Member Info for LionRock

Turning to the Medical division, the recent announcement of the award of FDA 510k for a more upgraded Adaptix product paves the way for future sales in the US (and elsewhere) in the orthopaedic, veterinary and NDT markets. In respect of Magnetica, the Chairman had made a side trip on a recent vist to Australia to look at the facility and was massively impressed with the entire set up and the instant and clarity of image demonstrated to him. Given the constant stream of requirements from the US in respect of security of images within the equipment, I asked how they know when these will cease such that they can then present the application for 510K. Steve McQuillan said they don't, it will be a case of determining a cut off point and making the application thereafter. This is intended to be in the near future and usually approval is expected three months thereafter, I queried if the problem was issue of "not invented here" but was assured this was not the case.

All the other group companies are operating well and there is as always great optimism for the next financial year. AS always I was more than happy to propose a vote of thanks to the Board.

The train to Birmingham was on time this year so no rush to the venue was required unlike last year. Compared to previous years I was not the only shareholder present indeed it was myself plus four.

As usual once the official issues were dealt with, the floor was open to questions. It was asked, on what basis is the decision made when to dispose of an operating unit. Steve McQuillan replied it was a judgement call at any point in time depending on many factors. Both Ormandy & Hayward Tyler are both benefiting from a tail wind, this therefore makes them worthy of consideration for disposal. At the same time they look to achieve mid teens ebitda as a yardstick, Peter Brotherhood was deemed to have been a maximum gain disposal all things considered. Ormandy are very busy with work involving data centres though at the moment it is unclear whether the future will be in air or water cooling. Hayward Tyler are talking to just about everybody in the SMR business most significantly the Bill Gates owned Company namely Terrapower as well as the likes of GE, Westinghouse and of course Rolls Royce following the recent announcement of SMR commencement at Wylfa, though this will not be producing power until mid 2030's.

The recently published report on the Nuclear Industry has raised the fact that British policies and procedures are unnecessarily complex and impede progress that in turn raises costs. The cost in millions of trying to find a way to prevent fish being harmed in the River Severn during the works on Hinckly B and the 200 Archaeologists always on site at Sizewell C are cases in point. The UK nuclear market to the group is of course significant, but the USA and S.Korean markets is far greater.

I asked about the work recently awarded by Sellafield to the Cumbria Manufacturing Alliance led by Bendalls Engineering for small scale boxes. This is Sellafield trying to get more than one supplier of boxes (ie Avingtrans) capable of series production ahead of the major tender being announced whenever that may be! Because AVG are the only current supplier of 3m2 boxes Sellafield are mindful of the consequences if for any reason AVG stopped production for any reason especially as they have recently gone from filling one box per week to five in order to keep up with the degrading waste.!!!!. It is thought that whoever else is chosen to manufacture nuclear waste boxes there is the prospect of technology transfer in terms of manufacturing such items. Since they started construction of the boxes there has been an ongoing modification to the design as knowledge has been gained. A case in point in each manufactured box there is 1 million measuring points!!!!

Booth has displayed significant potential for the future to the extent they believe it can be doubled in size to a £50m business and therefore its sale is not envisaged any time soon.

The train to Birmingham was on time this year so no rush to the venue was required unlike last year. Compared to previous years I was not the only shareholder present indeed it was myself plus four.

As usual once the official issues were dealt with, the floor was open to questions. It was asked, on what basis is the decision made when to dispose of an operating unit. Steve McQuillan replied it was a judgement call at any point in time depending on many factors. Both Ormandy & Hayward Tyler are both benefiting from a tail wind, this therefore makes them worthy of consideration for disposal. At the same time they look to achieve mid teens ebitda as a yardstick, Peter Brotherhood was deemed to have been a maximum gain disposal all things considered. Ormandy are very busy with work involving data centres though at the moment it is unclear whether the future will be in air or water cooling. Hayward Tyler are talking to just about everybody in the SMR busines most significantly the Bill Gates owned Company namely Terrapower as well as the likes of GE, Westinghouse and of course Rolls Royce following the recent announcement of SMR commencement at Wylfa, though this will not be producing power until mid 2030's.

The recently published report on the Nuclear Industry has raised the fact that British policies and procedures are unnecessarily complex and impede progress that in turn raises costs. The cost in millions of trying to find a way to prevent fish being harmed in the River Severn during the works on Hinckley B and the 200 Archaeologists always on site at Sizewell C are cases in point. The UK nuclear market to the group is of course significant, but the USA and S.Korean markets is far greater.

I asked about the work recently awarded by Sellafield to the Cumbria Manufacturing Alliance led by Bendall's Engineering for small scale boxes. This is Sellafield trying to get more than one supplier of boxes (ie Avingtrans) capable of series production ahead of the major tender being announced whenever that may be! Because AVG are the only current supplier of 3m2 boxes Sellafield are mindful of the consequences if for any reason AVG stopped production for any reason especially as they have recently gone from filling one box per week to five in order to keep up with the degrading waste.!!!!. It is thought that whoever else is chosen to manufacture nuclear waste boxes there is the prospect of technology transfer in terms of manufacturing such items. Since they started construction of the boxes there has been an ongoing modification to the design as knowledge has been gained. A case in point in each manufactured box there is 1 million measuring points!!!!

Booth has displayed significant potential for the future to the extent they believe it can be doubled in size to a £50m business and therefore its sale is not envisaged any time soon.

Cont......

Anyone other than myself going to the AGM this Wednesday?

Ooglflugal - you are quite correct they did get 510k approval for Adaptix previously, this is for a much improved development. The new version can do all parts of limbs and the plan is to subsequently have shoulders added as well.

There have been further delays to the Magnetica 510k submission, due FDA paperchase, which they do not expect to submit now until early calendar 2026 (H2 of FY26).

Further extension for takeover talks notified today

Results due out on 24th - Wednesday!

It seems strange that when they make a sp improvement invariably they are unable to maintain it as the sp usually drifts down by quite a margin. We have just two weeks to go before full year results though it would appear the FDA are dragging their feet over Magnetica approval that is still awaited perhaps they are jealous cos they didn't think of it first.

At the AGM last year it was stated that they had no intention of selling Booth as they felt it still had some good value to run, time will tell!

Whilst the equipment is aimed at the Orthopaedic market there has been no sales approach to hospitals for the simple reason it would be a hard sell against the established MRI manufacturers of GE & Siemens etc.

As to the future of Magnetica and Adaptix the present uses are dictated by the bandwidth currently used in the equipment but research is being undertaken as to what else might the equipment be capable of if experiments are tried into varying bandwidths. At the moment both products are still much below the radar and their true value cannot be seen until more of the products become available within the fields of NDT, Veterinary & Orthopaedic. The spectre of Trade tariffs being imposed by the impending Trump administration is not of undue concern as much of the equipment could be manufactured in the USA and whilst the spectrometer is manufactured by Tecmag in the USA there will of course be a tariff on the Magnets produced at Abingdon. A possible IPO of the division or part thereof might be considered be it on the FTSE market or NASDAQ that remains to be seen or perhaps a trade sale to an interested buyer.

Turning to the rest of the Group, the Nuclear waste boxes for Sellafield are ongoing, manufacturing about 10 boxes per month as part of the current contract, there is no expected customers envisaged from outside the UK as these boxes are to a very high spec compared to other countries, this is because of the nature of the waste, especially from the former Magnox sites that were not deployed anywhere else in the world.

The usual mirage of the Sellafield tender appearing for around £800m is reckoned to be once again “next year” as has been said on an annual basis since 2018, whilst the initial competitor has withdrawn from the field, likely participants in the competition are thought to be Bendalls, Graham Engineering and possibly Goodwin. In each case it is more than likely that there will need to be a technology transfer which would of course bring further remuneration to Avingtrans. Should they be approached by one of the larger engineering companies looking at a joint venture to manufacture the boxes such approach will be declined.

Booths are well into the HS2 door contract and will soon commence manufacture of doors for the stations, the cancellation of the Northern part of the project is not seen as too much of a loss given they are busy with other work on such sites as the Elizabethan Line for London Underground, the Board believe there is still much good value to come within Booths and do not anticipate a sale in the short term.

Whilst there may be small bolt on acquisitions to the existing units, no sizeable additions are expected perhaps until one of the existing divisions is sold.

In conclusion it was once again a most interesting meeting indicating there is a lot going on in each of the many divisions and as in the past I was happy to propose a vote of thanks to the Board.

It being a couple of years since I last journeyed to Birmingham I decided it was time for a further visit, however things did not start well when the Avanti train managed to arrive late with just 15 mins to the start of the meeting. A hasty rush to the venue followed in an attempt to make the start of the meeting however proceedings had commenced by the time of my arrival and while the temperature outside was around freezing the welcome was as always very warm.

As in my last visit I was the only shareholder to attend and so it was my turn to bat. I asked about the current situation in regard to the land at Luton, and whilst there has been interest in the background of late no particular effort has been made to pursue further due to the attention being given to other more pressing issues i.e.: Magnetica and Adaptix. It is thought if/when the general economy improves greater interest may appear but should that not be the case it will be bundled as part of any Hayward Tyler sale in the future.

There has been much interest in Adaptix at the various Exhibition and trade shows since the attendance at the Chicago event last year especially at the Non Destructive testing (NDT) related event. The relative compactness of the product has enable them to take an example to the various events so those present can see the quality of the image produced, it’s one thing to show an image on a sales pamphlet quite another to see it in reality. There has been much interest in the Adaptix offering with enquiries being received from much of Europe including Norway, Sweden , Germany and as far away as Mexico. Some years ago a similar product was produced by a company called OTI who sold some 200 units, they were subsequently taken over by General Electric and the product soon discontinued. As spares are now no longer available the customers are eager to acquire replacement products and one of the people involved in the initial distribution of these units is involved with the sales/distribution of Adaptix. The product was well received at the Farnborough Airshow earlier this year from the NDT aspect and winning the Emerging Technology Award was a surprise to all considering they only expected to get a lower ranking position that would give them some headline publicity.

Magnetica is awaiting the award of the FDA 510k award, this has been delayed due to the Americans concern over the cyber security requirements for imaging systems. The goal posts have kept being moved as yet another stipulation is published, some of which can run to many pages in terms of specification. Thankfully, there have been no updates for the last couple of months therefore it is hope they have now completed their requirement, if so a very approximate date of 501k is thought to be mid calendar 2025.Whilst the equipment is aimed at the Orthopaedic market there has been no sales approach to hospitals for the simple reason it would be a hard sell against the established MRI manufacturers of

Given the last profit warning was only about 5 weeks ago and the interims are due out very soon, I would not have thought much could have happened to change the overall picture so I would be grateful if anyone could advise what might be in the report that would cause a share price increase.

Michaelwood47 - Interim Results being declared on 16 October was stated at the AGM

I was one of just two shareholders who attended the AGM at Rochdale on Wednesday on what was a very quick event lasting just over 10 mins very similar to JD Sports one many years ago. The event was conducted solely by new Chairman Barry Bown who gave Clare Nesbitt's apologies as she was unable to attend.

The voting was carried out in brisk order with the votes cast displayed in a presentation, once completed there being no questions the meeting was closed.

If I recall it was stated the Interim updates would be declared - if I recall correctly - on 16th Oct 2018