Many negatives and silence on any positives5 Jul 2023 09:04
Unless you have the comprehension levels of a child it is important to understand context, especially from a board that has never communicated very well and seems to consider shareholders with apathetic disdain.
One area ODX have had a major problem with is production. Here are the facts:
1) The small Littleport facility was deemed inadequate before the covid outbreak so a new site was sought
2) The new site that was settled on has faced numerous delays and terms cannot be agreed with the landlord - this may be because the location is near the UK research epicentre where, against all odds, labs and similar quality facilities are in very short supply and just like the housing market, demand is driving costs up.
3) This has meant that the facility that is deemed unsuitable is going to be used until late 2024/2025 and ODX have made a financial commitment to this. Moving out before then wouldn't remove most committed cost.
4) Consultants have been employed since February to try and improve production flow and costs but no news has been delivered.
5) In the meantime raw material costs have continued to increase.
Ergo, even if the (expensive) consultants increase workflow this will be balanced by natural capacity obstacles that cannot be overcome in the current small unit and the increase in costs.
For the slow minded this means that even if successful the company still need to sell more to even stand still.
This is just one challenge for a company that has a track record of over promising and under performing.
Until positive news comes (if it does) the stock is not worth its current market cap in my view. I expect the stock to slide further. If revenue and profitability is down again all bets are off.
(Now it is July - est cash in bank will have fallen to 3.8m based on previous cash burn rates)
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