Member Info for Pharmhall

NHS Trust CEO's are having meetings with all staff to explain the closure of NHS England. Apart from removing a massive layer of duplicate bureaucracy (agreed) to improve efficiency (haha), it is being explained by "...to free up cash desperately needed to fund increased defence spending ...". All the right sound bites!

Another reason that these fund managers are having to re-assess their strategies is that the omission of defence stocks from their portfolios has seriously damaged performance and is risking that funds will be withdrawn and moved to competitors with less restrictions. Money talks!

Reading all about increasing use of drones recently triggered my memory that MSI has a "land-based mobile gun system incorporating our its unique 'counter-drone' capability" which it first announced in December 2023. Since then, we have not heard anything about this system and whether any sales have been achieved. Another item on which an update would be appreciated.

Why on earth would they buy here....when price will be dictated by the institutions when the Placing is done and, if management genuinely believe the story, they will buy at same time by Subscription at same price. Institutions will be looking to wipe out current shareholders, so any Placing will be at deeply discounted price...e.g. recently, Physiomics (88% disc) and TheraCrfy (75% disc).

Even for the largest companies, valuations are often incorrect. In my opinion, a key reason for this is company guidance and the lack of independence of analysts. They are so afraid of upsetting the company management that they go with guidance +/or- 2% without thinking it through. But things can change and they should do their own research.

I always remember a case when S&N had reported two good EPS growth (18-20%) for consecutive quarters and a strong FY result. But when it came to 1Q the following year, the analysts were all predicting 18-20% EPS growth, forgetting that 1Q of previous year had been stonking so making a difficult comparator. I struggled to get to 0% growth. In those days, we used to ring IR to sound them out and when I told him my thinking and expectations his comment to me was "You might think that, I could not possibly comment" !! Suffice to say, S&N reported -2% EPS for the quarter and the stock fell £2. Our market maker made an absolute killing. Unbelievably, exactly the opposite happened in 2Q....oh those were the days! It just geos to show: DYOR.

JL79: sorry to confuse; together with RM50, we seem to have started a mini discussion board between us, extending beyond our interest in MSI.

To that end, my next one is Senior (SNR). I do not think that there is any rush. 2024 results are on 3rd March and given the poor 9M statement in October, I am not convinced that consensus forecasts, or the market, is fully reflecting that - still trading on a P/E of 25x numbers that I think are too high. However, I do expect a big recovery in financial performance in 2025 and 2026, so I am hoping for a large negative reaction to the 2024 results next week to provide an opportunity to pick up at a more reasonable valuation. There is also an outside chance of M&A.

JL79, may well be right, and I am never shy of locking in profits, but I will wait to see what is said in results announcement on Wednesday.

What a marvellous day...WG. has announced that it has received an approach. Bought in that drop last Monday!

Struggled to find out reason for move, but evidently Bain Capital trying to take it over...watch this space!

The explanation is quite straight-forward. First, I the company has been surprised how long it is taking to penetrate the US market (royalties just £37k in 1H'25) and this is not going to change dramatically in next six months. Secondly, the top-line sales growth was only 8% – first time below double digit growth for a long time. Thirdly, there was a £982k charge to change the CEO – retirement payment for old and recruitment costs for new, which TSTL want to treat as exceptional, but it is all part of doing business. So EPS fell in 1H'25. For full year, you are looking at about 15p of EPS, so trading on 25x, hence the share price movement. To get this going again, need to see traction in the US. Very good company and numbers etc are very transparent.

RM50...Excellent trading update from BPM today. I have tried posting comment twice on BPM chat but will not accept them. Good overview of business at 31 Jan. Only slight disappointment is that NAV appears to be below 700p, whereas I was expecting it to be well north of 700p. Anyway, market seems to like the update.

How on earth is this positive !!? Only sufficient cash until April. Even if all the £1.8m live projects convert, this, together with existing contracts, would still insufficient to cashflow breakeven. Support from institutions for a fund raise will see existing investors wiped out. 2.5p of downside.

RCFX: I do not see much IPO churn. The CEO has 40% and I guess the other founder (COO, non-Director position) has 25% and Octopus is long-term and bought one-third of the IPO shares.

Well done on BPM. Handy to have the IC article just after my tip! But I was only stating the obvious, which has been repeated by IC. My only (slight) concern is that Brian Marsh is/was well connected in the insurance industry and he must now be retired/semi-retired. Will the next generation executives have the same connections as Brian. But , so far, they have done well with their investments. Look forward to next trading update.

I was really impressed by the Investor Meet presentation by the company this morning. Given that it is a very young company (5 years old) and it did nothing apart from getting its business in order and systems in place in the first year (i.e. no trading or contracts), it has subsequently been profitable and cash generative. Management is clearly well connected with UK defence companies and government. I was also impressed that the CEO and COO (both founders) have been paying themselves only £12k p.a. and then taking a dividend from net profits. They will now be paid properly and net income will be retained and re-invested in the business. It seems that they have many opportunities and reduce contract risk through profit share arrangements (i.e. they work in partnership with defence companies). Seem confident of the £8m sales figure mentioned in the prospectus. Plenty of scope for expansion in UK and internationally. Well worth listening to the recording.

I am not expecting fireworks, but I am confident that an early investment here will reap substantial rewards. I took the opportunity to pick up 30k at 33.4p this morning and will tuck them away.

BTW...I did get a reply from Shelley yesterday about the strategic review. Did not say much..."unable to give an estimated timeframe, please rest assured that we will release an RNS as soon as we are able to". At least company knows that we are seeking an update.

RM50, JL79; I was really impressed. Given that it is a very young company (5 years old) and it did nothing apart from getting its business in order and systems in place in the first year (i.e. no trading or contracts), it has subsequently been profitable and cash generative. Management is clearly well connected with UK defence companies and government. I was also impressed that the CEO and COO (both founders) have been paying themselves only £12k p.a. and then taking a dividend from net profits. They will now be paid properly and net income will be retained and re-invested in the business. It seems that they have many opportunities and reduce contract risk through profit share arrangements (i.e. they work in partnership with defence companies). Seem confident of the £8m sales figure mentioned in the prospectus. Plenty of scope for expansion in UK and internationally. Well worth listening to the recording.

I am not expecting fireworks, but I am confident that an early investment here will reap substantial rewards. I took the opportunity to pick up 30k at 33.4p this morning and will tuck them away, as I did with MSI several years ago.

...and Cohort follows at 11am!

RM50, JL79 ....Are you aware that there is a telecon on RC Formix this morning at 10am via Investor Meet site. I'll be listening in to get more information and to see/feel the management team.

The funding round in November was supposed to have been sufficient to see ONC through to decent sales levels...but getting sales traction is notoriously difficult, such that I believe the company is seriously low on cash. August balance sheet shows £0.85m gross cash, the raise added net new funds of £2.0-2.1m (net) and the company had gross cash of £1.0m at 31 January. This suggests that the cash burn is £400k per month, so ONC runs out of cash just after the end of March. It is certainly breaching the revised covenants, so it will be very interesting to see what the Board says at AGM on 10th March, if it gets that far. Share price simple reflecting that there is 3p of downside!

RM50..sorry been busy today.

I started reading the RCFX prospectus yesterday afternoon. I must admit, I did not pay huge attention (at this stage) to what they do. I tend to concentrate first on the financials. These look pretty good. The company has not needed much capital to date and has built up sales and profitability quickly. Management team clearly knows what its about and has the right business contacts. Having been reassured by these, I will start to read about what it does...I'll keep you posted.