Member Info for shandypants2

All dividends are a distribution, usually a distribution of profits, so not sure that's true.

I suspect as it's the first HVO has ever paid out there's some admin in the background that needs to be completed. I'm with HL and my divi payments have just appeared.

Greg is a very well paid CEO considering how loss making STX is and the impact on the SP since he joined - down 90%.

He joined in June 2021 as was paid £244k for the 7 months until YE. In 2022 he received total pay of £678k which included a bonus from the previous year of £178k. The company added on an extra 25% to this as they delayed paying it so he receive £244k in total.

Furthermore, his 2022 bonus was paid in April 2023 of £329k. I suspect his pay over the last 2 years equates to c50% of the total revenues generated.

In the accounts it states he has options for 5.8m share options too. This week they have given him an extra 7m options. Essentially all he needs to do is stay in his massively well paid job to benefit from these almost 'free' shares.

I have no issue rewarding the CEO but the surely that should come when we breakeven/reach profitability.

His pay and his free shares seem massively excessive. I have complained to the remuneration committee - not expecting a response!

The headline sale price is great, especially as there are no payments linked to future performance, which i expected.

However, the complex payment structure is both confusing and not guaranteed. The Loan note is being done at a very attractive price for the buyer (interest at the current base rate) and repayment is over a 3 year period.

The upfront payment is just over £2.1m or £3.4m if a redeemable share is not issued. No idea what this redeemable share is.

I honestly thought the SP might go up 50% based on the headline price being received. The fact that the SP rise is only 10% appears to show that the market doesn't quite get it.

However, with current trading going well, with a healthy cash position and now cash to be paid to us every 3 months surely this is massively undervalued.

Yep, not looking good for MSYS and receiving the money owed from DVRG.

Reading between the lines it looks like their previous auditor resigned because they hadn't been paid for the previous year and reducing/mothballing operations in STC,Labskin and Rhinocloud is hardly going to encourage a potential buyer for these operations. I suspect all 3 are heavily loss making and have been massively overhyped by a certain GB.

However, Modern Water is looks a decent business so who knows. YE accounts will be of interest

Agree, a great tie-up.

Philips are also big in Europe as well as North America so hopefully this can expand our coverage outside of the US.

https://www.philips.co.uk/healthcare/resources/landing/mr-7700

Shocking update, but i think it was expected.

Pretty clear that STC, Labskin and Rhinocloud are nowhere near profitable despite all the hype. STC seems to be overly hyped based on free samples and there is not much behind it. Labskin has been used for a number of years by a number of big beauty companies so surely there must be some value there?

If the auditors left just before starting the audit i strongly suspect they did so as they hadn't been paid for the previous year.

Can DVRG survive? Who knows

I can see why. Was in the Manchester Boom Battle this Saturday afternoon. Very busy despite it being a lovely day outside. Good mix of age groups too, although clearly targeted at the younger ages based on the music playing and the volume (very high!). Was playing shuffleboard next to the bar, which was doing a good trade despite the early time of day.

Was the kind of thing you would only do once or twice, but can see why it is popular.

I can see a few issues with the accounts.

Firstly the £1.5m writedown is clearly not a positive. Ok, there is no cash impact, but it is a concern.

Secondly, cash. The cashflow statement is good but looking at the balance sheet whilst there is a healthy cash balance of c£1.8m account receivables are c£2m whilst accounts payable are c£5m. Therefore, the net current liabilities are greater than the net assets, never a positive.

Finally, the current bank borrowing of c£1.5m is secured at base rate plus c3%. As the base rate keeps increasing this is becoming more expensive.

So whilst none of these alone are a big issue, combined these probably account for the 10% SP decline today.

However, whilst i'm still positive on SAL maybe the biggest factor today was no trading update for 2023. Positive words but no figures. As H1 is almost 5 months in this is a little disappointing. H1 last year was a c£300k loss so i'm hoping this is considerably lower this year. Breakeven would be an excellent performance IMHO, as H2 is the big earner.

Terry - how are you coming to that conclusion? Would be interesting to see how you value this. Looks cheap to me

Really not sure how you can claim NFX has enough cash until 2024 when it just raised £70k - yes £70,000.

Cash at 30/9/22 was c£400k and 6 months admin expenses are c£400k. You can do the math.

NFX must be running on fumes

Have you seen the new adverts for Chase gin and vodka on the TV? Seems to have come from nowhere. A british gin and vodka distilled in Hertfordshire. What a lovely idea.

Behind it is the biggest drinks company in the UK Diageo.

This sits directly in DIS's gin and vodka space and probably has a marketing budget 100 times ours plus direct access to every distributor - retailers and pubs/bars etc.

Almost impossible for DIS to compete

Totally agree handy, however, it is a timing issue.

1. get doctor to understand/agree that Accrufer is the best option for specific patients - say 3 months

2. doctor identifies appropriate patient(s) - possibly only after salt based options have failed - maybe 3 months

3. Wait for impact of accrufer to be proven , i.e iron levels increase in patient - 3 months

Now doctor is convinced by the product and other patients will be prescribed without the 'push'.

So potentially 9 months from initial contact. Some doctors will already be there, others being contacted now will have a long way to go. That is my concern with 2023 numbers - as the 98 salesmen are only now up and running the clock will be only now be starting for many of these contacts.

Prescriptions will definitely increase, and substantially, but will we get to breakeven before the money runs out?

And just to add to your good summary Banbury, Peach pubs that was acquired in late 2022 is a very similar set up to City Pubs - more food focused than pure pub - so hopefully they are performing well.

The extra bank holiday in May can only have helped H2 trading too

BigBite re the 16 sales reps 'doing' c200 prescriptions each, i have re-watched the presentation and have a few observations.

Previously we were told the 2021 fundraise was to fund 30 sales reps. Subsequently STX has stated that sales were via 22 salespeople. At the time i pointed out that there is often a high turnover of c20% of 'struggling' salespeople and so the c5 or 6 extras could have been used, but released after a few months and not included in the 22 figure.

In the presentation 25 salespeople were mentioned (not the 22 previously quoted) and of that the 16 top performers were hired. Based on this it appears they are averaging 200 prescriptions per month, so if we get to 100 then 20,000 per month or 240k per year is achievable. I agree. However....

These 16 are the top performers so clearly not everyone will hit this level

Previously CEO stated sales via a clinician can take up to 6 months. In the presentation this is reduced to 3 to 5 months, however, it is still a decent time period. So people joining in May not get any sales until August/Sept.

Based on this i suspect Q2 figures will not be great, but will show a steady increase.

Q3 and in particular Q4 are critical if YE targets are to be hit and the cash burn is reduced.

With c10k in Q1, lets say this doubles to 20k in Q2 STX need c100k in H2 to hit their bottom 2023 target.

With 98 salespeople that's 170 prescription per month for H2.

Definitely achievable but not easy.

Let's see how they get on

Surprised the SP is drifting down, albeit on very low volumes.
Vigilant sale could be announced at any point and should have a positive impact - possible a £5m plus windfall, and the overall company valuation is only £7m.
Excerpt from the last RNS is below:

"As announced on 6 December 2022, the Board is considering the proposed divestment of Croma Vigilant. Discussions in relation to the proposed divestment remain ongoing, and although there can be no certainty that the Group will complete the disposal, the Board hopes to resolve a sale by the end of the current financial year. "

broken through £1 now. This was over 140p last summer so with a decent H1 performance i think the 150p area is very achievable

IMHO it's a bit of a mixed bag. Positives are the sales teams have been put in place in line with the suggested timelines so H2 should be a period of rapid growth.
However, Q1 2023 prescriptions were c10,500 which is a little disappointing as Q4 was over 9k. A good c20% rise but as YE numbers are estimated at between 125k and 160k there's clearly a long way to go.
For example if Q1 was 10.5k and this doubles in Q2 21k, maybe 35k in Q3 and 50k in Q4 that's 116.5k, below their lowest estimate, despite rapid growth.
Previously CEO has stated it takes c6months of discussions before a clinican may be prepared to prescribe. Many of these conversations are only just starting.
Cashburn is difficult to estimate as costs will increase substantially but so should revenues.
Based on 31/12/22 to 31/3/23 they had £2.8m received c£24m from funding and now have £19.2m, so c£7.5m cash burn in the quarter. For end of H1 i think we need this close to £15m to ensure there is sufficient cash to take us to breakeven. If it is closer to £10m i'd be worried. Another fundraise would kill this share.
Finally whilst i like a CEO to be enthusiast i do think Greg needs to tone it down. Describing 2022 as a fantastic year (or similar) seems a little odd when the SP fell 90% and the company almost went bust. Similarly, telling us that the team are doing an amazing job etc is a little OTT.

karlo maybe AIM isn't for you if you are comparing it with a FTSE 100 company. Incidentally Ocado trades at 2 x revenues, has never made a profit yet is valued at over £4bn.
HVO has a moat and is an area where the industry is still very much in its infancy. With regulatory approval why wouldn't you do phase 1 and 2 trials quicker and cheaper?
This area will only get bigger.

it appears most of the trade receivables (debtors) don't exist as revenue was massively overstated so can't see that working.
Labskin could be the way forward, however, as almost all the tests undertaken have been 'free' ones not sure if it is a viable business. Monetarising the database of skin information that DVRG must now have might be the best way forward

the YU in May last year was really a profit warning, but it did also include Q3 numbers so you are right an update could drop in the next few weeks - maybe an exceed expectations one this year?
Cash growth is key for me as they need to repay £3.2m (from the recent £2.5m loan) in May 2024 and as at 31/12/22 they had £1m in cash .