Member Info for DRB83

Net Assets £150m includes £102m cash

Net Assets exc cash = £48m

Today's mcap exc cash = £11m

If you buy today you are buying a share in assets worth £48m for £11m

We are currently valued 4x less than net assets. Can anyone share a company that is more under valued than ncyt currently please?

Going on Harchris' info.

Ncyt pre covid 31st Dec 2019
SP 13p = £9m
+ Debt of £7m
- cash of £1.5m
EV = £14.5m or 20p

Ncyt today 31st Jan 2022
SP = 160p = £113m
Add debt of £0
Less cash of £103m
EV = £10m or 14p.

Nuff said me thinks

Strip out cash and today we are valued at 15p. A price last seen on 30 Jan 2020. Before the world had even heard of covid.

Triumph, I appreciate your attempt at trying to justify the current mcap of ncyt but there is no valid justification. Sentiment for Covid testing and ncyt bod is what is driving the downtrend. Sentiment doesn't reflect reality imo so at some point the trend will turn. We've only forecast in the region of £12-18m for Covid revenue in the UK so DA has kept a few cards up his sleeves imo. That £100m is growing daily and it's highly likely a new VOC will be with us by spring. None of which is priced in.

Correct me if I'm wrong but isn't our EV now lower than ODX's despite ODX's crash today.

Has Shell just said anything due back from HMRC is already included in the YE cash. Wow. Sorry guys but I can't even dumb myself down that far to even try and educate that theory.

I'd try and stay away from accounts shell. Stick to chart trending.

That is not the case Yeo.

The LDA was in accrues liabilities in Mar21 £1.2m. in Sep21 there is still £600k in there. On the cash flow statement you can see the net cash outflow of £600k from accrued liabilities (not £1.2m). Antonio says he's paid the £1.2m so it looks as though he's borrowed another £600k from somewhere that falls due in the next 12 months. Unfortunately it is not clear as no notes were made against accrued liabilities, which I also find very strange. Has he borrowed some money and not told us?

Burn rate I believe to be a little less than £200k per month. The £600k liability should be a concern to genuine lth's.

Yes smiller. But even by messing up, UFO still stands to be multiples of today's price. Albeit with slightly more shares issued.

So 19 vacancies for a shrinking business. That's either a high staff turnover or someone is lowballing the forecast.

Looks like they were using the Escapeplex to confirm the s gene drop outs of the Thermo fisher test. Looks like it the s gene drop out was detected correctly 100% of the time.

BA.2 is not so easily distinguishable from Delta so the Taq path test won't be so useful. Can our Escapeplex distinguish between BA.1, BA.2 and Delta. These look to be the main 3 VOC's going round at the moment.

So we were told private testing made up 58% or £55m of our total sales in FY21.

So 42% or £41m of non private sales. Assuming this is NHS and other governments. Not WHO or UNICEF as these were included in private sales. Some of this will also be non covid, let's assume £6m so £35m of covid sales to non private labs.

£35m of sales to governments. It would be great to see the geographical split of this. Obviously I'm assuming NHS will make up the bulk of this.

Assuming a 50% drop in this £35m gives us a forecast of £18m non private covid sales. Let's assume sales are forecast to decrease from Jan to Dec. So Jan would be say £3m sales, Feb £2m + 2 +2+2+2+1+1+1+1+0.5+0.5 = £18m As far as I'm aware, government labs are doing mass testing. The world has been consistently hitting 3m cases per day throughout January.

£3m by the way is about 300-400k tests or 3500 boxes of 96.
By the end of the year DA could be forecasting to sell £0.5m per month to governments. That's 50,000-60,000 tests or 625 packs of 96. That's globally.

If you think that is achievable then relax and be patient.

Obviously, this is just me playing around with numbers.

Captain. I'm up north. I wasn't referring solely to the recent change with masks. It's a build up. Reducing self isolation, reducing testing, removing restrictions, talk of removing self isolation. 99% of the population don't get as involved with what is going off in the detail we do on this board. They see the culture being set by Boris and most just assume covid is coming to an abrupt end. Ironically it is this culture that will extend the pandemic. The next VOC will walk in undetected and then weeks later we'll learn about it. By then it's in, and the damage has been done. Boris is too focused on the move to endemic to see the implications of what he is doing. Oh well.

LFT Pro volumes will pick up during waves and new variants imo. If the new variant evades testing then it's back to who can develop and market a new test quickest. Ncyt pretty good.

10 min test will come into its own as we move away from central mega labs to decentralised POC testing. Huge market growth imo.

Antibody testing - still waiting to see what happens here but I would assume as we start to prioritize vaccines we will want to know who has what level of antibodies rather than just jabbing willy nilly.

Upto now covid PCR testing has probably made up 95% of the 86% covid revenue. LFT's have contributed very little. Will this change? How much is in the forecast? Probably not a great deal.

Another thing that may be concerning the market is the EBITDA%. DA made no reference to it so even us on here are swinging between 10%-30%.

DA offered no information on cost controls. Therefore, as usual market will assume worse case of 10%.

£60m rev
£6m EBITDA

Mcap £120
Cash £102m
EV £18m
EV/E rario of 3. So even with so many worse cases included, we are still undervalued several times over.

The UK does look pretty normal out there. Imo it is this attitude that is going to drag the requirement for testing out throughout the year.

100k cases per day in UK. UK accounts for 45% of our total sales.
3.5m cases globally. A huge market still to tap into.
A large part of testing is moving to LFT. This market will likely go private in the summer. We sell a pro LFT, hopefully before summer we get the self test LFT approved.
Boris looking to end self isolation in March.
No border defence
No internal defence
A new variant by spring imo
It will take at least 2 months before they know it's less serious,
In that 2 month, travel testing returns, self isolation returns, mass testing returns.

There will be waves throughout the year for sure. Maybe UK will take the dips as an opportunity to invest in British diagnostics. It's already been mentioned by Starmer. How long will BJ last, how long will Tories last.

We have fcast £41m covid revenue in FY22. A 50% drop. We don't know geographically where that drop is. Is it evenly spread across the globe. If so the 45% of £41m will be in UK. That's £18m in UK covid sales.

Maybe, DA looked at how BJ is treating the pandemic and thought, most of the reduction will come from our 45% UK split. Maybe a 60% or 70% drop. So now your UK covid sales forecast could be as low as £12m. If this is the case then the worse case is already priced in.

As we discussed yesterday, the worse case for the dispute is also already priced in.

The £12-£18m UK covid sales forecast imo assumes testing will continually fall away from here out. No travel testing, very little winter surge, self isolation never to return, restrictions never to return and most importantly VOC's never again. That is the scenario that is already priced in. One whiff of a VOC and that forecast is blown. One whiff of a covid/flu winter surge and that forecast is blown. All imo.

Agreed Parkboy

Smiller, I get what you say about the £450m mcap for having a billion DSO in the ground. Obviously there's the cost of getting it out and the associated risks and volatility of the DSO to consider. Fenix have the exact same £1b of ore and have been selling it for a year now but still only range £80-£100m mcap. They also have close to £30m in cash so excluding that then the market only values Fenix operations and DSO assets at a measly £50-£70m.

Fenix did give their first dividend out last quarter at around £12.5m. If we add that onto the shareholder values then the equivalent mcap today would be £62m-£82m.

$1b DSO in the ground
$40 profit per tonne = $420m that's £280m
The risks would therefore be valued at £200-220m
That is almost 80% of the value in the ground not valued in the mcap

Worth considering this when we extend our resource. We could potentially be 10 times bigger than Fenix just in DSO.

It's also important to note that the rate at which you can mine it is key. The quicker the better, but the appetite for mining it quicker also depends on the ore price at the time.

Either way, when I look at UFO I only see hundreds of millions in mcap. If Bill plays it right then potentially billions. A lot talk about JV's but imo DSO is the key to the door that has billions behind it. Mine the DSO ourselves like Fenix which will require upfront customer agreements, loans, hopefully no dilution. Once mining we could be generating £10m per quarter from Han****. Use this to drill Brockman. Get 4-5 mining processing plant deployed across Hammersley. That's now £40-50m cash generation per quarter. At this point we'll have too much money to spend so bi annual dividends will be a certain. 3-4 years down the line we have multiple years left in our DSO and EH and Munni Munni have been firmed up or maybe even producing (especially the near surface silver). This is another revenue stream. Mexico? Why not.

If Bill does this right and things go our way then it is possible to do this on our own. If Bill doesn't want to be a miner then we spin out each tenement and assign a mining manager, like with DSO. Bill then has unlimited funds to spend out the rest of his life exploring. With this approach, even if he wants a JV, we would be in an unbelievable negotiating position.

Sorry, long post.

If that's how it worked and it was that easy I'm sure all companies would do it at some point. Kind of goes against getting the best value for shareholders policy that all directors have to show adherence to. Plus shareholders would have to sign it off through a EGM. Lastly, ncyt need the cash to play out their strategy so can't afford to buy back the entire shareholding even at these levels. All imo

Happy with that summary Swag

I'm not so sure B2. I maybe looking at this from a more positive angle but DA did mention shareholder value in his last RNS. We don't know if that last RNS is going to open the flood gates to more regular news feed. He's been in a little over 100 days, the business is now his, he's running the show. I'm hopeful that now those first 3 months are out of the way, we start seeing the real DA. The new year was always going to signify the true beginning for DA. If he knows how the markets work then he'll know positive news flow is required. He'll want to impress surely. He'll also what to go to work on increasing the SP so he can benefit from the LTIP/options etc. Just wish they'd tell us what the LTIP is and if it's not in place yet then why.

I live in hope.

That is a very good point Chas. Certainly possible although it has never been mentioned. Having said that, if they are as confident as they sound then why would they mention the insurance.

Chris, I get an overwhelming feeling that the market is valuing NCYT based on face values. Dwindling revenues, no clear strategy, a lost dispute. This is not what is happening behind the scenes imo. I was comfortable buying a few weeks ago in the high £2's and nothing much has changed since then. We knew covid revenues were slipping 50%. We didn't have a clue what the non-covid business was, some probably thought zero, turned out to be £13m. Some thought the cash would be £50m, it was double. I was actually thinking forecast revenue would be £50m, now I'm thinking £60m. If I was happy buying high £2's then I'm comfortable buying mid £1's. Patience is key