The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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thanks right. thanks. i get senior moments daily these days... so, be prepared to remind me again tomorrow!
I explained this yesterday (lost in one of my waffly posts) the revenue is spread over 3 years and it was the reason I asked about the value of the first three contracts, to establish their significance.
There are actually 10 contracts having been or go through POC, the 4th is of undisclosed value (hopefully a big one), but if we assume the total for the 10 is £6 contract value.
The company has confirmed the average contract duration is 3 years, so the value/month is £6/36 = £167,000/month. Being realistic if the average start date is 1st June, then the revenue to year end is 167000 x 7 = £1.169m maximum in 2021.
Hence the companies comment damping down expectations on revenue growth, however, that is not important IMO, certainly not a negative as this is a growth company not a cash machine that needs to pay dividends. As I said yesterday wrt "the amazing power of compounding" if the business continues to grow the live leads at decent rates and convert at say just 5%/month the revenue will start to soar as should profits and what's more it will continue for at least 3 years. That £6m may not materialise in the first year but it will materialise, hopefully along with similar maybe or £6m £8m and £10m in subsequent quarters. Contracts won later in the year will have even less impact this year.
"The Group's annualised revenue run-rate (ARR) currently stands at c.£34 million, ... which represents an estimated entry ARR for FY2021 trading." - 27 Nov 2020 update.
There has been no mention of ARR since, other than the exception reduction in full cost to gain £1 of ARR.
The anaylsts appear to have LOOP pegged at £30M t/o for 2021. How can that be? If the estimate of ARR was £34M in November 2020, and we know there has been a ramp up in the pipeline of business, and we have landed 3-4 contracts and 6 POCs with total value at least £5.6m then, conservatively, we could be sitting on 2021 T/O of £40M already - which could mean a May TU citing c. 22% ahead of expections.
Now, wouldn't that work wonders?