Member Info for Retireby40

GB-

"Why would we need to raise funds if we just closed a £2.75m placing and a further £250k in warrant shares we did not expect?"

"Your answer should be, Exactly why? Well, we don't and I have said in many tweets and I never raise to keep the lights on."

"I am fully cognisant that Private Investors play an important role in AIM, but if we did consider an acquisition to accelerate the introduction of infrastructure to meet the demand of LabskinAI and Labskin services, we would, of course, combine debt and equity. It is for that reason the statement is intended. It is not a flag waving a placing, especially since we just closed one last month."

https://lemminginvestors.blogspot.com/2019/06/integument-fy-2018-update-very.html

I think he was illustrating why he doesn’t need to raise more cash for the appointments, the new facility is because they raised with the Rinocloud acquisition and they also have the warrants so they’re covered.
My notes from the video- 300% increase in 2018 from continuing operations and this trend is continuing into 2019.
Rinocloud generated nearly £200k in Q1 19 and this is accelerating.
Running to catch up with demand, EU regs a driver with companies kind of panicking and keen to get accredited.
GB said 2017-2018 was good and 2018-2019 so far is great and will get even better with the increase in capacity.
Cash raised being used for growth/satisfy demand in terms of appointments and the new facility in Cork. 24 of the largest pharma cos are within a mile of the new facility so they’re In the thick of it.
They need to catch up on orders in terms of the increase physical lab space that should be online in Sept in York but the AI/digital side is well-placed to grow from Cork now.
CBD will take off and there is a lot of money being invested in this space so lots of money for testing that’s required so lots of opportunities here. Already has case studies with STOER and now DAYE.
There talking to various potential partners and will branch out from cosmetics to the drug trial space. The could JV, or some other form of collaboration, talks ongoing in CRO space.
Lots of upside and potential.

Because of the changes to the business model the Company is seeing an improved pipeline of activity. The Rinocloud acquisition and its development team has integrated well, as much of the work in collaboration had commenced prior to completion of the transaction. Moving to a higher value service offering and entering the clinical and medical device trial sector is both exciting and challenging. With an increased order pipeline, the Company requires additional infrastructure and expertise. The announcement on 20 June 2019 of increased laboratory space and personnel has secured immediate organic growth. The Labskin Human Volunteer skin cloning capabilities opens opportunities to explore options of collaboration, partnership and acquisitive growth to achieve Company goals of meeting increased demands from our clients, regulatory compliance and enhance shareholder value.

When company’s grow at a fast rate it’s important standards don’t drop and processes are in place to make sure the company can continue to execute effectively. The CEO and BoD will know this so as well as making sure capacity increases it’s making sure robust processes are in place to maintain quality and ensure efficiency. That’s also why the recent appointments were needed, especially as far as the digital side is concerned.

Although I doubt we’ll get a trading update given we’re still in H1 I hope to get a decent outlook statement tomorrow and better still if the CEO confirms the growth trajectory continues and we have a great pipeline. I also look forward to the interview and think that’s a great way to work, explaining some elements of an RNS published the same day in interview format.
It’s tricky to remember the BoD have only been in place since Aug last year, less than a year and what a turnaround.

I’d imagine there’ll be some decent buying on Weds (assuming the AR doesn’t land then) in anticipation for the AR and more importantly the outlook and trading update. I assume we’ll have one as this has been implied. We know what the figures will say but it’s all about what lay ahead. The 2 recent appointments facilitate growth and they have a lot of work to do. I imagine FY19 will be some 4 X that of FY18 given Rinocloud had a great Q1 and was due to accelerate. If H1 is near to say £850k that will be some 70% more than FY18 and H2 will likely accelerate further.

Lemming investors blog -

Integumen strengthens senior sales and IT executive team

Labskin AI opens digital hub in Ireland to accommodate expansion plan across the EU and US

Integumen announces the appointment of Paul Ryan as Head of Enterprise Sales at Labskin AI. Paul has managed strategic partnering programmes and initiatives with companies such as Siemens, Microsoft, Accenture and IBM and joins the Company from 8 West Consulting, a company with more than 240 personnel, where he was Head of New Business Development. He has worked with a network of clients that include Avon, Image Skincare, Estee Lauder and Anthem Inc., a Fortune 50 US health insurer.

The Company also announces the appointment of Colin O'Sullivan as Chief Information Officer (CIO). Colin is a 20-year veteran and joins the team from the Australian Medical Association where he was Group Information Officer. He brings extensive cross-platform software experience in medical and science applications ranging from enterprise applications, cloud computing, artificial intelligence, IT operations, customer experience and development operations. Over a six-year period, Colin was responsible for transforming the online business of the Australian Medical Association.

Make no mistake, these appointments speak volumes as to the credibility of SKIN as a company, technology, markets, etc. These appointments should offer encouragement to investors and demonstrate the direction the company is heading.

I asked CEO. Gerard Brandon about incentivising such high calibre management and aligning this with investors. In typical fashion, a straightforward no-nonsense response; "They are paid salary plus strong results orientated bonus. I am a strong believer in removing external concerns from to people so they focus on what they do best. Deliver results. If they hit their target everyone wins, big time as their share option package rises with everyone else."

"The great positive on exercising of warrants are that they are cheap to access to extra working capital. No advisor fees and everyone wins when supportive shareholders can exercise "in the money" warrants. Of course, the massive liquidity in the Share means even if they were sold they would disappear in an hour of trading. So if you look back at the warrants exercised since the RinoCloud acquisition, warrant income more than covers 9 months salary if both appointees and by the time that comes around the increase in sales will address the rest. Plus hitting the targets means more sales, higher share price and these executives are well rewarded, as are Shareholders. If there are Warrants exercised "in the money" the company is doing the right things all around."

Labskin AI Digital Hub Ireland

Following the RinoCloud acquisition and integration of data management and analytic services into Labskin AI, Integumen has taken new offices in Cork, Ireland to centralise global IT operations for the Group. These state-of-the-art fa

More PR next week in-line with the AR publication. Nice!

From the boss-

Not this week Bradley, though there will be a @proactive_UK video next week for the Annual Report with @AndrewScottTV time to be confirmed

Good point and from GB-

Exercised warrants equals chea additional working capital, no advisor fees. #SKIN liquid to easily absorb the small amounts with ease. Wins all around. We are getting it right when supporting shareholders profit

A reminder of where we are likely to be and this is conservative -
Remember the AR is to be published by a week Friday.
Last year - FY 2018 total revenue GBP502k increased 111% (FY 2017 : GBP238k) and whet was really impressive was the increase in revenue from continued ops, nearly 300% up.
We know that Rinocloud posted nearly £200k in Q1 2019 and they expected subsequent Qs to be better but let’s say £400k for H1. We also know that 3 deals contributed nearly £300k in H1 so we’re at £700k and let’s say conservatively we achieve another £150k from other projects/products that’s £850k for H1 which is some 70% higher than FY18. I imagine revenues will accelerate further in H2 so we should be close to 4X what FY18 generated.
Looking at the current market cap there’s an argument we’re over-valued but given the potential which is reinforced by the growth trajectory it isn’t at all and we should be nearer to 5p come YE than 3p. Just my view.

From the first thing gap up. Onwards and upwards!

The 225k is my buy so I assume the ones that followed are too.

Am surprised there isn’t more buying here given the AR is to be published by a week Friday. I’d hope it’s released early part of next week and am really looking forward to the business review and outlook.

Last year - FY 2018 total revenue GBP502k increased 111% (FY 2017 : GBP238k) and whet was really impressive was the increase in revenue from continued ops, nearly 300% up.

We know that Rinocloud posted nearly £200k in Q1 and they expected subsequent Qs to be better but let’s say £400k for H1. We also know that 3 deals contributed nearly £300k in H1 so we’re at £700k and let’s say conservatively we achieve another £150k from other projects/products that’s £850k for H1 which is some 70% higher than FY18. I imagine revenues will accelerate further in H2 so we should be close to 4X what FY18 generated.

Looking at the current market cap there’s an argument we’re over-valued but given the potential which is reinforced by the growth trajectory it isn’t at all and we should be nearer to 5p come YE than 3p. Just my view.

Twitter -

Massive opportunity for #Integumen in the short, medium and long term. I imagine satisfying demand will become an issue for @gjbrandon and his team. AR due at the end of the month and here’s hoping we get another great RNS beforehand. Greedy I know!

GB’s reply - If you don't ask, you might not get one, but then again ?? it just depends on what can and can't wait for the Annual Report next week

The CEO has done what he says consistently so the assumption that we’ll be hearing about more contracts in the coming weeks and possibly days seem highly likely.

This is excellent news for #SKIN @gjbrandon and by the sounds of the RNS....the news flow is set to continue? These contracts also allow Integumen to show what they can do and prove they are at the forefront of non-animal skin testing to a wider audience.

CEO - Yes, plenty more what that came from

According to the chart sent by someone last week the next gap to fill up is £5.80. DYOR but this is undervalued big time.

NO DEBT
Cash in hand £16.5m
Big revenues (increased by 77% last year)
contracted revenues at Dec. 2018 of £88m
FCA out of the way
Launch of new water retail prodect added to the already existing energy products
so few shares in the market and even fewer freefloats
Directors buyig

Its a steal at this price IMHO, DYOR!

Given 1000s of products need testing in the next 12 months there is a huge short term opportunity so I expect several such RNSs for the coming weeks. Also many US cos who use CBD in products will want to hit EU shelves so I expect we’ll pick up business from across the pond.

So existing products sitting on shelves that come into contact with skin have to test their products by May 2020 as well as new products being launched. A massive immediate, medium and long term opportunity. Lots of US CBD products to target too. Huge total addressable market.

When this gets to £50m which in my view is a few RNSs away you’ll get find managers all over it. Massive addressable marker and near term opportunity with existing products on the shelves who want to remain there.