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Was wondering if this is our Martin Lang…
https://www.investegate.co.uk/frontpoint-offshore/rns/re--directorate/200403051612222215W/
https://www.sec.gov/Archives/edgar/data/1756575/000131586319000875/xslFormDX01/primary_doc.xml
Feels more like a carrot to for when a sale gets done.
Think most folk would expect Hvivo to be acquired this FY, so 3 year targets become arbitrary.
Agree could have more bullish targets and start from current position, but suspect Hvivo will be 25p+ in the next 3 months given likelihood of hitting £60m+ this FY, UK II investment, potential APAC investment as profile grows there etc…
Think site expansion (or not) could be telling - if they need more space at £65ish mn, would need to be doing something later this FY, will see whether they look to do so…
Would be intrigued if abdx are talking to these guys, both York based…
Worth a listen
https://m.youtube.com/watch?v=RH09hd7oZWo
Clearly you can sell quicker, but you are then either hitting the share price or need some news flow to generate volume.
(may be that he had no intention of selling further and was just de-risking a little…don’t need to be binary calls)
RNS shows 2.1% holding still.
13/12/22 RNS shows reduced to 3.72%
So roughly 6 weeks to drop 1.6% (granted Christmas in the way)
“If” he’s planning on exiting completely that would be another 8 weeks at current rate (or am I missing something?)
Been in and out of this share (currently out) but keep coming back to it…it’s a bit like Stockholm syndrome…
We all know that on good news this will fly, and noting the execs financial commitment…but still twitchy about the numbers…if people are just in to trade (which makes sense given SP action in the last few months but wanted to get views on wider performance).
I get the movement towards CDMO activities but assume it’s a competitive market, and gross margins will be 20-30% rather than 60-70%.
Direct costs in their preliminaries were really high which I am hoping is legacy costs of covid activities.
Moving beyond Direct costs to Opex…
If they’ve cut staff down to 60-70 people (note they have recruited again recently), fully loaded salaries must be a minimum £30k as an average, so £2mn per annum.
Their administrative expenses to jun 22 were £6mn. Staff reduced from 130ish to 70ish, so if I assume 130 last FY, that’s £4mn ish staff costs and £2mn wider costs admin costs (they don’t state a breakdown). So £2mn admin costs (might be a bit lower now) + £2mn current staff costs = £4mn per annum, which ties in with the exec view they have a runway of 12 months from Dec, given a £4.4mn cash position.
So…if you need £4-£4.5mn Ops costs p/a and have a GM of say 25%…they need sales of £20mn just to breakeven…last FY £3mn sales.
£20mn rev - £15mn Direct costs - £4.5mn Opex. = BEP approximately…without that they’re still eating into their cash…
Not to say it isn’t doable, if looking at manufacturing contracts but a critical 3 months to secure sizeable contract wins. That creates some SP momentum so any future raise isn’t as dilutive, but gives them a platform to become cash flow positive next FY.
Happy to be corrected here e.g. size of contract potential, GM% etc…
Just my general thoughts…
- Dividend whatever guise seems to be sucking up more energy than necessary. It’s just background noise in this market, we’ve just swung from 16p to 17p today - c 6% (divi equivalent).
- Focus should be on a set of numbers that are really positive and a great outlook, and some now clear momentum upwards and II interest.
- The capital investment for new beds is a moot point as we still have 30% upside from here, and I’d be surprised if Hvivo is standalone at that point.
- From memory, it was around £1.5m to stand up additional c 16-20 beds so not going to make too big a dent.
:-)
I think this is a compelling industry and it looks like a strong management team that has been pulled together.
The information with regards to potential commercial performance though is too limited at the moment in my view:
We know 1st fit out is underway, which I assume is for the whole 40,000 sq.m in phase 1 (of the 195k sq.m in total).
I think they have approx £2.5mn after IPO funding, but a significant build out is underway, and difficult to know how far progressed that is:
- 14 buildings
- Security
- Post harvest processing area
- 200 tonne water tank
- 5 overground bunkers to renovate
- 3 storage buildings
If they were already well underway, there’s a cash run way through to sales, if they’re still early stages I’d think that would leave funding tight, but recognise this is in Greece so funds will go further. It would be useful to get an update to understand what is left to spend to have the site operational.
It would then be useful to get an indicative view on margins for the product - factoring in security, operational staff, energy costs etc… (not sure if the solar installations would cover all energy requirements) etc…
The number of growing cycles and production volume info has been provided, which is good, just hard to be clear on potential - clearly investors saw potential at 30p a share, so a lot must see potential at 10p… but would be good to get some more insight of their plans…just imho…
I’d be very surprised if someone sold down in those volumes just because there’s a slight delay in analysis. It’s gone from <1mn shares traded a day to 9mn… I would have thought it’s a strategic decision to step away from the company / sector. (or they have a very large tax bill due ;-) )
Feels like a very good entry though for folks given FY23 activities…imho
This “could” be a great investment…but there isn’t any info on which to base it…I know there was a prospectus giving some insight, but insufficient to make robust investment decisions on…until that is forthcoming or fundamental news, it will drift…but given the mkt cap is now 1/3 of the launch price, I don’t think that will be lost on the board.
They appear to have a strong team in place which I take as a real positive, but think there’ll be investors on the sidelines waiting for more clarity.
While the SPAC element was a pain, I don’t think it’s the SPAC per se - look at TLSA and Accustem, wasn’t a SPAC, 2 years to spin out and still not launched. Economic climate and regulatory loopholes here wouldn’t have helped. Just imho…
A 0.25% change in base rate drives a 15% share price fall…
TSX is only down 0.4%…
Something else going on, big chunks have gone through all day…
Not necessarily thinking anything dubious but very odd…