RE: RE: RE: Big after hour trades28 Jan 2021 20:38
With 3 acquisitions in 2020 alone (Coastal Genomics in August 2020, AGX-DPNI S.A.S. in March 2020, and Ex5 over the summer) further to Elucigene Diagnostics in April 2019; I can only hope that LR's appetite for dilutive acquisition is temporarily satiated. Ordinarily you would hope that if another placing either for acquisition or geographical expansion was imminent then someone in the Company would have the good sense of pumping the sp beforehand.
Although I recognise and agree with the potential of the earn-outs for the Coastal Genomics under terms of the acquisition, the risk for me here is whether funding for this contingent liability is covered and included in the H1 Results. So for example the contingent cash consideration of US$4.0m should Coastal Genomics generate revenues of at least US$8.5m in FY23 was not covered in the Fair value of CG of £7,468,332 as this was considered a "stretch target". So the Total Consideration was £7,468,332 (which included £1,844,932 for Indirect Issue of shares through exchangeable options and £3,053,435 for cash- and equity- based performance related earn-outs). My understanding, which could be wrong, was that the Cash Flow inherited from CG was £2,270,113 which puts the $8.5m in perspective as to how much a stretch target this is and how likely this contingent liability would be. As before I expect to be corrected so thank you beforehand.
Earlier last year we had the Euciligene shares in exchange sale as well as the sell down of Causal Capital. For now I don't think a placing is likely but a combination of a large PI sellers as well as market uncertainty as to how to appreciate YGEN; whether as a Covid player or not and the expectation of news flows. The latter points means that whatever the news, whether vaccine roll-out, higher Covid cases, lock-down you name it we suffer. When we cannot say as a BB when the "last" quarterly update was it makes the expectation of news difficult. To be fair to the "rainbow-chasers" at NCYT, GDR, ODX and so on; over there you have clear expectations of new products and geographical expansion. Whether this is the introduction of Rapid Antigen Tests, US expansion or Phase 3 results. There's been a few noted examples where things are floated (e.g. saliva tests, working on moon-shot, US commercialisation) which has just sapped patience. Key things here remain is whether the FY targets will be met and whether there will be any significant news before FY results given the lack of any major 'new' news flow since arguably October H1 results.
To be 6 years in and in the low-teens is not a great day.
GLA to LTHs
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