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Cheers JTT - like you I do believe there is opportunity here - just a pity I was buying in Dec @ £6! Anyway I'm still holding and may dip in again if I see price moving north after its retreat to the south of late! Also like you - I would have thought short positions closing would have led to increased positivity here - which is the polar opposite of what happened since the fundraise. As I understand although we trade on two exchanges our total issued shares in circulation comprises 75 shares - 11m traded on Nasdaq as 5.5m ADS shares; and the remaining 64m on FTSE AIM. Any shorting needs to be declared on the primary listing exchange based on total shares in circulation. Even the LSE short position tracker here lists no current positions. Strange times. SB
The 24 month cash runway does provide some degree of reassurance - and the recent participation of both existing investors and our new non exec was good to see. Given the comments made in the H1 accounts on overheads reducing from one off ramp up costs - we are now probably burning through through cash at c.$10m+ per quarter. The rate of acceleration of Sinai testing in Q3 and Q4 will allow a degree forward planning - we are still nowhere near the 300 tests per week target - or indeed the 10,000 2022 target. That would provide a figure to use as a benchmark for similar health systems based on available testing populations - and for me are a lot more helpful than the company's claims around 'commercialisation'. As for shorts - I have looked at the FCA daily short positions website dated 22nd April and cannot see any current positions held by Millenium or Armistice. Milleniums last position was declared on 12th April - on 13th April there were more than 1m shares traded (ie equivalent to 90% of their full position and taking them below reporting requirements). Can't be 100% sure - but did they close out? SB
AGM on Tuesday 26th. Expect a trading update to be issued same day - which will hopefully provide a Q1 turnover number in the region of £125m imo and will allow some of the market pricing concerns to be allayed. Current price does not reflect all the great work in the last 24 months - and we remain well below the 85p placing price used to purchase nordalk let alone the highs reached later in 2021. SB
Cheers Mommur - good to chat. Great that you have held NAS for so long - fantastic 20 year performance. I have held OIG on and off for the last couple of years - I wished I had been a bit braver and got in a decade ago when I first started looking at Mills funds. It does surprise me that both NAS and OIG trade at such a discount to their NAV - c.25% - possibly reflecting the fact neither pays dividends, NAS holds a lot on unquoted investments and there are clear links between the two with large holdings in the stocks we are discussing here (RENX and EFK). I'm not a regular follower of NAS - but it does seem to have a bit of an issue in relation to its share buyback programme that the ongoing reduction in shares is increasing the % holding of its directors - who acting in concert control more than 30% of the company and require a waiver in order to avoid making an offer for the entire share capital - possibly taking advantage of current low valuation of certain stocks...! SB
Its been a good run of late jimmy - we are now valued at a 10% premium to our NAV which is much more aligned to our peer group. Still a 6% very healthy dividend on offer. Some of our investments (PFI) will also benefit from the current high levels of market inflation - unitary charge payments are RPI linked. SB
Mommur - whilst I would not disagree that Mr Mills has a great record at NAS, Harwood and Oryx - the three primary current bio tech stocks in these funds (Renx, ekf and cir) have between them lost almost £1b in value in the last six months - and he has big holdings in all three. I hope like you we have reached the low point here (and others - I also hold) - I will be very interested if we hear from Mr Mills on his thoughts for the sector - his support for Renx was evident in the fund raising - but frankly what choice did the core investors have given the bonds probably dictated a healthy equity injection. Atb SB
Hi JTT22. Hopefully good timing on your investment here. A lot of people seriously under water….
Agree 100% on your director purchases point - just note that the increased 13% holding is from our chairman - on behalf our three funds which he manages. Our CEO did not participate in latest financing round - but he does hold 2.75m shares already - so is clearly strongly incentivised to grow market value. SB
Millennium have reduced their short position - down to 1.47%; first downward movement and hopefully a sign that sentiment here is improving. Will be interesting to see speed of closure if this continues. Let’s also hope Q3 testing shows decent growth and the commercialisation of the business gathers pace. SB
I hope you are right Hawker - imo millennium have been in the right place to take advantage of both macro sector issues and company revenue progress not hitting targets - and I know we have limited info in this regard - but testing rates need to show some acceleration from c.50 per week. Their continued selling since Feb 22 has been brutal to witness - and I would agree what goes down can just as easy go up - but the worry for me remains if millennium continue to short. Let’s hope not - our market cap less cash is not much more than £100m. Who would have thought….SB
Great initiative by the management team to host this visit. I wonder if Peel were also in attendance. Liberium price is a 60% upside from here! I think the H1 2022 results in august will be a major catalyst here - and would not be surprised if there are further acquisitions prior to that. SB
Confirmation that company fund raising was completed is good news - and helps alleviate short/medium term questions on cash burn. Good also to see strong participation from directors in the share issue.
Bad news is that Millennium have increased their short again this week - up to 1.51% - taking total declared shorts above 2%. Their continued short selling in a low volume market continues to have a devastating impact on value. Who knows if they have a target in mind - or are just letting their algos do the work. Until they cease - or there is a a blockbuster commercial announcement - they remain in charge of the price here. Not great for anyone invested here. SB
The only qualification I noted in relation to the convertible bonds being issued is the requirement for the equity fundraise to be in place - which all looked to progressing fine given the commitment from existing core investors to take up c.1.6m of the 2.2m new ordinary shares. There may a hold up in issuing ADS - but I agree it would be good to get this out of way and focus on the milestones we anticipate (and management have indicated) will be achieved this year. SB
There are most certainly institutional shareholders who sit below the 3% radar - so our total II holding is likely somewhere in the c.60-65% range. I think the downer on the business which resulted both from the referenced covid business decline and the price at which the buyback was established is way OTT. The building blocks in place to grow the business are there - in the meantime the company will still continue to benefit from albeit reduced covid revenue and has shown to be using that benefit wisely in its investments. The current price looks very attractive imo. SB
Would be good to get confirmation $30m funding is now in place. I’m hoping yesterdays hammering was not in anticipation of a problem. Equity funding is now at a decent premium to current share price - and 5.5% coupon on bonds seems a good deal in current market. SB
grippa - this is lifted from the results.
Total revenue up 25% to £81.8m (2020: £65.3m)
- Core business revenues up 14% to £42.1m (2020: £37.1m) including Point-of-Care- up 18% to £27.0m; Central Laboratory- up 7% to £13.1m; and Life Sciences- up 3% to £2.0m
- Contract Manufacturing- up 38% to £36.3m, driven by COVID sample collection kits manufacture
So an expected decline in covid test kits will reduce revenue - company appears to be indicating this will start impacting Q2 2022. To offset that (which was a one off unexpected bonus in the first place) - company is growing its core business revenue; investing in its fermentation business (targeting a conservative $10m additional revenue by 2024) which sits in its life sciences business (£2m revenue 2021); and finally growing ADL Health in new diagnostic testing services outwith covid.
So yes - very likely revenue will decline next couple of years - but there is a clear plan for growth using the positive cash flow from the last 18 months to invest in production and acquisitions. I like the plan - although still not a fan of how the buyback was arranged which imo resulted in an unnecessary loss of value here . SB
Good points vig - thanks for sharing your thoughts. I've got a decent holding here bought pre recent decline - so not great - but I am hopeful value will return here over next 6-12 months. In basic terms - the market has reset the company's valuation to its 2019 levels with an uplift for decent growth in its core business. Key to unlocking future value as you note is the fermentation business and non covid testing - and the company has been clear on its strategy for both including financing. A bit of director buying at these levels and higher would provide some further comfort. SB
Good point to raise vig - the response to me doesn't make any sense. Would be interested to see if you get a further response. The guys at ADL must be wondering what happened to their deal - taking an all share purchase at double the current share price looks like a very costly bit of business. Their earn out provisions were capped at a huge number - will be very interesting to see how they perform in year one which triggers the first tranche of earn out provisions. SB
Good spot overlook! Escrow should be with us tomorrow - hopefully we get some confirmation from company which includes we have paid all our tax obligations as well - closer and closer to final payout. SB
Chelsea
Mike Salter, Chief Executive Officer, and Marc Davies, Chief Financial Officer, will be hosting a live online presentation relating to the final results via the Investor Meet Company platform at 4.30 pm on Tuesday 29 March 2022. The presentation is open to all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and register for the presentation here: https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor
Thanks for posting this Italian - Simon sums up the current position well - 2022 is on track for another step change year in terms of scale and profitability. Market undervaluing a highly cash generative, growing and diversified business. But not alone in that position. SB