Member Info for Hydr31

£30 million ebitda stable earnings growing at 20% plus per annum….. 0.5 eps on a pe of 20 gives £10 share price.

So it’s really not far fetched given than we’re estimating it potentially stabilising at 10-20 ebitda this year. Make one aquisition and your at the 30 mill ebitda.

Directors bonus pot ( not exact estimated about 1000000 shares)December 24 average price. Bonus pot shared between board.

To qualify 10% pa share price £4.71. ( £1,177,500)

At 20% pa share price £6.11. ( £3,513,250)

At 30% pa share price £7.77 (7,770,000)

Share price £15. (£15,000,000)

Share price £54. (£54,000,000) just for porky

They can’t sell for a year once awarded shares so they are going to be looking for sustainable rise. No good spiking it in December 24 for it to fall back.

Nobody’s going to be able to retire unless they are targeting £15 share prices £7.7 provides a very nice bonus for them but split between them that’s not going to go very far.. I’d be drawing that as my minimum expectations.

So what does a £7.7 - £15 stable Novacyt look like ?

I think £7.7 upper target makes it hard for the board. They are going to be faced with resistance all the way up to that target as LTH sell out for what they bought. Whats the upside if it gets back to £4-5. I think I’d be selling up and reallocating cash elsewhere. Think they needed a stretch target £15-£20 for if they absolutely smashed it and to encourage lth to stay the course.

Even the lower level of ltip requires them to get back to £4.70. Great news for those holding at £1.60

(Management clearly know it’s worth more than that) to be fair it’s a pretty low target considering many holders were buying at £8. Mr mullis included. So I think they’ll walk this target. Should have been a £8- £15 quid target though

So it’s a three year plan.

Target to be above £7.80

4-5 bags from here.

So how does one play it if you are a director. Sort the dispute, then buy in big the same day you drop the RNS, in the knowledge that not only is the share price at all time lows and undervalued but the biggest uncertainties are resolved.

Does anyone have a view on the levels of goodwill and intangible assets on the balance sheet?

£337 million between them

Total assets 509 - liabilities 243= £266 million equity

But £337 million of those assets are goodwill or intangible assets. So could be a lot lower .

Unlike shareholders most CEO’s and businesses work to a long term plan… most business I’ve worked for set a 5 year plan. The share price is not of a concern over the short term. It’s just noise. DA can’t just join a firm and start ramping it. Any share price rise would be unsustainable unless the right infrastructure is put in place first to back the rise. Right now we have a dwindling Covid market so my five year plan would be to capture as much of that as possible whilst making plans for non Covid revenues. His comments on the recent RNS and video acknowledge just that. New products coming on line in Q4. Once dispute is resolved we might see some aquisition moves too. Plenty of Covid stocks are cheap at the moment. Once revenues are stabilised and future forecasts clearer then this can grow rapidly

Nothing to talk about that’s not been said. It remains incredibly undervalued in a sector that has been battered by poor sentiment since the emergence of vaccines. The sector will dwindle and what will be left will be the cash rich companies and those that can or have pivoted into other revenue streams. Eventually poor sentiment will turn. Likely to be a lot of consolidation in the sector, lots of loss making companies finding it harder to raise cash now and are ideal take over opportunities at the right price. Wouldn’t want to be holding anything but NCYT in the Covid sector.

Much more comfortable holding having read this thread. Shorters must come on line on a Sunday evening hey…

Load of rubbish…. Every Covid stock spiked…. It’s called a pandemic

I’m assuming the dispute has put a temporary halt to proceedings with regards to M & A activity? It would massively effect the cash position whether good or bad, so one might want to have it settled before deciding what to buy.

Can’t also really expect a buyer for us either when there’s £40 million of revenues in limbo.

I’m not sure regarding buy back as I think the money better spent on acquiring non Covid revenues.

However this is a good example of the value. With 100million NCYT could buy back almost 60 million shares. Which would leave it with ten million shares. No cash, no debt. But a business expected to generate 20 million ebitda. 20million / 10 million shares = 2 * a pe of 10 and you have £20 a share. Even a pe of 5 is £10 a share.

Around 45 million revenues looks like break even point where at the current cost base they would start making a loss. So given that we have expanded that cost base significantly ( spend on sales and r and d has doubled in a year) one would want to see evidence of it paying for itself . From operating sales team myself I know it can take 6 months to start getting traction. So expecting big things this year and there should be some evidence starting to show in non Covid revenues. The sales team can’t hide behind Covid revenues forever. Yesterday’s news. What’s next

Hi DRB,

I’ve rechecked my numbers and I wasn’t reducing COst of sales in line with revenue reduction. So I have my worst case as £54 mill revenue, 38 mill gross profit delivering about £8 million OP after paying for sales. ( not accounting for anything from dispute. Non Covid growth seems critical to me.

Ok next question. The trading statement refers to a shift in product sales from Covid products (95% in 2020 to 86% in 2021)

Total rev 277 m 2020
Total Rev 95.8m (+ 40.8m inc dispute) = £136.6m 2021

Do we include the dispute revenue or not?

If we don’t it suggest non Covid tests went backwards. That can’t be true can it ? If we include the dispute revenue then non Covid tests delivered 20 million revenues this year which would be sterling growth at more than 50%.

If we factor that growth to continue alongside a drop of 50% in Covid products then I end up at around £85mill revenue for the year and ebitda of about £25 million.

Mind if they’ve used the 95.8 as the base for the calculation then my forecast looks bleaker at about £54 million revs and a small ebitda loss. ( not including anything we get from the dispute in those figures)

Ok thanks DRB. Yes that adds up.

Ah the 73 million figure includes vat…. So maybe that’s where they are getting the 40.8 m of DHSC revenues that have been excluded from the P and L.

I’m just trying to map out the forecast p & l based on the H1 figures and what little bits of information they give us in the trading statement. Got to say it doesn’t quite add up for me. 95 million revs for the year of which 53 were in H1 so we are expecting 42 in H2. Group gross margin before exceptionals expected to be 70%. So that means cost of sales expected for the year at £28mill. £16mill in H1 so about £12mill for H2.. that leaves a gross profit of only £29mill for H2. Plus an extra £2 mill for H1. So £31mill gross profit full year. Then we have to take sales costs off.

Bottom line is for 95 mill turnover I see breakeven for the full year yet they are talking about full year ebitda above £36million. Are they factoring in that we will have sorted the dispute out and those figures will be included?

Just been reading the 2021 half year results. It’s £70 million That’s in dispute not £40million as some have stated. Approx £25 million wasn’t paid at the end on 2020 and then a further £45 million in the first half of 2021.

If Mullis no longer works for the company would he have had too announce if he had sold out ? Would be nice to know. I can’t recall what percentage he held.? But im assuming so long as it’s below the threshold he could sell out now without anyone knowing.