RE: The outcome will unlock the course27 Jun 2021 15:26
Although it's true that comparing EKF and NCYT in the way Porky has is misleading and the point about qualitative value is a valid one, the comparison is still enlightening. If novacyt had merely made a few million to pay off debts during the black swan event with a few more million to try and grow the business then what Triumph just posted would be spot on but they didn't, they made more money than EKF probably will in the next ten years. This stands for something, this is relevant. It is not easy for loss making companies to turn things around without money, money the company now has as well as fresh blood in the management team, people with expertise and experience that novacyt did not previously have.
Of course it is possible that the company makes a complete pigs ear of it over the next few years and the current valuation is justified, but the odds are surely against it and that's what it comes down to when valuing a company. I'm pretty confident soon the potential will be acknowledged and at the bare minimum ncyt and EKF will be valued more or less identically.
Fast forward say three years, there's a good chance EKF will be profitable and making around £15m a year. If you think novacyt will be making £15m a year by that time then you'd expect the valuations to be more or less identical, that's a 50% rise vis a vis EKF. Is that difficult to believe or a fairly conservative outcome? Most on here think ncyt could be making multiples of that but when you put it in that light you see that the upside is extraordinarily high with quite mediocre financials by 2024.
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