The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Standard response from the cult following here! I love how any negative post is dismissed as being from a shorter. I will raise the following point again; Declining grades were announced as one of the main reasons for missing the Q2 guidance. This issue has not been addressed yet. In Q3 the company used the strike as an excuse for lower production, but I believe this was a convenient excuse for a very large production miss. If Q4 production doesn’t exceed 700t then there is a serious problem that will need to be dealt with transparently. Has the issue of declining grades been addressed yet? Were they the reason that Sojitz cashed in for such a comparatively tiny amount, valuing Vametco at just over $100m?
Honest, genuine post here which I know will get shot down in flames... I do hope that the long term investors in this share don’t live to regret not reducing their vast holdings. For me, declining grades at Vametco could undermine the entire operation in the short term; Declining grades were announced as one of the main reasons for missing the Q2 guidance. This issue has not been addressed yet. In Q3 the company used the strike as an excuse for lower production, but I believe this was a convenient excuse for a very large production miss. If Q4 production doesn’t exceed 700t then there is a serious problem that will need to be dealt with transparently. It is the lack of transparency that concerns me, and the AIM disciplinary notice reinforces this. Yes Bushveld timed the Vametco acquisition perfectly, but if Vanadium prices were to normalise back to even $75 and production was stuck around 2500 tonnes awaiting Brit’s coming into production, the Share price would get hammered because; a. The board would have lost credibility with investors by not being transparent on the grade issues & long term production targets (5k/10k) b. Competitors production would have moved a lot closer & BMN would have lost its head start. Cash is king, but only if earnings are predictable & growing, plus the company has integrity and credibility. I await the promised dividend policy with interest, if it doesn’t arrive before year end then the boards credibility will take another hit. (Remember that Mokopane has been due any minute for the last year!) All the above is in my opinion.
Sorry that should have read; So in my mind, it’s unlikely to be an overhang from the July 18 fundraising. Instead it appears to be the climax of a protracted sell down from a couple of funds who invested in the July 2015 fundraise for £22m that resulted in the issue of 17.6m shares.
Also, from reviewing the last few years holdings RNS’s it seems very likely that Lombard Odier have been selling the last of their stake; 14/11/17 reduced from 11.47% to 10.77% 30/04/18 reduced from 10.77% to 9.69% 23/08/18 reduced from 9.69% to 4.63% Their holding was 4.63% at 25 October, so it seems inevitable that they have chosen to offload the remaining 5.32m shares. Given the huge trades on Monday/Tuesday I would guess they have offloaded a large proportion of the 5.32m so far... If also appears that Ruffer LLP we’re selling down their stake having reduced from above 6% to 4.7%, so they could also be taking the opportunity to exit given the liquidity available. Overall, I can understand the logic. When a fund decides to exit a small cap share it will clearly be aware that this will have negative consequences in the short term for the price & this will impact other funds invested (of which AVCT have many). Once the decision to exit an 11% stake has been taken, you cannot then change your mind at 5% as it will make the fund look unprofessional and indecisive. So no matter what the future news holds, the exiting funds need to complete their sale. So in my mjnd, this is more likely to be an overhang from the July 18 fundraising, rather the climax of a protracted sell down from a couple of funds who invested in the July 2015 fundraise for £22m that resulted in the issue of 17.6m shares. Investors in the July 18 raise (IP Group went from 0% ownership to 18.15%, so took 20m of the 44m share issued) would surely have been aware of the ongoing discussions with large pharma/biotech, and so wouldn’t be selling down now... All in my opinion, but once Lombard/Ruffer clear this could rise spectacularly.
Yep, this really feels like the real deal... The question I just asked myself is what would the Affimer part of the business IPO for if it came to market today, surely it would be several hundred million? Favourite bit below, especially the significant value inflection point; “Jose joins Avacta at a hugely exciting time as we progress towards the first Affimer® clinical studies, which is a significant value inflection point for both the technology and Group. We very much look forward to working with Jose on our established programmes and on leveraging his knowledge to expand the pipeline of innovative and valuable immuno-oncology assets for the future."
Agreed, clearly someone had made up their mind to get out at the first possible opportunity no matter what the news was. If you took away the 4m of large sells yesterday the price would have been 50+ at least, probably more!
Average volume was 25k, so we had 600 x the average yesterday, a transformational day for Avacta which has changed the landscape of the share price forever... certainly expect it to continue higher over the coming weeks & would hope that an institutional investor or two would be interested in buying given the scale of the news & other partnerships already signed!
Was doing some research and came across the following link; https://www.nih.gov/news-events/news-releases/niaid-sponsored-trial-universal-influenza-vaccine-begins Intriguing that the NIH are sponsoring the research project. Given the Stage 2 trial started in May and was scheduled to last around 7 months, it should be complete by now. I do wonder if the NIH wanted to compare the results of the Biondvax vaccine with the Hvivo/SEEK vaccine before releasing the final data/comment on Flu-v? Would go along way towards explaining the long delay... Thoughts/comments welcome
For any new investors, well worth listening to the September results call when you have a spare 40 mins ; http://hvivo.com/investors/presentations-webcasts/ Enlightening in a number of ways, and it’s hard to see any negatives other than the statement that in an ideal world they would develop Flu-V themselves but they don’t have the expertise or infrastructure to do so. Also interesting to note is their cash balances for the previous period ends; June 18 - £10.7m Dec 17 - £20.3m June 17 - £10.3m Dec 16 - £25.6m June 16 - 9.0m Revenue & resultant cash flow are heavily weighted to the second half & this was stressed multiple times on the call. Following the above pattern & taking into account the R&D credit of £2.5m, I’d expect year end cash to be around £15m, covering around 60% of our current market cap. This looks like agreat opportunity in the short & medium term!
Trading at 53 shekels in Tel Avon, equivalent to 11.16p, so all talk of 20p is premature for now! https://info.tase.co.il/Eng/General/Company/Pages/companyGraph.aspx?subDataType=0&companyID=002280&shareID=01131697
Wow, I feel genuinely sorry for anyone who bought or held based on the 15th November update, why on earth state that the raise would happen at a higher level in the first place? Disgusting behaviour and even more inexcusable when the chairman is taking £1m worth of shares.
@Tweet2, how do you know how much setup cost? My statement still stands; we need more visibility on revenues, direct costs, operating costs & overheads before we can really assess the potential here. For example, how many packages do they need to sell to cover there running costs?
The growth in packages sold & revenue is fantastic, but the cash burn appears massive? Raised £25m before expenses on 3rd Aug so prob £24m net? At 30 Nov had cash of £15m, so £9m burned in 4 months... Need more transparency on gross margins and overheads before we can really ascertain if this growth is sustainable... All that being said, the SP should rise given it’s well below cash at last nights close