Member Info for DRB83

CO, it will be under NDA until resolution imo. It's unlikely they would be able to give us stage by stage updates and reveal their strategy for the negotiations. It will be complete silence until resolved imo. It would hardly be fair for it not to be a blackout period. Imagine they walk out of the room having just discussed the last few details of a 50/50 resolution and a £20m additional contract and decide between themselves that their going to plough every penny they can into some director buys that afternoon. 2 days later they release the bumper RNS and the SP doubles. Same goes the other way. It is clearly a blackout situation we have here imo.

That really bothers me that no one on here can accurately answer is, why no director buys? We hear DA say that he's excited about the opportunity and confident he is the man to take ncyt to the next level. So surely with ncyt valued at less than NAV and almost cash, now would be a great time for directors to dip into their pockets.

Possible reasons:

1. They can't afford to (unlikely)
2. They can't as they are in a blackout period
3. They know of something that is going to nosedive the SP further
4. They've forgot ncyt are actually listed.

The 2 obvious ones are 2 and 3.

2. This is highly likely imo and I think the reason is due to the dispute. We and the market know absolutely nothing regarding the dispute, where as the bod and the DHSC will obviously know what kind of deals have been tables, where the negotiations are leading, how close to finalising terms they are. This is all highly sensitive information and would put any member of the bod at an unfair advantage over the rest of the market. Hence, blackout.

The interesting part for me is that GR was able to purchase 10,000 shares in July no problem. Since then, nothing despite this unbelievably low value. This could mean that back in July the bod knew very little by means of where the dispute was going. I think the bod and DHSC have now revealed too much information in those four walls to mean director buys are no longer allowed and won't be until the market is at least brought up to speed.

If that is the case then I can sleep easier at night because I don't like the sound of no. 3.

Let's hope it doesn't go to court Kilted. Lol

Peter, I did consider including it but as I feel it carries no weight I purposely omitted it. Ncyt already rubbished the article in the article itself. Ncyt advised that all the relevant processes had been adhered to accordingly and the test had been passed by several of our UKAS customers.

It's gone no further than PE in almost 2 weeks so it's nothing to be too concerned about imo.

This SP isn't supported by the fundamentals so as soon as we get some significant news it will rerate to a new floor.

150 doesn't change the fundamentals it just makes the value to be had greater. I'll be looking to top up at every 10p interval if I can. Although my holding is getting heavy now.

I think given the lack of news and the beaten SP it is worth reminding ourselves of what the fundamentals here are:

Pros:
£103m cash
70%+ op margins
40% EBITDA margins
Dispute fully provided for
Dispute resolution could come anytime
Potential new contract with UNICEF from July (won't be in fcast)
Potential new DHSC contract from March (won't be in fcast)
Potential new orders from WHO as part of 2 year contract
10 min PCR test possibly in development (not just for Covid)
News on self test LFT by March (in September we were told of up to 6 month delays) - Covid LFT is still a huge global market (none of it in our fcast)
News on antibody LFT
Co-prep release (not just covid)
M&A (plenty of cash to invest)
500+ tests to CE mark
Likely to be involved with the early pandemic warning system
Escapeplex for the next variant. (There will be one, at 3m+ cases per day it's just a matter of time)
New CEO with fresh ideas and strategy with proven track record of growing sales (just what we need)
Covid is over culture pretty much priced into market at these levels
Covid provided a solid platform to build our non covid revenue streams
£60m rev fcast already priced into SP.
Current SP below NAV and almost same as cash (hugely undervalued imo)

Cons:
Dispute goes to court
No more approvals through the CTDA and PROmate gets binned from UK shelves. (UK PROmate sales will be in the fcast so this would cause a potential profit warning)
Possible further covid negative sentiment following more restrictions being removed. Death rates stopping being reported, no need to self isolate etc
US don't approve our products and we collapse the US arm of the business.

I'm sure there's more but that's just for starters.

RMB, I am not downplaying your strategy at all. I hope it works for you and that you do get back in in good time. My point is that your strategy was to get out higher than today which is now no longer available to any left in. Your strategy also carried risk as B2 said, a resolution can happen anytime and if it goes the way we think/hope then the gap up will lock many bystanders out or see them buying back in at much higher prices. With hindsight your strategy worked but like I said, that strategy is now obsolete. Ncyt are now priced at basically cash so selling now, investing somewhere else, getting locked in there and then missing the ncyt jump and climb just might finish someone off completely. Whichever way you go there is a risk but the lower the SP goes the less risk of holding is imo.

Another perspective. Ncyt grew their than non covid revenues in FY 20 compared with pre covid levels. Not by much but they did. This was achieved despite covid being the 100% focus of the R&D team and ncyt in general. As we transition from covid to non covid revenue streams, what can ncyt achieve. Well let's look at what they have:

£103m cash and growing as covid is still providing a significant cash stream that some AIM companies could only dream of. Worse case, if they have to part with £28m to settle the dispute then we still have c£75m.

A fully functioning and expert R&D team that will soon be fully focused on non covid products. Covid has lead to new technologies that can now be utilised in the non covid markets. Plenty of development to be had here. I.e 10 min PCR test, Co-prep, PROmate, all revolutionary in their own right and all transferable technologies.

A fresh CEO with new ideas. It's too early imo to write him off. He was an integral part of the Amryt growth story so that has to count for something. Comms will improve I'm sure of it.

An increased reputation amongst our customers plus we'll now have more customers than pre covid. This along with more distribution channels and our own direct sales team will make getting our newly developed products to markets quicker and easier. Also our direct sales teams are going to be global not just UK as per before.

So all of this tells me that the likelihood of ncyt being very successful in a post covid world is extremely high.

With our current EBITDA of 40% in a post covid world then the revenue we would need to deliver a £5 SP at 20 p/e would be £45m. We're already almost 1/3 there and we haven't even focused on non covid or spent any money on it yet.

RBM, I respect your opinion but imo the market hasn't used logic to value Ncyt for many months.

The market is using fear (emotion) to value Ncyt. Fear of the dispute, which ncyt have already significantly provided for on the balance sheet despite "having strong grounds". Fear that the pandemic is over and testing is no longer required. The bod told us several months ago that Covid revenue was expected to drop 50% yoy, nothing has changed and since then we spent some time in the £4's. We have only £40m covid Revenue forecast for FY22, so the worse case is already known to the market. Ncyt have £103m in the bank which the market is currently saying 'ncyt are going to burn £40m of that and have nothing to show for it'

We've know for months that ncyt have thousands of machines dotted around the globe, hundreds in the NHS, some with TATA MD. These aren't just covid machines. We have £100m to invest on making the other 500+ tests we have CE marked and compatible with the q machines. That's what you call a strong foundation to build upon. None of this has been priced in for months. The market looks forward yes but because ncyt haven't revealed it's plans the market assumes there is no future then. This is illogical.

Even if ncyt pump all of their £100m cash and still only turn a regular £20m profit from non covid revenues. Then a market standard p/e of 20 would still value us at £400m or £5.63. That's why people didn't sell. We see the £100m in the bank, we see what DA has been able to achieve in the past, we see the platform that Covid has provided and we see the ample non covid opportunities that lie ahead. The market sees none of it. That's the logic part I was referencing.

All makes lots of sense RBM nut hindsight is a wonderful thing. We are currently valued a few million more than cash and the majority of the negative sentiment is priced in. The market already assumes we have lost the dispute and DA has already stripped a huge chunk of covid out of the guidance. At this point the SP must be close to the bottom if not there already. In hindsight, selling should have happened weeks/months ago but logic and huge losses kept us lth in. At some point the market has to value us fairly, right?. Now, imo is not the time to be selling. When I can I will be averaging down. GLA LTH

Insert, you beat me to it. I was a holder of Alba when it happened.

The Greenland project of Alba was an excellent project and within 2 years potentially of production. They choose to spin it off and float it at the same time.

Alba ended up with 54%. That stinks to me because what Alba effectively did was sell 46% of the project to new shareholders but at that days prices, meaning all the growth potential of those projects (and it was a lot) was now split 54/46. Alba shareholders stood to only benefit from 54% of any growth. The day it was announced the SP flopped.

Imagine if Bill did the same with IOCA. UFO shareholders would only be protected if they took part in the IPO for IOCA.

Is this why the market is struggling to rerate UFO. Imo, the iron ore is going to happen. Which means all the other projects will be funded easily which should also mean, EH, MM and Mexico should all happen in time. So I ask myself, why are we still only 0.85.

Is the market worried that at any point, Bill can just spin off a project and sell a big chunk of it to new shareholders for a huge discount. It sounds crazy that current shareholders wouldn't have a say in such a huge development but I don't recall Alba asking for permission.

The Alba CEO became the non executive chairman of GROC as part of the spin off. Did that come with some free shares or cheap options as part of the deal? I don't know.

Bill has skin in the game now so any spin off would harm his own finances, but if he agrees a deal which includes him having cheap options then he'll be fine. The rest of us shareholders will be left feeling rather sore.

I would appreciate others thoughts on this risk. I am a genuine shareholder looking to increase my pot and would like to understand this risk a little more.

Good find Dr P.

Unfortunately I don't have time to peruse our contract again but does anyone know off hand what the terms were for late payments. It's usually set at something like LIBOR + X %.

It is only going to become an issue if this goes to court imo. If we finally negotiate a mutual settlement then I'm sure any late payment fees will be scrubbed or rolled up into the final settlement figure.

So obvious answer then is, get Boris out and Starmer in and let Starmer lead one hell of an investigation into the corruption and bring all relevant parties to account before they get chance to retire.

If DHSC was a listed company all hell would break loose at the AGM and Borris and the rest of the bod would have gone months ago. Shameful.

Cash burn of £200k per month.

30 SEP £2m
4 month cash burn £800k
4 month of accrued liabilities settled (assumption) £200k
Sponsorship below £100k
Money in from our mate £100k

Cash at 31 Jan £1m (this will last about 4 months at the very most. Need to start selling some product and filling orders.

From RNS

On 15 December 2021, the Group entered into a finance agreement with gotoPremiumFinance for directors and officers (D&O) insurance. The policy premiums are $136,725 (United States Dollars) with $100,669 financed at an annual percentage rate of 8.75% over the term of the policy ending 13 December 2022.



On 20 December 2021, the Group announced a sponsor partnership with the U.S. Major Arena Soccer League (MASL), to offer the Company's CBD products to the league and member teams. Total consideration from the Group was $162,500 (United States Dollars) which consisted of $100,000 in cash and 500,000 ordinary shares at 12.50p valued as of the closing price on 11 November 2021.

Some people saying we won't hear anything until April. Last R&D update SEP 30. 7 months without an R&D update. That's got to be unheard of from an AIM diagnostic company in a pandemic. I think we'll have something in February.

Co-prep
10 min test
LFT self test approval
Next gen antibody test approval
Not expecting non covid products until end of Q3.

In September we had 24 new products in the pipeline. I expect DA will have had some impact on this with his new commercially driven approach but I'm still expecting double figures. 11 months still to go.

Sounds like a handy bit of kit to have in your lab. Especially has it will be adaptable to many other tests including non covid.

Possibly but there's the ROTW to be having a go at.

Very reassuring. Do we know what the delay was?

Steve, I would disagree. The market has already decided that ncyt are going to fritter a large chunk of it away.

Net assets exc cash £48m

Mcap today £116m

Mcap minus net assets = £68m

Our £102m cash is currently valued at £68m. Market already thinks we've started frittering it away.

Market's lost control and a huge gaping opportunity has opened up imo.

I'm sure you don't expect me to reply to that Shell

It might be worth noting that at 31 Dec 2019 ncyt was loss making and in debt with c£10m revenue.

Today we are profit making, cash rich with forecast revenue of £60m Inc c£20m non covid revenue.

Markets interpretation is 2+2=0.0004