Member Info for ak_gabba

Gizmo555,
Customer isn't happy with the supplier. Supplier feels they have honoured the contract. Yes they both have grounds to argue. It would appear that novacyt have recognised their customer as having a problem with some of the contract and provided a solution.
I guess the real question is how does novacyt successfully resolve the dispute without having to give money back and perhaps getting some or all of the withheld invoices while keeping a current and potentially large customer happy.
Its dragging on longer than most people expected.
I'm hopeful that some of the information we have received from DA points towards listening to customers and providing what is essentially required. I'm just not sure how UKHSA fits into all of this. They could have given a list of things for us to find solutions for, for all we know. it's all guesswork. frustrating and even more so when the share price tanks

ChrisToffer,
You are right. I've added 2 figures that I shouldn't have.
http://novacyt.com/wp-content/uploads/2021/09/Novacyt-Interim-Accounts-June-2021-English.pdf
Note 20 gives the full amount.

Gizmo,
Not exactly however there are possible clues to that here
https://www.lse.co.uk/rns/NCYT/proposed-accounting-treatment-of-dhsc-dispute-y4zu415psuxqpus.html
and also the previous link with regards to warranty provision.

drb83,

thats how I understand it. its laid out well here, page 27 and 28

http://novacyt.com/wp-content/uploads/2021/06/Novacyt-AR-2021-2806-spreads.pdf

"Post balance sheet event
/ DHSC Dispute
On 9 April 2021, Novacyt announced it
was in dispute with the DHSC in relation
to its second supply contract and made
a further update on 21 May 2021. The
dispute primarily relates to Q4 2020
revenue totalling £129.1m in respect of a
specific product supplied to the NHS. The
Company has taken independent legal
advice and a provision has been made in
the financial statements with the Board’s
estimate at this time in respect of this
claim with DHSC.
The Board has formed a judgment that,
in accordance with the contractual terms,
and if required, it should be possible
to replace the product in dispute and
a product warranty provision has been
made accordingly. The Board’s best
estimate of the cost to replace is up to a
maximum of £19.8 million, the timing of
any outflow is dependent on settlement of
the dispute. If no settlement is achieved
and legal action is required, the timing of
any possible outflow will be extended.
It is possible, but not probable, that
the DHSC’s claim for a refund under
the limited assurance warranty will be
successful. The timing of any cash
outflow is dependent upon the success
of the claim and the terms negotiated for
repayment. If the resolution of the claim
is materially different from the Board’s
determination of replacing the product,
the financial statements with regard to
revenue and the provision for product
warranty could be significantly impacted.
Of the Q4 2020 revenue, invoices
amounting to £24.0 million in respect of
product delivered to the DHSC remain
outstanding at the date of signing the
financial statements and recovery of this
amount is also dependent on the outcome
of the dispute. In addition, after the yearend, a further £49.0 million of product
delivered and invoiced to the DHSC in
2021 remains unpaid and is now also part
of the dispute. The unpaid invoices total
£73.0 million and include VAT.

Hydr31,

He can buy and sell as he pleases without having to announce to the markets through a director/PMDR shareholding.

Apologies

UKHSA swallowed up PHE and NHS test and trace in Oct 21**

Should read

UKHSA swallowed up PHE health protections and NHS test and trace in Oct 21

Louis_Winthorp,

I think thats a fair point! As things stand i'd imagine if they could get 10% off their stationary supply they should RNS it ;-)

bidstats for PROmate supply

https://bidstats.uk/tenders/2021/W36/758513953

redacted contract

https://atamis-1928.cloudforce.com/sfc/p/#0O000000rwim/a/4J000000NS08/_ZfrqchflPumMJWO68OtygVSE7N_GuartKC8tWTSbhY

We know the maximum value of the contract will be £4.7m from information received by the company so we at least know what the redacted maximum contract price is.

There is also a section for term extension options which indicates no later than 31st Jan 2022 to be notified if it wishes to extend.

Also 2.4 and 2.5 caught my eye specially with regards to all the discussions recently about disputes.

Last point. UKHSA swallowed up PHE and NHS test and trace in Oct 21. Not seen UKHSA publish any spend over £25k like other departments so not been able to track any payments concerning this contract like before through PHE and DHSC spend over £25k. I'm not sure they will as it looks like they might be following a new model.

neilrich3,

it looks like he is a software developer. Quite a senior position but I don't think he's directly involved in finance

Didi888,

The latest RNS touches on this subject.

"In the UK, additional uncertainty around product availability has been caused by the implementation of the UK Health Security Agency's Medical Devices (Coronavirus Test Device Approvals) (Amendment) Regulations 2021 ("CTDA"), as previously announced. Whilst Novacyt has so far been successful in receiving approval for one product and having two added to the temporary protocol, eight products remain under review. The Company continues to engage with the UK Health Security Agency and will provide further updates on its tests still under review as appropriate."

We have 8 products under review and i'm not sure exactly which of those 8 products have been submitted

Gazman123, thats a cracking job advert! also nice to read his write up about his role at Novacyt (IT-IS)

"I lead the software development team within IT-IS International, part of the Novacyt group, working with the R&D and product teams to build PCR instrumentation which helps change lives. I bring the experience of working in enterprise scale R&D and SaaS companies to a growing business at the start of its digital journey. My role is operational in bringing Agile and DevOps practices to a development team within a heavily regulated industry, and solving the problems that arise from the friction that brings. I also promote and evangelise the use of digital and cloud technologies, and the benefits of digital automation within business processes, and talk with customers and healthcare professionals to find digital solutions to complex problems in a volatile time for the healthcare industry"

Ajan joined novacyt in Mar 2020 as COO and then moved to CTO in Jan 21.

his name is listed in the full notice text as a contact

https://www.sell2wales.gov.wales/search/show/search_view.aspx?ID=OCT346979&catID

his linkedin profile specifically mentions the roll out of this contract as himself leading it.

PE live off taking off the record comments and rumours and creating stories from it. There angle tends to be based towards government corruption/scandals and they also like highlighting tax payers money being misused. The are clearly looking into track and trace and having a field day with it. The large contracts won by primerdesign through the DHSC puts them into the firing line for PE articles as far as they are concerned.
The key point for novacyt is ensuring their scientific data supplied stand up to any scrutiny. There have been a number of tests which have recently had their IFU updated which I guess is supporting the CTDA desktop review which I very much hope will soon be accepted

DRB83,

I'm glad you have reread the article hopefully you don't think PE are making up statements from novacyt.

Whistleblowing has it's place and the lack of whistleblowing is often cited as reasons for large/global scale business issues. Companies and organisations will have their own whistleblowing policies. Its highly unlikely that PE would be part of that process it should be internal leading to investigations with it all being confidential. For whatever reason PE have got wind of these whistleblowing claims, wrote an article with suggestions and taken it to novacyt and gateshead nhs who both responded with statements as opposed to direct answers to the claims/queries. That's the basis of the article. There is no inference to the conclusion of the whistleblowing. It could be on-going or even thrown out. It could be true or completely basis. As already i've approached both Mandy and fticonsulting and queried if they will be taking legal action against PE

DRB83,
I don't think you are fully understanding this. PE took the claims and additional questions and presented them to novacyt. novacyt responded with a statement which part of it was printed in the article. Are you trying to say that PE have fabricated the statement from novacyt? Thats quite a ludicrous suggestion and would end up with libel action.

I really think you need to read the article again.

DRB83,

Are they aware of it? If by they you mean BOD then of course they are aware of it. They provided a statement to PE. part of it is in the article.

I did ask Mandy and fticonsulting if they would be taking legal action against PE if the allegations and claims are untrue. I haven't had a response and I'm not expecting one.

Nelliedean,
I think the point which is trying to be made is what has he done?

Back to the £101.8m cash position it's very woolly from what we have received so anyones guess really. I'd like to think the non covid product development isn't just internal investment in R&D and there is a shortlist of companies which can be purchased to provide value. M&A was mentioned to strengthen business and accelerate growth.
There was a real emphasis on being market led rather than product led with customer needs thrown in and there was a decent paragraph on geographic expansion.

feels like it's back to wait and see. we live in hope

DRB83,

The whole point of that interview was to get his face in front of a camera to exude confidence that he is the right leader to continue the growth of Novacyt as a business. The market has reacted badly to both the contents of the RNS and the interview.
This was a planned interview with questions which he would have been prepared for. You can tell that as he is reading from his notes. The very least you'd expect is for the answers to have come across as natural as possible with little help required from the notes. I didn't see enough effort from him for this interview. Perhaps he was nervous due to the already crashing share price.

BYP, oddly enough i'd probably be better off if I had a habit instead of investing here!

I thought the interview was awful. Looked nervous and even more so when they touched on the DHSC dispute. Constant side glances at notes, poor quality webcam. The sniffing! shuffling around on the chair.

This was not the sort of presentation you would have expected from a CEO of a company with just shy of £100m revenue in 2021. I didn't pick up on confidence from that interview sadly and these were questions which were quite clearly prepared.

Add the above to the lack of clarity over the non covid next steps. wait until April??? and Q4 22 for the products to come onstream. 100 days for that. oh dear I very much hope he gets better and has some real marketing tricks up his sleeve to increase sales across multiple territories.

The article is from 3-Sep-2020

https://twitter.com/TaylorQuant/status/1301551570119798784

I would guess that IFUs have been getting updated recently to support the CTDA desktop review process. Reading the private eye write up and re-reading the initial draft CTDA put forward it looks like novacyt (and other testing companies) will be performing validations and updates to fit in with the new process.

https://publications.parliament.uk/pa/ld5802/ldselect/ldsecleg/40/4003.htm
12.Asked for further information about the new validation process and how it differs from the CE marking process, DHSC told us that:

“The CE marking process is far less rigorous than the CDTA desktop review. CE marking requirements do not specify sample size, sample type (clinical v contrived) or present the raw data from which an accurate assessment of the performance can be made. Many of the CE marked products that have been reviewed previously have insufficient and poor data sets that do not accurately reflect how a test product performs. This data and evidence does not facilitate accurate assessment of the product by the end-user and can be misleading. A common example is “front-loading” of data, whereby the CE marked instructions for use will provide performance data based on a selection of samples with a very high viral load thus the test appears to be highly sensitive but in fact may have a poor sensitivity. Other products have used clinical symptoms as the comparator method rather than a gold-standard PCR comparison. [ … ]

The desk top review is undertaken by an independent expert and ensures the validity and quality of the data used by the manufacturer for their CE mark self-certified claims. The pandemic has highlighted the inconsistency in the data behind such claims; for example using sets of samples that will make the performance of their test look better than if it was used on all samples, or not providing information on how their test works for all Variants of Concern. The data is then compared to defined performance thresholds for different testing technology types, as set within the legislation.”