Member Info for TheTrotsky

I think there's still some understandable caution (we really need to see the 2022 preliminary results sooner rather than later to put this in context) and I'm yet to be convinced that our seller(s) has gone. Also, it needs to be born in mind that, without the Glanaco contract, H2 revenues would have (only) been about £7.6m (as compared to about £6.4m in H1).

In addition to the prelims, we need further information on the non-Glanaco order book. The forward looking statement "... significant contracts and order book with a wide range of government institutions ..." in the 2002 Revenue Update now needs to be taken with a (large) pinch of salt (the Glanaco contract comfortably covers both those bases without telling us what's happening at Labskin or Modern Water).

Difficult to tell whether the glass is half full or half empty. The BoD need to step up and start putting more information into the market. Yesterday's RNS was a good start but more is needed.

What would the gross margin be on a licenced design? Could be (not saying it is) virtually 100% if you are using existing in-house (say) CAD/CAM resources i.e. if there are no additional staff/material costs. Considering the price we paid to acquire Glanaco, I never expected it to be a source of any significant standalone income. €10m is not too shabby especially when you consider we only paid about £430k in cash; the remainder of the acquisition cost was paid in shares (4.55m valued at 14.25pps locked in for 12 months - I'm betting that the original shareholders are now wishing they'd insisted on all cash).

They weren't sells. They were adjusting transactions. A 3.7m buy went through at 8:50. After 8:53 the original buy was reversed and replaced by a buy of 3.75m shares (all three transactions were recorded at 8:50) .

Can't say fairer than that ... an extra stronng prescription I suggest ;-)

B****y well hope so! 600p+ and more please.

I'm planning to make some a small top up on Monday (reinvesting dividends using my monthly ii free trade) so I wouldn't be surprised to see the sp down again ;-)

There was nothing in the interims to suggest that DVRG was "burning" through their cash and I would expect DVRG to have been EBITDA positive in H2 FY22 before any exceptional costs arising from the fund raising (don't forget that ~31% of DVRG's admin costs in H1 were amortisation and depreciation).

Cash was primarily being absorbed into fixed assets (both tangible and intangible), inventory and trade debtors. For me the problem areas are intangibles (when cash is tight you need to balance your need for ongoing R&D) and trade debtors (fast revenue growth coupled with slow payment is a recipe for disaster unless you get the balance right).

The fact that the BoD has identified £2m of potential cost savings is likley to mean that some staff will be laid off. The initial launch of the Skin Trust Club does appear to have been (badly) botched and there may well now be a period of downsizing in some areas whilst other areas like lab testing are bolstered and made fit for purpose before (hopefully) another attempt is made to accelerate customer acquisition (not looking to close STC but keeping it on the back burner ticking over whilst the neccessary support structure is put in place).

We do need a further update from the BoD and it would be good if we could move to proper quarterly reporting rather than the hotch potch that we had before. The last RNS stated that there was a significant element of recent orders at the end of FY22 falling for delivery in FY23 but the BoD do need to get a handle on this and put some more key KPI data into the public domain.

Hopefully we should get more updates this month and/or March but based on the information currently available I don't see any evidence to suggest that cash is simply being "frittered away"; rather, it's the delay between delivery and payment, causing cash to be tied up, that is the primary problem. At the interims the excess of trade debtors and inventory over trade creditors and lease liabilities was £6.6.m (more than enough to have repaid the £4m loan), which was about £1m more than six months previously. It should be noted that for the corresponding period the decline in cash and cash equivalents was only £700k. Hardly a disaster but definitely a problem when you only had £1.8m to start with. This all symptomatic of fast growing revenues outpacing cash collection; the solution is to slow revenue growth and/or raise additional finance.

As regards cash being used in operations, the net cash used in operations was £1.6m in H1 compared to £5.1m in FY21 and, given that sales in H2 were about £10.2m then it would not be entirely unreasonable to assume, if the gross profit margin was still around 55%, that DVRG was around breakeven in H2, if not better.

The fundraisings should, I believe, have raised at least £6m of extra cash after costs and repayming the mezzanine loan. So, DVRG ought to be out of the ICU and able to sustain 50-100% growth in FY23 although perhaps 40-50% might be better.

There would be no point in simply pumping up the price to 3p to exercise the warrants.

The warrant holders need to pay 3p to exercise their warrants; there's no profit in it.

Please engage your brains before making hairbrained deramps!

42.5p? I think hey are having a larf. Don't me wrong, I'd love the share price to climb back to that level (and more) BUT they seem to have completely overlooked the fact that ther are now 760m issued shares plus the circa 125m of placing warrants exercisable at 3pps at anytime up to mid-November this year. Are they seriously suggesting that DVRG could go from a market value of £13m to circa £376m in one year? That's IMHO is crazy.

"... the problem ... with investing in just UK listed shares is that you don't really gain exposure to the global economy ..."

???

The vast majority of the FTSE 100 have (very) significant exposure to the global economy (Anglo American, BAE, BATS, GSK, Shell, Unilever, Vodafone to name just a few) and many of them generate over 50% of their revenues overseas e.g. most of Shell's revenues and profits are generated outside the UK. There's a lot of global exposure there. That said, there are certain sectors where UK listed companies are not well represented e.g. Automobiles, Bio-Tech, Semi-Conductors, Software etc.

If you are looking for funds with (truly) global exposure then you might want to have a look at Vanguard's Life Strategy and Target Retirement tracker funds. The are true behemoths, each holding between 20,000 and 28,000 global companies!

We'll see; there were still some chunky sells today. I'd like to think (hope) that today's rebound wasn't simply a flash in the pan and/or the seller simply letting up so as to suck in more PIs to push up the share price before starting all over again. A further update from the company on FY22 (EBITDA, cash etc) and propsects for FY23 would (hopefully) help.

Stop F*****g Selling ;-)

It's not uncommon for companies to prepare cash flow forecasts and, if they are sensible, to run sensitivities. Even with the best will in the world, it seems improbable that DVRG would have ever been able to generate free cash flow of circa £4m in a 12 month period (given the need to build inventory, circa six month debtor days, capex, R&D etc.).

One can therefore assume that they either didn't prepare cash flow forecasts before taking out the loan (highly unlikely; if nothing else, the lender would more than likely have required cash flow forecasts before lending the money) or that they made certain (optimistic) assumptions (like receiving funds from China Resources following the completion of a succesful tie up) that should never have been made (the whole idea of running sensitivities is to stress test your ability to repay debt in the event that there is a downturn in trade etc). Given their level of debtor days and forward visibility, I very much doubt missing their original sales target would have had any material impact on them being able to start repaying the loan.

I think the reality is that until AEWU is trading at a premium to NAV they'll put any fundraising on the back burner. They've said as much before. There are investment opportunities out there and they'd love to do a fund raising but they will not do so at a discount to NAV (unless it is imperative). Last year they expressed frustration that share didn't trade at a premium exactly for this reason (it's holding back expansion and liquidity). C'est la vie.

You can always trust the MMs to spoil the party; they've increased the spread from 0.2p to 0.4p. More profits for them!

One can hope but I'm not sure the investors at the fund raising are the kind to "average down"; they are more likely to have a long term investment policy and their buying/selling is more likely to be dictated by whether or not they consider DVRG to be a good long term investment than short term price fluctuations.

PS. Shorting DVRG at these prices using spread betting or CFDs doesn't seem to make sense (to me). To make (say) £500 for every 0.1p drop in the price you'd have to (effectively) sell 500k shares and, allowing for the spread, the share price would have to drop 0.1p before you were even in the money i.e. to make £500 the share price would, in effect, have to drop 0.2p! Given the current share price, unless DVRG was on the verge of imploding (which IMHO is unlikely at this juncture) then we must be fast approaching the point where there is more downside risk for a shorter (the share price rising) than upside risk (the share price falling even further).

PPS. Interestingly my Spreadex account tells me that 100% of its clients (who currently have an open position on DVRG) are long! Virtually no shorts (allowing for rounding)! If the share price drops much further I might be tempted to join them!

I should add that I am assuming that the seller(s) accumulated their shares at much higher prices than today. Obviously the shares might have been acquired since the fund raising (albeit I don't recollect large buyers) and/or some investors may be shorting the share using spread betting and/or CFDs (the reasonably tight spread could make this profitable). However, if it was simply the latter I would have expected to see regular, multiple round sum numbers e.g. multiple (say) 500k tranches rather than the hotch potch numbers we are currently seeing.

I know this is a can of worms but I can't believe that it's ordinary PIs who are offloading multiple 500k+ tranches everyday. In the absence of any short notifications and RNS, one would have to assume that the seller(s) control less than 3% of the shares (circa 23m shares) and there can't be that many holders of 3% or less. So, painful although it may be, the end of this (recent) sell-off must surely be in sight soon. Also, who's buying? For every seller there must be a buyer. The lack of any RNS is perplexing (unless GB and his wife are selling, in which event failure to advise the company would be par for the course).

Will you all just give it a rest! First rule of investing, never invest more than you can afford to lose. If you have then you've got absolutely nobody else to blame for your own predicament - for FOMO read greed. DVRG has just generated circa £18m of annual income (almost doubling pror year revenues) and you are carrying on as if the business has gone down the toilet. It hasn't. It's cash management, not margins or bad debts (that we are aware) that have got DVRG into this predicament; slow payment (particularly by government enterprises) is nothing new and debtor days of circa 6 months is not uncommon (ask any small supplier who has ever dealt with government departments or large retailers). GB allowed DVRG's free cash to be consumed by inventory (partly because of supply chain issues following Covid) and trade debtors.

The position is (IMHO) still recoverable albeit that success will now probably be measured in (tens of) pennies rather than (tens of) pounds added to the share price. Clearly there are large sellers who continue to undermine the share price (I very much doubt that the sellers are common PIs) but the greatest short/medium term risk now to us ordinary PIs is that the main shareholders find an excuse to delist.

There is no guarantee that DVRG's share price can even partially recover but delisting would definitely put a kaibosh into any such chance. So, stop whinging about the past (we are where we are and whinging about it won't change it) and give the new BoD a chance (it's wholly unrealistic to think that kicking out GB alone would have solved the problem overnight).

Gruyere, I suggest you re-read Resolution 16 and go back to school to learn English. The resolution (put forward by MSG) was to REMOVE the Chairman and over 100m votes were cast AGAINST that proposal! I suggest that you go to Specsavers yourself. It was a ringing endorsement of the Chairman!

That should have read " ... just a case of better the idiots you know than the idiots you don't ...". Doh!

Need another cup of coffee ;-)