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We all know that lockdowns damage the core business as well so what is happening in the world is unlikely to improve NIPT sales.
I do not believe we will hit £25m sales in FY21, particularly as COVID-19 testing has not taken up enough of the slack.
But I believe in the company in the medium to long term.
We must be very vulnerable to a takeover right now and that is one of the risks of failing both to communicate properly and to deliver on expectations, leading the share price to languish.
Healthcare M&A is very strong at the moment and is expected to continue that way into 2021. I wouldn't be surprised if someone takes us out soon and then our misery will be over.
Totally agree with all the comments about poor communication and I think it has deteriorated.
One example, last year the company gave us notice of the half year results on 12 November but we have had nothing this year so far and it is one week later.
What is holding the Board back from improving communication and giving more news? Can’t be share options or the employee incentive plan any more surely? Recruiting 20 odd staff is noteworthy so there must be something to shout about but I can’t work out why they wouldn’t want a higher price to reflect progress, improve sentiment, reduce the price paid for acquisitions etc.
I think given the poor H1 revenue numbers we should be bracing ourselves for a loss of at least £1-2m when results are announced in December.
The full year revenue forecast has been maintained at £25m so we need guidance on that number to be reiterated.
If that number is achieved I’m sure we will see a profit for the full year but expectations need to be managed for the half year.
When are we going to get concrete news on Clarigene sales?
We were told many, many weeks ago that 500k units had been produced and 10 clients were evaluating the product but there have clearly been no material sales yet.
What is holding sales up?
Even at the end of May, the performance of the NIPT was still not a cause for concern and indeed growth was still expected at this stage even though all the damage occurred during this quarter:
26 May 2020
“The core molecular diagnostics business continues to perform in line with management expectations and remains on track to build on the strong year end performance announced in the trading update for the year ended 31 March 2020.”
“It's also especially pleasing to see that the main growth drivers of the business remain on track and with approval for our new Illumina platform NIPT just around the corner I look forward to providing further updates on our exciting new product development pipeline."
There was still no mention of the issues in the core NIPT and international businesses at the end of July when the poor sales figures must have been known, with growth still expected to meet ‘ambitious’ levels:
28 July 2020
“The Board remains confident that the Company's growth trajectory will continue and remain on track to hit ambitious growth targets for 2021 in line with consensus expectations.”
“We are confident in our outlook for the year ahead, even before potential COVID-related product and service revenues, and we are very excited about the prospects for further growth in the coming years.”
In the company presentation at the end of July the talk was again of the growth trajectory continuing (+86% for the 2019/20 financial year, not 5%!) and full profitability was very close. It seems likely now that full profitability will not be achieved in H1 2020/21:
28 July 2020
“Market forecasts for 2021 and beyond see our growth trajectory continuing and heralds a move towards full profitability in the near term”.
Even at the end of September when the damage was clearly known the talk was of resilience, not of double-digit sales declines in the core business:
22 September 2020
“The new financial year started with much of the world in lockdown, however our core business has proved resilient”
We now need to do £17.6m in H2 2020/21 to meet the broker’s full-year forecast. This is more than the whole of 2019/20. This leaves us very vulnerable to a profit/sales warning in the next six months, particularly when it is uncertain how the virus will affect the business in the coming months.
For me the investment case has been undermined since yesterday’s announcement, as has the credibility of the Board. The investment horizon just got longer as well. I will be looking to reduce if the opportunity arises unless the Board can quickly deliver something spectacular and show it has learnt from this.
I have been reviewing yesterday’s trading update and it is clear to me that investors have not been properly informed about the performance of the core business.
The revenue declines in the key NIPT and International segments have never been trailed and the results are truly shocking as a result.
These results may be understandable in the context of a global pandemic, but they have never been mentioned so have come as a surprise. When I opened the RNS yesterday morning I thought I may be disappointed by the COVID numbers, but not the core business and overall growth.
Growth of 5% is also total growth, not like for like, which the Board has conveniently overlooked (in spite of mentioning it in all other trading updates). I suspect that if you take into account the impact of the Elucigene and AGX acquisitions (ignoring the minor impact of the EX5 and Coastal Genomics acquisitions) as well as the £0.4m of sales that rolled into 2020/21 that organic growth was probably down 5-10%, a figure that would have been even worse without the contribution of the COVID-19 testing.
Some posters bleat about the disappointment of investors with the COVID-19 progress and others opine that dissatisfied investors should sell, but the former overlook the importance of the core business, which is the main element that should matter to investors as emphasised by Lyn Rees, and the latter are ignorant, selfish fools.
It is my view that the Board and Lyn Rees have either made at best a serious error of judgment here in not telling us about the performance of the core business or at worst have deliberately misled us. This is a large black mark on their reputations for me.
I have outlined below all the comments about the core business from the RNSs and presentations since late March 2020. Firstly, you will note in yesterday’s RNS that the main damage to the NIPT segment occurred in Q1 2020/21:
26 October 2020
“Non-invasive prenatal testing (NIPT) was affected by the diversion of laboratory testing capacity towards COVID-19 testing in many of the Company's core markets, especially in the first quarter. The second quarter saw a return to more normal trading patterns with strong momentum entering the second half.”
However, the scale of the damage was not obvious at the end of March:
25 March 2020
"Business demand for our core products and services is proving to be very resilient to current market conditions, albeit with isolated areas of friction for travel or customs restrictions.”
The damage that was being done to our international business was still not clear at the end of April:
20 April 2020
“Our core South East Asian markets have so far been very successful in containing the virus and avoiding restrictive practices which might have otherwise inhibited our business there.”
“The Group remains well funded to achieve its objectives and we are confident that our business remains robust going into the new financial year.”
Totally agree with you Twix.
Let’s take off the rose-tinted glasses and be objective.
For me that was a shocker of a TU and well below expectations.
I even feel misled by LR who assured us that core trading was strong.
Falling international and NIPT revenues clearly demonstrate that was not the case.
5% growth is not good enough. Declining NIPT revenues is not good enough when reassured otherwise. 20,000 Covid tests per month from January is not good enough. There was no reason to delay these results other than fear of the disappointment they would cause.
An absolute shocker for me against expectations.
I think it will be tomorrow.
10 working days into October like 2018 and 2019.
And it's my wife's birthday tomorrow so after the statement and the meteoric increase thereafter I will finally be able to tell her about why I invested so much in YGEN at a 14p average!
I wonder who the 2 employees are who got the options yesterday? 2 doesn’t sound that many. Will there be more? I’m glad they are now incentivized on this basis and 18p seems a fair price given recent trading.
Previously there was some speculation however that the price was being held back for this. Not sure how that is achievable but if so and there are no more options to issue then let’s see the share price accelerate. Lord knows there has been enough good news recently and seems to be much more to come.
I agree it’s a reasonable amount. I can’t work out how they got them at 17p though, I didn’t see them at that price all day to buy!
There has been some speculation that the share price is being manipulated so that employees can be awarded share options at a low exercise price or directors can buy shares at a low market price following the recent placing.
Whilst I don't know how that can be achieved legally or practically (would love to hear theories) the share price response to what seems to be excellent news is certainly suspicious at worst and detached from (what seems to be from announcements) underlying reality at best.
If share options are issued or director share purchases announced at these low prices I do believe we have a legitimate grievance that needs to be aired.
Is 7% the norm for placing fees?
£1.15m as we are netting £15m from gross of £16.25m?
Twix, you are an oracle, so right about the delayed publication of results! Well done for calling it.
More over-promising and under-delivering!
And now there will be speculation as to why there is a delay, albeit minor. An explanation would have helped.
Meanwhile, the share price continues to languish.
I’m not sure if everyone is getting excited about nothing.
Motio Bio plc had no direct loan with Hercules, it merely guaranteed the loan Hercules provided to Motif Bio Inc, its wholly owned US subsidiary that owns Iclaprim.
As part of the restructuring in late 2019 Motif Bio plc agreed with Hercules that the guarantee would be removed and that Hercules would have a full charge over Motif Bio Inc.
I think this is just them tidying up the paperwork in that the guarantee to Hercules by Motif Bio plc no longer exists.
Motif Bio Inc still owes Hercules $7m as far as I can tell.
This is why there was no RNS. Either they had forgotten to do this before or all the conditions have only just been met.
Of course it could be a precursor to the sale of Iclaprim and/or an RTO for Motif Bio.
Except if you look at Lamellar's website and Companies House, Wardhaugh is not disclosed as a NED?
Am I missing something?
I know it’s a bit late (been trying to save my own business from the impact of the coronavirus) but I thought the trading update was pretty mediocre myself so not surprised by market reaction, although still lots to look forward to in terms of approval of our CE mark application and our involvement in the coronavirus testing manufacture and analysis.
Organic growth down from 56% to 36%
Still missed the £17m forecast even with the £0.4m that fell into 2020/2021 because the results included a 3 week contribution from the French distributor
No mention of positive EBITDA
Nearly ten weeks now since CE mark submitted
Im still holding over 1m shares here but wonder when we will ever catch up with our potential.
Why is it taking so long to appoint a director to oversee the sale process? Very worrying.
And I would have thought a 21% drop on no news the other day was worth an RNS to respond to it?
The directors are a shower of ****.
I think we need some news now to propel us further ahead.
It would be great to have an RNS confirming the Illumina NIPT test has been submitted to the regulators for approval.