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Midlands territory account manager. 200% of target achieved. Supporting nhs roll out or q16/32s. And winterplex. £52million expected from territory. Sounds good. How many territories do we think they are operating.
The other thing to consider is that these forecasts don’t include a lot of the additional potential revenues, phase 2, nhs extension, airport testing, potential USA revenue and overseas revenues. It’s easy to get carried away. So on the current expected revenues I see it trading between £6-10 short term based on sentiment and based on growth and delivery of contracts and acquisitions we can realise £15 and beyond
Do we think the next aquisition would be covid related? Most Covid stocks are going to be expensive. Might be good timing wise to snap something up that’s not in the limelight. Or as in the IT-IS aquisition is already part of our supply chain
So based on your assessment I would say the market is looking forward to FY23 or beyond with the current valuation. Very pessimistic to not think in that time that the company might not develop into something bigger and better, but at the same time, there is a lot of work to be done to realise even those forecasts and so we should see the pe catch-up and expand providing we keep beating the forecasted revenues and the aquisitions and contracts ect start happening.
I agree with jungla. Assuming £200 million cash in back.
200/70= £2.85
£6.72 share price - £2.85 = £3.87 share price for future earnings
£3.87/ 52eps = forward looking pe of 7.4.
Looks low and could easily see that double just on sentiment.
Off course am I daring to be optimistic by deducting the cash that they need to spend in order to become the company producing £40million per annum profits.
But then you have to consider the cash valuation which hopefully provides a bottom on how low this can go without triggering buying. At some point your almost getting the company and it’s potential for nothing
Agree, personally I think our oversees sales are much larger than we think and that a good portion of the U.K. revenues are in H1 this year. All the evidence shows how we are growing a massive infrastructure of routes to market abroad. Unfortunately we may have to wait for these results before the market can start taking a more optimistic view. That’s why I’m invested and whilst I can try and understand the current valuation, I think it’s pessimistic and it can’t go much lower without being undervalued even on pessimistic terms.
You can value this in so many different ways.
Let’s be pessimistic. Ignore money in the bank and value this based on a future generation of £40 million a year ebitda.
40/76 million shares = 52 p earnings
So that would put us on a current pe of 12 which is probably fair value for a diagnostic company trading between 10-20 pe. So being pessimistic we could expand the pe to 20 and see £10.20 per share.
Being optimistic, add on aquisitions, growth, a pe north of 20..... valuation could be well north of £15 but without some developments how can the market value it .
It still wouldn’t resolve the problem that the market doesn’t currently know how to value Novacyt. A buyback would reduce shares in issue so current shareholders would have a larger share of the future profits but what are the future profits..... this is what we need clarity on as I would fear a buyback would not help us as at the moment that number is fictitious. I’d rather see the money getting spent on earnings enhancing aquisitions where by we can actually place a valuation on it.
Just dropped my daughter back at school, was a bit shocked to be honest, I’d forgotten how busy it is when it’s full. Kids all mingling and jumping in each other and loads of parents catching up with no masks on. You’d think the pandemic was over. Yet the majority of people there won’t have been called for vaccines yet
Yes I have recently sold out of quite a few holdings on the basis that they have had to raise cash through placing to survive the pandemic. The travel and tourism sector is littered with them and they are flying high on sentiment yet shareholders have been significantly diluted. BOO has put in a sterling performance through the pandemic and is pretty much flat on previous year. It’s solid. Looking forward to £5 in the summer
Thanks exmex. So in 2020 air travel was down 76%.
Normal arrivals into the U.K. are around 300million a year and I’m assuming there will be a similar number of departures. So 600 million tests if we are to be able to get back to normal under a testing regime. That’s a £4.8 billion pound market in the U.K. alone. I’d say there’s some growth to come!! How long will we need airport testing for ? When will the world be vaccinated?
I noticed we are working with at least one of the companies providing tests out of Manchester. What do we think that market is going to be worth. In 2019 30 million passengers ( departures and arrivals) travelled through Manchester alone. At £8 a test that’s £240million a year through one airport. I this might be a big growth driver for Novacyt... until the world is vaccinated tests will be mandotary? No airports flying yet so this is all too come
I’m seeing between £4 and £6 by October. Likelihood that we see some buying before results like last year and then based on good forward looking statements we might then see it go on a run for £5 in summer. Then I’m sure Pedro and TCM will turn up to remind us off why we all hold.
Why do they bother they have been called out for exactly what they are and in the medium term, it just justifies my conviction that we will see all time highs soon. They are desperate to get in at a decent price.