Member Info for DRB83

Sorry Trouble, don't follow. Which I guess answers your question.

I don't mind the comparison to be honest Covid. A lot of people like him on here. I take it has a compliment. I have nothing against Porky. Been reading his and everyone's posts for the last 12 months and he certainly comes across like he knows what hes talking about. Rampy at times I admit but nothing wrong with that at the right time. You'll soon figure out that I am my own person.

On a more positive note. What if last year's winter was a circuit breaker for Flu and it actually died off or at least to extremely low levels which will take years for it to bounce back. By which we will have covid under control.

What if herd immunity does work and whilst cases will probably continue to rise this winter, hospitalisations and deaths remain within the acceptable range. We come out of winter realising we have just got through the worst time of the year fairly unscathed and now look forward with optimism.

The thing about covid is we just don't really know what is going to happen, even the experts are both sides of the fence. As an investor you have to weigh all outcomes in order to evaluate your position.

Given the above best case. What happens next. Do we as a nation or a planet stand still pretending that another deadly virus won't bring us to our knees again at any given moment. I don't think so. Covid is the hot topic currently and all governments are still experimenting with how best to manage it. Once we arrive at a working system to tackle this pandemic, focus and budgets will shift to how to spot the next one. Covid has cost the global economy trillions of dollars and countries will pump billions into preventing the next one. Covid just put a couple of v2 rockets up the backside of the infectious disease diagnostics industry and ncyt are right in the middle of it. All my take obviously and why I see ncyt as both a short and long term investment.

It's a fair possibility. The graph that shows where we are year on year with cases, hospitalisations and deaths is interesting.

Multiple times higher in all 3 in 2021. We didn't have a vaccine 12 months ago and natural immunity would have only just been getting started.

Last winter we were under the mask mandate, work from home, socially distance, no travel, no stadiums, covid was still relatively new so the majority of us were still quite fearful and not venturing out without good cause. Not to mention 2 lockdowns and it still caused a world of pain.

Now we are much more free to live our lives. The world is connecting. I fear the government and its people are putting too much hope in the vaccine. I really hope it works for the sake of all of us.

Lol. Thanks covid. A little too obvious though. 2 recommendations as well.

Any impact the travel PCR decision has on Novacyt would be manageable imo and should be more than offset with the fact that Microgen now comes more into play. A de risking element for ncyt was the introduction of the covid LFT suite to their arsenal. I am expecting some big news on this front over the next few weeks.

What the naysayers fail to appreciate is that the covid pandemic has provided ncyt a very healthy foundation to build on in a post pandemic world. We don't simply just disappear into the night in 12 months. Quite bizarre how short minded some people are. Probably £86m in the bank at the end of this month. The dispute will be resolved amicably in my opinion and not to forget that the DHSC currently owe us £61m of unpaid invoices. Then we take the foundations we have built during the pandemic use it has a springboard into the non covid world which due to its vast range will offer much larger opportunities.

At the start of the pandemic we had very little cash and some debt and look how we got ahead of the curve. What can we do with hundreds of millions in the bank. That remains to be seen but I'm backing ncyt.

The last director purchase I believe was Raimondo back in July with around £35k approx around £3.45 per share. Not sure why we haven't seen anymore since. Block out periods will be part of it but won't explain it all. I know this bod lead by GM are highly conservative so maybe they only go in when the positives slap them in the face. It was around this time last year ish that we had several directors buy in. Winter is coming. UK have just opened their doors to Covid with a big Welcome sign hanging on it. 100k cases a day becon. Diagnostic bull market approaches. I wouldn't be surprised to see several directors follow DA and put their hands deep into their pockets. Let's see.

I am very pro ncyt and based on the fundamentals and the current SP I am mopping up what I can when I can. What I would expect is that DA has already seen the potential in ncyt and the areas that need to be improved i.e Comms and marketing and so expect him to back up his abilities and confidence with a nice chunky share purchase as soon as is possible.

Correct. Thanks Neil. At a rate of £10m revenue per month I would expect at least £9m cash from that at a 32% conversion rate. That's £86m and counting. That puts my forecast for YE cash north of £130m (with resolution).

Sorry Chris just seen your last post. Yes so it was PROmate, Thank you for the reminder. Still baffled then as to what the issue with PROmate is. Could it be the machines that were the issue as I believe both Exsig and PROmate run on the machines.

Also baffled as to how we have been ordered a new contract for PROmate worth £4.7m when there is a dispute surrounding that product.

Can't wait to get this resolved just so it all becomes clear. Clear as mud at the minute.

My view is H1 as the absolutely worse case built in and some so that number will only get better imo. I am hopeful that we get this dispute resolved by YE and the accounts come March will show significant upside on what the H1 will look like.

FY20 is different. It is not absolutely worse case. Worse case is a full refund of the £103m which would reduce sales by £103m (assuming £129m Inc Vat) and cash by £83m (they haven't paid us £24m Inc Vat). The £20m provision would also be released back into the P&L reducing COS.

Net impact to bottom line = £103 - £20 = £83m
Leaving us with £50m EBITDA in the restated 2020 accounts.

In my view, this will not be the outcome but is worse case.

I believe we will negotiate a favourable resolution for both parties which is to give the DHSC replacement products. Let them pick what they want. We have a large offering and the DHSC demand is about to go through the roof.

The £20m provision in 2020 and £7m in 2021 will cover the manufacturing cost to replace the orders in dispute. Leaving the DHSC to pay the remaining £20m from Q4 and £41m from Q1. Ncyt don't need to pay anything back. As for the £30m stock write off. Not sure about this. Don't know enough about it.

Following this the accounts stay as they are for 2020. A nice £132m EBITDA. 2021 H1 goes to £95m sales, with EBITDA of approx £38m (40%) less the £7m replacement cost less whatever happens with the stock write off. Worse case £0 EBITDA for H1 but again, I am sure we will get something for the stock.

Our cash balance today of £77m grows by £61m less the £27m to pay for the production of the replacement stock. Gives cash of £111m

Add to this a solid H2 and I would be expecting a cash balance north of £125m going into 2022. Then M&a comes into play.

All just my opinion of course.

Chris, had a very quick look back through the relevant RNS's but can't see any reference to the £41m being promate. Can you specify where it quotes this please? There is also no confirmation of what the Q4 product is as far as I can see. We are assuming Exsig and Winterplex because it makes most sense.

It will Saint and thank you. Good to be here

Chris, wrong choice of words apologies. I do realise that we have not received the £41m but my point is still valid. If they haven't paid for them in the first place why are we replacing them? If they end up with a replacement order they would have to pay the £41m in the end. It's one or the other but not both.

Agree that a full refund is highly unlikely. Happy with 50% and move on

I don't think the Q1 is promate. It is all roped into this case together so must all relate. Q4 and Q1 are the same products imo. Which seems likely to be Exsig and Winterplex given the timeline.

We all have to start at 1 Saint. I did wonder how long it would take for someone to mention it.

Just a genuine holder here. You'll see eventually.

Sounds like you have made your play Woody. Good luck. Airlines, no risk what so ever in that industry. What are you doing here then. Go research some airlines.

I am more than happy holding my shares in one of the best young global diagnostic companies in probably the fastest growing industry in the world. Hence why I'm posting here.

I do wonder about the £30m stock. Have we really allowed this to become obsolete. What if GM has been sat on it awaiting the outcome of the Case not wanting to sell it in case it was decided that the DHSC would have to have it. The case has massively over run and now it is out of date. If so, the recovery of the £30m should be included in the case if we win. All this seems illogical but you never know.

I assume the £20m provision at YE related to the £129m of goods in dispute. The £7m additional provision in H1 I assume relates to the £41m in Q1. The stock write down is to reflect worse case that the stock is now worthless.

Our H1 accounts will now show the absolute worse case scenario. Which is

We receive zero of the £41m from Q1
We actually have to replace the order free of charge at a cost to us £7m
Our stock of £30m is now obsolete and we will get zilch for it. Unlikely imv.

A few questions from me

1. Why would we have to give the full refund of £41m as well as a free replacement. I must be missing something
2. If we have factored in zero sales for the DHSC in H1 in line with IFRS15. What does that mean for 2020 Q4 revenue. Does this need restating? If so, why no mention of it. Confused

Chris, cash is cash. You can't just book something to cash unless you are physically paying it. Ncyt are not physically paying those adjustments that they mention they are just being prudent and will be putting them on the balance sheet as a liability until settled. The debit side will impact the p&l hence the EBITDA loss. No cash is moving.

Agree with your prediction of North of £100 by year end though.

£77m start
Sales of £40m Sept to Dec @ 32% cash conversion giving £13m
Finally settle this DHSC and receive 50% of what they currently owe us which is £65m from memory = £32m
Year end cash £122m

The settlement is obviously just my opinion. I would settle for 50% given what we have been through. Also, hopeful that sales will exceed the BODs conservative £100m by year end

So we started with £92m cash
We were told we have a cash conversion of revenue of 32%
We sold £95m in H1 giving a cash pile of approx £122m
We know we haven't received the £41m from DHSC so this will show as a Trade Debtor not cash
This brings cash at bank to £81m. Give or take a few million it's pretty close to the £77m quoted.

Don't get the grief that people have with Porky. I believe he is heavily invested here so why not be positive about your investment. As an investor it is always sensible to consider the negatives which I believe he does also. He also puts a lot of time along with many others into researching which I for one am greatful for as I don't have much time to research myself. Been watching from the sidelines for over 12 months but coming out of the shadows now. Lots of positives in play here, just taking a little longer than I had thought for the market to realise them.

I don't believe the exceptional item would touch cash. It will just be an accounting transaction on the balance sheet for prudence.

If the DHSC would have paid us the £41m from Q1 and £24m from Q4 our cash position would look like £142m. But instead of showing in the bank it is showing in Trade debtors. Scum bags.