The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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@Kaeren,
My only explanation is that they are not the types to swagger and are avoiding any fanfare at all cost: One, it's not good to be seen as profiteering from the pandemic and, two, they don't want to alert the competition.
Instead they want to corner the diagnostics market by stealth and take market share from under the noses of the sleeping giants.
There is a another possibility regarding the machines that has since crossed my mind. They built a load of them for the NHS and now they are sitting as part of the £15m net inventory - would they be able to put that down as intercompany sales? I hope not. But, at least they wouldn't have a sell-by date, unlike assay stocks, and could be sold or given away as part of a package deal. Probably best not to speculate on this as it's only a thought - but worth further digging.
@HillSeeker
Great assessment and to quote Warren Buffet :
' Predicting Rain doesn't Count. Building Arks Does '.
Think this applies equally well not only to private investors but to companies too.
Novacyt certainly haven't been lounging around while the sun shines and should ride the NHSC storm with ease.
It's only a matter of time.
Free money.
Hillseeker ,
I have been sitting puzzling over the 7.9million intercompany sales since early this morning. If Primerdesign have sold that many Q machines as packages , then there is a big installed base to sell into. Why is this not being shouted from the rooftops , what am I missing ? Views please anyone.
Part 1 of 2
I agree there's nothing much new in this report, the bad news already having been given a few weeks ago. Everything is being presented on the overly-cautious side. In other words, absolutely the worst case scenario - although if we did get absolutely nothing more from the DHSC, we would then be due some tax rebates that they haven't yet applied - so actually, they've totally overbaked the negative - possibly as part of their grievance and negotiating tactics. IMO the bad news, and there was plenty of it, is all out of the way and we have only upside from here.
With regard to the future development, the way I have read it , is the intention to apply their new (patents pending) streamlining tech(ProMate) to the 250 odd other PCR tests, giving them a strong competitive advantage for NPT and also to use their new sales force to proactively sell their existing and expanded (soon to be announced 2 new tests) PathFlow range of LFTs. It is not clear what they mean by making 'investments' to expand their geographical range but this could be M&A activity, they certainly are not giving too much away here. As with IT-IS, any such activity will be announced when the ink is dry.
Clearly, they want to milk the covid income opportunities as much as possible and revenue streams from this could go on indefinitely, as other posters have alluded to. Whilst they have previously said this market is predicted to decline next year, they intend to take a larger share of what is left, as they have not only superior products but now also have a sales force with which to do it. They are also best placed in terms of continued surveillance with their SNPsig range for those that cannot afford the cost of, or to wait for, full genomic sequencing.
Part 2 of 2
To me one of the most interesting but intriguing pieces of additional information was regarding their instrumentation. Clearly, they intend to develop products to complement the Q machines and reduce further the amount of manual pipetting. These devices (I assume designed to fit the circular test-tube rings that are used on the Qs) can then be sold alongside their Q offering when selling new products but also to all existing customers. And this is the intriguing part. When I emailed Novacyt some weeks ago, they were unwilling to confirm the number of Q machines sold (to the NHS or otherwise) and in the report they have shown sales from IT-IS by geographical regions as just over £1.5m. However, the total revenues attributed to IT-IS are, in fact, over £7.4 million! So IT-IS sold £1.5 million worth of machines directly to customers but a further nearly £6m worth of machines were delivered through one of Novacyt's other arms, I am presuming Primer Design (as part of tests and machine packages) and it is hidden in the £50m of Primer sales. So, it's not possible to say where these have gone geographically. But my calculations based on £15k per machine would be 500 machines in H1 2021 alone (if the cost per machine is closer to £10k then it will be more like 700 machines). Using the old razer analogy, these machines will not all stand idle but require feeding.
@brochrock
Warren Buffet is overused - but whether people are fearful or just plain bored - now is the time to be greedy and load up. IMO opinion the skeletons are all out of the closet and with AGM this week, imminent product development announcements, a new CEO starting and the DHSC eventually put to bed (I suspect in the new year following GLP reviews etc) by whcih time we will have overshot teh £100m revenue predictions for the full year, the future will be far more rosey.
IMO, DYOR, GLA
For new potential investors like me, Why would you buy Novacyt shares?