I think you are correct oldbut - its almost a deliberate play by Amber to use current market price conditions (bonds, gilts etc) as a reason to lower infra sector valuations - in the hope that once the sentiment improves later this year (or possibly 2025) then through their stewardship INPP will rise again! If I was being further cynical I might add that certain performance linked fund manager bonuses are linked to % fund NAV increases.....all the best with your alternative plays. SB
Mikodx - 100% agree that Renx has huge potential. That said - as we are all aware - the company has an FDA approved product (the regulatory bit); a US government approved cost model (the reimbursement bit); and goodness knows how many insurance/healthcare partners signed up who can access the test (the insurance bit). Despite this - there is little evidence that the clinical market is ready to purchase the tests, despite all the validation evidence available. Perhaps the medicare local coverage determination is the final piece in the jigsaw. In its defence the company has achieved a lot in a short time period; however its commercial and financial approach has appeared at odds with its positive healthcare journey. I do not assume a takeover at a decent price is a foregone conclusion; but given the potential there are pharmas/diagnostics who could view this as a bargain - even at multiples of its current valuation. On the subject of dilution - you are correct to note the company currently has c.124m shares in circulation. My estimate was based on the addition of the 26m second close funding placing shares which will be approved at the GM next week - gets you to 150m. Interesting to see if GB Capital take up their option at 30p by close of play tomorrow - if so that adds a further 8m. The convertible bond holder will continue to be paid in shares - currently 3.6m per quarter based on current share price. There are also a significant number of options available to directors, management and employees - exercisable at various values which will effect whether they are taken up - a further 37m in total. Lets hope we get some clarity soon on what's going on. SB
Its a strange position in the UK where the FTSE is continually testing the 8000 level and yet the majority of PI's seem to be having a difficult time. The constant flow of funds out of UK equities does not help - and there does not appear to be a safe haven unless you opt into managed funds, bond, gilts etc which do not really suit typical PI's. I have holdings in various 'profitable' companies and they are also way below in value terms; although they are debt free and not in need to development capital which is possibly the point the pharma boss is making. Another 3.6m shares yesterday to the account of our convertible bond holder - this constant dilution is not good - 95m shares to 150m in less than 6 months. SB
There are no easy answers here - that's the reality of being a private investor on AIM. I don't think its as simple as to whether DB are smart or dumb - its what is going on behind the scenes that led to this transaction which appears murky. Why are they being allowed to pick up 10% of the company for $4m when as it stands Renx does not need the funding - that's a larger holding than Harwood/Mills - and their 10% holding cost a lot more than $4m. The company has made it clear the formal sale process may or may not result in an acceptable offer - and if not the company will continue in its present form. In the event the company ran out of money with no more funding available then it could go private via a low ball offer from existing majority shareholders or even a pre pack administration. I don't think that will be the case given the recent take up of new shares from the equity placing. The company is essentially owned by 10 major shareholders and its management - who have shown that when funding is required they commit, albeit the recent 'strategic' interest no doubt helped matters. PI's probably account for less than 20% of the shares in circulation so we are all essentially bystanders. The growing II interest is what provides comfort that we won't end up being shafted as they would end up in a similar position - DB Capital included.
One final point - the securities purchase agreement RNS relating to DB Capital includes reference to the funding being used for 'commercial sales' and to 'provide enhanced optionality' during the sales process just to throw some further intrigue into the debate.....SB
Sorry - CVI Investment bond to date has been settled in shares, not cash....doh. SB
Yesterdays funding announcement came as a bit of a surprise, but is the latest in a series of what is now becoming a complicated shareholder/funding structure. Within the last month alone we had the equity placing to raise $10m at 20p a share (although at that time only $4m could be raised because of the nasdaq 20% restriction). So the placing was split into two - a first placing for 20m shares to raise $4m; and a second placing to raise a further $6m subject to a general meeting on 22nd April to deal with the Nasdaq listing issue. As it turns out, forward commitments to the second placing now mean a further $2m has been raised, taking the total under the equity placing to $12m. We know the take up was good amongst existing shareholders. Now, less than a month later, we are told that DB Capital Partners Healthcare are taking an initial 2.6m shares for $1m on nasdaq; with the option to increase for a further 8m shares at the same price (c.30p) to take them up to $4m. That's just under 9% of the business and would make them the 4th largest shareholder. The web site link for DB Capital looks like it was put together over the weekend; and good luck finding out any details on the 'founding partners'. How did this come about - did they try and get into the initial equity raise, miss out, and come back to be told told price was now 30p under a share purchase agreement? Who do they know that allowed this to take place. What drove the need to raise $4m so shortly after the $12m last month? Alongside this, anyone remember the $21m convertible bond fundraise in 2022 advised by Heights Capital. Turns out the fund behind this is a company called CVI Investments (channelling money for high net worths, trusts etc), based in the Cayman Islands, and represented by William Walmsley, Director who lives there. They now own 8.5m shares in Renx as a result of the company settling its annual interest coupon and capital repayments in cash. Its an intriguing picture to say the least given the current 'formal sale process' and I'm not entirely sure what to make of it all. SB
There seems to be a tendency for shares to drift down to placing prices - and Renx appears to be heading in that direction, albeit on low volumes. Wonder how the business fared in Q3 - not due to hear on that for another couple of months - and likely other news will overshadow that either way by then. In the meantime - Armistice have reduced their short position - although even that buying has not helped current drift. SB
The Extraordinary General Meeting has been arranged to approve the issue of a further 26m shares at 20p to comply with nasdaq rules which curtailed the original placing to 20% of shares in circulation - and resulted in 20m shares being issued as part of the first placing. Sinai and Harwood have already confirmed they are subscribing for additional shares - will see who else participated in due course assuming all motions are carried - which they will be. Nothing else at present. SB
I was thinking just the same donmac.......for a company which has c.£9m in the bank to fund it through to 2026 its not exactly performing the way we would like with a total market cap of just over £20m. Tutiva appears to be the victim of a slower take up than previously assumed, although the thermo deal for Clarava bodes well for the company's suite of products. Like most new and innovative products, the clinical market needs time to assess and evaluate the tests before moving forward with order commitments, despite the clinical, financial and regulatory evidence before it. Much like sister company Renx. I'm still buying at this price. SB
Not exactly the upbeat set of results I was expecting (although I do recognise the current macro environment stills weighs heavily) . Biggest negative for me was the significant 4.1% NAV reduction (c.£120m) - despite being advised we were due a modest increase. The two reasons given don't add up imo - dividends are covered by 1.1x earnings and why if we have inflation linked higher cash flows is the investment adviser increasing discount rates? Positives are the debt free position, further 3% increase to the dividend next year, plenty cash still earmarked for a share buyback and strong cash realised from existing investments (OFTO). However, imo INPP need to start navigating the path from being valued on discounted cash flows into asset valuations - cadent, angel trains, thames tideway. Despite repaying the CDF we have lost value and trade at a 20% discount to NAV - that's £500m, without the large unrealised value on the balance sheet from cadent etc. SB
I think that was the previous position prior to the fund raise - and was issued as a statutory update resulting from the updated 119m shares in circulation. NR holdings appear to have subscribed for a further 1.7m shares as part of the 20p placing - taking their total holding to 4.7% (5.7m shares) - that said 8.3 takeover code reporting forms have various interpretations....SB
What the results do show is the impressive impact the senior management team have had in the last 3+ years to get the business to this strong and growing position. It does look like there may be a changing of the guard - Michael Roller is going part time; and you wonder if Ian Johnson is considering how long he will remain with the business (he is 70). AstraZeneca remain a major shareholder - and active investor Richard Griffiths still retains a 24% holding. SB
*oogle.....
Morning ooggle - decent position when you compare the company to where it was a few years ago. At a market cap of c.£270m this looks fully valued for me at present based on operating profit (£4.6m). What is starting to make a major impact is the tax credit - which contributed more profit (£5.4m) than actual trading operations - and there's a lot more to come from that source - and that's an area where potential suitors may look to take advantage of. SB
Really useful post MSA - thanks. I have another theory to throw into the mix. Given the pre-existing relationship that exists between RENX and AZN - I do not believe AZN would have made an unsolicited approach for RENX and would not class them as a strategic diagnostics company either. What I think may have happened is an approach was made from the unnamed potential acquirer looking to access the growing CKD market and which was pitched at a level which interested major shareholders or you imagine it would have been dismissed outright. The formal sale process was introduced to allow others - and lets assume in particular AZN - the opportunity to consider making on offer bearing in mind the potential offer from the original acquirer. Also bearing in mind the extended timescales for such activity, and the reality of the existing cash position, a fund raise was carried out to ensure sufficient funding to see this process through to conclusion. The fund raise was well supported by all major shareholders (with the exception of JRC) who would have been aware of the likely level at which the original offer was made - or at least ball park. Sinai and Harwood both put money into the first fund raise closing, with additional monies already committed to the second closing. Other shareholders have updated their holdings via form 8.3 notifications based on the first closing 119m shares now in circulation; with a further 26m shares to be issued as part of the second closing which will require to be approved at the next AGM taking shares in circulation up to c.145m. Sinai, Harwood and RENX directors (McCullough, Sterling, Fleming), acting in concert, hold close to 30% of the issued shares. Other major holders who all took up the fund raise included Polar Capital (13.8m); Penwater (8.5m); Rothschild 5.7m); Lombard (4m) and GGH (1.5m). JRC retain their previous 8.5m holding. I think something in the region of 70% of RENX is now owned by these combined parties. Interesting times...SB
Disappointing...that's an understatement. Todays lacklustre, late issue RNS is completely symptomatic of why the shares have tanked to their lowest level in years. The life sciences business is meant to be an exciting, dynamic and innovative space where companies develop new products alongside market and end consumer demand with a skilled management team driving shareholder value and navigating the companies place in the bio-tech sector. EKF appears to be limping in completely the opposite direction of where it needs to be in just about every category where I would measure success, pushing out growth into another meaningless time period where it now looks there is yet another failed investment - if this is what the business is aspiring to, they really should just put the business up far sale. SB
Can't say I was expecting much and the company didn't disappoint - market clearly know hence the share price performance of late. Fed up with the ongoing pre-covid stories - its 2024 and yet they are still harking on with 2019 comparisons to compare growth - none of which are particularly impressive anyway. Life sciences in decline - with limited income from a significant investment which has blown all cash to the point they have to cancel the dividend - although I think we saw this coming with Baines back at the helm. Even POC growth is grinding to a halt. Overheads reduced - but still way too high. Wonder what share options packages will be forthcoming at these depressed valuation levels. Painful yet again....and the thought there is any consideration for acquisitions sends a shiver....SB
*interest rate decreases….doh……SB
I expect a solid earnings report as well oldbut - slight increase to NAV; growing dividend; no debt; cash on balance sheet for buyback programme and future investments; and latent value in the portfolio which has not been reflected in the current NAV calculations - but the infra market remains a very much unloved sector, although at some point (no doubt linked to interest rate increases later in the year) funds will start to move back in...….lets hope. SB
More and more interesting as we get to further clarity on investors in the placing. In addition to Harwood, Sinai, Penwater and Polar - Lombard Odier took 1.7m shares and billionaire financier Nathanial Rothschilds investments holdings business picking up a similar amount - taking his total holding to 4.7%. Updated list of significant shareholders holding 3%+ is going to be very interesting. SB