Member Info for ShearClass

Firstly, Novacyt are still a small cap company and there is no way that they should be making material corporation tax payments before audited results have been finalised. If they had impaired the P&L by £129m in relation to the DHSC dispute then their 2020 tax liability would have been far lower. To then give away another £10m in Q1 for future sales which haven't materialised shows exactly why you shouldn't be making payments in advance. So they are now potentially in dispute with HMRC as well as DHSC! You couldn't make it up.

The below is quite possibly one of the stupidest things I have ever read in an RNS! Corporation tax isn't due for 12 months after the end of the accounting period to which it relates...

"In January 2021, the Company paid £19.5m UK corporation tax for what it believed to be its outstanding liability, this has subsequently changed primarily driven by the late impact the DHSC dispute had on the 2020 results. In Q1 2021, the Group made the first quarterly instalment of its projected 2021 UK corporation tax liability, paying £10.0m to HMRC prior to the impact of the DHSC dispute being formalised. This £10.0m resides on account with HMRC and the Group will look to see if this can be refunded in the near future as, based on the 2021 interim results, no corporation tax was due for H1 2021."

So, firstly, why were they in such a desperate hurry to pay the £19.5m for 2020, especially given DHSC still owed them £75m at that point?

But more importantly, why are they making a £10m payment on account for 2021 corporation tax before profit was even reported?! This is crazy behaviour.

To me it suggests they were trying to curry favour with UK gov, something which clearly didn't work...

The problem is the IPO was priced very aggressively so there is no margin for error on any of the forecasts. That's why you've got your 18% fall. How far it falls is all down to the longevity of the supply chain issues, the fact they mentioned 'medium' term must be a concern.

It's the future that matters...

Their busiest time of the year by far is November & December. If supply chain disruption & increased costs are in play for Black Friday & Christmas then they are going to struggle to hit their targets.

The moment of truth approaches. Will ARBK open 37% above the downpriced NASDAQ IPO price? From my experience, downpricing usually results in a fall rather than a rise, as logically it suggests that there wasn't sufficient demand to sell the 7.5m shares at $18.40... it'll certainly be an entertaining afternoon.

"The Company received strong orders in the first quarter of 2020 before the outbreak of Covid-19 from its Chinese partner (the "Partner") for Dentyl and other products and on 27th April the Company signed an exclusive distribution agreement with the Partner for the Company's key oral care products, including Dentyl, with a minimum purchase obligation of €168 million over the 15 year term of the agreement."

Wonder how much of the €168m they will see? Very little I would guess. The market has effectively removed this from future NPV. We've seen it before on AIM, Nuformix was another example of a Chinese deal going completely wrong. They simply don't care about contractual agreements as far as I am concerned.

Management should also have informed the market long before it did regarding the sanitizer sales + Dentyl performance. Trust has gone & it would not surprise me if the mess up the BBI acquision.

Bottom fishing is a dangerous game, but good luck to those that try!

Lock in?! Hahaha. Are you for real. Not a chance that any of the US investors participating at £1.10 equivalent will have a lock in. You'd be insane to agree to a lock in for something as volatile at BTC. I still can't understand why anyone would buy at £1.50 prior to the US open, HUT8 did a placing last week at a 15% discount and guess where the share price opened? At the placing price. Guess where it still is? At the placing price...

Why would anyone be buying at £1.40 when the US will almost certainly open at the placing price?! Even if it didn't the investors who've bought shares at $15 will flip for a 35% profit... hilarious.

Sneller adding another 1.5m, that's enough conviction for me to jump in. Was 26p pre Covid & has had zero dilution, so with Iodine prices back to pre Covid levels I can see why he has decided to buy such a significant stake.

TSX still not interested, level 2 starting to turn red...

"On the PDL website Vontobel are listed as a 16.81% holder which equals 1,632,266,006 shares. However, in their TR1 on 15th March they owned 1,730,825,578. So they appear to have sold just over 98m shares, annoyingly it doesn't say when the shareholder listing was last updated."

UPDATE:

Just checked again this morning and Vontobel are now down to 15.99%, so they have sold 0.82% of share capital = 79.6m shares. They have a mere 1,552,643,274 shares remaining. This confirms that the recent selling at 1.77p is from them. It is the ultimate iceburg. Furthermore, do 'Monarch Master Fund', who hold 1.165b shares get next dibs after Vontobel?

It looks like it'll be a long while until this clears as most PI's will steer clear given the historic issues + lack of share price movement. The best bet for a swifter clearance is likely a significant share price drop which will create major volume.

It was a real buying opportunity as far as I'm concerned, a situation where the US took the price back to retest the horizontal support at $18 and the UK overreacted and took it back even further before the current rebound began. The news of Mt Sinai scaling up to 300 KidneyIntelx tests a week seems more important than the uncontrollable MCIT change.

Don’t understand how you can derisk some when the price is down 50% in a few months? I added today & will increase to a full position if it gets nearer to £6. The near term catalyst is FDA approval, without that MCIT didn't even matter…

@Larry will confirm that the undervaluation of Covid shares on the French exchange isn't limited to Novacyt.

Biosynex reported €225m in sales of primarily antigen tests for H121 with €150m of that in Q2. Sales are split 50/50 between France and International. Their EBITDA margins were 33% in 2020 on sales of €150m, they had €20m net cash at year end and they raised €109m in debt financing this August, presumably to fund acquisitions. Whilst they aren't directly comparable to NCYT, I'm sure you'll all be amazed to hear their market cap is currently £180m!

For me their market cap makes a mockery of ODX etc, and shows how depressed French valuations are.

The major difference with Biosynex is that Directors / founders still own over 50% of the stock. That helps avoid cringeworthy situations like the AGM vote plea.

At some point these valuations were shift to reflect reality, when that will be is anyones guess.

"If share buy back is voted yes , what is there to say that we continue with radio silence , the new CEO adopts same strategy as GM and share price drifts around £1 which is the price they buy back 7 million shares."

So you claim to hold 90000 shares at £6.60 average, but think the company want the share price to drop to £1 so they can buy back shares on the cheap? This is despite the fact that they had £1.30 per share of cash at 31/12, received another 70p per share of cash from DHSC in February and will likely report EPS of at least 50p a share in 2021 excluding DHSC?

Sure thing.

For whatever reason, it appears Vontobel has decided that 1.77p is an acceptable price to sell their 1.6b PDL shares, despite the fact that they exchanged their debt for equity at 3.4p a share... why wouldn't you ease your sells up slightly on the L2 order book to reflect the improving fundamentals & increase the cash you receive? Again it makes no sense. They could easily be getting 2p a share rather than 1.77p and volume would be attracted by the rising price. Is this just pure laziness from investment bankers? Have they just bunged a massive iceburg at 1.77p and left it indefinitely? Answers on a postcard!

Ps. I get the fact there is still risk here, however the capping of the price seems ludicrous.

Was about to ask what I'd missed that's made them mark it down this morning?! It's laughable. Debt reduced by 66% since 30/06/20 yet the enterprise value (market cap + debt) is nearly 40% lower than it was at 30/06

30/06/20 - share price 2.05p, shares in issue 865m, equity value £17.7m. Debt $693m / £500m = EV of £518m

14/09/21 - share price 1.7p, shares in issue 9710m, equity value £165m. Debt $228m / £165m = EV £330m

Why is the enterprise value down by £188m in spite of improved market conditions, vastly reduced debt overhang & some huge special stone finds? It's completely illogical if you ask me.

There are many reasons why, however the main one is that voting yes for resolution 6 authorises the company to commence material share buy backs. If they buy back 7m shares and the market cap remains the same then the share price increases by 10%… which if you hold 90000 shares would equate to roughly £30k. Why wouldn’t you want this to happen?

The reality is it would likely increase the share price by more than 10% as it’s a sign of financial strength…

@MONTY888

“so that’s a pretty destructive paltry £5m Rev”

This is complete rubbish! The £95m H1 revenue included £40m from DHSC. They have excluded this £40m from their full year forecasts as it is in dispute. So they are forecasting £45m for H2. As others have said this is conservative. You appear to either not read other posts or are deliberately posting incorrect information to mislead others.

“Don’t think we will see much going on until results around 22nd December”

I mean what are you talking about? Results in December?! Half year results have always been in September, with a full year trading update in January. Where has December 22nd come from? Results could land any day prior to the AGM, but I’d be amazed if they aren’t issued before GM leaves on 18th October. Again why are you deliberately trying to mislead?

I’ve read the same cr*p from you multiple times and it’s time it stopped!

This article summarises things really well IMO; https://seekingalpha.com/article/4450423-pure-gold-better-h2-ahead-as-mining-rates-improve

"Based on ~462 million shares fully diluted and a share price of US$0.96, Pure Gold is currently valued at more than $443 million on a market cap basis and more than $500 million after including net debt. This does not offer much of a margin of safety relative to the Madsen Mine After-Tax NPV (5%), which comes in at ~$312 million at a $1,500/oz gold price and ~$362 million at a $1,600/oz gold price. In fact, even if we use the less conservative $1,600/oz gold price, Pure Gold still trades at more than 1.3x NPV (5%), with the Feasibility Study completed in Q1 2019, ahead of significant material inflation and with a much weaker Canadian Dollar (USD/CAD $1.32 vs. USD/CAD $1.26). This suggests that costs might end up being higher than the projected costs of $787/oz, especially after factoring in added costs related to the Construction Finance Package announced in August.

Even if we were to add a value of $63 million for measured & indicated ounces outside of the Feasibility Study (1.05 million ounces at $60.00/oz), this still leaves Pure Gold trading at a premium to NPV (5%) at a $1,600/oz gold price. Generally, I prefer to buy at 0.80x NPV (5%) or lower in the first year of production, when it's still unclear whether actual results will look like the projections laid out in the mine plan. Given the early teething issues related to excessive overbreak, I wouldn't call the mine plan de-risked just yet, though it is clear that operations are improving from what was a disappointing Q1."