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£10m revenue for June confirmed as expected (£30m for Q1 and £7m for April and May) and £54m for H1 makes the £100m FY (ex DHSC) feel conservative IMO with all of the additional travel revenue. Nice additional wins announced, which will also bolster H2 2021 and 2022.
New website, improved engagement and comms (with the meet later) and the momentum from H1 and good traction with wins for H2, it’s all coming together…
Official Tweet
https://twitter.com/novacytgroup/status/1427691704556027905?s=21
2/2
Question 11:
Have there been any takeover offers that you have not informed shareholders of? If yes, what price were the offers at?
Question 12:
What is the biggest risk to delivering £7-10m monthly revenue in H2 21?
Question 13:
Are the gross margins sustainable? Are we being pressured into lower price margins due to focus on price to the consumer in fit2fly?
Question 14:
There seems to be an increase in new roles in 2021. What is the increase in costs in 2021 compared to 2020? Has this impacted the gross margin? Are these new roles reliant on Covid revenue to be sustainable?
Question 15:
Clearly you can’t comment on specific acquisition targets, but in what areas do you see acquisitions? Manufacturing? Expanding into labs? Distribution to new territories? Other diagnostic specialisms?
Question 16:
What is the current unaudited cash at bank?
Question 17:
What progress has been made selling in the US? What is the revenue so far? Has the FAR and DFARS (USA regulation) FAR 52 application been completed because there are specific US Gov contracts that Novacyt is bidding for? Will there be a RNS for any wins?
Question 18:
What is the IMUplex trademark registration for?
Question 19:
What is your estimate/prediction/forecast for monthly revenue and gross margin for 2022?
Question 20:
What is the biggest threat/risk to non-Covid revenue, following other diagnostic companies also receiving significant additional revenue from Covid?
1/2 Thanks Porky for organising, collating and submitting these questions. Below are the ones that I’ve submitted, some duplicates with yours, but hopefully that will help show how important those questions are and the more “prominent” ones will hopefully get answered.
Question 1:
I appreciate that you can’t disclose any confidential information about the dispute with the DHSC, until it is resolved or moves to the next stage, but can you at least confirm that we’re still in an ADR or Arbitration process and whether there is a time limit on when that process expires and has to move to the next stage if not resolved?
Question 2:
There are distributors (such as Victory Scientific) in the US with “coming soon” on WinterPlex, can you confirm where in the process it is for EUA and/or FDA approval?
Question 3:
Did you move to reporting in pounds £ as part of the process to move off the Bourse?
Question 4:
Why as a shareholder do I find out more information on new deals and distributors via personal research and other Shareholders rather than via official comms channels from Novacyt, either through RNS (for substantial deals) or simply updating on Twitter?
Question 5:
What is the threshold, which you deem it material to RNS an update? The recent Validation for PCR tests and fit2fly did not have an RNS. It had a Tweet, but did not reference the actual validation, shareholders had to make the link themselves. What size contract win or loss (in pounds) do you feel is material enough to release an RNS?
Question 6:
What is your communication strategy? How to you plan to communicate to shareholders going forward?
Question 7:
What is the geographical split (UK, US, Europe, Middle East, Rest of World) of revenue for H1 21? What is the prediction for the geographical revenue split for FY 21?
Question 8:
What is the prediction for non-Covid revenue for FY 2021?
Question 9:
What are the contingency plans if Covid revenues dry up in Q4?
Question 10:
How many NHS Trusts have we contracted with as part of the framework? What is this as a percentage of the total?
I clicked on the Novacyt Investor meeting 18/08 link and below is the list of presenters on the Investor Meet platform, don’t know how accurate it actually is for who will be there on the day, but it is interesting as I just expected Graham and James. Reflecting now, the team at the presentation is probably larger due to Graham retiring and wanting to show continuity and the team actually responsible for delivering the future strategy being present and accountable. Trevor Reginald is the biggest surprise to me, though may be I’m just tainted based on some previous chat about his dentistry history on here. He now has a photo on the Novacyt Directors page so you can review those stories and come to your own conclusion on all that…
Anyway away from that I do see Guillermo’s inclusion as a positive, talking through the growth opportunities and traction already gained in various markets in more detail.
Still feeling positive for a RNS prior to the meeting.
Featured Presenters
Name
Guillermo Raimondo
Title
CCO
Bio
Joined Novacyt in January 2021
Over 25 years in healthcare
Medical devices & services markets
Internationally experienced leader with multi-disciplinary background
Successful track record in driving customer facing organizations and different types and scale of business
Name
Paul Eros
Title
CBO
Bio
Joined Novacyt in November 2017
Over 30 years experience in molecular diagnostics, classical IVD markets and life science research with Becton Dickinson, Roche and DiaSorin
Globally experienced marketer and commercial leader
Name
Trevor Reginald
Title
CTO
Bio
Joined Novacyt in January 2021
Over 25 years in healthcare
Diagnostics, Pharma and Biotech markets
Internationally experience leader with multi-disciplinary background
Successful track record of leading R&D organisations to develop innovative new products
Name
Graham Mullis
Title
CEO
Bio
Appointed CEO of Novacyt in 2014
Over 30 years in healthcare; pharmaceuticals & medical device markets
Internationally experienced leader with multi-disciplinary background
Led multiple successful exits; Biocompatibles Eyecare, ClearLab, VisionTec, Optivue and Lab21.
C-level executive with FTSE 250 (Biocompatibles International) and NASDAQ (1-800 CONTACTS)
Name
James McCarthy
Title
CFO
Bio
Appointed CFO of Novacyt in 2021
Over 30 years in international manufacturing and industrial businesses in both consumer and B2B
CFO in both Private Equity and public businesses.
FCCA qualified over 30 years with broad commercial, supply chain and M&A experience
Listened to it all and thought it was a well run presentation and they at least said all of the questions, even if they couldn’t answer them all. The CEO even said he reads the message board! They’re seeing significant Covid testing increases, as we’re expecting, without clear confirmation from the NCYT BOD. Fingers crossed that 18/08 is as open, though I don’t expect it will. Still holding out for a RNS or 2 before then, DHSC or full H1 21 Trading update and/or revised FY 21 forecast based on July and August trading…
This has to be positive for the SP and their view of what may happen in the next 10 days!
https://bdif.amf-france.org/en_US/Fiche-BDIF?xtcr=1&isSearch=true&docId=744767E1202_2021E767447&lastSearchPage=https%3A%2F%2Fbdif.amf-france.org%2FmagnoliaPublic%2Famf%2Fen_US%2FResultat-de-recherche-BDIF%3FformId%3DBDIF%26DOC_TYPE%3DBDIF%26LANGUAGE%3Den%26subFormId%3Ddpcn%26BDIF_TYPE_INFORMATION%3DBDIF_TYPE_INFORMATION_DPCN%26TEXT%3D%26BDIF_RAISON_SOCIALE%3DNOVACYT%26bdifJetonSociete%3DRS00005391%26REFERENCE%3D%26DATE_PUBLICATION%3D%26DATE_OBSOLESCENCE%3D%26valid_form%3DStart%2Bsearch%26isSearch%3Dtrue&xtmc=Notification-of-net-short-positions-NOVACYT
Agree only small, just expected it to go down, especially given it feels like we’ve hit the bottom.
It looks like the WQ short, just increased back to 0.71 from 0.69. Seems odd to me as it looks like, IMO, that we’ve hit the bottom. I expected the opposite. This is gonna hurt them a lot more when it bounces, but expect a lot of rubbish/noise from disrupters in the meantime.
https://shorteurope.com/details.php?player=Worldquant%20Llc&land=france
I can only see increased sales in H2 given all the distribution in the US, validation for fit2fly and the need for distinguishing Flu from Covid (increased WinterPlex demand), whatever way the dispute with the DHSC goes.
https://twitter.com/themax22d/status/1424723219291021317?s=21
DYOR / IMO
The link didn’t come through on the previous pot.
https://www.gov.uk/government/publications/assessment-and-procurement-of-coronavirus-covid-19-tests/coronavirus-covid-19-serology-and-viral-detection-testing-uk-procurement-overview
Sorry if I missed this last week, had a busy week, but the link below confirms that PrimerDesign PROmate has been validated (1 of 19 validated, out of 142 tests that have started the process).
National technical validation process for manufacturers of SARS-CoV-2 (COVID-19) tests - GOV.UK
This process is to ensure that tests meet minimum performance standards.
“Tests that fail this process would be barred from sale. Retailers, distributors and manufacturers of tests that attempt to sell unvalidated tests would face sanction. This will apply equally to those companies based in the UK and overseas who are importing into the UK.” From the document in the link below.
https://www.gov.uk/government/consultations/private-coronavirus-covid-19-testing-validation/private-covid-19-testing-validation
This is another positive step forward and presumably is why we had a tweet from Novacyt (below). Why was this a Tweet and not an RNS? Seems massive to me, if we’d failed validation then that would be significant and material for the next 6-12 months, so why wasn’t being successful something to inform investors about directly? They should at least have made the link for us from the Tweet to the actual validation and that only 19 out of 142 tests have been successful so far, that in its self has to be a big positive. 108 concluded or paused. Difficult to know if 142 is actually the full total of tests and 108 that haven’t been able to get validated yet (or whether the 19 validated are in the 108 as well), but at least 89 haven’t been validated. At some point the tests that fail will not be validated and will not be able to be sold, without facing sanctions, reducing the amount of competition for quality tests.
https://twitter.com/novacytgroup/status/1422844790388019205?s=21
Don’t know if this validation has anything to do with the rumoured resumption of PROmate to the NHS. I’m hoping it’s not and the resumption is connected to a final resolution with the DHSC and the RNS confirmation.
IMO, DYOR
The potential of WinterFlex, with the Flu season expected to come back very strongly this year, is massive. Worry about Lord Bethell’s comments below and whether they will look to launch a cheap and ineffective test, specifically for Flu, like the Covid-19 LTFs. They should look to an accurate and effective solution in WinterPlex, with only one sample needed per patient to test for multiple viruses (all strains of Influenza A, Influenza B, RSV and Covid-19) in one go.
https://www.mirror.co.uk/news/politics/home-flu-test-kits-could-24712081
“Tests for flu are normally only undertaken in laboratories when patients are hospitalised with severe complications.
But health minister Lord Nicholas Bethell said: “The Department is exploring potential options to expanding winter virus testing via home or community testing.””
We just don’t know what’s behind the dispute, it’s pure speculation still.
What we do know is what was in the RNS and your line “The financial statements report that product replacement is a possible (not probable) resolution.”
misrepresents the RNS, which actually says “ It is possible, but not probable, that the DHSC's claim for a refund under the limited assurance warranty will be successful.”
We’ll find out, when we find out.
Be patient, this is long term, not short term. The cash position is strong and the H1 sales are strong, even taking out the disputed income.
IMO, DYOR
I also think that they might be gearing up for some RNS’s before or why have an investor meeting where 99% of the key investor questions can’t be answered. I’ve submitted 4 questions already, but I can also already guess what the answers will likely be and I’ve stayed away from asking directly about trading.
They’ve been gearing up for this presentation for a while, getting the Investor Meet Company on board, this isn’t a whim.
The distribution is warming up for WinterPlex in the US, just need the approval.
https://www.victoryscientific.com/winterplex
It is a nice idea, but very unlikely. Their Market Cap is €19.52bn… probably more likely the other way ;)
https://www.google.co.uk/search?q=eurofins+scientific+share+price&ie=UTF-8&oe=UTF-8&hl=en-gb&client=safari
Maybe I’ve misunderstood it but “or patients in home settings.” Isn’t this personal use?