Member Info for HarChris

It IS relevant to mention Avacta here but not because it's a similar company, it's relevant because Avacta highlights just how crucial it is to be cashed up in this environment. I've certainly never experienced a climate as bad as this for raising funds (I wasn't investing during the 2008 financial crisis which was probably as severe) .

Where does this place Novacyt? It places them very damn well as a cash-rich business looking to grow through M&A in the months and years ahead. I think we're going to see diagnostic companies with rather solid technology and IP going to the wall and being brought out of administration for a fraction of their otherwise fair value.

It's even possible to see companies as successful as Biosynex or EKF run into significant trouble and end up merging with Novacyt in a cash for assets type deal.

And let's not forget Oxford Nanopore, the government reneged on their contract with them before Nanopore had even supplied a single test and then later settled the dispute by paying out £50m.

https://www.pilling.co.uk/home/profiles/news-and-research/external-news/article/?category=news-and-announcements&slug=oxford-nanopore-strikes-pound50m-settlement-over-uk-government-contract&story_id=9508074#

I don't agree with the majority of what you say and will never stoop as low as to throw out wild unfounded serious accusations I do now think we're at the point in which Shishir, if there is nothing untoward going on behind the scenes, has to come out and share that with the market. When your valuation falls to a quarter of what you claim your net asset value is and it happens as rapidly as it has (60% from the start of 2024 alone) then you have a duty to quell the uncertainty and fear.

This is well past the point of silence being golden.

Nigel they started this year with £290k so it's no surprise they are close to the margins. They will still be operating at/around break even but there's just no room for anything else, including crucially the CLN repayments (one in which was due and paid in Jan) hence the £1m raise.

The equity raise document last month includes this: 'The Company is engaged in discussions with a range of prospective lenders, aiming to secure additional funding.' so it's still the plan but obviously the market isn't convinced they are going to pull it off.

That's not a surprise, the company has raised and invested, if we include the Suni Acquisition, close to £35m (with £2m debt on the books) since IPO a few years back against a valuation of £8m now. Turn this around and those buying down here will make multiples of a return but the management are making this a blind punt right now by keeping us in the dark.

Yes the share price is down due to fear of the worst following another NED resignation. That's not the same as the company actively replying in a way that makes you feel the need to sell...

Mayu would you be willing to share the response you got from the company on here, seeing as it's supposedly the reason you now think this is a sell?

Mhow, I've turned too. The ned resignation was the straw that broker the camel's back after doubts have been creeping in for weeks. It's simply not good enough for Shishir to tell everyone privately to disregard the disconnect in share price and blame it on misconceptions and false rumours and then fail to put out anything to prevent it.

Https://www.chemanalyst.com/NewsAndDeals/NewsDetails/us-graphite-price-surge-amidst-limited-supply-and-increase-demand-25604

No doubt that the blame falls squarely on Shishir and the management here, they're allowing negativity and doubt to snowball. Getting to the point where a buyout from the Poddars might just be a reasonable result for long term holders, after all they'd have to offer well above today's price if they themselves are claiming net assets to be £30m currently (equ. 24p per share).

It gets worse:

5 Feb 2024 08:02 - Poddars jumping ship to take the company private

28 Feb 2024 08:58 - My 17k buy today showing as a sell

Now wait for it

29 Feb 2024 11:06 Guess the date this goes under

Who buys more shares and then spends the following day calling for suspension and failure? Strange.

The broker left following the placing in which they were cut out of, so it sounds like TGR weren’t happy with them and they forced them to resign. Hermant stepping back in an attempt to professionalise the company and distance itself as a family run business but Isobel, who knows.

Time for an update Shishir, we’re shareholders not mushrooms.

And more than that, all senior management took shares instead of fees and salaries and Murat Erden bought £50000 worth of shares.

Makes you wonder why institutions dug into their pockets and paid over £1m @ 11p just last month if this is a busted flush?

A lot of work to be done though to regain the market's trust.

WBAFC, I am reposting GLTader's excellent post from yesterday and including the likely cash position given each scenario, which answers your question

______________________________________

Scenario 1: Goes to court, Novacyt wins > under this scenario, I fully expect Novacyt to return cash to shareholders (versus buyback). This is because shares in issue only 70m so not big, and shareholders deserve it! A one-off dividend of 50p will be the minimum I expect in this scenario, leaving plenty of cash in the business to deliver a profitable business. Cash position ~£125m

Scenario 2: Settlement in favour of Novacyt, but not full amount. Depending on settlement amount, I also expect a one-off distribution. Cash position ~£65m-£85m

Scenario 3: Settlement at NIL liability both sides. This will still mean a circa £8m VAT reclaim, improving the cash position of the company. With the clarity, I still expect a small distribution, perhaps 10p, with the remaining cash used to deliver the growth needed to become profitable. Cash position ~£48m

Scenario 4: Settlement in favour of DHSC. Novacyt will not settle at any values that will compromise its going concern. So, I imagine it will be max £8-10m, countered by the VAT reclaim. Even so, it will pave the way to a clearer future. Cash position ~£35m

Scenario 5: Goes to court and Novacyt loses. Subject to appeal, game over.

Whilst a possibility, scenario 5 is the least likely. No good for any parties, and for the remaining cash, to put 250 employees out of a job is not something the Court will take lightly. Perhaps even in this scenario, there might be a negotiated lifeline.

The more likely scenarios are 1 - 4, and in my view, any of these will move our SP north of £1.

*Scenarios 1-4 leave NCYT with a higher net cash figure than today's market cap.

Good news re SPR but with Acacia's delayed $3.5m to contend with as well it leaves more questions than answers following what was a fairly vague rns - and considering the $20.6m ($8.1m + $12.5m) was like pulling teeth it's hard to feel at ease about the rest of the money ($13.2m for vanchem and $25m-$30m debt facility), cash BMN need to enact the strategy Craig laid out in December.

Still, we take the positives and live to fight another day!

Mhow, simple answer to your final question... Shishir doesn't work with women that aren't his family.

Ha i'm joking. Tbh there's a reasonable explanation to your question. Christian Dennis is the CEO of Optiva, TGRs broker. It's pretty normal practice for brokers to be on-site.

This NED exit is not a good look just as corporate governance looked to be strengthening though, and when sentiment was at an all time low already. We very much deserve some news and accountability soon.

The board was looking healthier after TGR founders Hermant and Christian stepped away and Murat and Isabel joined so it's frustrating to see this - obviously some conflict behind the scenes over the direction the company should head in, hopefully all will be revealed soon.

Worth remembering that for all the positives SRB has going for it (net cash, low capex to double production, Vale partnership etc) the one noose around its neck is its relatively high AISC - movements in POG immediately impact the bottom line to a greater degree than its peers.

Heading towards $2050/oz is therefore a big deal.

I still don't see how comparing TGR, a nascent producer with a long established producer like Galloise is fair or even handed? 'The Gallois mine has never stopped producing over the past 120 years.' and they were producing 60000Tpa in 2017 so if they have ramped up to 100k over the past seven years it's not all that miraculous.

As for my point re other listed graphite companies I wasn't talking about explorers, I was talking about producers. Your throwaway Galloise stat gave the impression that this is a simple to operate business which TGR is failing at when the reality is quite the opposite, this is a sector that almost all but the long established players are failing in currently.

Whilst it doesn't make for a compelling investment case TGR are in the majority rather than unique with the issues they are having.