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Superb news on Abiss. All of that last quarter ebitda improvement is added to RUA group’s numbers for the 6 months to 31/3/25 since the acquisition took place in September 2024. Catching up with the backlog acquired no doubt helped but it’s a “high quality” business going forward.

Maybe, just maybe, the market will credit RUA with something now?

8.10am Buy 20,662 @ 14.5p

8.15am Sell 20,662 @ 13.55p

Net loss in 5 minutes = £196.

Impressive work.

The new 5 year agreement starting with new revenue of £500k pa, rising gradually each year, will likely be accommodated in RUA’s existing manufacturing capacity, I believe. Given that gross margins are probably 70-80% and operating margins 50%, this suggests the new business alone might be worth close to another £3M on the market cap. Assuming a PE ratio of 10-12.

The growth profile of the business going forward might even justify a higher PER.

Current market cap is £7.5M. On that basis, even assuming that this is a fair valuation and not grossly undervalued, this addition today should result in a 40% uplift to around 17p.

Yet, here we have a regular stream of sellers at 13p.

It would be good to know from RUA how ABISS is shaping up after four months of ownership and working on backlogged orders. Not forgetting to mention the asset revaluation upgrades expected there.

The market maybe needs to know that ABISS is staying on track. But then again, the market is slow on the uptake down here in micro land!

Just to demonstrate the trading perversions we are enduring here, someone sold 37,287 shares at 12.75 earlier today, having received this value-enhancing news.

9 days ago they bought them at 13.38. So, with good news received today, they decide it’s good to take a £235 loss exc. dealing charges. Social media has turned minds to mush!

Thanks Popeye. The key is that they have established a multi year deal for a second global MedTech. That’s good for business security and sends out a message of quality to a notoriously difficult market to penetrate for a small cap MedTech.

By deduction, this is a second global customer for the CM division, to add to Coloplast.

Hi Greeneyes. I thought that myself. There’s nothing specific mentioned in the interims so I guess he/she was referring to the general comments about new business and opportunities in contract manufacturing being sought and expected.

I was also intrigued by the Hybridan throwaway remark in December about potential bolt on acquisitions.

Last summer, the BOD awarded themselves substantial share options at 11p a share and said the three year minimum time before exercise would be shortened in the event of a takeover or an event leading to a return of capital to shareholders. Based on such expectations, I have been guided by the assumption the BOD are seeking a price way above 11p in the next “whenever” period of time. We all stay patient.

Yes, I am hoping and expecting cash generation in the contract manufacturing and device selling divisions (Abiss and the Scottish ops) to be accelerating the transformation into a profitable group in a year or two.

If the gross margins at Abiss can be brought up to the levels in Scotland, things will be looking good.

It’s then down to how the general R&D overheads are being reined in without jeopardising the good work still being done on heart valve and grafts.

That was one month ago…..

So there is the main cause of the drop off, circa £8k worth of shares sold (75k @ 12.15p). Enough to flush a tiny seller out at 11.6 but peanuts in the great scheme of things.

My educated guess is they are waiting until they have fully completed the revaluation of the ABISS balance sheet and cleared through the backlog of orders before commenting further. Then maybe have a presentation when there is certainty about the current state of play?

I personally don’t think we will hear much until the period to 31/3/25 is complete but maybe they’ll surprise us with an update? Probably ABISS related if so. Anything else would be a bonus!

A 25k and 35k sold together today. A 25k and 35k bought together two days ago. No profit. It should be reclassified as a medical condition :)

I would rather see the day traders go elsewhere!

They can return after the sudden big move north which they will all miss anyway…..

Can sell

65k for 13.03

110k for 12.86

Rua earns its royalties in its Biomaterials division in US dollars. These were rising as at Sept 24 but were pressured by a strong GBP rate (then over $1.30 to £1). Now it’s nearer $1.20, that should help this year’s income a bit. Also makes it cheaper for the CM main US customer to buy GBP to pay its invoices in the Contract Manufacturing division. It all helps!

Thanks for that, fieldwolf. The Hybridan article originally came out after the interims in December (which we talked about at the time) but it’s a bonus to have it rerun by them in an update.

The UK markets took a hit yesterday thanks to the gilts jolting upward so that hit the nascent momentum we were building this week. Just look at today. Next to no volume, 90k shares bought, 18k sold, MM drops the offer!

However, the big moves up this week were on two much heavier volume days. That’s usually a positive technical signal.

It seems so many do not want to make proper money. Trading the range? It should be a proper move once it clears the long held upper end of the range around 15……

It’s like the big furniture shops, running grand bargain sales all year round…..

…..I will toast in 2025 with a fervent wish to see the start of a true re-rating befitting of its assets and potential.

Other snippets of interest concerned the likely asset revaluation of ABISS and a nod to other possible acquisitions. The Hybridan note suggests £2M revaluation which is > twice the gain on mere book values. I certainly expect something bigger than £900k so maybe they’ve been given a hint by the company about both that and M&A?

The note finished with this conclusion:

“The Financial Y/E is being changed to September to suit the deal, so the next report will be unaudited second interims or the 12 months to March 2025, which are likely to be in June. These should show operating at break-even and with the windfall going concern asset revaluation c. £2m. The net cash is £3.8m which should achieve sustainable profitability with room for further selective acquisitions.

Comment: The interims and acquisition progress shows that the bigger risk could be missing the upside.”