Member Info for Ejackson

Now that the convertible share option has lapsed, it clears the way for all offers to be formalised and explains the radio silence since early December.
This, together with the expected TU, will provide for an interesting few days ahead.
Interesting to note the permanent appointment of Le Brocq to Director of Digital Operations. I am certain he would have insisted upon a lot of assurances as to future ownership and indeed vice versa, before before accepting such a pivotal role?

And if the Globant scenario needed underlining, the appointment of two heavy weight brokers merely underlines where this is heading.

And so the courtship begins.
MS knows exactly what he is doing and would never have made such a huge statement as this without internal and external discussion with the relative rainmakers.
He has broken cover and is now moving his Knights across the chess board. Let the fun begin, he is just warming up.

Whilst we await news, I looked back at the last RNS detailing our product development. The more I read, the more I kept returning to the LFT we have in the pipeline. My strong suspicion is that we have been tipped a wink by the Government that when this product is available, they will be buying substantial amounts. Witness just how much sub standard Innova LFT’s they have bought and continue to do so to give some context to what it could mean for us. What we are developing is relevant to the next, post vaccine, phase. In my view a complete game changer.
Here is the relevant paragraph.

The Company expects to launch its LFT in Q2 2021, slightly later than planned as it has taken the strategic decision to develop a next generation of LFT to detect the neutralizing antibodies generated by successful immunisation and, therefore, to assist in monitoring the effectiveness of future vaccines3. The Company believes this exemplifies how it can extend the revenue horizon for COVID-19 as the demand for testing continues to evolve.
The Company expects to launch its LFT in Q2 2021, slightly later than planned as it has taken the strategic decision to develop a next generation of LFT to detect the neutralizing antibodies generated by successful immunisation and, therefore, to assist in monitoring the effectiveness of future vaccines3. The Company believes this exemplifies how it can extend the revenue horizon for COVID-19 as the demand for testing continues to evolve.

It’s really quite simple.
Until we have RNS’s updating us on contracts, trading, M&A activity, the market will look at the company and say yes, it’s generating cash but in a perceived declining market so the SP will continue to retreat accordingly. All the good news about vaccines plays into this narrative.
The disconnect when NCYT is valued against so called peers that are yet to return a penny, the irrationality becomes even more frustrating, however, we have a board that are invested in the company’s future and if patience can be excercised, reward will follow.

Sadly BoJo has just endorsed LFT as being integral to detecting Asymptomatic cases and did not recognise the low efficacy numbers Emma Sands MP quoted.
His response: I don’t recognise the numbers quoted and that is why we are using LFT.
Not sure if the right hand knows what the left hand is doing. Same old, same old. Truly shocking.

https://www.bbc.co.uk/news/business-56126559

Mr Skou meet Mr Kirk. I believe you two ‘buoys’ know each other already but I will let you have a coffee to have another chat about how you can get this carbon problem under control as I note from the above article how Maersk anticipate spending billions to get there.
Don’t forget to pop it into an RNS when you have crunched the numbers and want to tell everyone how green Maersk has become overnight.
Enjoy your coffee....

I think the only requirement here Skindle, is patience.
You and I have been here for a long time and it’s been a bumpy old road but we do finally have some likelihood of a positive outcome attached to realising a fair value SP in our sights.
All we can do is leave it to our Board and majority shareholders to extract the best possible value or continue trading on an upward curve and realise an even higher exit price in 12 months or so time as now the For Sale sign has been well and truly hoisted, corporate interest will never be too far away.

Good point well made Skindle.
If you are right, and I would side with your opinion in this instance, it just shows how the market can manipulate a share price albeit we as humble investors may well ultimately benefit here.
Always frustrating having to wait when you sense so much is going on behind the scenes.
FY Results will be known around the same time and my gut feel based on what we know +/- in certain areas leads to a profit of c.£50m. The question I ask myself is if you have approx £500m to invest and are looking to make a 10% profit together with the opportunity to grow the business on a compound basis by a conservative 10%+, you would be very interested, wouldn’t you?.
I look forward to seeing how many interested parties there are that think similarly.

Despite consensus that our current share price is significantly undervaluing the company and we are fully up for sale, the volume traded on a daily basis is pitiful and we remain stuck in narrow trading band ever since the strategic review was announced back in early December.
I have never seen such a lack of interest in a company given all the fundamentals and what’s at play.
All very strange and there really should be an RNS to advise the market at which stage the review has now got to.

Succinct to a ‘T’ Sonicboomboy.

My apologies, the Edison report was 2019, not 2020, hence the compelling nature of their then valuation against our current trading as has been confirmed and in likelihood still improving.

Until we have clarity on future revenue, be it Phase 2 being signed or otherwise via updated guidance on how our new products are selling, expect the SP to stay at these levels as sentiment is geared towards vaccines working and the need for testing fading.
Rest assured that GW has not invested £500,000 into a pipe dream/ one trick pony and he will be ensuring the new team and sales force are working flat out to maintain as much momentum as possible whilst aggressively exploring opportunities elsewhere to successfully diversify the company’s future revenue.
Everything else is just noise but boringly it clogs up the BB.

Skindle, I am not sure if you are correct with the amount Frasers have sold and that aside, I wouldn’t read anything into what they have sold. They still have the largest say in our future direction.
I would expect the Board to provide an update soon as it has now been 2 months since the announcement of the full strategic review and would like commentary beyond it just being ongoing.
In the meantime, below is Edison’s opinion on the SP back at 19.12.20. With everything that has changed since, a fair value north of £6 is not unreasonable by any measure. Not comparing an apple with an apple but the recent valuation ascribed to Moonpig underscores this and suggests there should be strong interest in STU as a highly profitable online retailer openly seeking a new owner in an environment of cash rich deal makers keen to do business.

Studio benefiting from the shift to digital
The first six months of the financial year are somewhat seasonally less important (H119 was c 43% of FY19 revenue) for the Studio (Product and Financial Services) division. In total, the division’s revenue was broadly flat at +0.3%, gross profit improved by 6% and adjusted operating profit increases by 1.1%. The company does not chase sales ahead of the peak trading period in Q3, in which, to date, it has traded strongly, with 10% Product revenue growth, underpinning our broadly unchanged assumption of 7% revenue growth for FY20. The company has highlighted record numbers of customers, single-day online sessions and daily dispatches, implying strong customer acceptance for the move to digital.
Planned disposal of Education
The planned disposal of Education to a competitor, YPO, for gross consideration of £50m (10.3x adjusted EBITDA in FY19), represents the final disposal in the transition to being a digital-first, value-focused retailer. Completion is expected in 2020 and the transaction is subject to clearance by the Competition and Markets Authority. Net proceeds are likely to be £35m, some of which may be invested in warehousing infrastructure. The transformation over the last two years, with changes to products, solutions, pricing and controlling of costs, is feeding through to improved profitability for Education: H120 revenue -1.4% and adjusted operating profit +64%, derived from greater volume of own brand and online sales at higher margin.
Valuation: Well supported by DCF valuation of 450p
Our revenue forecasts are relatively unchanged, but our PBT estimate for FY20 has increased by 2% to reflect the improved gross margin performance in H120. Our DCF-based valuation increases to 450p from 423p, representing a premium of 90% to the current share price.

In general terms, I am not hugely surprised by the market’s reaction to the latest TU.
The market reacts to transparency and guidance for the future revenue streams and currently GM can’t offer that owing to DHSC Phase II not being confirmed which despite our proven global expansion, still appears to remain our largest source of revenue. No surprise then as all previous guidance was to this being advised/ negotiated / confirmed at the end of January. The fact we are in ‘active discussions’ is to be expected and suggests we will know one way or another very shortly. Annoying that we couldn’t have the news per the TU but nothing more. Expect a very positive move in SP if this comes through, likewise the reverse if DHSC decide against it.
Beyond that, GM has always wanted a cash pile to morph NCYT into a different diagnostic company and now has the ability to do so coupled with a talented Board primed and ready to follow the business plan. He has tweaked the Board to reflect the new scale of change which only a year ago, he could have only dreamt of. They must feel like a bunch of kids who have been told to spend lockdown in the sweet shop!
In the meantime we continue to expand globally and have hugely increased our number of employees to implement further sales growth. A strong start to the year suggests we continue to generate £10m+ in cash a month and are likely to do so for some time to come as the worldwide vaccine roll out is clearly going to take longer than hoped extending the need for testing.
As an additional observation, my hunch is that at these levels, the likes of Glaxo in particular, who desperately need to play catch up in the diagnostic sector, will be running the slide rule under NCYT, DHSC contract or no contract. This is not an investment strategy just a simple statement of MOR and the likelihood of corporate activity.
Every which way, a compelling company to be invested in and whilst it will take some patience to achieve its full potential it will do so from the now confirmed and incredibly strong financial base.
GM has started the countdown to lift off.
Enjoy the ride albeit as it has proven already, it’s bumpy!

I agree Keith1105.
Glaxo have been touted for a while and given all my research, they would be the obvious suitor.

As a LTH, the Maersk / buoy incident still baffles me.
The company was guilty of putting too many eggs in one basket and we paid the price with the resulting dilution of shares just to stay alive.
Today is different. The Board have seemingly learned from Maersk and engaged in a number of strategic deals that whilst not immediately revenue enhancing, appear to now be be coming to fruition. A relief as having bought into the concept of QFI many years ago it has been a rocky road to say the least.
My gut feel is that this is now a ‘Domino’ investment in that once one deal of significance falls into place and demonstrates what the products can do, everyone else will not want to be left out and be in a rush to sign up.

The extract below is taken from an interview with Scott Spirit by Adnews which I found intriguing.
The choice of phrases, ‘ I don’t think’ and ‘probably wouldn’t’ are telling.
To me, WPP is the ultimate target but heavily caveated in that it needs to be broken up first as MS has openly called for at almost every opportunity available to him. This would then allow him to pick up the half that is complimentary to S4 and at a stroke, become bigger than the remaining part to WPP thus achieving his ego driven desire to stick up two fingers to his old Chairman and Board members.
This is why he has kept his shareholding in WPP so as to allow him a meaningful voice in its future direction without being cast as the ‘ disgruntled ex CEO, sniping from outside’.
It will take some time to achieve it and he will be patient to gain the ultimate prize. In the meantime, he will continue to build his new baby into a highly profitable, fit and relevant for modern day advertising company. Being part of that journey as a shareholder, for me, is a very exciting proposition.
Keep going MS, and enjoy the fun you are having. As close colleagues have identified, they have never seen him so full of energy and they are struggling to keep up.....
Here is the extract:

“We're 100% focused on digital. So from that perspective, I don't think WPP would be the kind of target that we'd focus on given that given they have a very large traditional business.

“We're also very focused on organic growth and WPP hasn't grown for a couple of years. So again, probably wouldn't meet our criteria.”

A superb update by every metric.
The response from the market against the back drop of today’s figures tells us all we need to know.
Misunderstood doesn’t even come close.
Good to see the sale process is ongoing and I really hope we can realise true value. I am looking forward to the forthcoming updates.

Great article EMEX
Round pegs into round holes. Join up the dots. A formidable company is being assembled and the Board is making sure it has all the right people doing all the right things.
These individuals are exceptionally talented, have proven track records and, critically, have invested in NCYT.
If that is not enough to help you sleep well at night, I suggest you try and find another investment opportunity that offers anywhere near the same reassurance and strength of balance sheet that will be updated shortly.