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If I were Lyn & co, and I am sure they are, now that we have the DHSC legal dispute behind us with an anticipated £40m cash balance when it all nets out, the focus shifts solely on developing the business. I would like to hear about a 5-point plan such as below:

1. Cost reduction & continued discipline - removing fat in business, deprioritising, ROI based spend etc

2. Getting back to growth - this is key and I know an area Lyn is great at;

3. Investing for the future - pointed R&D and innovation to stay ahead

4. Re-engaging and broadening shareholder base - proper comms, new brokers note, new institutional investors

5. Expanding partnerships - throughout the value chain

Let's hear it Lyn and then execute properly!

PS: Especially the Q&A section. And kudos to those who asked the GOOD questions. Topped up earlier because of what I heard.

Https://www.youtube.com/watch?v=WdmpwH0v_ds

One of the favourable outcome in the legal dispute for me in a win-win scenario has always been minimal cost to settle and new business with the DHSC. This way, DHSC saves face and get tests they want. Novacyt strengthens with legal dispute overhang cleared, cash intact (in this case, net inflow) and revenue growth.

Perhaps DHSC will be:

Making Novacyt preferred supplier for bird flu, monkeypox, Zika etc instrument and assay tests;

Encouraging adoption of DPYD test across UK.

Now that will be a masterstroke.

Disappointing and bizarre SP performance since legal dispute has been settled. I guess speculative money exiting, compounded by stop losses, driving it. This I believe will settle down and I am optimistic SP will start gradual and steady rise from here on. Will be adding.

I re-read the accounts. Parking aside the non-cash accounting i.e. debt write off of £24m and provision release of circa £19m, my focus is on the cash balance. We know we will get £8.5m VAT receivable back now. What I missed is the £4m VAT on the debtor ledger (the £24m above). So, it is actually £12.5m VAT receipt. Less the £5m settlement and say £1m further legal costs, that is still a £6.5m net inflow. Therefore cash balance of £36m as at end April 2024 will be £42.5m before operating matters.

The market cap today is under £35m, with no debt. Even on the current cash burn rate, we will end the current calendar year with cash supporting the market cap alone. There is surely value in the entire Novacyt business, even in distress! I place this at circa £35m. This is why I had thought any settlement of legal dispute (scenarios 1-4 of my post) will give us £1 or more SP.

Let's see.

Just found Novacyt's H5N1 tests under Primer Design.

When the legal dispute was resolved with Illumina back in Yourgene days, a deal was done with Illumina.

I wouldn't be surprised, in fact, expect some new business with DHSC now case is settled! That could be the "behind the scenes" package to be announced separately outside of the cash settlement.

We can now focus on the business......anyone know what tests Novacyt has on bird flu?

Seems like the next disease humankind will be facing, with first case now in India, following other cases in US, Australia, etc.

Thanks.

Https://www.msn.com/en-gb/health/other/bird-flu-tests-are-hard-to-get-so-how-will-we-know-when-to-sound-the-pandemic-alarm/ar-BB1o0GmE?ocid=msedgntp&pc=LGTS&cvid=74a8aafb2681451db87bf5c649228a9d&ei=13

Well, it certainly not the settlement we had wanted but a settlement nonetheless. I refer you to my posting months ago, convinced that a settlement will be reached before full hearing. Here we are.

The scenario we ended up is £5m out of Novacyt, although as per my notes, it will be a NET cash improvement to Novacyt of circa £3.5m (after VAT refund). The provisions for warranty released as a non-cash accounting adjustment only.

The negative: No upside.

The positive: Dispute settled. No more drag / uncertainty on company.

Many will view this as a terrible. But there is NO admission of guilt / wrongdoing on both sides. People should not forget this means there is no longer a £130m+ risk, and that what has been earned stays earned i.e. no claims at all.

I am going to make another bold call. Let the dust settle. Let the growth plan be hatched. I won't be surprised we are an acquisition target now by the bigger boys!! £21m+ revenue with GM of 60%, cash pile, no debt, strip out overheads and a very healthy IP portfolio - it can be very attractive. What multiple? I will leave you to DYOR on multiples of GM in last 2 years M&A......

Good luck all.

I posted last night re being "Reassured" - I am glad the RNS came out exactly as expected & scheduled.

One other point I forgot to highlight is the seemingly pointed fingers at The Validation Group (TVG) in the Twigger refute. So, this could be the save face / way out for the settlement.....I.E. not the govt fault, TVG did not clean the data up as well as they should have. Of course, I imagine it was the govt who commissioned TVG and hold final responsibility for how it used and what caveats are in TVG's reports......but it is certainly a way out.

We march forward with confidence, IMHO.

I have always been curious what the basis of the DHSC claim is and legal case thereof. Today's Sky News reporting helped clarify quite a lot for me.

Firstly, by my interpretation of the article, the summary judgement has been dismissed and we are going to full hearing in the High Court in June. This from the last sentence "The hearing is set to continue at the High Court." I expect an RNS to that effect at 7am.

Secondly, subject to above interpretation being right, it would appear that the DHSC felt their claim was so clearly justified by what they deemed as lack of robustness (ie test failures) resulting in breach of contract, they asked for a summary judgement. This has been refuted by Twigger/Novacyt on the basis the data that supports that assertion has been wrongly analysed. For many reasons, tests can fail and not necessarily due to product defects / inadequacies. I think someone mentioned as a professional in this space, and I am aware of this too, if a test is not properly administered, there are "contamination", process incorrect etc, such test failures (or success) should be excluded. For the court to agree means there is more than enough in the data that supports the refute.

This is obviously only one part, but a big part of the DHSC claim ie the product "does not do what it says on the tin", otherwise they would not call this argument out for the summary judgement and the whole claim value. For it to be dismissed is very reassuring to me.

I am more convinced than before a settlement will be reached before full court hearing date. The only reason it will now go the distance is because Novacyt wants the full amount and the (positive) publicity that comes with it. From my perspective, it will be better both parties settle, in a "face-saving" manner and draw a line against it. Perhaps accompanied by a new deal with DHSC for other products in our portfolio.

Good luck all.

Court hearing is at 9.30am per the Caseboard, so we should hear during the day......GLA.

https://caseboard.io/cases/f3fa868e-723e-443d-8d5a-991769a05892

No, you haven't. You're broadly right. It is growth PA, so compounded is how I read it over 3 years.

I set out my expectation depending on outcome of DHSC dispute - all point to above £1 and some even more. BUT like I said, that's a moment in time and in the next few months we will know. The task of the Board is to keep it there and grow it! If they do, then fair play - take the award!

PI100, what you are saying makes no sense at all!

(a) This is a 3-year LTIP scheme - so, it is as much a retention tool as it is a reward scheme. It only vest at the end of measurement period ie 31 December 2026;

(b) The management team now have an incentive to deliver TSR of 30%+ PA over the next three years to trigger the 100% award......it is meant to be achievable whilst giving SH a decent return too.....

(c) Any talk they just get a nice bonus / bump post DHSC dispute (subject to outcome) is not right. Even with the bump, they have to keep it there and for the next 2.5 years!;

(d) They now have every incentive to drive SP higher than £1.38......I was concerned the new directors have little / no shareholding and with the closed period / sensitive time now, unable to buy even if they wanted to. So, I really like the fact they have this now;

(e) As people pointed out, it's not that many shares in total - enough as an incentive, not too big to cause a fuss re massive dilution.

All in all, pleased this has been done. Another piece of the jigsaw in a proper functioning growth oriented company. Over to you Lyn & co to deliver this time!

I think I mentioned before, one of the first things Lyn Rees did when he took over as CEO in Yourgene was to negotiate settlement of legal dispute between then Premaitha and Illumina.......removing "hand cuffs" as he called it. He also negotiated the restructure of Thermofisher loan with a significant write off / waiver from them.

For all his "sins", Lyn did get value of Yourgene to £100m+ before its ultimate fall post Covid......so, I am encouraged by recent appointment. And yes, I lost a tonne in Yourgene, but still support the appointment!

This action is much more than ISA new year.....

I suspect it could be:

- DHSC settlement;

- Significant commercial contract (perhaps from the Chinese);

-PLUS About time it recovered from an unnatural low.

All the best.

Hi Kaeren, good find. I don't know. The facility I was referring to and aware of is Port Coquitlam. This looks like another site. I can only surmise (guessing only), it could be a large enough customer who has adopted Ranger and Yourgene is supporting their in-house but outsourced implementation.........

Hi Kaeren, as far as I know, Yourgene Canada set up a best in class lab and factory in Canada. It was in fact launched with the mayor "cutting the ribbon". I remember it was expanding the scale in preparation for the increased adoption, particularly in the consumables (testing cassettes). I don't know if that capability has been emulated in other key markets, don't think so nor think it is needed.

In some of the other settlement deals, the DHSC shared in the IP of the Covid related tests / tools, given they paid bulk of its development / commercialisation. All I am suggesting is that for a win-win ie no one loses face, there could be a deal done whereby DHSC settles all outstanding invoices (no extra), but they also sign a preferential rate deal for all of Novacyt's tests or share of income, related to infectious disease.......just a thought. That's a win-win.

Doesn't Novacyt have portfolio of tests for insect borne diseases?

https://www.msn.com/en-gb/health/other/mosquito-warning-for-british-holidaymakers-as-imported-infections-return-to-pre-pandemic-levels/ar-BB1kvRQr?ocid=msedgntp&pc=LGTS&cvid=ceec1ae6717f4abd8bdbd175b34b7044&ei=14

Perhaps a deal can be done with DHSC.....?