Member Info for Soder

Given we know there is a dispute on the numbers we dont actually know what ebitda is….until tomorrow

You are beyond weird.

I think holding cash in a bank account or maybe under your pillow is best for you.

It’s a zero sum game and someone will always be left holding the baby at the end to carry losses when people flea.

It’s also market manipulation and illegal.

What you gonna do with you money when you in prison?

Wbafc…you state complete nonsense like it’s fact. “ Don't forget Novacyt hire ODDO and ODDO would have had to go through these price targets with them ”

Research and thus price targets is totally detached from all other business and has to be kept separate from pitching for “other” business. In this case corporate booking services.

Do you think a regulator allows a company to say “pay us and give us a mandate for corporate advisory and we will give you a high price target that you want”. Do you think that would be allowed? Do you think that the research would be worth any more than toilet paper if it was not fully independent and unliked to other businesses?

Oddo may have left but their px target is down to that analyst views. Whether we, Millie, the market agree is irrelevant. It’s that analysts opinion.

Yeh the prob with that is most sov wealth funds have enough of their own oil?!

Buys way out numbering sells. Added. Technical.

Guess what will happen porky if you ramp ramp ramp between now and Tuesday and then the reality does not match your fantasy? We will get hammered. The share price already reflects a savage hit from dhsc including large negative cash adjustment and slow down in sales going forward.

If we all go in to Tuesday with that as our base case rather than currently “likely having 150m of cash” (which is is nonsense!!!) then we may be pleasantly be surprised and the share can find a footing and base to grow from.

Operational cashflow is different to cashflow. Companies need to fund themselves and we can see margins have likely decreased as testing has become more competitive over last few months. This biz has been hiring (adding costs), capex has been spent in R&D (new tests), working capital may have been a cash drain as q machine inventory was built up….all these cost money and MAY eat cash upfront. Your preidiction of 60m FCF in H1 to get to 150m (from 90m at year end) is needlessly bullish. You get all the financially illiterate dream chasers fired up and frothing at the mouth and then the share bombs again when they ncyt do not meet your equally financially illiterate expectations.

Let’s just set levels to a normal expectation.

Full list of analyst targets and recommendations below

Peel. Buy. 100p
Sp angel. Strong buy. 110p
Berenberg. Buy. 135p
Hannan. 124p
Finncap. Buy. 110p
Stifel. Buy. 111p

That’s pretty conclusive!!!!

Roll up. Roll up. Get your tickets to the free money party.

Scheme would need to be voted and agreed by creditors still. Will take months.

I mean **** me!!! A headache and a runny nose? I have had it twice last week alone then. What a crock of ****.

There won’t be a dhsc resolution. But surely now that is factored in.

If the mkt sees another q of 30+ million not dhsc then you can see the near term future and even a total idiot can start to appreciate that you can’t have a solvent, growing, liquid, diversified, innovative biz trading at this liquidation like enterprise value multiple.

Just a few weeks to flatten the curve. Just a bit longer to protect the nhs. Just until we can get the elderly and vulnerable vaccinated.

The curve is flat. The nhs is saved and the elderly and vulnerable are vaccinated.

History has shown us that when you give leaders supreme power they find it very difficult to give up.

It is not a governments job to stop us getting sick. I feel sick to the core this morning. I do not consent to a bunch of lying, corrupt, self serving, scumbags having a controling say over my life chou es and decision s any longer.

Wake up people this will never end. In 1 month the next variant will be here. Then it’s autum, then winter. We will still be having the odious thick creep handjob lecturing us in 12 months time. You ok with that?

I am off to the cricket this weekend at Edgbaston. They sent me a compulsory LFT to get in. Guess which one it is?? Yep innova. So that will be 18k people attending an event with limited social distancing all pretending we are covid free after testing with a kit as useful as a **** flavoured lollipop. Well done Boris. Well done Hand job.

Hey

Thanks for that response. I’m am deliberately confusing the contract revenue with cash as I am trying to show that even if a decent proportion of the gross value (not net cashflow) of that contract is taken from the cash balance (ie refunded) then we are still cheap.

The contract reads that refunds are due in certain circumstances (eg if machines fail validation). I’m certain this did not happen but in that instance full refund is due and not just the money paid less your costs or cashflow.

Even without that contract we probably did 175m in top line last year and I think the cash balance would still be high. Even in my absolute worst case and assuming that contract value is refunded from our cash balance for 2020. I think we rally when people can put numbers behind it all.

Ebitda is simply:

Sales
Minus: cost of good sold
= gross profit
Minus: fixed cost
= earnings before interest, tax, depreciation and amortisation

I essentially a pnl proxy for operational cashflow

And at high level free cashflow =

Ebitda
Minus: cash tax paid in that year
Minus: change in working capital
Minus: net capex (including acquisitions and disposals)
Minus: any other CASH costs
Minus: cash interest on debt service
= free cashflow for that period

What ever premise you are working on is irrelevant. I am just saying that even if they lose the dispute and repay huge amount of cash and strip out that contract we still are undervalued.

If you are right and we win then this doubles at a click of the fingers. But even if not I think we rally. Market just needs to hear.

B2h2. It’s not a dangerous assumption. It’s trying to put together an absolute worst case scenario. In this case it’s pretend that contract never happened or hair cut it massively. We know it was only 150m in size so we can do that.

The point I am trying to make that I do t actually think it makes much difference now what the dhsc issue. The valuation and market cap now price that contract and the associated cash from it at less than zero. Even if they come out at the results and say we had to give 50m of cash back I think this rallies hard. Be prepared that what people may think are bad headlines could actually be good.

The market is clearly assuming and pricing in now that the reported year end cash balance is at risk from the dhsc dispute. There is no other explanation how it can trade at an enterprise value (mkt cap plus net debt) of where it is.

On a purely reported basis taking year end cash

Mkt cap is now 237m
Net debt = gross debt minus cash
= 0 - 92m
Therefore enterprise value (EV) is 237 -92= 145m

Professional investors and analysts look at EV as a multiple of ebitda (earnings before interest, tax, depreciation, amortisation). This sector trades at like 15x upwards. Some deals have been completed recently on crazy option value multiples. But let’s take 10x as a conservative multiple.

EV / 10x = implied ebitda = 14.5m.
So the market is saying ncyt will only make 14.5m in ebitda. Annually going forward. Assuming conservative 50 percent ebitda margins (we were at 70% last year) then the market is saying the valuation supports sales of around £30m FOR A FULL YEAR going forward. We just did more than that in q1 for just the private sector alone with no dhsc.

So what does this mean? It means the market is already pricing in the cash balance takes a HUGE hit when they report. If that does not happen this will absolutely turbo charge.

It’s just frustrating the the key known is also the key unknown. But that contract was 150m total size. How much of the cash balance was due to that. At end of H1 cash was 18m and we know the dhsc paid ncyt 90m odd pre year end. Let’s assume that half of this is paid back for whatever reason. So year end cash is adjusted to 92-45 = 47m. Therefore enterprise value is currently 190m. Using 10x ev/ebitda multiple implies ebitda of 19m and sales of approx 40m a year. Again. We just did these sales in just over 3 months.

So **** it. Let’s pay the dhsc back 90m of cash. So we now have no cash and the ev is the same as the mkt cap = 237m. At 10x that implies 23.7m of ebitda and sales of 50m. I reality we will do that in h1 2021 without the dhsc. So what I am saying in, the downside is price in and then some.

Also what is the significance of the rns being from the company secretary and that being explicitly stated?

They do t need to run it. That’s an option. But they will make money by just running down the book. Bonds trade 85% of face value at moment and were trading at 55% last year. If they run down the book they get 100% back.

These funds did same with bright house which is a similar situation. Take a credit book and run it down whilst letting the underlying biz quietly die to avoid bad PR.