Member Info for Soder

Primer design 2 contracts totalling 469m

Hi. Yes they will be included as any positive test is passed to track and trace. Also government are tracking wider data to make modelling and policy decisions.

Yes I know. But companies are valued on the present value of future cash flows. If we did 100m ebitda (a proxy for cash flow) every year forever we would still not be valued at 2bn and the pv of that 100m would not be 2bn.

Also, our current mkt cap is 600m. If we have 300m of cash in the bank I will run naked through Westminster offering Matt handjob just that. There is NO way and I mean NO way we have 300m if cash in the bank. I spoke about working capital a few days ago. People need to get their heads around that or the I think will be disappointed when results hit.

Valuation will be based in cash here. Think I saw someone saying 1.5x. A 2bn valuation on 200/100 optically looks a stretch as I cant think of many companies that trade 10x sales and 20x ebitda unless they are high growth which would not be the case on current product suite.

However, if the stars align its possible we could have 750m-1bn of cash on balance sheet in 2-3 years if we see high demand last through 21 and 22. Probably unlikely but who knows given recent news on mutations and obviously we still have no clue how long vaccines last for.

Just to add. The risk of switching provider at this stage is also far far far far far too high. Just look what happened when KFC tried to change chicken supplier. The risks of doing that are off the charts.

That contract extension is agreed. I would bet the bank on it.

I tell you what.... it’s very very odd. There is no way handjob et al can be making all these statements re testing and specifically PCR going forward without ABSOLUTE certainty the testing capacity will be there.

The government could not be so stupid to rely on NCYT being there for them at a click of the fingers. What would happen if the Dutch, for example, said we will pay you 2x what UK government are when your contract expires in January. Ncyt are free to negotiate the future sale of their supply with anyone after the exiting supply agreement ends. They are a commercial entity and are answerable to us as shareholders alone. Ncyt is not a government entity and they have no obligation to provide testing capacity for the UK.

My take is that extension is agreed but for some technical reason can’t be announced now. Why? Could it be a budget issue so needs to be officially announced/awarded after 31 December to fall into next years government spending?

Not even handjob is so stupid to run the clock down on what is essentially now... gold dust. The world is crying out for PCR. If handjob screws up his access to it he would be lynched.

Fromthe last R&D update....

Development of a LAMP COVID-19 test

Loop-mediated isothermal amplification (LAMP) technology is a single-tube technique for the amplification of DNA and RNA and is considered a low-cost alternative to detect certain diseases, including COVID-19. Isothermal amplification is carried out at a constant temperature without the need for a thermal cycler, contrasting to PCR amplification, which is carried out with a series of alternating temperature steps or cycles in a thermal cycler.



Novacyt is currently developing a LAMP test for COVID-19, including evaluating the trade-off between cycle time and test performance. The Company expects to launch the product during Q1 2021 with an expected cycle time of 20 minutes or lower. Novacyt's LAMP offering is designed to be compatible with its q16 and q32 instruments. The Company is also in active discussions with several potential partners who are seeking support to develop, manufacture and supply LAMP tests for their instrument platforms.



Development of an antibody lateral flow test for COVID-19

On 29 September 2020, Novacyt announced the launch of its IgG specific antibody test for use in central laboratory testing. The Company is also working on developing an IgG antibody lateral flow test (LFT) for use as a rapid antibody test for professional use. An LFT is an easy-to-use diagnostic device used to confirm the presence or absence of a pathogen or biomarker. The product is expected to launch during Q1 2021 and is expected to take approximately 20 minutes or less to give a result.

The ability to integrate LFT and PCR testing will be very appealing to governments, local authorities, airports, corporates etc. Something like a versalab which can rock up on site and do thousands of LFTs and then immediately retest all positives with PCR from same operator is a simple, affordable and attractive proposition.

I am gonna burst you bubble. Your charts are useful for large cap beta stocks driven by flows. For a share price driven by a fundamental need for testing, for a company due to report huge growth very shortly and potentially a new government contract they are about as useful as a turd flavoured lollipop.

This is now becoming my base case. I’m debating with myself whether to just sell every other stock I own and go limit long ncyt Monday morning. I just can’t see a situation where this gets resolved in 2021. Even with a decent chunk of the population seemingly vaccinated the government will need to be monitoring the virus and the population for years via testing to ensure it is under control.

Oh please. 2+ 2 = 9865416288.

It’s shares magazine. A pump and dump pennystock weekly.

Cool. Just to be clear I am 100% not saying it’s a problem. Ncyt are generating meaningful fcf. I’m just managing expectations for cash on balance sheet at year end as some people will see the 2020 number and puke without giving any thought on where the cash is tied up.

Ventura. When your sales go up your WC increases unless you run a negative WC position where (for example) you get paid upfront with little inventories eg Virgin media. You can see from primer design Twitter they have guaranteed stock ready to ship so they have built up inventory to respond to demand v quickly. It’s a good strategy during a pandemic where you are confident on demand. But, it has a cash cost via increase in WC.

Hartlebury, numis base case does not factor in the the dhsc extension. If that happens we are off to the races as it will be a big boost to 2021 base case.

Under that case numis estimates are

2021
Sales 609m
Ebitda 463m
Cash 465

They also have a stars aligning blue sky which is not unrealistic if everything comes together.

But if the NHS orders are increasing the cash will be used very quickly as more inventory will be needed. No matter how quick people pay, when your biz grows this quick cash is tied up in WC. Think about it in simple modelling terms. If WC is a percentage of sales, then as sales increase so does WC.

Cash will definitely meaningfully increase and will look good but it won’t be even close to what some are expecting on here given WC. Cash will be tied up the day to day operations and not sitting idly on the cash line on the balance sheet. Just point this out so people are not disappointed when they see cash next year. They will need to also look at short term assets.

Yep. The base case will be updated for that new contract and any new guidance from management for 2021. But for 2020 I think they will have had good access to management and will be there or thereabouts otherwise ncyt would have had to give an update. The SP will move on that contract extension and confirmation of guidance for 2021 not the backward locking 2020 results.

The big contracts and growth all came after that June update. They have already said they have increased manufacturing capacity significantly. That has a cash cost esp on the manufacturing side but also on receivables. The guys buying tests from ncyt are not paying the same day. So what payment terms? 30 days? 60 days? All that uses cash in working capital.

Take a look at my other post/thread with title consensus and cash. That sets out cash forecasts from numis.

Hi donneder...2020 results have been flagged and you have the numis estimates. Unless we have a trading update they will be inline with that due to listing rules. What will make the SP move in my opinion is confirmation that next year will be inline with numis and testing will be elevated all year. 2020 is priced in. 2021 probably not so much due to u certainty.

Unfortunately that’s the reality. The sales will be there but cash will be tied up in inventory and receivables whilst the business is pursuing a growth strategy. The cash outflow next year won’t be as severe but I’m not expecting cash to be released until 2022 at the earliest. Perversely this is a good thing though as cash only is released when the sales are going down and they are not ramping up manufacturing and growing.