Member Info for Porky9

@ScardieCat
You are putting a heck of a lot of effort into discrediting this business.

Let me help clarify a few points for you:-
* There are a HIGH volume of Order/supply disputes every year with DHSC. The good news is that the contract includes a 28 day period to enter arbitration to resolve them. The majority are resolved in that period. It is Highly likely that NCYT and DHSC will resolve in that time phase.
* The statement said "May" revise not "Will" revise but, based on what we do know and what Novacyt have delivered the range will be between -23m and + 27m. There is a minimum contract value of £ 150m of which they haven't invoiced £ 27m of. So worst case scenario a £ 23m mark down in Q4 BUT frankly i don't see that being a reality. In fact it could well go the other way and DHSC settle the balance of what's due!!!
* You have seen the 2021 forecasts they have just been revised down following this adjustment. Circa £ 160m EBITDA and £200m Cash at Bank at the year end. I think its possible it could end up better than that due to the new product sales going live and being released this quarter. Including the next gen antibody and Antigen LFT products.
* ROW sales if a hospital Buys Gensig kit they will likely continue to buy reagents for it after (Razor blade effect) no guarantees of course but no guarantees someone buying a big mac and fries from Mcdonalds will buy another next week. I guess a lot of this comes down to if you think we will still need to test for this virus, how long this situation around the world will last for and if/ or Variants of Concern will still need checking on in the future or not. That's your call.
* I would say that GM is a VERY honest man with high integrity. I'm not sure he is a great spokesman for the business, PR has been fairly cr@p to be honest but they have never failed to deliver quality. They currently have the ONLY test that can detect ALL variants so they are doing some things right.

You keep mentioning this two bit shorter on Twitter, you don't know what shorting profits were made. He Probably did well shorting NCYT especially as the SP has halved in so many days from an already low base level. Its not 4.7%, the Share price has tanked lets be clear about that over 200m wiped. Now the question is can these shorter's squeeze anymore out of this from here??? or is it better to move onto another stock with more to go at? I would say the latter now. Share price is burnt out!!

Finally, i'm not sure if you are invested here or just posting to vent. My view would be if you are are shareholder and not happy you should sell, cut your losses. move to pastures new.

For me, i hold the stock and whilst i have had a royal stuffing with the SP recently, I still think there is a chance for GM to turn this around and i'm giving him until at least the H1 is out for him to prove that. Business is never easy, he has some current challenges but they are NOT insurmountable challenges. They can be resolved

Regarding the prospect of a take over by Abbott i would say its highly likely.

It's a total no brainer frankly, even stripping out DHSC all together, its still on course to deliver £ 160m EBITDA this year and £ 200 m cash at bank!! and its currently sitting at a sub £ 300m market cap. Yeah right,,,,,

We have the ONLY test to detect ALL Variants of Concern. Not to mention the current R&D pipeline.

If Abbott snapped this business up at say £ 700m (£10) on a VERY rough quick calculation i estimate it would add circa £ 6.4 bn of value to Abbotts business current valuation metric. That's right you read that figure correctly £ 6.4 Billion NOT Million. That's how ludicrously cheap our current valuation is.

At the current price it could well create a bidding war based on other deals done. As illustrated above any price Abbott paid between £ 700m and £ 6.4 bn would result in a exceptional value to them.

Frankly, if you weren't even bothered about what Novacyt does, adding this business into your group adds so much more value than the acquisition cost it would be hard to ignore.

The business would fit Abbott, AZN, GSK, Thermo Fisher, Perkin Elmer and that's before we come onto any out of sector players, private equity groups or plain asset strippers. When the sum of the business is less than its market cap a lot of companies will now be running a calculations over this.

I would say that Novacyt being acquired is no longer a case of IF its more of a case of when. GM and team need to focus on what they are great at, R & D. A T/O would enable them to do that.

In my experience these matters are nearly always settled fairly quickly during the 28 day arbitration phase. Arbitration is there specifically to enable both sides to put forward their argument and reach a compromise.

Its not in anyone's interests to have a long drawn out dispute over effectively the sale and delivery of some diagnostics products. Its really not that complex.

This will result in either a product swop, a credit note or a balance of payment made.

Anyhow, now the Share Price has been smashed in half from an already ridiculously low starting point even if they knocked £ 50 million off last years figures, the share price would still be nonsense in relation to its fundamental value.

Talk about over done, Jesus.

BR averaging £7.50 at best guess. £10 SP would deliver £ 700m offer giving BR small premium.

The SP was being kept in a tight trading range circa £ 7 it was imo about to break out. Had the SP started to rally past £ 10 it would make any bid far more expensive. The timing of all this was very convenient.

Lets see what happens next

GLA

@Hopeful32
Couldn't agree more, you take care now
Pork's

@Deas99
It is possible that Steve Bennett has called this right????

I'm not a big fan of coincidences:
SH were in a good place and we were building for a SP Rally then they pushed out the statement.
Having been Hit, again SH starting to re-group and buy in for another push and we get hit with the ODDO valuation statement.

GM was 100% aware that his comment on forward outlook in the Jan results statement " difficult to provide a clear forecast on the financial performance " damaged the SP immediately by 17% and continued to decline. I know this because i personally made a big point of how bad this message was perceived by Share Holders directly to him. Other SH did the same thing.

In addition to mentioning the Dispute in this TU again he quoted "the Company continues to have limited visibility over future sales" WHY WHY WHY??? It wasn't required. It did not need saying!

Now in my considered opinion when a business has bad news they tend to push out other positive news to try and dilute the situation. In GMs case he hasn't bothered. In fact it feels like he has gone out of his way to make the situation worse.

I would go as far as to say that recent actions could indeed point to a deal being done and a price "Subject to" has been mentioned and these recent moves are designed to keep the SP down whilst the deal is finalised. It would not surprise me in the slighted to wake up to an RNS saying we are in talks with Abbotts ..

As for the dispute, frankly i 100% believe this will amount to nothing.
The minimum order value was £ 150m (Novacyt have not invoiced £23m yet). DHSC may be saying we didn't need the 100 machines that were late if that was the case the order value would be reduced to £ 100m a refund of £27m, Novacyt meanwhile probably want to invoice for the minimum contract value.
It does not matter. It will come down to what was agreed to be supplied and what they took delivery of. So as i see it worst case - 27m best case +23m or meet somewhere in the middle. I bet i am not far off here???
Ultimately this is just a mere distraction.

I believe that GM no longer cares about SH because a deal is about to be done. Hope to be proven wrong.

GLA

@Maestro
It's cicrca £ 130-140m ish based on the first Quarter results and its forecast to grow to £ 200m by the year end.

We will have a much clearer picture of the entire situation, trading position, next gen LFT products, forward plans, cash at bank etc etc by the H1 unless a bid comes in beforehand.

For me personally i will give GM until at least then to turn the situation around. Frankly its takes just one decent win worldwide to completely change investors views, but each to their own.

The doom and gloom on here coupled with posters with a specific agenda's is just relentless,

There is little discussion here its just "Company is Sh@t" sell now "Oh i might buy if the SP falls a bit more" How about some bloody substance to back up those claims????

I'm still confident the situation will be turned around fairly quickly. Likewise so will shareholder sentiment

Good luck genuine holders

OK well lets look at the glass half full then instead, far better to be a pessimist...

Black Rock can sell the Fcking lot all 2 million shares worth £ 17m without telling us and enjoy circa a £9m to £10m loss on it.

@TrueBlue
I agree with you

It's more challenging because we have to endue shorters, chancers and other pond life posting here predicting further doom and gloom without any substance to back up the "it will be 50o by Friday" or "I'm not buying unless its 10p" type posts. See it before, worn the T-Shirt.

The moment they release the next gen products, update with a resolve on the dispute, publish the accounts and a trading vision the situation here will change positive just as quickly as its turned negative and these doom mongers will be history - watch this space.

@AK_Gabba
No - they need to advise at every 1% point - those are the rules of the Bourse.
Lets see what they do....

@risehill1
With respect you are confusing mass testing requirements with point of care PCR testing. You don't go to Hospital and have a kidney removed to be tested with an LFT do you? Likewise a LFT wont know what new Variants are trying to come through. The LFT has its uses but we are not comparing apples with apples.

Regarding the outdated indy news article, pro-mate was released to reduce the steps in the process and remove the requirement for cold cabinets so it was a material improvement in the process and did the job. The implementation issue was regarding staff training during a pandemic. This was later improved.

Further we can see that the minimum order was £ 150m and the invoices are some £ 23m short. So best guess is that the dispute is over whether DHSC settle the remaining bill under the contract or not? - this will most likely be the dispute.

However, irrespective of what we may all guess is the dispute, goods have been delivered in good faith. We don't know the amount of the dispute but we will soon. IF novacyt have delivered products in good faith they will need to be paid for them simple. Novacyt will have held back products for this client which they could have supplied elsewhere.

The arbitration period under the contract is UP TO 28 days. My guess us they will reach some kind of agreement in that time. No point dragging it on.

Time will tell.

@Wilson63
You can't, no matter how you do the calculation it totally defies all logic:-

Sales 179m
Ebitda 94m
Cash at year end 219m
Equal a Price target of £ 5.70
That’s a mcap of £ £400m

IF this is reality then Novacyt should put the business up for sale, call it a day.

I am using ROUND figures here for simplicity.

Now interested to know what Black Rocks next move will be here?

We know that In March IIs were playing the stock, buying, and selling to flip a couple of percent.

To keep the math’s simple let us say deals were between 8 and 9 Euro = 8.50 Euro and let us call that £7.40 SP in March.

I do not know what Black Rock first brought in at, but the holding moved about from just over 2 million to a bit above and bit bellow during that time, but for the purpose of the calculation let us say they hold 2 million shares as at today and let us be further conservative and say that after short selling and manipulation in that period they average £ 7.

That would be an exposure of over £ 14 million.

The SP has crashed to £ 4.

Black Rock are in the business of making money, serious money. They know the market and are not in here for 20% they are in here for MULTIPLE returns. So, what will they do now?

If I were Black Rock, I would buy as much stock as I can at £ 4, at least another 2 million shares if not more to not only half my average cost but also for greater control. I would then talk to the other funds involved and I would be on the phone to GSK or any other player saying let us bid for this. The IIs now control X and we will support a bid at Y. It has cash at bank of x, market leading tech and its revenues at your PE ratio would add significant value to your companies bottom line.

This is an absolute “no brainer” move.

Alternatively, I could cut my losses and sell the lot at £3.50-£4 and take the hit, but you do not make profits that way, do you? Black Rock would rather make profit than file a loss on an account. Or they could mess about dipping in and out shorting to get a couple of percent points each go however that will take a bloody long time in view of the sudden crash.
So what’s next?

Interested in other thoughts on this?

Pork’s

@SR123
Not seen the Numis one yet but hope to get hold of it shortly
Can you indicate the Buy target?

Starting to run now.
Shaken loads more out this morning, moving back north of £ 5.50
GLA

Last time a number did contact the company, emails easy to work out graham.mullis@ and mandy.cowling@ both novacyt.com
Likely just forward to the PR agency but you never know.

I am a bit surprised we are not seeing any positive PR issued I have to say. Golden rule of business, when you have bad news lesson the blow with some other positives..

Most odd situation

GLA

Lets keep adding and spank these shorters...

Panic due to set in VERY shortly, LMOL, bring it on....

True,, can't argue with you @HarChris.

But at a £280m value when they have half of that in cash and growing per day and sales ex. DHSC of £35m+ in the quarter you have to ask yourself is it worth more than that especially with other similar plays being sold and valued 12 to 20X higher.

Still if SH want to sell at fire sale prices that's there call i guess.

I just cant get my head around why GM is not putting out any positive messages around all the good stuff they are doing to drown out these negative messages. Doesn't add up.

I'm of the same opinion and Adding

You have the shorter's on the one side trying to make a few quid and then you have ODDO helping create further uncertainty when the bottom line is the company has just delivered £45m of NON DHSC sales in the quarter, its market cap is sub £300m and has north of 130m in the bank.

We have just seen an acquisition of £590m on a much smaller business doing £35m in YEAR not the bloody Quarter and it has debt. You couldn't make this up....

If a TO is being done subject to DD of the accounts going on behind the scenes we will know soon enough and the shorters here will at least get a well deserved smack.