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Hi All,
I had a quick stab at some projections. FY24 being the first full year of consolidated business and I expect on an annualised basis this year, we have circa £25m, and applied a growth rate of 20%. Thereafter, 30%. Gross margins of 55% which can be improved upon with scale. Operating costs synergies of 10% in Year 1 with flat operating costs going forward covering inflation but also further synergies.
I am confident we will end up with circa £50m in the bank end December 2023, and interest income should be better than £2m, plus FX benefit to come back. Assuming this is delivered, just £7-8m of the cash will be enough to get us to positive cash flow.
revenue GP% GP Op Cost EBITDA Interest income
FY2024 30.0 55% 16.5 22.5 -6.0 2
FY2025 39.0 55% 21.5 22.5 -1.1 2
FY2026 50.7 55% 27.9 22.5 5.4 2
FY2027 65.9 55% 36.3 22.5 13.8 2
FY2028 85.7 55% 47.1 22.5 24.6 2
The key is DHSC dispute - and I anticipate settlement at NIL cost to either party. We might hear about that sooner than people think. I think you can see a valuation of £1+ easily, on this basis.
Re directors' buys, I imagine they will do so post AGM, which I also expect.
Well found.
As I have said, Novacyt got YGEN on the cheap. With funding now, and Novacyt's own installed customer base, the business growth currently at 20%+ can easily reach 30-40%+.
Novacyt's cash position post acquisition and this year's cash burn will be circa £50m. Add both YGEN and Novacyt business on top, this should really be a £1+ share.
What I am definitely looking out for are (a) DHSC settlement - it is more than likely to happen and (b) new director buys.
With new Covid variants spreading, the govt will need to increase surveillance again I suspect.
Perhaps there could be a deal whereby the dispute with DHSC is settled, with resumption of orders.
Yourgene also operates leading class laboratory for PCR testing and analysis.
Thank you for replies.
Ok - so resolutions are ok, which is how I read them too.
Just listened to April IMC - came across well (enough). Quite clear to me it is intended (both parties I assume) to settle DHSC dispute pre court hearing. Well, Lyn is good at that.....
And let's have a strong H1 results discussions with core growing.
As I said before, notwithstanding the Novacyt pipeline and base with Covid on the up again, YGEN was bought at basement prices due to funding issue - with funding, it should be 2-3x more, so that alone should give Novacyt a rerating.
Good luck all.
Why do I get a sense there is some dissent around voting for the AGM resolutions?
Read through them all (yes, all 24), and seems pretty standard / normal to me.
Obviously not that familiar with the history, what if any, is the issue?
Thanks.
I sense clear reservations against the enlarged Board. There is one sure way to win over the sceptics - to deliver success. And I would like to see the in the days and weeks ahead, and before calendar year end.....
(a) Directors buy - particularly those from YGEN with their YGEN share proceeds, to be fully reinvested here;
(b) DHSC dispute settlement - one of Lyn's early success was settlement with Illumina, let's get the DHSC dispute sorted positively;
(c) growth in sales - immediate signs of traction from the enlarged base will give a lot of confidence.
All the best.
Yourgene Health Launches MagBench Automated DNA Extraction Instrument and Kit for NIPT Workflows
09:17
For best results when printing this announcement, please click on link below: http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230905:nBwSM7CJa&default-theme=true
Yourgene Health Launches MagBench Automated DNA Extraction Instrument and Kit for NIPT Workflows
Offers clinical labs in APAC and Middle East cost-efficient, bench-top robotic cell-free DNA extraction workstation and reagents for Yourgene’s Sage 32 NIPT Workflow Yourgene Health plc (“Yourgene”, AIM: YGEN), a leading international molecular diagnostics group, today launched the Yourgene(®) MagBench™ Automated DNA Extraction Instrument and Kit. MagBench solution is available to Sage™ customers across Asia-Pacific and the Middle East. MagBench offers a simple, fast, and cost-efficient, bench-top robotic cell-free DNA (cfDNA) extraction workstation optimised for Yourgene’s Sage 32 NIPT Workflow. This provides clinical laboratories with a streamlined end-to-end solution, from sample to report, enabling them to provide a more accurate and competitive non-invasive prenatal testing (NIPT) service.
The MagBench Automated DNA Extraction Instrument is easy to use, quick to install and provides users with an intuitive touchscreen user interface with built-in protocols, offering fast run times and flexible sample throughput to meet the laboratory’s testing needs. The MagBench Extraction Kit comprises sample and elution tubes, pre-sealed cartridges with all the reagents needed for efficient cfDNA purification, and individually packaged tip sets with a unique cross-notch design for precise volume pipetting.
Increased automation during DNA extraction, limits hands-on procedures, minimising the chance of human error and with single-use tip disposal and a built-in UV lamp for decontamination between runs, it minimises the risk of cross contamination. It also helps improve the accuracy and consistency of pipetting, resulting in a lower failure rate.
Sage Prenatal Screen offers a Safe, Accurate, Genetic Evaluation of placental DNA in maternal blood using next-generation sequencing in three days. The NIPT workflow includes extracting DNA from the maternal plasma using MagBench, followed by library preparation and enrichment, sequencing, and Sage Link analysis to estimate the risk of a fetus having trisomy 21, 18 or 13, rare autosomal aneuploidies, sex chromosome aneuploidies and the most clinically relevant microdeletions.
Dr Rob Henke, Vice President of Sales, Asia-Pacific at Yourgene Health, said: “Yourgene is committed to delivering best-in-class NIPT solutions, where precision and quality assurance are key. MagBench enables an economical and automated NIPT workflow. Reducing manual procedures improves user experience, facilitating true walkaway time while minimising the risk of contamination and improving testing accuracy. This decrea
Hi OG,
Good to see you on this Board. The way I see it is as follows:
YGEN acquisition (16.7) + Thermo loan (6.5) + SVB loan (2) + acquisition costs (3) = c £28m
I anticipate YGEN cash burn to be marginally negative turning into break even, which the $1m proceeds from Taiwan sale will counter.
Then we have Novacyt H2 cash burn of say £7m.
So, calendar year will end with a cash balance of circa £46.7m.
Going forward, I imagine they will find synergies of at least £4m out of the combined entity OPEX. So, if we assume this will be circa £20m combined, then on GP of 60%, need revenue of circa £34m. Combined business today will achieve £26m, so to get to £34m will need 31% growth YoY. Given YGEN already growing at 20% and Novacyt getting more of their products into market, plus the cross-fertilisation of the installed labs / customer base, it is very possible.
So, effectively they have £46m to grow and get to EBITDA positive, as above, one-off restructuring, investment needs and of course the legal case, if it gets to that. Should be more than enough even for Rees unless DHSC dispute defeat. Which is exactly why YGEN on a standalone is worth
Lynn Rees most definitely mucked up the last year and half of YGEN ie post Covid era, due to some miscalculations and poor financial management (CFO culpable too). But, what he did do successfully was broaden YGEN portfolio, built a strong foundation and drove growth. Critically also, one of the first things he did at YGEN was agree a settlement with Illumina, which was a big drag on the company. Well, let's see if DHSC can be resolved before court case, in a win-win scenario.
Glad all approved today - didn't doubt it myself - and looking forward to the ride in Novacyt.
Gizmo555, no offense taken. No need to apologise. I am basing my assessment on multiples of revenue, not EBITDA. I am sure you are aware, there has been M&A activities in the healthcare world in the last 3 years. Those with no sales (yet) but IP, those with sales, IP but no profits (yet), and those with the full suite. We are in the 2nd camp.
I have offloaded 65% of my holdings and for the remaining holding have voted yes.
For those continuing the journey under Novacyt, I look forward to seeing YGEN potential being realised there (hopefully).
Otherwise, all the best everyone. It's been a big and expensive learning experience with this one!
Based on acquisition of YGEN at valuation of circa £23m (including Thermo debt payment), and knowing the YGEN business well, here's my view (illustrative numbers only):
YGEN standalone = £23m
YGEN with capital / funding = 2-3 x £23m
YGEN with capital / funding + Novacyt installed lab channels = 3-4 x £23m
So, the completion of the acquisition alone should give an uplift to Novacyt valuation, just because of the valuation uplift from the acquired YGEN business.
As for Novacyt business:
Novacyt stand alone = £28m (c 40p prior to acquisition news) (discounted NAV due to legal dispute)
Novacyt + YGEN installed lab base = 2x above?
Novacyt with legal dispute settled at NIL either way = at least 2-3x above
Novacyt with legal dispute settled in its favour = at least 3+ x above
Bottomline, Novacyt + YGEN business should therefore give us a rerating.
And finally, if proper management injected in, expect even more fireworks.
It's a win-win deal.
PS: YGEN is growing its core business 20%+ and therefore I expect EBITDA positive. And with the synergies, will reduce cash burn in Novacyt / combined business. Growth for each non-Covid business should also get a lift from cross-selling.
Boy, have we taken a battering here at Vodafone but I think we have reasons to be optimistic.
Net Debt - this is now at a level comparable or better than industry, and with interest rates peaking and its long maturity dates, should no longer be a problem;
Germany - signs of stabilisation and recent piece by the CEO of the turnaround gives comfort. The Altice JV and improved reliability should reduce churn and bring net growth back;
Energy costs - this impacted EBITDA across the region. As we know, energy prices have subdued and its benefit should unwind in the quarters to come. Add to this, the recent PPA deals with Iberdola using solar PV gives both price and suppyl security, whilst supporting net zero ambitions;
Vodacom / E& - not talked about much, but the strategic partnership with E& should drive dominance in MENA and procurement strategies improve margins;
Price rises and growth in IOTs & Business - continued price rises on contracts to flow through into numbers on the consumer side, plus we are the no 1 in IOTs (mooted to be bigger than AI!) and focus on business which is growing;
Corporate M&A - further divestment of Vantage, UK - Three merger and Spain strategic review.
And finally, we are at an EV multiple and dividend yield that is VERY inviting. The re-balancing will happen and telcos will be loved again because guess what, we all need a connection these days!
And full disclosure, I am from the YGEN shareholder camp. WAS a large shareholder until recent dilution. I think it is a done deal and I want to ride it under Novacyt. I think with the right investment and management, YGEN business can be worth north of £100m. So have started buying Novacyt. I am just holding back from fully committing due to legal dispute - so doing all the research I can.......and forming an opinion.
Thanks HarChris. I am sure there will be different viewpoints - hence the share price. I want to make my own judgement - the missing piece of information being on what basis DHSC is claiming against Ncyt........anyone?
I have moniman. Read all relevant RNSs, listened to podcasts and press articles. The one piece I cannot find is the basis of DHSC claim - and that is what I am asking fellow BBer's. No long essays needed - just one short answer - on what basis is DHSC claiming against Novacyt? It's only on the follow through contract, so I can only think of a few reasons!