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Looks like the asset sales are well advanced so covering the bond is not an issue now. I think that the share issue was a last ditch opportunity to ensure that if sales did not materialise then they had the funds to ensure survival if all else failed. I don’t think it is a realistic option now.
Finished off by saying, "Yesterday Regional also said it would maintain its next quarterly dividend at 1.2p.
At the current share price, that equates to a yield of about 17pc, which is obviously unsustainable. The market is saying that further dividend cuts after the one earlier this year are on the way but brokers have said they believe a divi at or around current levels should be sustainable.
If this is case the shares are severely mispriced and a strong recovery will follow sooner or later. While our portfolio’s paper loss of 72pc in capital terms is clearly unpalatable it would not make any sense to sell at such distressed levels, especially if the income looks reasonably secure. We’ll hold on."
I sent this email to Trinity researchers today;
I was previously a stockbroker, but now just a private investor. I read your excellent research on Futura Medical, of which I am an investor, and I was wondering if you had seen the recent James Barder interview, and whether this might change your DCF model. Specifically in your note, "On the cusp of MED3000 commercialisation Update | 10 November 2022", you write under Valuation and Financials:
....However, pending visibility on the US terms, and given limited disclosure of precise terms in Europe (which includes multiple revenue layers based on various accounting practices) for simplicity we assume Futura Medical receives payments from partners that are equivalent to a royalty rate of 20% on in-market sales.
However on James Barder on Proactive Futura Medical "on track for a profit in 2025 after strong first half" 2 weeks ago when talking about financials about four minutes in says that margins are around 50%.
I was wondering if you would be looking to update your model in light of this information.
Someone is bullish. Couldn’t buy them thought.
Hi Bandit,
I agree with you. FUM are overpriced on current revenue and sales, but share prices are determined by the future, not the present. Sales in the UK are not going to determine FUM's share price, the US is and the rest of the world are more important, and that is still to come. Going on UK sales it all looks positive!