Novacyt Transforms13 Jul 2020 12:12
Not my title but from Investors Chronicle. Imv IC tend to be on the conservative side in their reviews as they aim for the respectable investment community (whatever that is) and so the following write up is very positive imo and the hold is them being cautious imo (note for shorts it's not a sell recommendation) pleased with IC write. I have the web subscription and doing a search I can't see that they've ever done a write up before! As I said before, with the results people will start taking notice.
Those forecasts of €3 million profit and circa €28 million turnover(referred to in previous AJ Bell post) for the whole of the year were way of the mark and look really silly now.
https://www.investorschronicle.co.uk/shares/2020/07/13/novacyt-transforms/
"Novacyt (NCYT) experienced a “transformational” first half, in the words of chief executive Graham Mullis. This was not an exaggeration. Revenues for the France-based, Aim-quoted clinical diagnostics group soared by more than 900 per cent to €72.4m (£63.3m) over the six months to June, with more than 91 per cent of that figure arriving in the second quarter alone. Meanwhile, cash profits are due to come in at more than €45m.
Central to such growth was Novacyt’s Covid-19 molecular testing kit, which the group developed and launched as early as January 2020 – making it one of the first to do so. It has since released three new products to support laboratory testing for the disease. Aside from the new coronavirus, the group also makes diagnostic products for clinical and food labs, and for haematology and serology applications.
With global cases of the new coronavirus exceeding 12.7m – up by more than two-thirds over the past month – Novacyt expects continued demand for testing “well into 2021”. The group’s tests are being sold in multiple countries, including the US where it has signed a distribution agreement with a new strategic partner. It says it has adequate manufacturing capacity and materials to keep pace with what is required, and thus expects second-half sales to be even greater than the first – with margins “at least” at similar levels.
IC View
As of 30 June, Novacyt had €20m in cash – up from €1.8m at the 2019 year-end. That figure is net of investments, and also constitutes the group’s residual funds after servicing all of its borrowings – leaving it debt-free for the first time ever. Unfortunately, Covid-19 is not going anywhere yet. But – for now at least – the crisis has illuminated the work of smaller, lesser-known diagnostics specialists. The market has piled into Novacyt over the year-to-date, taking its shares from just 14p to 289p. It remains to be seen whether such momentum can be sustained in the long-run. Hold.
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