Member Info for Porky9

@Soder
Agree, we are looking at solid revenues out of the Travel sector for sure

Interested to read the forward statement this week on H1 Results, Based on current activity it looks like the H2 could well be stronger. I remain VERY confident based on research the 2021 full year will perform well and likely ahead of the forecasts which were very conservative anyway.

It will be forward plans now into 2022 we need to start to hear more about. I think once we can get this DHSC matter out of the way and they can make some non covid acquisitions we can see this business start to properly re-rate.

PE X 1.7 currently needs to change. It can and I'm confident they can do it

Good luck holders

Pork's

Daily tests not self-isolation for police, fire, borders, transport and freight staff
https://www.bbc.co.uk/news/uk-57950930

I understand consideration is also being given to bring the the mid August date date forward for more people to daily test rather than self-isolate.

Looks like this is the way forward

https://news.sky.com/story/covid-19-extra-nurses-called-in-to-belfast-hospitals-to-deal-with-extreme-pressure-from-patients-12364065
Northern Ireland is seeing a spike in COVID-19 cases and people being admitted to hospital with the virus, with the capital hardest hit and every hospital bed in the country occupied.

Meanwhile restrictions being lifted. Interesting that media are focusing on fall in infection numbers yet hospital admissions are increasing.

With significant testing delays last week we will see the true infection rate figures out in the next few days

PS - Someone mentioned, think Larry about 300 test samples being similar???
I can't take that as assumption its the same partner, if you read the PD rules on LFT Validation for Home use all tests must be supported with blocks of data. 300 looks like simply a respectful data size to gain meaningful results from.

These are the ones with 3a validation of their LFT so far:
https://www.gov.uk/government/publications/assessment-and-procurement-of-coronavirus-covid-19-tests/outcome-of-the-evaluation-of-rapid-diagnostic-assays-for-specific-sars-cov-2-antigens-lateral-flow-devices
We need to see our name in lights here....

Meanwhile, this is in contrast to validated PCR tech where we excel and is significantly less competitors. This also has its own criteria and these are the validated tests in this field so far at 19th July 2021:-
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

The evidence is stark really; Within reason any old business can produce an LFT and try and get it validated. Market saturated, when it comes to PCR we are talking an entirely different ball game.

That's why if you are on M&A hunt and want a virtual monopoly , if you control the PCR side you can corner the market. I'm sure the likes of Thermo Fisher, Roche Diagnostics, Abbotts and others will be watching Novacyt's every more...

This has been going around now since jack was a lad (or Graham was a lad :)

I am personally surprised that Novacyt has not had an approach yet. There is significant M&A in this sector, and I would consider Novacyt Hot property to acquire without doubt.

Someone spending £ 237k buying stock on Friday I didn’t think was that big a deal frankly. OK its all relative and volumes were low Friday, but it just looks like a very sound purchase to me. Let’s face it at these levels you can’t go far wrong, so a sound investment decision is all it was imo.

Now if we get a director BUY update on Monday then fine but I won’t be looking out for one.

As for takeovers going forward, well they now have the full audited Year end and next week we get the H1 statement out, so someone would be comfortable at looking at making a bid subject to further DD I believe within a couple of weeks of that H1 statement imo if its going to happen – Lets see.

There are many suitors and timing is possibly right for GM. His and Tony’s LTIP deal ran to the end of 2020. There has been no new bonus deal set out yet as far as I know, possibly because of the DHSC dispute outstanding maybe but, at some point he is going to want to pony up with a new deal going forward for sure.

This of course won’t be required if the intention is to go in with someone else as any acquisition would likely include a golden hello and significant earn out guarantee bonuses anyhow for GM and Tony if a deal was struck.

Personally, I do think a Takeover likely, but I have thought that for a while now.

GLA whatever your call

Pork’s

Further, this speculation about availability….

As for the LFT Antigen test, it’s a high-volume low margin product as discussed so they would need to manufacture high volumes of the stock before they can even consider selling and shipping.

I would imagine sales to distributors would be by the absolute pallet load, if not container. I mean what would £1m wholesale of LFTs look like?

If they started manufacture the day of the RNS 29th June 21, its not even 4 weeks of manufacture time. So, lets just keep figures round and say they now have at best 4m Units ready to go on pallets in the warehouse at £4 a unit wholesale, so £ 16m of product ready for shipping. That’s like one or two client orders? No point in advertising the stocks as they are probably already spoken for.

The next thing we need to see now are deals to increase manufacture output, I am confident Novacyt have the distribution network for sales, I can see obvious manufacturing partners with ODX, but there will be others?

Also, we are still awaiting CE validation on the Saliva Test and not to mention the second gen Antibody test any moment soon. Add these into the mix and Novacyt are going to need to seriously scale up manufacture yet again or as I say cut partner manufacturing deals.

Interesting times.

Pork’s

Not 100% convinced the partner is Eurofins but its an obvious contender.

There are several Rapid Antigen tests around similar S & S levels in the market. I’m relaxed as I understand Novacyt are only forecasting to about 1 million units a week hence, as discussed, the potential by rough calculation is to add about £200m of revenues and £ 60m EBITDA so a nice additional revenue stream on top of everything else.

The Saliva Test is the jewel in the crown here as far as I’m concerned, now this one could get interesting and be a massive surprise, demand could be Significant especially in the education sector due to its non-invasive nature.
In the R & D report Novacyt state: -

"PathFlow® COVID-19 Rapid Antigen is a self-test LFT to detect SARS-CoV-2 antigens using oral fluid samples and provides results in approximately 15 minutes. This test demonstrated a sensitivity of 90.1% and specificity of 99.3% "

Meanwhile, in the market place and its VERY limited for Rapid Saliva Tests, Alpha PH have a rapid saliva version out, S & S Exactly the same as ours see here:-
https://alphatestkits.com/product/saliva-rapid-test-for-coronavirus/
Clinical Sensitivity: 90.1%
Clinical Specificity: 99.3%
Clinical Accuracy: 97%

The bottom line for me is that these add to our already strong PCR sales. It doesn’t really matter who the partner is, Novacyt have an established worldwide distribution channel and its how that’s used to our best advantage to maximise revenues.

Not to mention any high volume government or large private sector wins they can secure on top from around the world?. Let’s not rule out BIG possible opportunities Stateside?

In all these are VERY positive times for the business

Pork’s

Katalyst are a terrific partner to work with and its nice to see Novacyt building on these relationships in the private sector, its only going to get stronger from here.

Just like Biograd its evident that the private sector is going to continue to expand as they pick up the slack from the inefficiencies in the UKs Test and Trace system plus the massive amount of travel sector testing.

As we discussed here on Wednesday, if you are going to work in labs which employer would you pick; mega labs where your employment security is low due to government decisions on closing labs without forward thinking or employers like Katalyst or Biograd where you can progress and benefit from stronger job security – I know which I would pick.

Good luck for Katalyst going forward, they are doing some amazing work.

Pork’s

@Mactrader
Have to totally agree with you, just madness currently
Take Care

@Butchers.bike
Must admit we don't hear that much about sales in Germany. The other one I'm interested in is Japan. That also looks like a fairly lucrative export market.

Although, i guess at the moment demand will be outstripping supply as it is. A lot will come down to what capacity they have and if operations have been scaled up again recently.

We understand that extra unit space was taken over at IT-IS to increase capacity but that's about it. Maybe next weeks update will touch on that.

Feeling positive anyway, no change there :)

Its interesting that Stateside in WSJ they are reporting that the UK is engaged in an Experiment:-
https://www.wsj.com/articles/opening-its-economy-as-delta-variant-surges-the-u-k-becomes-a-covid-19-test-case-11626884725

"The experiment should give a strong signal of whether Covid-19 can be relegated to the status of a manageable, seasonal menace such as influenza and whether lockdowns and social distancing can be consigned to the past"

Well the H1 statement will be out next week and we tend to see interest in the stock around that time, currently volumes are fairly low but it's the same in a lot of the market.
Good to try and get ahead of the crowds :) You can't go far wrong imo at this level.
GLA

Highest Wednesday since Jan 13th
Major Testing Boom here in UK and ROW
Novacyt are going to be be busy for sure

@VanV
I wasn't suggesting that they needed to deliver £1bn of revenue to justify a much higher market cap, i was merely just trying to illustrate that they have proven they can scale the business which i something some businesses could only ever dream about.

We have previously proven the valuation argument just using a simple example such as EKF Diagnostics (EKF) where its delivering £60m of Revenue a year and £ 15m EBITDA and warrants a PE Ratio of X 29
https://www.hl.co.uk/shares/shares-search-results/e/ekf-diagnostics-holdings-plc-ord-1p

Now i grant you, EKF have proven the longevity argument but, its a matter of time before we also do the same. I don't see Covid as short term. In fact, i see it as a permanent ongoing issue, like the flu only worse. it will keep mutating and will be a constant diagnostics testing area.

Now in future years it may be that revenues decline from pure covid testing but it will still contribute and i believe significantly more than £15m EBITDA a year from this vertical!! Then as you say add to that non covid areas and we are seeing a serious diagnostics player on the world stage.

I'm not saying we should jump to a PE of X30 overnight but i am saying we should be valued at a significantly higher PE Ratio than X 1.77 which is where we are placed this evening. Its a farcical situation:-
https://www.hl.co.uk/shares/shares-search-results/n/novacyt-eur0.0667-cdi

Take Care now

Pork's

@whatnonewsyet
:)

@Surfie1961
When the SP is £20, i guarantee you will be saying "oh i wished i had brought a load of that stock at £3.50 when all that nonsense with the DHSC was kicking off". That would be hindsight as your outcome at that point known.

From my perspective i see this as an Investment opportunity. Yes, a leap of faith is required, nothing comes without risk and its not for short term traders. If you need the money out tomorrow this is not for you.

If you have ever tried to scale a business I can tell you its not easy, the challenges to get your first million turnover, then scale to £5m and then scale to £15m are all different and take time. GM has already scaled this to £ 277m Revenue. The distribution network world wide he has built is not easy. His management team are top draw. It takes time to do this. Having scaled to £277m and as a result they have the skills to scale to £1bn revenue that's the reality. Granted he will need acquisitions and time BUT it will happen.

Traders want quick fixes, they want the returns now but remember you have not made a profit or a loss until you close your position. So yes, i have a number of stock buys in the red on paper and a few blue mixed in but ultimately im confident on my outcome here over the longer term.

Good Luck

@whatnonewsyet
why......sp keeps languishing!!

Simple really, this is the AIM, bigger investors and II want to see proof of delivery. They don't like uncertainty, they want proof the business has longevity, they don't like disputes. This grey cloud of uncertainty attracted shorters and they further savaged the share price.

With all the uncertainty removed the share price would be materially higher and they would be buying in big style. With only 70,630,000 shares in issue it wont take much for those to be taken up and the SP absolutely rocket.

Currently trade volumes here are fairly low for now. So the investment window is all about the RISK/ REWARD ratio. Do you want to buy now or pay more for certainty? Do you think the downside risk too high in relation to upside risk? Or do you think like i do that the downside from here is more than priced in and the upside substantial?

These decisions you need to make for yourself.....

@Jackin36 @earth70000
thanks, well it wont be for want of trying that's for sure..
I remain really confident here.

No matter which way i cut it, my valuation is worlds apart from the current mcap.
I don't recall seeing a business of this caliber with a share price so divorced from its true fundamental value, in the last 20 years, that's how i see it.

I mean think about, the divisions Microgen, Primer Design, Lab21. Heck they paid £10m plus debt for the manufacturing IT-IS business. Then you have R&D the Bioinformatics side, its distribution network, its goodwill, its patents and Intellectual property. The value is currently £ 242m and next week they will likely declare they have £110m cash at bank to boot. This is a crazy situation.
Not sure how long it will hold but i'm taking full advantage in the meantime that's for sure.
GLA

@Bluelight
I have just totally given up on the SP movements at the moment, the MMs can do what they like to encourage buying or selling. I'm just now relying on plain old fashioned fundamentals
A rapidly expanding diagnostics business, profitable, war chest of cash, fantastic R&D, fantastic product range, superb distribution network so route to market covered and materially undervalued
PE Ratio less than X2 against Industry peer average of X15
https://www.hl.co.uk/shares/shares-search-results/n/novacyt-eur0.0667-cdi

Further, I'm now starting to look on the DHSC dispute as a blessing. As i have been able to keep adding at these low prices, if the dispute hadn't occurred i would be paying three times the price now for this stock.

Just got to sit back and let events take their course, we are in a major testing boom, NHS will shortly run out of Promate if not already, sales will be filled direct. Novacyt will deliver sales Stateside, the new product range will add further revenues and by my calculation at least £200m a year and £60m EBITDA on Just ONE line, that's probably what GM means by "significant" oh and i think DHSC will get resolved in our favour which will further boost the cash position.

Its a win win win from here as i see it...

@ValJu
LOL - not quite at TR1 stages but yes you could say I'm comfortably adding. This stock represents the best upside potential in the market imo

If you treat staff with utter contempt by offering them a job as a lab technician start to train them up and then say, oh sorry bad news we are closing the labs now, covid over you need to find a job elsewhere. What does that do for staff morale?

This is exactly what lighthouse labs have done already.

So now they are re-opening again. Come and work for us and need 1500 staff, 300 of which recruited.

I know what I would tell them!! And if I had no choice but to take a job at the government lab due to no other employment options, I would take the training and have one eye on the door looking at other labs in the region in the private sector, I could join. So, staff retention will be another problem for them.

It is self inflicted frankly. Lack of forward planning.

If I were in that Industry, I would take a job at say Biograd all day long over one at Leamington Spa mega lab and as for leaving a stable lab position to join mega labs, forget it…

A report I read stated that the government thought they would have recruitment and the lab at capacity by end of this year… yeah, and I might start flying…

Meanwhile, great news for us as Private sector and NHS direct picking up the slack.

Pork's