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In term of DX, i think PE is the natural home for that as part of a "Buy and Build" strategy. However, they are currently paying a margin of around 700bps for bank finance so i'm not sure we would get our money back currently. That is improving however, so it's a possibility.

I think the SP reflects the complete lack of deals that Avacta have signed in the past 3/4 years?

There is a path to greatness here, but can the company navigate that path? I've a six figure investment here so i hope the more optimistic posters on here are right about deals in the offing.

GLA

Well, the good news is that it will be easier to raise money at these SP levels....

Another Heights type deal would be neither possible nor desirable i think.

So it's either a licence deal(s) or an equity raise. Personally i'd be more than happy to subscribe if it meant that the company was really well capitalised and negotiating from a position of strength going forward.

Non-dilutive funding is always preferable of course. Hopefully someone has bought AS a pen with some ink in it in the office secret santa this year.

Seem to remember many moons ago that they registered TM's around Planet Prison, City, Hospital. I guess those are possible but not very original?

Sold out here for a small loss following YH's update on the falling review ratings for Realms, so thanks Yank for that. But tentatively bought back in yesterday. It would be a cheap "acqui-hire" for a US business and i wonder if DB might be willing to sell now?

UK small caps are really beaten down so feel like there should be upside in the next couple of years. It's uncomfortable buying this, but sometimes those investments can turn out very well.

GLA

Ophidian, it's not that long ago that Myles had to explain to you the difference between gross margin and operating margin, so a little more humility wouldn't go amiss. Or if you prefer - to pull off the irascible genius act, you do actually have to be a genius (with apologies to the Imitation Game scriptwriter).

SB, agreed, 300k shares is around 0.1% of the issued share capital - not sure that even warrants a worked order? All BB noise for me.

More importantly, i know for a fact that Alan will be opening his advent calendar on friday and box 1 contains a rocket-shaped chocolate. This is to remind him that he has something important to do, something to do with a paradigm shift in cancer treatment....now what was it....

There is a reasonable chance i think that the company has its last board meeting of the year this week. What better time for everyone to sign off on the mother of all RNS's? Thurs/fri release then, with human interest stories in the weekend press? £5 by Christmas and £20 takeover in January. Jeez this prediction stuff is easy (i mean hurstbot is wrong more often than chance alone would permit and that qualifies him as some kind of Oracle around here).

GLA

Tempted to buy a few in my SIPP; the downside seems essentially zero.

Bit surprised they talk about the upside being as high as 50%. I would think the small cap sector is still seeing net outflows so my expectation is that they may take a few haircuts offloading some of their stakes. Not sure who the natural buyers are for eg the loan notes - some distressed credit fund maybe?

I wonder if the 50% is based on a desktop exercise or whether there have been conversations in the background around some of these stakes? Interesting!

The interesting thing is that Swedbank have sold quite a few shares without pushing the SP down. So who is the buyer? Maybe we'll get a TR1 shortly?

Just getting up to speed on this one - on the face of it a 50% return over the next 18-24 months seems attractive, but the portfolio seems a very mixed bag.

Is there really any value to their investments in Real Good Food for example? Have to say i'm a bit sceptical.

There's no doubt that UK small caps are as cheap as i can remember, but there do seem to be a fair few own goals here as you say.

Anyone any views as to how likely a 50% upside is in reality?

Yuyus, technically if an event has 3 equally probable outcomes then the odds would be set at 2/1 for each rather than 3/1. I'm ignoring of course the bookmaker's margin aka over-round.

At 3/1 i could place a £1 bet on each outcome for an outlay of £3. The winning bet would return me £3 of winnings plus my original stake of £1 for a return of £4 and a net gain of £1.

Not having a pop and appreciate this doesn't alter the argument you are making. It's just that i've seen this misconception a number of times on this BB and it intrigues me. It seems to confuse both respected posters and also some less respected ones!

I guess success in investing requires both sticking within one's circle of competence and knowing exactly where that circle sits? I suspect Avacta is probably outside my circle of competence, but as i always say - in Dr Tap we trust.

Looking forward to those inflection points that everyone always talks about. Can't be long now can it?

Always assumed that XOFF meant the trade had gone through a Dark Pool. Very difficult these days for investors to transact large deals on exchange without getting scalped by HFT's.

I've occasionally seen trades from my HSBC account labelled as XOFF, so they will chuck any size orders in there if it suits.

Agreed, that UT was not very exciting in reality.

It is a bit annoying, but it seems that when the trade price is entered in pence then the value shows in pence, but when the trade price is entered in pounds the value shows as pounds.

Anyway, good to see management take the action needed for the long term health of the company. happened quicker than i expected tbh.

Note 6 is pretty clear that only £1.5m deferred consideration is payable in FY24 so that's what i've included in my estimate of annual cash burn:

"Deferred cash consideration of £1.6 million was paid during FY23, with a further £1.5 million due for payment during FY24 and is included within trade and other payables. "

I would be surprised if they add much if any headcount this year. Certainly if they were to add 200 plus heads then they would deserve to run out of cash. Given they've signed the accounts on a going concern basis that doesn't seem likely.

ATB

Fair point on deferred consideration, but if i add in the remaining £1.5m payable then the company still has plenty of cash through to the end of next calendar year.

Can you give me a flavour at how you arrive at your figure for cash burn? Thanks

Yeah i would agree that most adjusted EBITDA numbers are nonsense and typically i ignore them, but to be fair this one does subtract all the cash costs of development that were capitalised in the year so it doesn't look too bad a proxy for cash flow.

I'm estimating the cash burn here at around £10m pa maybe, taking into account lease payments and purchase of shares for the employee trust, so adjusted EBITDA of (£5m) isn't a terrible proxy.

The shares seemed surprisingly strong towards the end of the week. Maybe a "dead cat bounce" or maybe someone picking up some shares. Interesting.

Is on youtube now; well worth a listen, particularly the Q&A at the end.

I thought AS was excellent yesterday (and i have been critical of him on occasion in the past).

Listen, relax, start reading car reviews.

Some interesting snippets such as that biopsies have mainly come from metastases. The platform is basically a fire and forget cancer seeking missile for certain cancers. Also the last dose increase level of 25% was set by the FDA, not MHRA. Quite easy to join the dots here - revenues from AVA6k will start well before 2026.

Cash flow benefited from an £8m working capital inflow which likely won't be repeated so i do think they are cash flow negative. The adjusted EBITDA figure is the one that they look at, and that was negative to the tune of around £5m.

So likely no immediate concerns on cash, but there are 900 people to pay so those costs are cash costs whether they go into capitalised development on new games or straight to P&L.

AAAA's issue with FDEV is an historic one and well documented on this BB and the other one. I tend to agree with him that mangement are complacent about poor products, but i still see value here albeit it doesn't feel like there is any urgency to buy in.

ATB

Pretty sure they have the wording about the ability to allot shares at every AGM so i don't read too much into it. DB would be reluctant to be diluted and would he really want to put more money in to maintain his percentage holding?

I do think the reducing cash balance will concentrate minds and hopefully spark some change here. It is needed for the long term health of the company. Hard to detect any urgency though.

Bella, what sort of EBIT do you see DX contributing FY23?

Fwiw, i've pegged them as around £20m turnover excl Covid products so perhaps £2m-£3m core EBIT? Not sure what the covid upside is given that broadly speaking 50% of the gm goes back to the vendor.

I view the businesses as extending the cash runway a little, but in the context of a £300m market cap not very exciting.

Do you remember the USM btw. Now that was a junior market!!

Thanks. As you say, Working Capital are a very low profile outfit. Be interesting if they were to go over 10%. They look to be the main buyer currently, probably just as well! Perhaps they will bring some pressure to bear on the board for cost savings?

We don't usually get a TU until January so most probably this will drift until then i guess. Very much a wait and see for me at this stage.

Ok, i'm a bit confused on the II's here.

I can see Invesco have reduced. Also Swedbank Robur as per RNS's 18th August and prior, but they are still higher than the 5.8% shown in the last AR so they must have increased and then thought better of it!

So who are Working Capital Partners? Never heard of them. They must be based overseas as they only disclosed at 5% (5% intervals is the threshold for overseas investors). Are they hedge fund, activist investor? Appreciate any feedback.