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You realise Barclays are largely hedged? As of yesterday's 8.3 declaration they had a 5.7% long position (mainly shares) offset by a 5.49% short position (mainly derivatives). So net just 0.2% long.

I can add a couple of points on cash, which sat at £37m at end-1H.

Firstly, they have indicated they are looking to acquire around £10m of revenue as part of the £100m FY28 revenue target. At typical CRO multiples of 3x to 5x that suggests an acquisition cost of £30m to £50m.

And secondly, some of the cash is effectively "borrowed" from their customers in the form of deposits. There are different ways you can look at this:

they had £22m of deferred income at end-1h (cash received but work still to be done) so if you net that off the £37m it leaves a balance of £15m;

or you can take what seems to be the CFO's preferred approach which is to net the trade receivables (money owed by customers to HVO) off the deferred income to say they have a net £7m of client cash meaning that the net company-owned cash is £30m;

or you just go with net current assets (current assets less current liabilities) of £22m, meaning if all the near-term (within 1 year) assets and liabilities are netted off they have a net £22m available.

So I think it comes down to strong cash generation, prudent balance sheet management and wanting to have the flexibility to acquire the target revenue largely for cash rather than have to take on debt, although clearly they would take a view on optimum capital structure when working out how to finance any particular acquisition.

Personally I applaud them for being able to grow while maintaining such a prudent balance sheet in the current environment where fundraising can be very challenging, particularly on AIM.

The question is, why would an investor give any credibility to the forecast for ebitda/margin this year given the disaster that was last year.

If you read last year's annual report you can see reference to rebalancing towards higher margin business. Yet in the recent preliminaries, elective care gross margin was actually lower than urgent care gross margin, wasn't it?

If you look at note 14 to the FY23 accounts you can see an estimate for FY24 elective care of 42% revenue growth and 18% gross margin. In the recent preliminaries they have reported actuals of 21% elective care revenue decline at 14.5% gross margin.

But in any case margin is fairly irrelevant if they run out of cash. Remember the £2.9m late payment at end-1H? Could they manage a repeat of that if it slipped beyond payroll? And how much cash will drain away as the Staffordshire Stoke on Trent NHS111 working capital unwinds?

And if you look just at 2H, where the company reported a £0.6m increase in cash, it did so only thanks to the £2.9m NHS receipt which had been expected in 1H, but slipped into 2H. Again that £2.9m shows up not through ebitda but through working capital movements - a debtor at end-1H gets converted to cash. Without that late payment though, the company would have had a £2.3m cash outflow in 2H.

Ebitda may have some correlation over the medium term with cashflow, but not much good to make short-term forecasts.

If you look at the cashflow statement you will see the company managed negative cashflow in all 3 categories (operations, investments, financing).

In operations, ebitda won't pick up working capital movements. This is particularly relevant to Totally as its urgent care business shrinks and the "negative working capital" comes out of the business (cash outflow).

In investments you have things such as cash spend on developing software, which is sometimes capitalised and depreciated over time.

And in financing you have lease payments and interest payments.

Evening and weekend shifts by NHS staff in NHS facilities (presumably reducing the scope for Totally's insourcing work in the same facilities).

But perhaps some private involvement in terms of using "spare" private hospital operating theatre capacity (which Totally doesn't possess).

"Labour's Wes Streeting said his party's pledge to make use of "spare capacity" in the independent healthcare sector would remain "free at the point of use".

"Huge numbers" of people were opting to go private where they could afford it, he said, adding: "I'm not going to see working class people left behind while operating theatres in private hospitals are left empty.""

https://www.bbc.co.uk/news/health-69070207

"Trusts should pay staff around “time and a half” for the additional shifts required to hit Labour’s manifesto pledge for an extra 40,000 elective appointments a week if the party wins power, shadow health secretary Wes Streeting has told HSJ."

https://www.hsj.co.uk/policy-and-regulation/labour-expects-trusts-to-pay-time-and-a-half-to-staff-delivering-40000-extra-appointments/7037403.article

"Hospitals would be expected to pool staff and share waiting lists as part of a Labour drive to deliver an extra 40,000 NHS appointments a week.

Under the plans, hospitals will run evening and weekend surgeries, with staff and resources pooled across a region."

https://www.standard.co.uk/news/politics/labour-nhs-wes-streeting-hospitals-conservative-b1158696.html

I thought the Labour near-term plan for waiting list reduction was to pay existing (NHS) staff overtime to work additional evening and weekend shifts. This presumably is in direct competition with Totally's insourcing service isn't it? i.e. competition for the currently unused hospital facilities during the evenings/weekends.

Where Labour perhaps might be more likely to use private companies is in the provision of more facilities (operating rooms, beds) for waiting list reduction i.e. deals with private hospitals to use their facilities. Totally doesn't have any such facilities does it?

On dividend amount, they have guided, at the interims presentation, to something in the order of 0.1p to 0.2p/share dividend (£1m cost to the company), as per the last post of mine in this thread.

They could well surprise to the upside on this, but the guidance is what it is, and should still be available to listen to on the Investor Meet Company site (Q&A tab, answer to Q16).

A really bizarre thread this one. The numbers are all on display in the balance sheet (Interim Consolidated Statement of Financial Position as at 30 September 2023) reported by Totally in the RNS of 28th November.

£18.4m Current Assets

£30.3m Current Liabilities

If you subtract current liabilities from current assets you get -£12m. i.e. net current liabilities of £12m. Not total liabilities or net (total) assets but net current liabilities. The "current" in current assets and current liabilities means assets or liabilities that are expected to be settled (paid, received, work completed etc) within 12 months.

It doesn't help clarity of course that Totally itself quotes net current liabilities of £15m in the same balance sheet and appears to have added in non-current liabilities to get this higher number.

Net current liabilities is not a new thing for Totally and the company explicitly addressed this in their last annual report.

"The Group has consistently had net current liabilities in recent reporting periods which reflects the nature of the contractual terms with customers and suppliers. "

The position arises because Totally get paid in advance (at least in aggregate paid in advance of having to pay their suppliers and employees) on some of their contracts - particularly the urgent care contracts - and have chosen to use the cash generated in this way to fund their acquisition-led growth. That was OK so long as the company could continue growing its urgent care business (the larger the business, the more cash up front they would have) or could generate meaningful operating cashflow (excluding this working capital effect) from its overall business. The risk was always that, for whatever reason, there would be a change to this source of cash - either because the contract terms changed (to more traditional pay upon invoice after work done terms) or because the company's "pay up-front" business started shrinking. What we have seen recently is the materialisation of this latter risk - the "pay up-front" business started shrinking with the ending of the North West London UTC contracts and some Covid-related contracts. As a result cash disappeared from the balance sheet as those contracts came to an end and Totally settled the bills (relating to the cash received up front) with its own suppliers and employees.

With £12m of net current liabilities (at 30th September), gross cash of only £2m and a net debt position, Totally doesn't appear to have a lot of capacity left to withstand further loss of material "pay up front" contracts. That may not be a problem if it can return to growth in the "pay up front" contract business, or if its overall business can start generating sufficient cash, but it seems to me the risk is relatively high at the moment.

The CFO set a very clear expectation for nominal dividend amount in the Investor Meet Company interims presentation (12th September). It's still up on the IMC site and if you go to the Q&A tab you can hear that answer in response to Q16 "What is a nominal dividend Vs normal dividend, and why have you chosen this approach?"

He suggests that whereas their special dividend cost £3m (0.45p/share), a nominal dividend might be around £1m. So that would indeed be 0.1p to 0.2p / share.

Of course expectations can change, but at the time that was what was being considered.

In terms of JPM declaring, I suspect they are under the 5%, 10%,.... disclosure regime (FCA handbook DTR 5.1.5) rather than the 3%, 4%, 5%, 6% regime (DTR 5.1.2). So if they are increasing I don't think we'll see a new holdings notice until they get to 10% and therefore we may see evidence first through Morningstar or the HVO website or the HVO annual report.

And what about the £11.4m net tangible liabilities (as of interims balance sheet date 30/9/23)? Wouldn't any sum of the parts valuation based on divestment have to cover at least that as well as the market cap before you got to breakeven vs the status quo? And probably a lot more than £11.4m if you assume that all intra-group loans would have to be repaid on the divestment of a subsidiary.

i.e. all the main operating subsidiaries have positive net tangible assets don't they? Whereas on a consolidated basis Totally plc has a large net tangible liability position. This is possible because cash has been lent by subsidiaries to other group companies and then used for various purposes, such as acquisition. In the lending subsidiary those loans sit as current receivables and contribute to the net tangible asset position but on a consolidated basis they disappear as they are intra-group transactions. Any buyer of a subsidiary would be likely to demand that intra-group loans be settled at completion, wouldn't it?

As examples, as I read the accounts, Vocare Limited was owed £11m by other group companies and Greenbrook Healthcare (Hounslow) Limited was owed a net £12m by other group companies, both as of 31st March 2023. Totally plc, on the other hand, in the company (rather than consolidated) accounts at the same date owed a net £27m to other group companies.

Just for clarity, Thordon is incorrect when he states “Net cash as per last RNS just under £5 million”. The company actually reported afaics, as of the interims balance sheet date of 30th September 2023:

£1.7m gross cash & equivalents

£2.5m borrowings

£2.8m lease liabilities

By my calculations that makes £3.6m net debt, or £0.8m net debt if you exclude lease liabilities.

Thordon was I think getting confused between gross cash and net cash, but also lumping in a specific debtor of £2.9m referred to in the interims, which Totally said was paid shortly after period end. If you look at the daily cash chart for October 2023 provided by Lisa in slide 12 of the interims IMC presentation, you can see it looks as though gross cash actually decreased to around the end-August low of £1.2m in early October before recovering through the month and then falling back to £2.7m at the end of October. with the usual late-month large cash outflow - maybe payroll?

Broadening out from cash, bank debt and lease liabilities, Totally reported net current liabilities of £15m at 30th September, although it looks to me as though the correct number should have been £12m (£30m current liabilities less £18m current assets), with the £15m figure appearing to include non-current liabilities as well as current ones.

"This TV production investment could see you turn Zinc Media shares into gold"

Must say something about the state of the UK retail investor and UK microcaps when a weekend MIDAS tip doesn't generate any reaction (until now) on this bulletin board.

https://www.thisismoney.co.uk/money/investing/article-12054051/MIDAS-SHARE-TIPS-Investment-turn-Zinc-gold.html

gdog - yes, the signature page of the credit agreement "Silicon Valley Bank as an L/C Issuer and a Lender", along with RBC, HSBC and Goldman Sachs in the same capacities.

gdog - TRMR have $44m of bank deposits, but also $174m of cash (as of 31st December). The cash is not kept under the mattress (I hope). The difference between the cash and the deposits is the access I think (term vs instant access).
If you have a look at exhibit 4.6 to the 20-F you will see the Credit Agreement in which SVB is named as one of the lenders / letter of credit issuers for the loan and RCF.

Announcement that Novo Nordisk is buying DRNA at an 80% premium, so other RNAi plays (ALNY, ARWR, SLN) rise based on a view that they might also be in Big Pharma's sights. Also, likely to be some DRNA holders taking profits and reinvesting elsewhere in RNAi because they like the space.

https://investors.dicerna.com/news-releases/news-release-details/novo-nordisk-acquire-dicerna

$23m CTV estimate for 4Q is from the finnCap report (chart on P.7 top left).

From that 14th Feb 2019 circular I took that major shareholders only wanted the merger to go ahead if Ofer would agree to lead the combined company, and he would only do so if he got the huge remuneration package. This was reinforced by my subsequent conversation with the Chairman.

From that position, I think all the rest flows, as he has used his leverage to continue to increase his remuneration, and has not met sufficiently effective resistance from either the remuneration committee or shareholders.