Member Info for HarChris

@byp I agree with you re EKF on the whole, I just vehemently disagree with you that novacyt should now more or less be valued based on pre-pandemic financials - there are risks ahead and there is no guarantee of ncyt developing into a half billion pound+ company but the massive cash pile and business expansion over the past eighteen months gives them way more of a fighting chance than you appear to be giving them credit for.

As you say let's move on from this and hope I am right on this one and you end up being wrong.

Perhaps you think Graham shouldn't have reported the absolutely mega deal they had just won in case he was called a ramper?!

Yes just a coincidence I think but fair play for going to all that effort!

@byp, re your view on Graham 'ramping' the hell out of the share in order to maximise his bonus before losing interest or whatever afterwards, how does that square with all the other covid companies that also saw extraordinary gains in the same period before dropping off in 2021? Did they also all have LTIPs that were vesting in late 2020? Or could it be that mid to late 2020 was a totally different time where the stock market was crashing and anything considered a 'covid stock' saw exponential rises? And as we were in the thick of it there was a hell of a lot more news to report which created excitement and momentum???

I feel less warmth towards Graham at this stage for different reasons but I see no justification for your claims that you are constantly repeating. Coincidence vs conspiracy.

I know it's a little different when down at such low market caps but interesting to think that ncyt were valued at 7 x cash pre-covid, yet they had £6m debt and were unprofitable so very likely to see that debt balloon until eventual insolvency.

Now valued at 1.5x *net* cash.

It amazes me to hear folk say they are now reducing at this price and I say that as someone who would never have said that at £6, £5, £4 etc - but at £50m for the entire business even if it drops another 10% from the news void it will take absolutely nothing to see pretty big sizeable returns from here.

And yes that's no consolation to those with huge averages but this message is aimed at those only now reducing after months and months of decline!

That was meant to say the ~80p (£2.20 - £1.40) above net cash is what are currently being valued at for all the things listed below...

Something that was going through my mind earlier and (to me at least) an interesting thought experiment to try to make sense of today's valuation...

Let's rewind back to mid January before any covid related news or spike, the share price was 15.5p giving a market cap of £11m - £1.5m cash and about £6m debt. If instead of the covid pandemic unfolding imagine novacyt announced the most unusual news that a beneficiary had left novacyt £100m, wiping out its debt and leaving it with £95m to develop a cutting edge diagnostics business what do you think it would have done to the share price? I think it would have temporarily spiked to around today's share price before drifting back down to cash level - around £1.40 a share.

Today's £2.20 is therefore how much premium we command for having shown such agility in beating all others to market during the pandemic (with merely £1.5m cash) rather than just a massive £100m free handout. It's how much premium we see for all the business expansion achieved over the past 18 months, for the new board in place more suited to building a midcap company, for the international supply chain, new global partnerships and distribution channels, for all the new tech already approved, for the continuing revenue we will be making next year from covid, for the changing face of diagnostics in which we will play a part in (especially bioinformatics). It also doesn't account for the tens of millions either that we may well be reimbursed by the DHSC.

This to me is kinda mind boggling.

Cross ramping? I don't think I've ever said anything positive about EKF - cross deramping I suppose.

There is a comparison, EKF are a UK diagnostics company that have directly benefitted by selling POC covid tests and equipment - the fact that their share price has grown so much is a sign that the market does believe that these boosted covid-infused revenues will remain high into the future.

Can't argue with that, we are down here because of the uncertainty but there's reason to believe that the CEO hand over will change this in due course. What I find particularly interesting is the growth in the EKF share price thanks to the pandemic - they are a good 150% higher now whilst revenues grew just under 50% and profit was only back to where it was in 2018. Cash levels at the end of 2020 were just £10m higher than they were pre covid and yet the mcap is £230m higher!

In other words the market is believing that this covid spike will be maintained and built on whilst our gains will be continually eroded... maybe we will turn out to be wrong but I'm happy taking my chances.

I've seen the comparisons with EKF popping up once again and the very fair argument that they are valued at more than double us because they've proved high revenues for many years prior to covid - that I agree with, EKF deserve a higher valuation as of today but that isn't the point, the question is who is the better pick today - EKF @ £380m or NCYT @ £155m???

Pre pandemic EKF turned over ~£44m a year (with tiny growth yoy) and novacyt £13m - not world's apart. We've had the far more radical transformation over the past year and we now have a cash pile around 4 times higher than they will do at year end... we also have an international reputation and partners that we obviously did not have before.

I think there's every chance novacyt will be the bigger business in two years time.

I completely disagree with this - the biggest fear I've had in recent times as I've gone balls deep again in this investment is something dodgy being unearthed, whether it be a bribe, whether it be a novacyt board member's link to a Tory minister etc etc a scandal along the lines of Randox. What we now can probably say is that private eye's investigation into all this brought up nothing, there is no dirt on novacyt besides what's already out there in the open, that this small company made a fortune through its first mover advantage (and higher margins that are consistent with the industry).

It's one big sigh of relief for me.

Agreed DRB, it makes no sense why it wouldn't... there is a lot the company can do with £100m in a growing diagnostics sector and with their ever growing reputation around the world - if they fail to whip up some market excitement over the next year then they really are an incompetent board!

The amount of money spent by the government on our high quality tests is but a fraction of what they squandered on the total failure that was 'test and trace'.

Sure but there is nothing in this that is particularly bad press, we know how good the profit margins were last year, they were in the financial accounts! It doesn't seem that novacyt did anything underhand or got the contracts through special relationships - just first mover advantage.

Anyway thanks a lot ak for sharing the text with us all.

Yes but it also reads that all the money made by novacyt was from the two DHSC contracts, in particular the massive second contract - this is far from the truth.

Not an issue whatsoever then and nothing we already didn't know.

You're the one with the scoop - you tell us!

Yeah it's a good question and one I think needs to be addressed but it's not true that no rns equals no significant news, it just means no news that the company deem legally rns'able...

It's not strictly true that anything that might affect the sp will be communicated immediately as there have been many smaller contract wins that almost certainly would have affected the share price if RNS'd yet weren't.

Even an RNS from the new CEO saying hello with a few paragraphs on his ambitions would probably spike the share price!