The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Errrrr......is that it? I could have told TW that!
From my projections below, I expect us to be net cash of c. £0.5m end 31 March 2023.
With revenue H2 weighted and costs H1 weighted, not surprised really!
Nothing wrong with that.......
The tech validation process takes time in our business / category.
Eyes will be on us given various university research results, plus Labcorp, Ambry and 2 other megalabs. I wouldn't be surprised if takeover is being discussed already at buyco level (business case) and then swoop.
Re finances, we had £8.4m as at 31 March 2022.
We already know we are on track to deliver FY revenue expectations, with based on the comment of "£9.6m being over 40% of FY revenue" indicate anywhere between £21.3n - £22.3m I reckon. @ GP% of say 56%, we have circa £12 - £12.5m GP. The savings of £5m is approximately 1/3 of total OPEX, so say OPEX in FY2023 is £13m (ie not full year savings) + one off restructuring of £0.5m, we are then -£1m EBITDA.
Given the comments from company, they will manage WC and discretionary investment IF needed. So, assuming they counter each other, the loan repayment of £1.7m + interest = £2m.
This leaves year end cash balance of £5.4m.......and for prudence, say £4m!
We then expect to turn EBITDA +ve in FY2024 and that should fund loan repayment and investment (if needed).
If we generate 30% growth in FY2024, that will deliver £5m EBITDA assuming same margins, full year savings and no more one-offs. So, I don't see why we need more cash!
And if we are growing Ranger + NIPT significantly in US, we can get financing for growth another way.
As I previously said, Ambry revenues should be in excess of $5m alone!
Madness really, on low volumes and from what I observe over the last days / weeks, mostly buys!
Our market cap today of £16.4m is less than the acquisition prices of Coastal, Elucigene and ADX added together, let alone our NIPT business.....go figure!
Yes, based on improved working capital management and restricted investment activities.
And if needed for growth plans, then alternative funding mechanisms versus placing due to low SP! (eg below)
Yep Davand.
I remember Thermo bankrolling us when we were under litigation with Illumina. That was obviously strategic.
I wouldn't be surprised, if Ambry starts to get a feel of both reproductive health portfolio traction their side, and YGS oncology services our side, they will be prepared to bankroll us too, IF needed.
We know Lyn has done such deals......
Yourgene is positioning itself as THE fetal fraction enrichment company leading to superior NIPT workflow & testing solution, which can be expanded into oncology, infectious disease, gene synthesis and RNA.
Due to Covid, the growth expansion plan was subdued / curtailed, and only now reignited at force.
We have signed up 3 megalabs in 2021/22: Labcorp + 2 other. From what I can make out, Labcorp focused on oncology, one of them in reproductive health and the other on non-Covid infectious disease. ALL of them have the opportunity to expand across segments as per the RNSs. These megalabs have stringent embedded processes. Validation takes time but I am very confident, once validated, our tech will be applied across all their tests. That alone will be huge. We are at $2m per annum run rate already.
2 have remained anonymous due to competitive advantage they feel they want to preserve. This buys them at least 12-18 months headstart. Let's be clear, if I didn't have plan to adopt it across my entire workflow and gain an advantage, I wouldn't worry about staying anonymous.
I said Ambry contract alone is worth our market cap. Add EKF and the 50+ labs around the world. Plus YGS.
Our SP confounds belief. I have said before and will say again, if this continues, we will be taken over. Just hope it will be at least 10p.
These positions all signal growth in operations. So, supports the back to growth in core business we have been told. I really think the Ambry contract and extended partnership alone is worth our market cap!
Waiting for contract news (with upfront licensing fees ideally) and/or statement re possible offer.
Yet again this BB outdoes itself with conspiracy theories!
Yes - I sat next to our largest shareholder and DIRECTOR of the company. He confirmed he has not sold any to my question re rumours of him doing so. In fact, said not until above 25p! (it was c 10p then I think)
Many people, for personal / tax reasons shift holding to a company - that does not negate the need for disclosure of shareholding change. Whatmore for a director!!
Please remember, Bill Chang added 510,000 @ 17.5p back in Sept 2020, to his already big holding.
And Lyn, Barry, Hayden, John Brown, BGF etc all added at 17.5p - 18p back then!
Amati joined us in that round and remains.
There probably is a seller but until notification given, it is not any of our major shareholders.
Perhaps ex-employees, perhaps those earn out shares, perhaps, perhaps, perhaps.......
I still have, together with people I know, 3%+ and holding / adding.
All I know is that for a business and where we are, we are worth more than £19m even in a distress sale!
Goodness, we do make things up on this BB!
Re company silence: I think the company will say they have been very vocal - trading update Jan, CMD April, FY update April, Final results July, AGM Sept and most recently interims update last week. I am not saying they can't be better with their RNSs, but they have updated us a lot this year on developments - which has all been positive really!
Re state of play: We know core is BACK TO GROWTH. We know Ranger has picked up 3 x megalabs, including Labcorp. We know NIPT labs installations had >40% growth this year (50+ now). We now EKF installed and ready for samples. We know Ambry is starting marketing. And we know we will take Ambry's world credible oncology into our YGS offering. We also know, in not so many words, there will be no placing. They will manage discretionary costs.
Re SourceBio: Very different structure. 70% owned by three parties!
Re SP: NO idea why we are here and we can all have our theories. Bottomline, do you think we are worth £19m or more? If more, then take the opportunity to snap up more shares.
This BB sometimes exacerbate matters by coming up with conspiracy theories. Until proven otherwise, we are a company back to growth, after Covid derailed plans albeit allowed us to generate funds for investment. Do read my "Overdone" post. It's all I got to say.
Bottomline - we are not a £19m market cap business!! 3 or 4 times that wouldn't be an overstatement.
Looks like someone accumulating in 250k lots?
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!