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Now the dust is settling on a couple of strange days let's look at where we are.
Despite being told only 2 months ago there was sufficient cash to get us to break even it now appears this is not the case and an extra $20m is required. This is not the 1st time the company has failed to meet its own targets - don't expect an apology from the CEO BTW, he only does positives.
Anyway, prescriptions were c10.8k in Q1, 15.5k in Q2 and now c28.4k in Q3.
If we continue at 25% increase for each month in Q4 that's c55k , so about 110k in total for 2023 (for info i've assumed 11.7k in Sept, so 14.6k in Oct, 18.2 in Nov and 22.8k in Dec). Whilst this is within their new estimates for the year it is less than those previously published (i think this was c125k to 160k).
If 2024 increases by 'only' 10% each month (currently we are c26%) that would be 25k in Jan increasing to 71k by Dec 2024 and c500k prescriptions in total for 2024.
The big disappointment in today's announcement is the net prescription received. It has dropped to $119 whereas the target is $220 to $240. Whilst the net price is $250 per prescription for those not covered by insurance it is sold at near cost so the clinician can at least test the effectiveness of the product on their patient(s). This should be a short term option only before moving to full costing and should not impact all customers. Something is clearly not working here.
Anyway, let's assume the 2024 average price is $150 per prescription (hopefully it will be nearer $200) - on 500k that's total revenues for accufer of $75m. Assume STX get 50% of this plus other revenues we should get a minimum of $40m for the year. Current costs are c$35m a year so assuming these don't increase it's a small profit and the end of the cash burn - yippee!!.
This is the tipping point for the company. If by end of Dec 2024 monthly prescriptions are c70k per month then 2025 should see c1m for the year.
At say $200 per prescription that's over $100m rev for STX.
Good update? They missed their own 2023 targets by quite a margin and revenues will be much lower as the price per prescription has actually reduced rather than increased. The latter is very concerning IMHO.
Now more as their own breakeven target is clearly not achievable.
Other than that it's great
****nal - if sales re lower than expected then it will be a distressed sale so can't see how this is a positive.
similarly, why would viatris be interested in a purchase if sales are not good?
essentially they've already got 45% for a £5m upfront fee. not sure they would bother increasing this unless the price was right. if the price is right, it won't benefit shareholders.
Things must be looking positive here if our old mucker is coming on here , in addition to his usual ADVFN posts, and trying to post a few negatives.
Good job i didn't take his TLY advice.
Just watched the Investor Meets presentation.
Slightly underwhelming as per the results and even the CEO looked a bit bored.
They did answer the questions in some detail though which was nice to see (and hear).
Hopefully H2 will get us to a small profit for the year.
Barn - they will not be profitable in 2024 IMHO, although i expect the loss to be massively reduced.
In H1 accounts marketing costs increased form £1.8m to £2.5m - almost a 40% increase.
Why do you think marketing costs will not increase further based on previous numbers?
If the products are so good why are the marketing costs over 50% of total revenues?
This is a bizarre business strategy
What safety net? If sales revenue does not grow as per the companies (new) predictions, which have been wrong many times before, then they will run out of cash. Surely it's that simple.
The Viatris deal seems to be much better for them than us. They get a large % of revenue for next to no upfront costs.
If sales are lower than we would help, Viatris still get their %.
Cash down and balance sheet weakened?? Not sure what you guys are looking at. Cash flow statement shows that the business generated over £200m in H1. However, investing activities shows they put £110m of this into a term deposit.
So £110m out of cash and into trade receivables (money they are owed).
Overall Net assets have increased from £573m to £709m and perhaps the better measure is net current assets (including cash) which have increased to £648m from £524m.
These are fantastic numbers IMHO.
Very underwhelming update IMHO.
Similar to last year in terms of loss in H1 which will hopefully be reversed in H2, and growth in Germany has been offset by a reduction in the UK.
Still very lowly valued so happy to sit and wait.
Last year we had a trading update in Sept and final results in October for YE 30/6, so we are overdue an update.
Back it June when the disposal was announced we were told
"the Group has continued to trade well and we have had a strong second half to the year which ends in June 2023 and we expect to report overall trading comfortably ahead of last year".
Hopefully the one off disposal costs (legal fees etc) will not be excessive.
For comparison H1 last year was £2.4m revs and a £300k loss. So £3m rev would be a 25% uplift.
Just getting to breakeven would also be a decent outcome as H2 is always the larger weighting.
IMHO anything above £3m and a small profit would be an exceptional performance.
Don't forget the train strikes will still be having an impact.
Barn - what's the saying an out revenue being vanity and profit being sanity. That sort of sums up BRSD.
Yes revenues are growing but the marketing costs are excessive and are still increasing - over £2.5m p.a from £1.8m last year. A silly amount when total revenues are only c£4m, hence the massive losses and the regular fundraises - despite what the BOD have previous said.
Based on current spending i don't think the current placing will be enough to get to breakeven as surely no one will buy via the open offer at over 5p when you can buy in the market today at 3p.
Maybe WeShop will come good, but i've been waiting for a few years on that one.
Strange timing - why not wait until 7am tomorrow.
revenue growth and gross profit increase looks good, but still making excessive losses (over £2m for this 6 months) and marketing spend is now £2.5m, almost as much as the gross profit.
Cash burn is reducing but with £1.3m cash in bank and there are a lot of trade payables on the accounts so i'm not sure there is sufficient cash to get it to cash positive.
Yes, very disappointing. I thought Cyprus was very copper heavy and once the JV was agreed i thought it was nailed on.
Clearly not.
HC - nothing wrong with selling, but we already knew the results (trading update on 26/7) and they were very good, so when these were formally announced it was pretty obvious they would be well received.
It was implied yesterday that the results may not be that good - clearly unfounded speculation, as has been proved.
Surely, if you are selling you want to do so at the highest price possible. Waiting 24 hours could have got you an extra 6 to 7%.
Well the deferred payment for the disposal hasn't gone down well, despite the excellent price - a £7m business elling 1/3 of its EBITDA foe £7m looks excellent business IMHO.
So what will get this moving?
- Good H1 numbers (with limited one off disposal/consultancy costs) and a healthy cash balance will be a good start
- use this money to make one or two decent acquisitions to complement the core business
- receive the 1st payment 9 months after disposal (so end of March 2024)
- get the £1.3m paid in July 2024
Yes, another important piece of the jigsaw now in place. Hopefully further progress will be reported ASAP
Agree Lord, good news but not sure how good.
The US order may now replace the 6 figure H2 exclusivity payment we already receive.
450% online increase is great, but from a very low base and how much marketing spend was thrown at it?
The 4 Asia orders are great but as we have seen before it is the repeat orders that bring in the value, these one off ones can be a little misleading.
Time will tell.
IMHO it sounds like a like for like replacement but with better facilities, which will give the company more flexibility and at a lower price.
MO finished the interview by saying it was a good day for shareholders.
BTW in the RNS, below, it states that both Whitechapel and QMB will close - so that's 50 beds.
hVIVO's current Whitechapel and Queen Mary Bioenterprises Centre (QMB) clinics will close in 2024 but will remain fully operational throughout this transition, ensuring uninterrupted service delivery to the Company's clients.
Surprised the SP hasn't started creeping up as we approach delisting.
Seems easy money to me