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Dartron,
Manufacturing revenue (covid related) was still at 2021 rate for Q1, then it tails off. So if you strip out all manufacturing revenue that gives you a very conservative forecast. Margins on this are also low compared to other business.
The singer target is also quite conservative and so from current price there is upside potential.
I and other current shareholders are a bit miffed about the way the buy-back was done, which largely signalled a 45 p valuation.
I saw enough in the presentation the other week to accumulate at this price and expect a tick up leading to the AGM in May. At the AGM they are requesting approval to buy-back another 15% of issued share capital.
0
3M shares bought at or above ASK throughout the day on Friday from delayed trades (which have not been used in the the totals shown on this site). Another 1M was bought in 4 x 250k purchases between 10.30 and 11.30AM which printed and were not delayed.
01-Apr-22 15:04:38 44.0488 1,000,000 Unknown* 42.20 43.50 440.49k O
01-Apr-22 11:23:14 44.00 500,000 Unknown* 42.20 43.50 220.00k O
01-Apr-22 12:33:21 44.00 500,000 Unknown* 42.20 43.50 220.00k O
01-Apr-22 15:04:50 44.0488 1,090,005 Unknown* 42.20 43.50 480.13k O
Not delayed trades
2022-04-01T11:33:35.283 GBX 44 250000 110000 Off-Book AIMX P LRGS AIMX
2022-04-01T11:33:26.627 GBX 44 250000 110000 Off-Book AIMX P LRGS AIMX
2022-04-01T10:23:22.690 GBX 44 250000 110000 Off-Book AIMX P LRGS AIMX
2022-04-01T10:23:18.050 GBX 44 250000 110000 Off-Book AIMX P LRGS AIMX
I expect 1M above to be Fridays Buy back.
Meanwhile, the Algo bots are trying to present a different storey, closing on a day low of 42p for 65 shares!
2022-04-01T15:23:23.743 GBX 42.1 65 27.365 AT AIMX P ALGO
I have also been through the fundamentals of the company, but from an accounts perspective:
EV 167M,
Rev 81.8M,
Non Covid revenue roughly 56% (I stripped out all the manufacturing revenue)
Margin 48%
Ebit 26.5M
Cash 20M
Substantial 'hard assets' 16M
Ev/Ebit = 6.3 for 2021
Singer broker target 62p (from reading other site). Not sure what multiple that would give for 2022 ??
I think this is over sold currently, and am expecting some recovery. Maybe only a few pence, but would make current price the low entry point. - Thoughts?
Thanks for info, wadded in with a couple of bags of sand a few mins ago. GL
They target to complete before the AGM in May.
At the May AGM they are requesting shareholders approve a mandate for buy back of a further 15% of issued share capital.
This does not guarantee they will execute, but they have the option.
Followed a company with similar buyback and similar amount of shares. After buyback 50% increase in sp. Iam not saying that will happen but with the current situation iam happy to buy and hold. GL
This buy back should be concluded quite quickly, looking at the amount they buy each day. Maybe 2 more weeks.
They might extend it, if they feel the shares are around half price.
I bought yesterday. I think a few pence rise is more or less guaranteed - because it is over sold rather than the buy back.
This company has plenty of cash and plenty of work. That's good enough reason.
Thanks Dartron, i will add at these prices and hooe for a rise after the buyback.
They are just bought on the exchange, exactly how you or I buy. 9M out of 464M wont make much difference. Many companies are buying back at the moment, Direct line, Hays, Shell.. It is a good move, but I don't think you will such short term difference.
Can anyone tell me where these shares for the buy back are apearing from ......
And will the they dry up when the 9 million has been reached?
re: share buyback, I understood from the presentation yesterday that this is actually locking in value, as the 9mln shares essentially cover the shares issued to fund the ADL acquisition which was agreed when the shares were over 80p. So buying back now at 45p level is locking in the cost of the acquisition at a cheaper level, pretty neat and making something positive of the recent share price drop.
Thank you ever so much Silverblade that was exactly what I was trying to understand and explained in layman terms. Ok I now see they reason of the drop but I ready before by a good fund manager the management here are supposed to be very good! Hopefully won't take them to long to improve through organic growth of core business revenue. Good luck!!
grippa - this is lifted from the results.
Total revenue up 25% to £81.8m (2020: £65.3m)
- Core business revenues up 14% to £42.1m (2020: £37.1m) including Point-of-Care- up 18% to £27.0m; Central Laboratory- up 7% to £13.1m; and Life Sciences- up 3% to £2.0m
- Contract Manufacturing- up 38% to £36.3m, driven by COVID sample collection kits manufacture
So an expected decline in covid test kits will reduce revenue - company appears to be indicating this will start impacting Q2 2022. To offset that (which was a one off unexpected bonus in the first place) - company is growing its core business revenue; investing in its fermentation business (targeting a conservative $10m additional revenue by 2024) which sits in its life sciences business (£2m revenue 2021); and finally growing ADL Health in new diagnostic testing services outwith covid.
So yes - very likely revenue will decline next couple of years - but there is a clear plan for growth using the positive cash flow from the last 18 months to invest in production and acquisitions. I like the plan - although still not a fan of how the buyback was arranged which imo resulted in an unnecessary loss of value here . SB
I was just looking on simply wall street and they were saying they forecast revenues to drop by 8.2% per year fr the next 3 years. I couldn't see this as being true unless someone can tell me it is. On the investor questions did they state whether overall revenue with loss of cover related revenue next year do they still expect to see growth of revenue and profits please??
Good points vig - thanks for sharing your thoughts. I've got a decent holding here bought pre recent decline - so not great - but I am hopeful value will return here over next 6-12 months. In basic terms - the market has reset the company's valuation to its 2019 levels with an uplift for decent growth in its core business. Key to unlocking future value as you note is the fermentation business and non covid testing - and the company has been clear on its strategy for both including financing. A bit of director buying at these levels and higher would provide some further comfort. SB
On investor meet, I see they are still working through comments and Questions, so I might get an answer via that route.
As I have a fair investment in EKF I was trying to rationalise my thoughts yesterday evening. (main points only)
As far as competence in their field I got a warm feeling and also their CEO although a Brit clearly has a lot of contacts in the US an knowledge of their market.
They said Q1 2022 Revenue was running at same rate as 2021 and that 2021 should be seen as a spike in revenue due to Covid, so I am looking at 2020 as a benchmark to measure progress. Note Covid work was high revenue but low margin.
The Covid effect they think will tail off from Q2 onwards and their efforts now are to switch the testing to non Covid (and there are plenty of opportunities), which they are already pursuing. I think this will ramp up as the year goes by. In the US this means leveraging on ADL.
The other area they rely on for growth is via the investment they made in bio culture production. This would seem to have significant potential in the US and although they are marketing this capacity now to secure contracts. The new capacity will not be in place until 2023 Q1 and so sales will ramp up from there and thru 2024.
They were clearly conscious that investors may measure them based on 2021 spike and see any revenue reduction as a negative. I don't see this as an issue as what 2021 has done is allowed the to develop new areas that build the future.
I think 2022 is the challenge and it will be interesting to see how quickly they transition to the future business model.
As with most AIM companies, they rely heavily on advice especially on governance and Shareholder engagement.
I await clarification on my question on the share buy-back and this will shine a light on this.
Good point to raise vig - the response to me doesn't make any sense. Would be interested to see if you get a further response. The guys at ADL must be wondering what happened to their deal - taking an all share purchase at double the current share price looks like a very costly bit of business. Their earn out provisions were capped at a huge number - will be very interesting to see how they perform in year one which triggers the first tranche of earn out provisions. SB
Suprise suprise.... guess who will be filling thier boots at these levels and i think it might rise after tgey are finished. Dig in..GL
I asked the question about the share price drop today after the buy-back RNS. They only answered in part saying that they were taking 9 million shares out of circulation as they had issued 9 million for the ADL deal. Also as that deal was done at 80p + per share they said if they could buy back at something like todays price it would be a good result for the company.
They didn't comment on the share price drop triggered by the announcement, which was the point I wanted to make.
I have left feedback post meeting on this point and I will share the response when I get it.
Chelsea,
Once you have registered with the investor meet company, you will get a weekly mail informing you what company presentations are upcoming.
I find it a a great service and free to investots.
SB - Much appreciated.
Chelsea
Mike Salter, Chief Executive Officer, and Marc Davies, Chief Financial Officer, will be hosting a live online presentation relating to the final results via the Investor Meet Company platform at 4.30 pm on Tuesday 29 March 2022. The presentation is open to all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and register for the presentation here: https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor
Can anyone help me with the dial-in details please? Apologies up front if I’ve missed it.
Cheers Vig - will be interesting to see if the company reports any share purchases made this morning/today. Cant imagine II's will be overly happy with todays events so far. I hope the investor call is helpful - I cant make it unfortunately but I think there is a replay function. No idea what Singers are playing at - total waste of time - and again not helpful in the current context. This is a core bio-tech holding of Christopher Mills (OIG and NAS) alongside CIR and RENX - and its been a shocking six months for all three in market valuation. SB