STRONG BUY08 Jun 2022 11:50
strong BUY:
- business is delivering
- structural tailwind drivers as highlighted by the recent jumbo contract
- positive outlook
yoy gowth: strong across the board
Revenue: 78.9%
EBITDA: 138.4%
NI: 98.2%
EPS: 99.4%
OCF: -137.5%
clearly cash generation is the only negative.
looking at note 28. Cash used in operations, the main detractors were:
- Exceptional items => - Transaction (gain) relating to Capital Reduction and spin out (note 39) => one off
- Change in working capital mix: the decrease in trade payables which should prove a short term issue and is part of the way a business passes.
- R&D: doubled, would be nice to clarify with management a certain guidance on future R&D spend
=> all in all, 2/3 detractors to cash generation are transitory.
yoy margin change:
EBITDA: 48%
NIM: 50%
OCF margin: -24%
Cash Conversion: + 1%
Outlook: positive
"As at 1 June 2022, Open Orphan had an order book of signed contracts worth £64.2m which is expected to be recognised across 2022, 2023 and 2024. These developments reaffirm the Board's expectations of a profitable growing business with revenues in the region of £50m in 2022.The Group is now well positioned and well capitalised to deliver sustainable long-term profitability."