Member Info for Blue83

The trading update reported NCYT sales to the USA for 6 months to 30 June were £3.1m and Asia/Pacific £2.3m in total revenue of £54m. Taking all the figures given UK sales 6 months to 30 June were £28.75m.

If the guidance given by the company for revenue in YE 21 of £100m is right, at the same rates as H1 & the revenue from USA in 12m would be £6.1m, Asia Pacific £4.6m and UK £55.9m.

Other sales would be Europe H1 £16.5 (12m £27,1m), IT-IS (not including inter company in UK rev above, i.e. net external sales to third parties) H1 £1.7m (12m £3.3m) and Lab 21 H1 £1.5m (12m £2.9m).

The scale of sales in the USA should be in mind, £3.1m in H1 & £6.1m in a year.

Given demand, it would be hard to sell less! What are they doing? Getting the American who have heard of Primer Design to come to a UK web site?

Falcon - this might be a bit off topic but of interest to you going by your name.

Did you know that this part of WA was settled by Welsh immigrants c 1900? I visited a household 20km away from Wubin whose family had cleared land with horses before WW1 to grow wheat. 5th generation Aussies with Welsh surnames & biblical Christian names served up beetroot sandwiches and tea as though they had never gone out of fashion. They talked fondly about "back home" when their grandparents had not even been there. It had been a really harsh place to live over the generations from what they said because of the isolation and local knowledge needed to get by (I guess the same is relevant for the Salt Lakes project & what ever went wrong there).

yes, doesn't look good, what a risk.

Much machinery & salt beds have been set up, management was unreliable, we don't know what dilution is planned but at what point this is worth a punt. I wonder? The sun is still shining in Wubin.

I have just trawled through the contract in search of the "troublesome clause" Poidster mentioned in his post on this topic at weds 21.21 without finding it. "troublesome clause in the contract though, I'm not quoting verbatim and I really cba looking now but it states that the original contract was for supply of exsig or any subsequent improved products."

The timing of events seems to support the gist of the suppositions though:

11 Nov Mullis 65,000 share purchase at 817p along with other directors buying on 12th.
16 Nov ProMate launch announced in R&D update RNS.

How did it go down at the DHSC?

Under the contract invoices were due to be raised on 1st & 15th of each month to be paid in 7 days. Payments were running through regularly according to FoI data on government spending. I'm not sure what the dates refer to but a usual payment was made on Thursday 29th Oct (i.e. 15 Oct inv date + 7 days + 7 ?), and Thursday 12th Nov (1 Nov inv + 7days + 5?) but then the pattern breaks down. NCYT was paid for the 15 Nov inv on Sunday 29th Nov NOT Thurs 26th suggesting the payment was pulled from the normal run & processed manually somehow. No subsequent payments were made until 24 Feb.

It looks like it went sour when PROmate launched.

Here's Poidster weds 21.21 post for ease:

@Kaeren, spot on, agree with everything you have said, what I've said about the dispute is pure conjecture on my part, I know no more than any poster on here.
I think there is a troublesome clause in the contract though, I'm not quoting verbatim and I really cba looking now but it states that the original contract was for supply of exsig or any subsequent improved products.
In my view Novacyt have done nothing wrong, they supplied what was ordered and delivered it.
They then developed a superior, easier to use product, promate, which again was duly despatched and indeed used and more has subsequently been ordered, so it clearly works. I suspect Novacyt wanted paying for the initial promate replacement, DHSC will argue that it was an improved product and should be covered under the original contract. Again pure speculation on my part. The last time I posted this my post was deleted, so fully expecting the same with this.

Agree. We are weighing up what we know and what the situations could be so our decisions are informed.

I just recheck the calculations. The resolutions to empower the BoD to issue shares at a discount last year would have diluted 20% (nominal value of 941,683 euros mentioned being shares of a nominal value of 1/15 euro = 14,125,245 shares with 70,626,248 in issue = 20%). The BoD considers them having power to issue a nominal value of 1,412,524 euros = 21,187,800 shares/ of 70,626,248 in issue = 30% at up to 20% discount.

Decide for yourself about that.

Lets say they might issue shares of nominal value 1.4m euro being 21.187 m shares at today's SP of 2.63 less 20% or £2.10 that raises the company or £44m while having £77m already in the bank and the possibility of raising finance by other means.

Another contributor floated the idea that there is a reason for the SP dropping & it isn't because it is in the interest of SHs that the company can raise capital. They would be able to raise £59m at £3.50 or £67m at £4.00, actually, lets be fair, if the BoD had been interested in raising capital, they would have done that already.

The change in the resolutions proposed could be about opening up 30% of the company to other owners (rather than just 20%). Would we be better off for that? Not sure & as this is AIM.

I also don't understand why GM left after seeming to be so keen & committed to the future of the company this time last year.

The issue is of trust as Hillseeker said.

I voted for the BoD to have power for a 19% dilution in numbers of shares at 20% below market value last year. The explanation InvestorSteve is good background to why the BoD propose powers are extended to 28% dilution in number at 20% under market but we get back to the points about trust with GM going, the stance on DHSC, drop in SP with Q3 probably reasonably strong & known. GL

I'm expecting MMs to raid stops as they did last night again today as they fill orders.

I think GM had long standing relationships in the DHSC & he delivered on what was agreed but those people were over ruled by policy decisions made to change (after the event) what had been agreed whilst continuing to string GM along. It was the lack of integrity on the DHSC side that unsettled GM, imagine he had put them in a position to PCR test locally on a widescale & the politicians decided to back peddle on it as a central procurement. What could we honestly if we knew the significance of VoC, could see Delta arriving & the client is ultimately against being equipped to test for it?

Hawkes bay - no & we don't know what route the process is taking either. "Arbitration" with one side under a political directive not to given away anything regardless of the contract or litigation.

NCYT are letting SHs down by not pressing their case publicly. They should not be afraid to say that the DHSC has acted as it has, gentlemanly pussy footing around about "confidentiality" plays into the hands of politicians hell bent on covering up.

I wonder how tough gentle James McCarthy or fat James Wakefield are. GM did his bit & excellently so IMO, he needs back up. Wouldn't we all prefer a Shearclass + a gang of equally modest cut throats round at the lawyers until it is sorted? The DHSC had the goods nearly a year ago, F*** their politics, Han**** & Javid, where is the dosh + interest + damages & costs & what else can be claimed?

Davand - my guess is that the dispute has continued as NCYT have been wary to litigate and DHSC have played on very lever they have knowing they will only pay what they are forced to pay. All the words about a probable solution being replacement (though not now supply chains are terminated) or possibility of repayment were a smokescreen for a policy change within the DHSC following a policy change & precisely why a contract was in place. Dec - April went on wondering NCYT (but not DHSC) whether there was actually an issue April onwards on "arbitration" (" " used as arbitration requires two participants, NCYT was one & the DHSC was playing for time with no intention of resolving anything). Who knows whether NCYT have been bold enough, daring enough, to litigate. They have the terms under which their huge contribution was supplied, the share price should tank if they don't have the gumption or guts to enforce any terms for it. At least ABDX said how underhand their treatment had been, this has been far worse & far more unjust IMO.

No, it wouldn't be public info.

They are out of their depth. James Wakefield as a private equity specialist & the boffins simply aren't used to having to be bothered about quorum, metrics to run the business by & attract IIs to rely on, investor relations or planning development on a business, growth by acquisition nor should I guess litigating debts due from the DHSC.

Who bets they do not have a non compete clause in place with GM when he retires?

Velocity Composites PLC seems like a well run business. £3.3m in the bank a year ago (& two years ago) no other investments on balance sheet, nor goodwill from acquisitions based in Burnley, BAE & Airbus as clients, materials science sector, would do well to diversify but no mention of that a year ago in financials.

It isn't just forward statements. It is the way the company is run & its commercial instincts.

It could be that the DHSC misled GM in what they said, or long standing counterparts made representations & asked things of him but were later over ruled, or any number of other situations but it is a failure of BoD to have been so damaged by it. The BoD is there to advise the CEO, to protect him & safeguard interests of SH whatever the circumstances are with the client & do they seem to have done that?

It seems GM's attitude when from gung ho (in the RNS a year ago, perhaps over cooking optimism, buying in at £8 to silence Dec - April) to announcing his retirement. Perhaps he is rightly fed up & deserves a break. The non Exec & Chairman have been awol in this dire outcome.

The weakness of commercial culture of the business and has been written into SP by MMs & IIs. A normal "business" for example would not develop unsaleable products. NCYT has put store on developing its own a LFT, holding it out as a positive, until they said blandly to shareholders that the market for LFTs is shot through while they are given out free. Oh, so if we hadn't realised the LFT shouldn't raise the SP, even ramper gangs on BB have specifically put on notice of it now & should not be surprised the MM's factored it it some time ago.

The same goes for the honour with which NCYT scaled up its supply chain (no doubt based on representations made from solid relationships in the DHSC) without due commerciality. And in NCYT paying tax dutifully on account. They did the right thing & have been let down, why do they carry the can?

It is not NCYT's (or at all GM's) fault that the DHSC acted with such an apparently underhandedness, nor its shameless ruthlessness & seeming duplicity but NCYT lacked the commerciality to avoid being a victim on an exceptional scale.

The situation would be far better had they had sharp commercial acumen in the BoD ruling in protection against worst risks & protecting GM, rather than an "experienced private equity* investor" James Wakefield. IMO even our very own shearclass would have made a difference judging by his contributions IMO.

*no surprise market relations & managing the market is so ineffective.

Don't forget, the DHSC may have changed their story during Dec & Jan, or perhaps the people GM dealt with & their representations to him were over ruled higher up (as ABDX claims happened in their dispute).

I remember something about the criteria for corporate size apply to the proceeding two accounting periods, not just one, it is lagged so companies do not bob in & out of bands so I suspect that SC is right & you do have to admit he has a point.

I would rely on him now not least as he is looking at it with benefit of what we know now. The tax advisors would have given advise back in Jan based on the belief the company had of its position back then which has turned out to over optimistic. SC is spot on in his prudence & point payments now with HMRC

Great post, thanks.

What I don't understand is why the GLP is so keen on the "£85m" contract when Innova is so much bigger & seems so scandalous. How did Sir John Bell & the Porton Down collaboration to approve LFTs put forward Innova so strongly as their leader when the FDA has found Innova devices so unacceptable and unsupported by the false statistics of accuracy the submitted in support of accreditation in the US? Are we going to find a huge donations for research at Oxford University, Tory Party or others made mysteriously in the future, do you think? Why aren't GLP interested in the billions first & long established specialists in the UK crippled by DHSC procurement second?

It seems to me the company has been sitting on the information & manipulating the SP all this time by limiting information or leaking disinformation. Poor governance all round IMO