manufacturing.”
So he has certainly been planning, with others, for these kind of numbers for many months.
Mowzer I think each 10m a month gets you £2 a share if you are looking on a 2 year horizon (AS said 2-5 years).
I'm hoping many outline deals are already in place, subject to validation results. Wouldn't like to put a figure on number we could produce, but safe to say I'm hoping for multiples of 10m a month.
I also think we could will see an iterative increase in share price over months. If we get clinical validation results in line with earlier results, I think we will see initial rises but not the huge gains initially. Then more and more manufacturers could be added. Then Europe deals, then licensing/USA etc. Think I heard we did cancer as well ;-). I'd sell now, or hold long term. Obviously I'm still here so going for the latter.
For every 10m we can produce it could be another £1 per share???? Is that crazy? What do we think capacity would/could be???
Yup I agree and my finger in the air estimate supports a current £2 share price - as capacity is increased that would support a higher share price. So as long as our test makes an appearance then £2 should easily be major support line. Bare minimum.
I think we'll get significantly more than £1 a test. We own the tech, we own the test. We've taken all the risks. A manufacturer like ODX for example loans in government bought equipment and just makes whatever test has made it through validation, amongst many that have failed. I would expect £2-3 a test min from govt and more when selling privately.
10m imo is our nailed on initial capacity. If the govt are on board, I think it will be far higher.
Stifel note said 35% margin
Depends what the profit is per test. At 10m per month for 12 months the profit per test x .5 could be an estimate extra value per share (10m x 12 / 253m) however probably anything above £1 is built in to that. So £2 profit would be £1 per share (so already built in at 200 SP???) - feel free to rip that apart. What do we expect production volumes to realistically be with BBI ABDX and ODX ?
Just for fun then (why not it's Friday!), whereabouts would that put our M'cap & SP?
Great work Daddy pig.... Snooooort
Everybody loves doing LFT’s....
Love your way of thinking DP
:D
So getting back to the projected UK Requirements of 120 million per month referenced by AS numerous times in the September presentation, when he admitted being in detailed discussions with Governments and health authorities.
https://www.investormeetcompany.com/investor/meeting/interim-results-for-the-6-months-ended-30-june-2020-2
This coming just a few weeks after AS had gone to Downing Street and had discussions with the PM
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/958306/Rt-Hon-Boris-Johnson-MP-meetings-July-to-September-2020.csv/preview
Knowing what we know from today’s Bidstats video that the UK will spend £10 billion on LFTs in the next 12 months.
https://vimeo.com/516654709/b3f7bdeda6
I thought it would be interesting to use AS’s figure of 120 million units per month to work out a possible price per unit to see if it fits with Avacta’s recent business update where they say “Healthcare services providers and governments are likely to be the largest volume customers of a professional use rapid antigen test and with an estimated price point in the mid-single digit GBP range.’
So £10 billion pounds divided by 1.44 billion units per year (120 million per month x 12) gives a sales price per unit of around £6.95.
I would say this just about falls within the “mid-single digit GBP range”