Member Info for DRB83

Commodity prices aren't going to move the SP in the short term. Positive drill results and JV or off take agreements will move us significantly in the very near term. Just a case of patience.

2.6% is production right, not demand.

The higher production gets the smaller the price gets if I understand the economics right.

There's a good chance that the £135m of goods would have been ordered over several purchase orders. It's likely it would have been delivered over several deliveries. Those deliveries would have been signed for at receipt. Those first orders would have been used and follow up orders would have been placed.

It took £135m of invoices before DHSC said "hang on" I'm not happy about this set up. I'd love to here DHSC's argument.

Sorry, I thought I was clear. Non covid £15m I believe is too low based on all the reasons from my previous message.

Therefore I believe covid revenue will be £15m - £25m for the year. As we are already at £10m, you can see why I think £35m is a ultra conservative forecast. Time will tell.

Covid is has been hugely unpredictable from the start in terms of revenue. From £277m in 2020 they didn't do to bad to be slightly out on their £100m fcast for 2021. The margin for error was huge at such a volatile time for the virus and at such high revenue numbers. Now on the other hand, covid has steadied and the numbers being talked a out are much lower so the margin for error in forecasting has significantly reduced. They are also basing their FY forecast on Q1 actuals and did say 'if' this trend continues. It may not. These are more reasons why I think ncyt have gone ultra conservative.

The reduction in non covid sales from 2020 is a result of a combination of things imo. Covid took centre stage so ncyt prioritised covid as you would expect meaning R&D, stock levels, marketing etc for non covid products took a back seat.

Secondly, our customer labs who would have been buying our non covid products also switched their focus to covid therefore demand was significantly reduced.

The world is moving on (certainly UK) pretty much all of this year so far and I am hoping it continues that way. Demand for non covid products will be increasing. Ncyt have already told us that come H2 they will be revitalising our vast portfolio ready to hit the markets in Q4 but probably some in Q3.

In addition, ncyt have much larger resources available now than in 2020 so I believe you are under egging your 'slight q4 increase' forecast.

Thank you for pointing that out byp. I used the £45m to be conservative in supporting my point. Let's use £35m. I would still assume £20m non covid as the Q1 reduction is all covid related. So

FY22 would be £35m of which £15m is covid so 43% of our FY22 revenue would be covid. Certainly won't be seen as a covid company for long.

To add to that. The revised forecast of £45m ORGANIC revenue for FY22 I assume would include upto £20m from non covid so

FY22 55% of ORGANIC revenue from covid

By FY23 we would be far from being a Covid company. Throw in some M&A and non covid revenue could actually exceed covid revenue, this year. Plenty of cash to spend but I'll admit my patience is wearing thin.

On the bright side.

2020 95% of revenue from covid
2021 86% of revenue from covid
2022 Q1 77% of revenue from covid

We are becoming less of just a covid company with every passing month.

Hopefully from Q3 this decline in covid dependency will start to accelerate rapidly.

France was down yesterday when AIM was closed.

I'm giving DA the benefit of the doubt for the time being. Semi expecting a TR1 back end of this week, although was expecting more volume on the EuroNext.

Was expecting a rapid rise to 7-8% instead of the next TR1 being 6% but time will tell

Not sure if I follow what your question is Kaeren.

Kaeren, I am not aware of the payment terms. It could be that all of October and some of November relates Q3. Especially given that the February £50m relates to Q4.

I suppose I'm saying that the £135m dispute payment is made up of the £50m Feb and £85m of Nov.

There was a £50m payment made in Feb that related to Q4 I believe. I also think some of the October payments would predate the September contract.

Good question Kaeren. Unfortunately I am confused about that too. It makes more sense to be stock as if they would have despatched it to DHSC they would have invoiced it and therefore it would be on the aged debtor account with the other £24m. Confused.

Captain, I too was burnt by odx but I'm sure you can agree ncyt is a whole different investment. No longer reliant on one customer. No longer reliant on placings or debt.

Ncyt have the distribution channel in place which they will use to pump our new revitalised portfolio through.

Ncyt have the instrumentation from covid that they will adapt to allow for other assays. Economies of scope and scale will be available. Sales discounts for buying multiple products.

Ncyt have in place a world beating R&D and Bioinformatics department.

Ncyt have the cash to make several mistakes and still be in a position to capitalise on new opportunities. Risk is low.

The market now thinks ncyt covid revenue for FY22 could be as low as c£25m. I would be very surprised if it is that low but anything north is a bonus. The market also hasn't considered the upcoming M&A activity so once something is announced assuming it is a good deal then we will see a step change in the SP. Imo.

Byp, Arteta will do exactly what DA has done. Be modest letting everyone know what challenge lies ahead, never downplaying them and never being too revealing in his plans but being positive that the team he has can deliver. He will also leave several cards close to his chest.

The biggest cards DA has is the £100m cash and M&A and the dispute resolution which is already covered on the balance sheet.

The dispute has held us back too long. It's time to spread our wings. If we could invest that £100m to at least double our revenue target to £200m then an EBITDA of just 30% gets us £60m which at a measly 10 p\e that's closing in on £8.50 per share. The chances are by then that ncyt will be commanding a much higher p/e.

What I am confident in is that ncyt are currently undervalued and the 5yr plan should get us in excess of £10.

Captain, I wonder if Arsenal will do Leeds the courtesy of telling them just how they intend to beat the competition in the upcoming match.

Maybe they'll attack down the flanks and concentrate on getting crosses in from the byline. Maybe they'll focus on deep crosses or maybe just settle in balls over the top.

It would be great for Leeds and the rest of the competition if Arsenal would kindly reveal their match strategy before each game.

Unfortunately for Leeds, it probably wouldn't make much difference but other clubs would certainly benefit from knowing their plans.

I'm sure you can relate this to ncyt and the competition.

Patience is key here. We know what the plan end result is. We don't know exactly how they're going to get there but we know enough imo. The few blanks we have will be revealed in due course.

M&A is coming imo.

Just a couple of observations from the recent presentation.

JM said the £100m revenue target was organic.
He also said that to get to £100m would require very little of the £102m cash we have as cost increases will come from profits.

So if we strip out the cash of £102m from the mcap we have a EV of £10m. So DA and JM believe it is achievable to build a £10m business into a £100m+ revenue business in 5 years. I believe they can and this just shows just how undervalued we currently are.

Secondly, the good old Moto of plan for the worst and hope for the best comes into play. I strongly believe that JM has calculated the worse case scenario regarding the dispute, similarly to how I did and would have ringfenced an amount of say £50m cash just in case.

What we can assume from this is that the current 5 year strategy uses very little if any of our current cash pile and any M&A or partnership activity will use upto £50m cash. What this does mean is that the strategy has allowed for the worse case scenario on the dispute. Anything better than worse case will only help accelerate the strategy.

Therefore, having had more time to reflect, I can start to see plenty of upside left in the strategy.

Ncyt have never been a bad business it's just been a lot slower in transitioning than I expected. On top of that, covid revenues fell away quicker than I expected too. A lot quicker. I also never expected the dispute which has cost us hundreds of millions. The underlying business has always been sound imo.

The transition has now started. H2 will see the revitalisation of our assay portfolio. Hand selecting the best ones to take to CE. Covid reduction is now very much at its lowest at <£35m pa and the worse case dispute resolution is priced in.

Lots to come now imo. At least £50m cash to spend on INORGANIC growth. That will be interesting. Dispute resolution. If it doesn't go to court then timescales suggest we may have an accord this year.

I'm not happy with the SP but the business is one of the strongest on AIM imo. GLA and have a great weekend

I'm thinking Thursday RNS stating 6%+. Here's to a better week next week.

Steve,

Double digits EBITDA. It's not great but it's still profitable which would be a great feat to achieve for a company transitioning out of a hugely declining covid market which accounts for 80%+ of their business.

JM said the ORGANIC business would be self sufficient meaning investment and running costs will be covered from new cash generation i.e profits.

JM also said that the £100m will be primarily for inorganic growth i.e M&A or partnerships.

It's safe to say that the organic side of the business will be dramatically reduced for certainly FY22 but it sounds to me that M&A and partnerships are high up on the agenda which will hopefully salvage this year's P&L. FY23 will see a full year effect of maximising our revitalised assay portfolio + any M&A from this year.

PI's may not necessarily like the short term as we all want multi bags tomorrow (especially in AIM) but II's may just start to sit up in their seats following the presentation and see the long term growth of the business.

For me we have bottomed or are close to the bottom here. Onwards and upwards with the help of strategic transactions and institutional investors. I'm semi expecting a TR1 from Bio next week.

It's been a tough week but I'm hopeful that we can start to move up. DA didn't buy in at £2.31 because he knew it was going to a tough ORGANIC FY22. There's something else brewing. GLA