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Given that a chunk of it is to Illumina, it would have been nice for that be be made clearer in the announcement as surely that is part of the settlement amount and should have been stated as such
Cheers Andy ...much appreciated. If it.s been done ...good. That would explain the emphasis that the placing would be done straight after the rns announcement. If true, okay with me ... bit of working capital etc ...
Winnifrith on Hot Stock Rockets (subscription)
Full 2.5m @ 10p
newsletters.advfn (dot kom) /hotstockrockets/4138/premaitha-results-placing-and-the-sheer-uselessness-of-broker-finncap-wankers
It will be on ************* before too long I expect
Andy, at what price, and what's your source? please.
Placing has been completed despite what is said in the RNS and was led by Reynolds with only IIs included. Finncap tried to place and buggered it up by touting it round too widely, which is what led to the rapid fall from 15p to today's closing price.
Apparently a good chunk of the money is to purchase inventory from Illumina following the settlement agreement.
I imagine he will publish on his website in due course.
hopefully the new ceo can start to shake things up a bit because Mr Little has been a disaster, great in the lab, crap in the boardroom.
The going concern note is fairly common in these sort of small new aim companies isn't it? Just covering their arses I believe?
Dibs, how could any non-profit making company have any other going concern statement? If not cash flow positive they will need funding somehow, right? Which numbers on the balance sheet / cash flow were materially different from what you were expecting?
Not the kind of companies you’d want to compare NIPT with though twix ;)
I can understand your desire to play it all down. I get that. But be honest did you really think the results would be that poor? Did you think there was going to be another placing now after the May one? And another one in a few months? you know and I know the market is going to savage this on Monday.
Anyone read Rockets de la hot ? I havent. Full story out tomorrow on Pizzas casting bears.
That type of going concern statement is seen in a few companies results year after year.
Virtually every AIM company will have the same (or worse!) going concern section, or at least should have .... most of them bump along from raising to the next raising.... Most also have little or no revenue ... NIPT has a reasonable and growing revenue stream - and now the litigation elephant has gone ... Maybe 30% growth in revenues? no further litigation costs ... not too far from B/E year ending Mar 2019?
Overall, disappointed to see the impressive revenue growth (which seems to have settled at 35%-40% per annum) suffocated by both the general administrative expenses and the litigation costs.
I'm inclined to agree with Andyken that there is an element of 'kitchen sinking' going on here, to reset the baseline both for the new CEO and following the settlement, but the financials are well short of what I was expecting. It does, however, get everything out in the open so we can move forward with a clean slate.
I wonder whether part of the reason for the delay has been Lyn and Steve arguing over how to present this. Reading between the \zlines of the CEO Statement, I think there are indicators of a shift in focus coming through, with reference to the number of tests (which I think was SL's focus) being recognised as important, but that new KPIs are needed moving forward (which I think references Lyn's more commercial focus).
All of the revenue numbers are already in the public domain, but the general admin costs (which weren't included with the interims) are clearly the thing that's dragging the profits and the reason that they need to scale up the revenues quite a lot further before they can reach profitability as an overall business (rather than at an NIPT product sales level), even if the litigation costs are excluded.
I think the challenge we have as shareholders is that we look at things in quite simple ways and if we're told that a business has reached break even, we assume (not unreasonably) that this means we'll be making (or close to making) a profit, whereas the business (also, not unreasonably) may know very well that they will still be loss making, once the broader business development overheads are included, but that's all part of being a start-up. The reality is that we need the continued investment in R&D and marketing etc. to drive the future revenue streams, but it does feel like a kick in the proverbials when they BOD and commentators are touting the break even mantra, only to find that their definition of break even doesn't equate to shareholders' definition.
I'm not personally worried by the placing in terms of dilution - another 25m shares is less than 5% dilution. The key thing I guess we'll find out next week is whether the market sees this as attractive - we've got about a third of the placing covered already by the directors, so the market would need to be happy picking up the remaining £1.7m at 10p. I can see arguments for and against that, but we do now have a very well established global footprint, strong revenue growth and a (genuine) freedom to operate globally, all of which are pretty unusual on AIM, so I think there's a fair chance fresh money will find this attractive and they'll get this away (and it's not a huge amount of money either). If they don't, then I guess the possibility of a T/O by either or both of TF / Illumina may come to the fore more quickly than anticipated.
I think it is fantasy island they will raise the funds at 10p - i can see this crashing 50% on Monday and maybe even test the low point when the court case result was announced last November. £700k is peanuts to Dr Bill Chang, so not sure how much strength to place in that. Feel totally mislead at this point by the statements of the spring on nearing operational breakeven and TW's excessive, repeated misplaced confidence - would not be surprised to find he was selling into the recent rise post Illumina settlement. This is an utter car crash set of results.
My advice to anyone with an interest here is go straight to the Going concern section. The fundraising on Monday is fairly critical. The going concern section makes it clear that a failure to obtain the n3cessary funds will create a material uncertainty on the companies ability to continue to operate. Furthermore they say that if revenues, for whatever reason, do not grow at the rate they expect, this in turn will have a material impact on the companies future.
The bottom line is their costs and admin expenses are rising quickly - they require substantial additional funding NOW AND in the future months to get even close to b/e. Imho this announcement changes the whole perception of this companies future. In short, it’s badly managed and badly managed companies fail - even with a good product.
Every body needs to calm down and ready the RNS carefully. Bottom line directors are still buying, so this is a good sign
Dubious at worst of course!
Let’s make no mistake these were terrible figures with no confirmation of breakeven and derisory revenue growth since the last half, all of which was made worse by the after hours release of the final results on the last day they had to be published, topped up by a placing. You couldn’t make it up. I am not sure about the future of NIPT now but I do think this placing will get away with £0.8m of the funds coming from directors. The problem is we then have to wait for the outcome of the strategic review and the inevitable need for more funds, which will depress the share price. I think it is time for a change of Chairman. Reynolds confirmed operational breakeven at the trading update RNS in May but the lack of reference to it in the final results suggests it was untrue. His links to Winnifrith are unhelpful at best and dubious at best. Let’s hope we survive because the going concern note was pretty gloomy and was no doubt the reason the results were released so late because they had to agree it with the auditors.
bottom line for me is, how much more funding will it take to b/e point, hopefully next year, bearing in mind sales should increase quite a bit? £5m more needed maybe or more?
or even car crash!! lol
brainspark, are you for real? It's a feckin car carsh!!!!
at least bucket shops are not involved I hear?
brainspark just cannot see that happening. This is a book build so the price is not cemented in. It requires favourable sentiment for them to get this away at 10p. I expect the SP to quickly fall under 10p on Monday as these results - overall - are a car crash. The market will punish this severely. The BS is a mess. They will require further funding in the coming months just for WC.
brainspark - very much respect your view. i can't see beyond the level of admin expenses (ignoring the litigation costs) at the moment that implies such a large increase in revenue to reach break even from here soon. appreciate that test volumes are ramping up (and hopefully will very much accelerate) but the results just seem very disappointing to me. will be good to see an updated Hardman report ASAP.
Results look good. Institutions and funds will take all they can imo.
it's the 9m admin expenses that kills this for me. with the margin of 52% (seems good in isolation) it seems implausible they can increase revenues even in the next financial year to reach breakeven so numerous cash calls to come. with impact that will have on SP the raises will be very dilutive for existing s/h's. snatching quick looks at the RNS so hopefully i have missed something - please someone tell me there are some positives here? is this a business that will ever make money in this field or will volumes always just be too low absent developing other tests (where volume market for them will justify the investment)?