RE: Soder27 Dec 2020 09:38
I have a background in AIM regulation and the question of whether a statement of improved prospective results is required if they are outperforming the base case has had me in logical knots! Soder is of course correct with his statement and approach to the rules and there is no question that any likely underperformance would need to be released but I think that lots of other valid points have been made about the judgement call required, Kaeren and ButchersBike in particular. What the judgement call must centre around is ‘forecasts’ and I think the company have given themselves a great deal of scope to go beyond the base case without making an announcement of it. As suggested, Numis and SPAngel would have sat with the company and had more concrete reassurances than us about what modelling figures made sense - but this would have happened before the note was released and the second wave of the virus hit so badly worldwide. The ‘step change’ in the broker note is the second phase DHSC contract which completely changes the ballpark, that would need announcing but has either been not officially given or possibly been fudged via extension of phase 1 (the £406m?). We have been told that manufacturing has been increased 5 fold, with potential for more, had positive R&D statement, indicating good progression with care homes etc. New products. The market is aware of Versalab (albeit not through rns and I agree with Soder, not necessary). It is aware of partnership with Wren and of the huge number of ads for new employees. Adjusted tenders with higher values have been published. Logically this all points to better sales figures even though they don’t seem to have pushed the share price up! I think lots of different strands increasing sales and profits for the year and beyond could be happening and not be announced although there has to be a limit to this, certainly once they start to push through 20-30% higher than the brokers forecasts..
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