Member Info for GLTader

Let's remind ourselves that Ambry Genetics, the WORLD LEADER in hereditary cancer testing and biggest by market share in US, has branched out into reproductive health and chosen Yourgene! Worth another read and appreciation of what it means to be part of their CARE programme....

https://www.ambrygen.com/partners/care/reproductive-health
https://www.ambrygen.com/company/press-release/143/ambrys-new-reproductive-health-program

That alone should be worth our market cap and more!!
The market truly overshoots both ways......

Oh dear Bakky.
You do realise they are likely to be nominee holders........the same 30m will have appeared in other "big boys" houses!

FF, that's why I say potential suitors look at recurring revenue, revenue growth and GP. Majority of overheads goes upon acquisition for them, in fact, the distribution channels will just grow hence accelerating the growth.

I think when a SP is going down, many different theories pop up - in the same way people make theories when SP is going up. Bottomline, SP is feeding off the negative sentiment and MM are feeding off it.

We are now £19m - crazy for a company with revenue, GP, global footprint, IP and growing again. When it turns, it will hopefully be equally violent. Just need that one trigger. Can't time it.

There is nothing wrong with prioritising revenue growth over near term EBITDA. Our potential suitors / PE houses look for recurring revenue, revenue growth and GP%. We just need to make sure we fund it from existing resources, or if equity, at proper valuations. At today’s current share price, I am confident the Board will look at other funding mechanism (if needed) other than equity of which there will be many, including working capital management and restricting investing activities. They already insinuated that in the interims.

I am not giving excuses to management for the horrid share price performance. But when you look at the journey to date, excluding Covid period, Lynn & co spent their first two years building a group capable of penetrating a huge market, and today, we shall be enjoying that growth over the next few years. So, why jump ship when that growth journey has only just begun……..in the US alone, I think EKF, Ambry and Ranger (x3 megalabs today) should grow from $2m (now) to $10m (FY2023/34).

I don’t care if you sell. I am holding tight to mine knowing it will be worth more tomorrow than it is today. It’s just I have been here and I don’t want my fellow (retail) investors to act emotionally or irrationally. Hold or add to average down where you can. You shall be rewarded.

I am writing this to my fellow (retail based) shareholders, who may have “given up” due to our SP performance and considering selling at this very low share price. Please don’t. In fact, add and average down where you can.

At today’s share price, we are at £20m market cap. Some must be rubbing their hands knowing £10m can give them control of the company! For a business with £21m anticipated FY revenue, GP% in 55% range, growing again post Covid and a host of valuable IP, that would just be giving away your shares to those who will benefit from it.

Looking back, we have had a chequered history up until Lyn’s arrival in mid-2018. Believe it or not, at that point, we were £6m turnover business with a higher market cap than today!! For all his failings in influencing the share price performance, I actually think Lyn has achieved a lot in his time so far – the fruits of which I hope we will enjoy in the years to come.

>The legal dispute with Illumina was settled late 2018, and together with Thermofisher, gave us access to 90% of NGS platforms;

>A deal was made in early 2019 with Thermofisher, with loan forgiveness of £12.7m – cementing our relationship across Asia where they are stronger;

>We acquired Delta / Elucigene (now YGS) in mid-2019 for circa £9m adding to our product portfolio;

>We acquired AGX (sale and distribution partner) in Q1 2022 for circa £3.4m securing our France / Europe channel;

>We acquired Coastal Genomics (Ranger tech) in Q4 2020 for circa $7.5m, excluding contingent consideration, giving us another USP and end-to-end solution. They started development with us back in mid-2018.

We all know Covid effectively harpooned the trajectory of our core business plan from mid-2020 to early-2022, and in this time, Yourgene pivoted and delivered record revenues and further invested in our capabilities, sales channel, manufacturing bases and footprint on our core business. We are pivoting back.

The glossy, if you get a chance to read it, have clear and audited valuation assumptions for goodwill impairment assessments. Even the acquisitions alone, all of which are growing, should on a standalone basis be worth more than our current market cap as it stands! Add that to our NIPT base business, together as a group, we have a much stronger and complete proposition.

None of our major shareholders have sold – Bill Chang, BGF, Steven Myers, Life Sciences, Amati. I am sure they are as frustrated, and baffled, as we are. But I suspect they can see we are way undervalued. If we return to growth consistently from herein, at say 30% pre-pandemic levels, in three years, we will be a £46m turnover business and at 9-10x sales, close to the £400-450m market cap. We are at £20m today!

(To be continued....)

Slich, I think you should look at the year ended 31 March 2020 for the most representative core only business investments. The last 2 years have been years of investments, abnormally high, because (a) they can and opportunistically wanted to and (b) to scale up both Ranger (Canada) and YGS in UK. This is why I said the investing activities are done and we now should reap the reward. Critically also, it is discretionary and can be cut back. Yes, working capital management can/should be improved!

Hi Slich, thank you for your analysis.
From a cash used in operations perspective, I think the company has tracked its EBITDA quite closely bar working capital management needs. By definition, that's what EBITDA is really. Your -ve EBITDA in 2022/23 turning into +ve EBITDA in 2023/24, which I also expect should help reduce cash used.
Then the only other thing to manage is "investing activities" - which to me has been done and is discretionary.
Therefore, I expect our cash position to be circa £3m end of FY22/23, same again in FY23/34 and then rising thereafter assuming we restrict capital investment and manage our working capital accordingly. We can also refinance / renew debt if needed.
In summary, I don't think we need to raise more money UNLESS we choose to invest further for growth.

There is definitely a notable change in how they PR news or RNS them.
Looks like updates are provided in statutory reporting and/or presentations.
For instance, signing up 12 new labs was "slotted" into FY results presentation.
Similarly, the new mega-lab signed up for Ranger.
In the interims, very little details on the pipeline, which clearly there is a healthy one to maintain FY forecast.
The lack of SP care also suggest they are not worried re funding.
YET, we are growing very nicely again, against increased base of customers and geographies.
Vacancies hire also keeps popping up in the logistics, quality control, technical support space all pointing to growth.
I can only conclude they know the end game ie a takeover or some partnership where funds will be injected as part of deal. Perhaps a licencing / distribution deal with upfront $.

Market cap wow officially below 1x sales or 2x GP - madness!
The sizeable trades of 500,000 and 1,000,000 are the smart money? Whilst PIs bail at the low......oh boy.
I am staying put for the takeover!

Glad interims are out. Until we see it, we can't be sure - and it's good to see core back to (healthy) growth.

On further reflection, the other thing that stood out is Ranger revenue which has now exceeded $2m annualised revenue. Some might say this is slow - having launched products myself, this is pretty impressive for 1st year of adoption interrupted by Covid lockdowns. We signed our first US supply in Q1 and then another in Q2 2021. Another undisclosed one recently in Q2 2022. They take months to validate and get going routinely, and within a year, we are looking at $2m annualised revenue. I expect this to increase organically across segments and then of course new clients signed up. If the 100% growth rate can be sustained every half year for the next few years, you can do the maths.
Lightbench Detect just launched in July 2022.....
......this is why I think a takeover is very likely soon.
Yes, I am focused on topline and GM%, and less on EBITDA, because that's what our valuation will be based on.
EBITDA important of course but so long we don't need to do more dilution - fine re timing.

Yes, the Board can recommend OR reject it, but they still have to tell us!

PS: Apart from the players in our sector, I imagine PE houses (who are flushed with cash to allocate) will also be sniffing. Take it over for 2-3x sales, inject some funds to grow the business, then flog it off for 9-10x! Because we have IP, a base and revenue generating, the risks are lower......

Davand, it's not up to the BOD - they have to put it to shareholders to decide if / when one comes!
I am confident of a takeover because:
(a) we are ripe for one at this level ie cheap!;
(b) we fit the profile of potential acquirers;
(c) the GBP/USD is weak;
(d) our technology has now been validated across both NIPT and Ranger and it is a matter of widespread adoption;
(e) we have larger players, ie potential acquirors, as our client, validating / routinely using our tech;
(f) the sector we are playing is growing and the SAM is in the billions - Ravgen lawsuit a case in point;
(g) our core is growing and GP is still healthy @ >55%;
(h) we have geographical footprint outside of US.
Let's see........

I think it is very easy to gloss over the positives, both due to SP performance and the update notes. I am disappointed with the margin issue, and therefore EBITDA impact, but:

- Our core is back to growth, strongly: ranging between 18% in NIPT consumables, 50% in NIPT services and 100%+ in Ranger tech;
- reading between the lines, the company does not have any intention of going to market for additional funding: they will adjust costs accordingly, without impacting growth as much as possible, should this be required depending on commercial progress;
- FY revenue outlook reaffirmed and targeting EBITDA positive in 2023/24;
- continued wins in NIPT accounts.

I think any investor buying into YGEN need to decide if they are looking for an income based return (ie dividends) or capital growth (ie SP appreciation from here / takeover). I think if you are the latter, this will be an exciting entry point given I very much expect we will be bought out........a company with the IP, product range, geographical footprint and installations globally that we have is most definitely worth more than £24m!

Market cap now under £25m.
Surely we are worth more than that on our IP and footprint alone!
Next up "Statement re Possible Offer"! :-)

I expected £8.5 - 9.5m topline. They have come in £9.6m which is better than expected.
Reiterated FY expectations, albeit with margin pressures.
Good they are reviewing discretionary.
Think we will be bought out quicker then.

Isn't it the case, whether you are relying on Ravgen patent or Streck patent (and paying for it), then Ranger offers an alternative that is more cost effectiveness and with improved performance?
I think the whole dispute has just awoken the market re Ranger as an alternative.

Interesting. Another acquisition @ 10x sales......

https://www.reuters.com/markets/deals/thermo-fisher-buy-diagnostics-firm-binding-site-26-bln-2022-10-31/

As I said yesterday, if the royalty value to Ravgen on one lab (ie Labcorp) is $272m, then when you add the others using similar methods, it could be up to $1bn now and into the future.
This places a very good reference point to the value of our NIPT workflow and solution (with Ranger). Even a fraction of that is worth more than our market cap today.
We truly are significantly undervalued.

I have enquired and I would like to think it is ok to repost:

"Yourgene are fully aware of the legal dispute occurring between the small biotech Ravgen and the largest reference lab in the US Labcorp. Yourgene can confirm that they are not connected to the legal disputes taking place and it has no negative impact on the IONA test.

In fact, the disputes highlight the benefit of utilising the Company's Ranger Technology. The Ravgen dispute centres around the infringement of Ravgen's method IP, whilst collecting the samples in cell stablising tubes. Yourgene's Ranger tech enables laboratories to use simple EDTA blood collections tube, which are substantially cheaper than the cell stabilizer tubes caught up in this dispute."

Let's hope we capitalise!