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Well, I've just returned fresh-faced to the Novacyt bb after kayaking for a few hours against the Norfolk wind. I’m totally taken aback by the response to my post from yesterday evening (33 likes!). Thank you for all your kind words, Kaeren, Saintsmsith, Porky, Batman27, VanV and Gazman 23 - completely unexpected.

@gregreen - glad you're hanging on in there. What I’m saying is that, just because we’ve been in some considerable time, it does not make it any time to be selling. Remember, the climb up that huge mountain is a long, arduous, undulating and, at times, foggy one and were only just out of the foot hills.

As per Porky’s reminders, there’s so much to come out of the pipeline over the next six months.

@ buthcers.bike, a very good point and something not much mentioned, internationally recognised brand-awareness takes time to build, but we’ll be up there with them, given time.

*** Nestle, Nike, NASA, Nisan, Novacyt ***

exactly my thinking - let's see

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@Greggreen – you posted at 10:46:
“Certainly agree, most of the cutting edge tools are in place. A fair priced, high accuracy LFT would be the icing on the cake. I can understand keeping quiet while making inroads into a new market. Trying to sit tight, but I can feel my grasp slipping as I wanted exposure to some other shares by this point (can't believe were in May already). I think things will be clearer over this month. I admit it, running out of patience now :D.”
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Please do not take this as a criticism in anyway, we are all trying to make money, and all have different investment styles. In fact, I believe the vast majority of AIM holders will be thinking along your lines and please excuse me for taking the liberty of using your case just as an example to highlight a point. If your thought process and the potential resulting actions are multiplied, it would explain the seemingly inexplicable price movement we have been experiencing over the year.

You had planned to make some money by investing in Novacyt (= price goes up) and then capitalising on the rise, i.e. selling to move on and seek other opportunities through “exposure to other shares” (=price goes down).
Hence, the share is largely sentiment driven with investors taking profit whenever they see the opportunity, resulting in huge volatility and the SP is never able to reach its true value. Other investors recognise this cycle (rinse and repeat) and try to capitalise on this this price movement with short term trades accelerating the ups and shorts accentuating the downs, taking the SP to well below fundamental (material) value.

When will the cycle be broken for the share to reflect the true worth of the company? This cycle will only be broken when longer term holders become the majority. I have not doubt that we have dozens of committed LTH here, but in reality, these will make up only a fraction of holders. A friend said to me in the pub on Friday: “I saw Novacyt back down to 365 the other day, so bought back in.” I asked whether he was still holding. The answer: “No, not over the bank hols”! A lot of PIs cannot afford to keep their money in for months, let alone years, on end.

But if it is so materially undervalued, why are the institutions not snapping up all these ultracheap shares? Most investment trusts will be playing safe (its other people’s money after all), they cannot act on sentiment and intuition like we can. They need to see hard (and independently confirm) figures. They will slowly come. Clearly the DHSC debacle will be resolved in time for end of year audited results on 29th June. These will be the first fully audited hard figures that ii can act on since we were a £13m company.

And PI will speculate a price rise in the lead up to these results, so expect more volatility and ‘unexplained’ movement. These are last year’s figures though. We may get a glimpse of 2021 HY results at this point and if not, these will appear in early July.

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As has been well document by other posters, by the end of Q3 this year we will have covered all areas of the market: Antigen LFT, Antibody LFT (for vaccine and immunity response), Promate for two gene, qPCR for 3-gene needed internationally etc., but in reality, the bulk of revenue will be reported some considerable time later (as air travel, for example, will peak in July and August). Key performance points will be end of:

Q2 - will see international figures (US in particular could be interesting but cards are close to GM’s chest – could be India or even France). We will also have Novacyt’ s longer term strategy revealed.
Q3 - looking for huge increases in private sales (Wren, Boots, Katalyst, our own Versalab – the network will be huge) due to unrestricted travel and opening of other business sectors – think Westend (thank you, neilrich3)

Q4 - looking for NHS sales, especially Winterplex (no lock down, flu will spread) and further Promate orders

2022 A new UK Health Security Agency ( UKHSA ) – came into being March 2020. Look for the agencies long term plans to ensure no relapse, including continued genomic surveillance. Private revenue from travel air, cruise etc. will continue to grow throughout the year. All those q16 and q16 sold throughout 2021 will need more feeding and can be used for non-covid too.

At this point, (Q1 2022) I believe institutional will start getting in with both feet. They will have two years’ figures and future forecasts that show longevity of the company.

But remember a left field M&A activity can come at any point – big fish eats little fish; even bigger fish eats us? [My preferred, long shot scenario is a merger with our close collaborator AZ, with one AZ share given for each NYCT share :-)]

Conclusion: Simple strategy, load up as many as you can at these ridiculously low prices and sit on your hands. In hindsight, many of us could have made huge profits selling at £11 or £12 level. But we didn’t; and why didn’t we? Because even at those prices we knew the company was undervalued and had much further to go.

Keep the faith and joining the dots… it takes time but £1bn coming with SP £15 potentially this year; who knows where the SP will be next year? I for one am expecting multi-billion longer term value as this matures over the next year or two. You’ll be thanking God you got in early – even if that was £12! All IMO, DYOR, GLA

Indeed, we knew about Katalyst Labs, but thought this was previously related to mobile units and airports. This is the first time it's been associated with the Westend and getting businesses back to work in The City. Nice spot in the heart of it all.

Thanks Rhinocol, I came in at just under 200 then averaged down with a couple of large chunks as price continued to slide down to under 150, as felt the figures did not stack up and this was materially undervalued. Sold at 241 on the spike and then came back in at 211 and 215. Clearly, there is some profit taking on the AGM/news but, likewise, expect this to continue its steady climb. Seems a solid performer with management making sound decisions that will see considerable returns for longer term holders - especially if UK Gov decides to splash out on any infrastructure projects (thinking rail - as Ibstock make the concrete sleepers) to get economy up a gear.

We have good positive momentum - my target has been about 270, but now thinking with this demand, we could eventually reach new all time highs. This peaked at well over 300 end of 2019, does anyone think we could reach these levels again?

@shaunp thank you, but that's just semantics to be fair.
Rep=representative, but call it field officer or account manager if you like. You are right that, these days, post sales care is the springboard to future sales. And this is much of our point I believe.

On this board, we have frequently used the metaphor of the Q16 and Q32 being the razor/printer and the PCR tests being the more lucrative disposable blades/ink cartridges. Once these devices are in situ and working well, repeat sales are pretty much guaranteed.

The key here, and for the company 's longevity and exponential growth, is our reps (or field officers) on the ground. Firstly they need to be supporting hospital staff in the efficient use of the machines, so that maximum capacity and efficient work flow is achieved - this needs to be ongoing, not just because personnel have a habit of changing, but because, once all is working well and relationships are sound, this will be when they start dropping into conversations all the other products.

In one or two years, as Promate sales of Covid tests begin to decline, the range of newly developed, easy-to-process, clinical diagnostic test will expand and take over.

There will be a cultural shift. PoC tests will become the norm. If you are transplanting a kidney, you don't have time to send tests off to a lab across the country; you want the test done on the spot and the results back within the hour. More regular screening will also become routine and Novacyt will be at the forefront of this paradigm shift.

Razors only take one type of blade, printers only one type of cartridge, but our Q machines will take all manner of PCR tests. This is the key point, that new/prospective investors need to comprehend.

This will all take time of course - hence a hold for the long term, but we are truly well on the route. We are over the foot hills and starting up up the real mountain now!

@VanV (14:26) - I am not sure whether we are concurring or talking at crossed purposes.

We agree that UK growth has been quick and organic; and with 50 reps in place, we can increase support to NHS and use them to increase private sales throughout the UK. I have no doubt, that whilst Covid is still prevalent, we will be primarily selling our Covid portfolio of tests, but these reps will be building relationships and once they have their foot in the door will be able to drip feed in from the 500+ other products as appropriate. This will be a key part of the strategy for long term sustainability. Ideally, they will be making use of the Q machines long-term for these other products – but this aspect depends on how successful their rollout has been.

As you say, GM has continuously talked (over a year now) about US, but we have not seen a great deal. At the AGM his comments on the matter were rather muted. Clearly, a hard nut to crack. We only appear to have one person on the ground. This person could be encouraging distributors to push Primer products up the agenda or could even be lobbying state governors or even national politicians. We do not know. All I am saying is, it would be difficult for Novacyt to build an army of reps under this manger, as has happened in the UK, in a timescale that would enable us to capitalise on current opportunities. A quicker approach would be some form of M&A activity, which IMO is highly likely to be news in the near to mid-term.

All we really know is that £36m of sales were made either internationally or privately in Q1. We don’t know the private/international split even. We do know that 12m was UNICEF to Ukraine which leaves just £24m. I suspect that the majority of this would have bene international, but this is only a fraction of what it could be if we had direct sales in critical countries. Private sales will be low. Whist we have many private labs offering our products, actual sales will IMO only pick up in Q3 when the pent-up travel demand is truly released. When this does happen, and whatever travel restrictions/test combinations the UK and other national governments decide, we have all the right products, as demonstrated by the latest RNS - so it will be a win-win situation.

We know Q1 is £72m, Q2 will be at least £36m but possibly a lot more as international demand continues to increase depending on NHS and possibly even a French contract (we won’t be making 2-gene Promate for nothing), then in Q3 we will have a huge private sector boost and in Q4 we will be back to 4th Covid wave in the UK and more NHS sales again.

This is without the M&A that will hit us somewhere along the lines, plus all the other goodies. Bottom line is by the end of this year we are not going to be £4-£5 but well into double figures.

DYOR, all IMO etc. (join these…….)

I totally, agree, Porky…

…only 70m shares and only one person can own a share at a time (unless it’s those pesky shorters borrowing them!). So, no one is having my golden tickets until at least £30 (I do not care how long it takes) and even then I’m still keeping at least half. Unless bought out before then, of course :(

As I said in my last post - there was so much news in that RNS, so packed with juicy bits. I have read and re-read several times since, to fully digest. The tastiest part for me:

“…the Directors believe this product could add significant revenues for Novacyt”

Two other key observations:

1. As we know, the new PathFlow® SARS-CoV-2 SMART IgG will detect the difference between antibodies from a vaccine and antibodies from natural immunity (having had Covid), but Novcayt are careful with their wording – so, notice the use of the word ‘levels’.
“…as well as the levels of immunity derived from infection by the virus. ’’

I’ve not seen any other posters pick up on this. Do we know any other antibody tests that are not just binary (positive/negative), but give an indication of antibody levels? Is it true, the test not just detects the difference, but tells you how much? Wow!

2. Some posters have been discussing the wording of the RNS header “UK operational update” (SteveV, VanV – are you brothers?). The strategy in the UK is through direct sales, with 50 new field officers operating. (i.e., The company has used its’s new firepower to expand quickly and organically within the UK). However, I don’t think we can simply employ people in other countries and grow organically in the same way internationally. Distributors have been an easy and cheap short term measure to get our goods out internationally, but to grow truly globally and see more significant sales and contracts, M&A activity is definitely required and, I feel, this will be news (amongst a lot of other news) we will be hearing in the near future.

Keep joining the dots… and keep hold of those tickets

Well done to all who kept the faith...
…and thank you to Porky, Kaeren, Wilson et al, who have done long stints batting for the BB.

If Carlsberg did RNS this is what it may be like, it is packed with so much that it may take several weeks to fully sink in. But go back to last year when the NHS contract was announced; it took nearly a month for the SP to fully reflect the news at that time, so be patient.

We all know how ridiculously undervalued the current SP is. The Brokers will need to re-rate their forecasts, and then re-rate again, and again:

"It is not even the beginning of the end. But it is, perhaps, the end of the beginning." – Winston Churchill.

We have so much still to come. The NHS/DHSC dispute will be settled, full year results will be out and then the long-term strategy is also to be announced; plus, further M&A to come.

We have often talked about joining the dots. For those chartists amongst you, here is my take. When looking at the year view of the SP, my wife and kids thought it used to resemble a cat’s head with two distinctly visible ears. We are now down in the neck and starting to draw up towards its lying body. I have explained, not to worry, we are holding long term to see the full picture – the rest of the cat we cannot yet see – but firmly I believe that once all the dots are joined, one will see that our beautiful moggy is waving its tail high in the air, far above the ears. The long, and at times painful, wait will have been worth it.

Keep the faith and joining those dots – £1bn and SP £15 will take a while to achieve but could well be in the realms of this year, with 2-3 bn (the cat’s tail!) a little further down the line. IMO, DYOR, GL all.

Not heard much news recently, growth above expectation in US is positive, the only negative here is that banks are saying they won't apply Sunak's new 5% deposit scheme to new build properties.
The steady growth in SP is pleasing - not like the sharp rise last time, so less likely to pull back. Can see this reaching year high soon.

@ Bluelight

Yes, I totally agree with you there. For every sell there must have been a buy. Someone has bought them.

I have said before, at the time of the last AGM the company (and Mandy in particular) was scrambling around trying to collect a minimum of 25% of votes from some 25k individual investors in two different countries; something I should imagine they don't want to have to repeat this year, but a French legal requirement nevertheless.

It does seem strange to me that, as Porky and other investors have not infrequently pointed out, GM used the same phrase regarding an opaque outlook that has seen our SP plummet since January. There was no need to use it again in the latest TU, especially when he knows what an adverse effect it would have. All he had to do was alert the market to the DHSC dispute and give the figures regarding sales (the private/internal and UK Gov split was useful, but even more detail here would have been advantages). The additional statement on an unclear outlook was completely unwarranted, so why did he do it?

There has been much speculation regarding suppressing the SP in order for at TO to happen. I suspect it is much less sinister. GM is probably thinking he is being matter of fact and honest with shareholders. If the SP drops short term – so what? It will only recover once all the figures emerge, as in his mind, longer term, this is going to be a leading mid-cap £1-2bn diagnostics company. He may be thinking, he has already told shareholders this, and if you don’t believe him, more fool you. If a few thousand PI with small holdings of a few hundred or a thousand quid drop out and are replaced with three or four II that will make counting votes at the next AGM much easier for Mandy. Three or four II holding 25% between them would be ideal for Novacyt.

Keep the faith and joining those dots – £1bn and SP £15 will take a while to achieve but could well be in the realms of this year, with 2bn a little further down the line.

[Note: The SP has strongly correlated to UK infection rate over the last 12 months; at some point this correlation has to end and will begin to reflect sales income instead. IMO this is company is materially undervalued (a bargain) and a clear long term hold if ever there was one, DYOR, GL all.]

@Porky
Thanks for the link to Blackbird's excelkent article. This provides more in depth calculations and supporting evidence. [A must read for all holders and potential investors.] In the cold light of day it looks like many of us have reached similar conclusions and are now singing from the same hymsheet. No panic nessary; ignore the deramping; this has huge intrinsic value. My £15 SP predictions is only a steppingstone for the current year, but I am looking much longer term and I won't be taking any profit until at least twice that price, so strong is my conviction.

@shaunp
Thanks for your kind words - yes, a metaphorically long and hot summer ahead. Novacyt is provider of quality ice cream with the capability of satisfying the desire for a full range of flavours!

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No one expected the unexpected, we were hoping for a contract extension/phase 2 or a possible renegotiation of a new contract as intimated by GM himself. But as things drew on, many investors were having their doubts and the SP drifted down to a £7 price tag, which one thought already was factoring in no extensions – Oddo’s target SP was not so ridiculous after all, although still on the low side compared to SP Angle and Numis, whose worst-case scenarios (excluding any DHSC contact extensions) were significantly more bullish. But then came the whammy – not only no extension, but dispute and possible litigation and even a rewriting of last year’s financials! Panic ensued and we all endured a dreadful day.

Some have said they ‘lost the bet’ – but the show is not over until the proverbial fat lady sings. I have lost a lot of value, almost as much again as the drop from £12, but the last time I looked I am still holding the same number of shares – I still own the same 0.13% of the company and until I sell that will remain the case. The only reason for the decrease in value, to state the obvious, is more people selling than buying and that is down to sentiment and not figures.

As I posted on Friday mid-turmoil, and others have repeatedly calculated the same since, the figures released show this still as materially undervalued. It is not rocket science to calculate 72m for Q1 and then 36m of private/international sales for the remaining three quarters which equates to annual turnover of £180m (most aim companies would die for a turnover like that – let alone the 80% margins giving an IBITDA of 144m!), and that calculation is based on no furth NHS/DHSC money whatsoever and intentional and private sales remaining static.

But that (remaining static) is not going to be the case is it? Internationally, we all recognise that Covid rates globally are spiking again with the daily case rate is back at 750k. With the importance of variant detection ever more important, selling SNPsig and Variplex will be like selling like ice-creams on a sunny day in Southend.
And on top of that we have travel resuming at the end of May. The above £36m sales to “private and international” were made at a time when January 2021 flight arrivals to the UK were 631k (last January, before Covid, they were over £7m!) l would expect this August the number of flights to be in line with last summer at over 3 million flights (still down 75% due to cost of PCR and continued uncertainly).

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It looks like we supply approximately one fifth (20%) of private test suppliers (Wren, Boots etc. see ShaunP’s doc). Again, Promate is a huge advantage with its simplicity. With Shapps trying to drive costs down, Promate will IMO gain an increasing share of this market. As many on this board have pointed out, the cost is in the process and not the test itself. With reduced processing times, costs can be lowered. But even assuming a conservative 20% of inbound flights that would be 600k flights just in August. At two tests each that’s 1.2m tests and at £9 ($10) each we have a conservative £10.8m, just from planes coming into UK. No outbound, no cruises, no channel crossings included in this figure. Just inbound flight to UK. That alone would cover the £36m per quarter! And then as confidence resumes travel is only going to increase and, despite UK gov preference for LFT, there is no way they are going to jeopardise what we have gained, and PCR will be required so that VoC are picked up.

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All along, the cash is piling up in the bank, already at £100m plus. The product range is expanding. We have a new special LFT for antibodies coming out which will help with the monitoring of vaccines and may lead to some form of Covid passport test. But what of post Covid? (If there is such a thing – this is already drawing on far longer than anyone anticipated – travel will be restricted by PCR tests well into 2022 if not 2023). We keep hearing of the 550 other products – if invested, please take time to have look. It’s our tests that discovered the horse meat in supermarket lasagne, remember that? You name it, we cover it, from veterinary products to transplants – the difference is, we will now have a national sales force to drive the sales of these wonderful products.

So, yes, I still own my share of the company and still have faith. Friday was a kick in the teeth with everyone from, the children, wife and family, not to mention friends, who I have encouraged to invest in this having to take a hit. And some of you are probably sick of me saying this is worth £15 and will be £1bn company, but my conviction has not waned. Not focussing on the DHSC may be the catalyst needed to allow this great company to flourish and fly like phoenix from the ashes.

I was contemplating a trading play tomorrow as there will be downward pressure on the share first thing. I don’t think it will be difficult to sell huge amounts of shares, and some will do so, but then we have all number of people on the side-lines (gggg21 included) all waiting to get back in and although you may see a theoretical price on the screen at 350p, trying to get back it may prove easier said then done as IIs take priority and the SP bounces hard back above £5 or £6 even. I shall stick to holding my golden tickets until we are back up that mountain and climbing high.

Still believing there is huge upside here, £1bn companies take longer than a year to make, SP £15 still very reasonable in the year ahead

This latest pull back prior to end of tax year is illogical, with savers about to invest new ISA allowances and news about to break on several fronts (full year accounts, DHSC contract, new strategic aims) - I mean, who would be crazy enough to sell?

My only answer is that Vatel may have started to sell? You would think they would wait to sell into news but they may be pressurised to sell some of their holding ASAP having been forced to hold since the £2-£3 range - plus they have to keep half until the year end anyway - so as the share prices continues to rise they will still hold a million shares. We may, therefore, have to endure a drip feed of shares - that's what held us back so long last time. They will want to hold the price at this level and not drop it so it will be sow and steady, if that is what they are doing - I have no evidence, just supposition, without any other reasonable explanation. Either way, it resulted in a coiled spring effect last time - once the pressure was released the SP had to return to its true value and it shot up.

Patience is key - fundamentals will always win out.

"Vatel has exercised its right to request conversion of all outstanding debt into new ordinary shares of €1/15 each in the Company (“Ordinary Shares”) at a fixed conversion price of €0.70 per Ordinary Share. Therefore, the remaining debt of €2,066,257 has been converted into 2,952,681 Ordinary Shares. No future or accrued interest is payable as a result of this conversion.

Vatel has agreed to a lock-in period for a certain number of the Ordinary Shares, whereby 1,107,255 Ordinary Shares will not be sold or transferred before 31 December 2021, and a further 1,033,438 Ordinary Shares will not be sold or transferred before 31 March 2021. The remaining 811,988 shares have no such restrictions."

Delayed gratification, the act of resisting an impulse to take an immediately available reward in the hope of obtaining a more-valued reward in the future. The ability to delay gratification is essential to self-regulation, or self-control.

Most board members will have probably heard of the Stanford marshmallow experiment, a study on delayed gratification in 1972 led by psychologist at Stanford University. In this study, a child was offered a choice between one small but immediate reward, or two small rewards if they waited for a period of time.

It looks like we are in a parallel experiment. Calimera55 can buy one Ooni Pizza Oven now on this month’s wages or invest that money and buy two ovens once the price hits £15 when details of the new NHS contract are announced – or, of course, delay gratification even further and buy three or four ovens for friends and family members with the same money when Novacyt is truly recognised by the market for its long-term potential and its relationship with UK Gov and its pivotal role in the new UKHSA becomes truly evident, but of course we all get hungry and will want our pizza at some point.

Be patient, join the dots… £1bn, SP £15 - without a doubt a certainty now and only a matter of time (IMO, DYOR)

yes - there does tend to be new money invested post tax year end, and this will affect the smaller AIM and ftse 350 shares more than blue chip.

but more importantly is timing entry on other news.

I was expecting a pull back here after a pleasant rise and having sold at 240. Tried to buy back in sub-212. Managed to get half back just under this figure but the price immediately rose and have waited several days now to buy back the second half of my original investment. I have relented this morning and bought at 215, as I think this correction has now run its course and we are unlikely to go down to this level again IMO.

Bojo quoted this week as wanting to see 300k house built per annum and I suspect they will also want infrastructure projects as part of their ‘not-London’ recovery agenda including rail (Ibstock make the concrete sleepers etc.), so I believe this is a good long term recovery stock to hold as part of your portfolio and the earlier you get in the more you will make.