The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
As I've highlighted previously YG was a £70m company even before covid, rose to a high of ~£135m during covid and was still valued around £60m well into 2022 with a net cash position of £3m, but their downfall came with the £5m loan they took on that year and a failure to reach profitability soon enough to give them any further options bar diluting to oblivion.
Now YG, alongside Novacyt, is part of a group that is debt free and has £44m cash that appears to be being channelled primarily into its side of the business. Does this guarantee success? Of course not but the chance of fulfilling the potential that many IIs have recognised in the past has ratcheted up many times. And what that success, according to brokers would mean, is a company valued in the hundreds of millions.
Then add in Novacyt's own portfolio and the potential for a number of small bolt on acquisitions alongside (and possibly big ones if the dispute goes our way) and you see how a 'midcap' diagnostics business is still a possibility here.
We’re entering ‘EBITDA exceeding current mcap’ territory now if POG remains high and forecasts are met
Well Joanne Mason was the Chief Scientific Officer of Yourgene so she essentially took over an expanded brief as the CSO of the entire group. Right now the board set up feels very positive. You have impressive individuals like Joanne, clearly capable entrepreneurs in Lyn Rees and you have the dull accountant types in James and Steve with tight control over the finances.
We're clearly not going to get any updates on the DHSC situation until there is some settlement in place or until a judge decides the outcome in June, they've kept tight lipped for two years so nothing is going to change in the run up to the end game. With that so close now I wouldn't expect many strategic updates but hopefully the next trading update will at least start to show the cost savings impacting our margins as well as hopefully further steady progress on the sales front.
There aren't many options for Chippas though at this stage. You either take as much cash as you are offered as often as you can and simply increase your chance of survival (continuing to earn a ceo salary and 9.33m shares a year) or you take the gamble and wait and hope that the share price catches a huge wave before you drown.
With the market's awareness of Argo's constant cash needs I doubt there will ever be the potential of enough of a rally to make the latter a risk worth taking so it probably is in his interest to just raise as often as possible.
Really it's a case of what comes first, running out of working capital or the next debt maturity deadline? As of 30th Sept they have $13.7m of debt maturing so only a small proportion of the overall debt but still a reasonably sizeable sum.
Unless they can raise enough beforehand to push both those things further back but we're still forever delaying the inevitable and it won't be too long til the fleet of machines will need to be replaced just to continue mining 50 odd coins.
How do you know he's still active on Linkedin? As far as I can see he never posts anything and only occasionally likes a post, the last being 5 months ago. Clearly not a tool he uses (but should, admittedly).
That's almost like an Argo default countdown too.
Argo's cash flow break even must be at what, around $6m per month revs? i.e $100k if mining 60 coins a month? Be interesting to see if this new ceo has some unexpected Ace up his sleeve but the outlook is grim.
Am I right in saying that Argo is going to see just over two weeks in April pre halving and just under two weeks post halving? So we'll see something like 110BTC mined in March, 85BTC in April and maybe 60 in April?
Why? Yourgene was valued around £70m before covid even existed and now they are a debt free part of this group... There will be a lot of interest in a diagnostics company fully cashed up with no funding requirements, so once the dispute is behind us.
That 'wee rally' is coming soon.
Yes fre I'm hoping the next rns relates to the $2m being received and with it a declaration that no short term cash funding is needed (but still securing the credit facility) - that would give a healthy boost to the share price.
Well if they can keep up the momentum and get the share price at least back to where it was in Jan i'd happily participate in a small placing for the other £1m. Not the end of the world if that's needed for ramp up.
Exactly. This rns certainly isn't enough for a rerate but if we get news that the $2m has been received, perhaps an update on NED/CFO appointment and also further uptick in graphite prices we might just see some momentum into the full year results due late April/May.
So I was going through the numbers in the updated broker note and it does capture some of the Naira devaluation but for 2024 they forecast 806 to the dollar when right now we're actually seeing just shy of 1600 to the dollar - that's a full 50% depreciation against broker forecasts. Again it can be assumed that Nigerian inflation is factored in as the report is recent.
Operating costs are expected to be $109m in 2024 according to the note, I wonder what difference this is now going to make - could it be tens of millions in extra profit?
This is a positive ‘business development update’ - we know they are looking for £1m cash in the immediate term, from a working capital facility / the long overdue vat rebate, whichever comes first.
Do you want them to keep repeating time and time again ‘we need cash!!!’ ? We know it, that’s why the market cap is at 30% of its net asset value but considering that’s the case today is a positive update (and the share price is up)