Twix. I quote you from your 13.50 today. "Contracts will have a valid ascribed but not an exact value and it will usually be based on anticipated or known number of tests. It is this value which can be stated and I think occasionally has been"
"Occasionally has been" is a little vague. How often would you say Premaitha has stated a contract figure?
Yes a contract can anticipate a number of tests and consequentially can anticipate a cash value. But because it's not exactly definitive it's pretty useless really - how could you sue if something goes wrong? The other side would defend by saying the figurers were guess work which didn't pan out. If you can't sue for breach because the figures are wooly there's no point in the contract. Just have an agreement.
"Occasionally has been" is a little vague. How often would you say Premaitha has stated a contract figure?
Hi Florida yes I do agree that all of us should consider the various points but forward. Unfortunately twix has failed to grasp my point about contracts. Our sales model is more akin to a licencing model rather than a contractual model as I'll hopefully demonstrate.
We sign agreements to process our tests with Labs. No sales take place no revenue is generated so no contract. We then sign agreements with doctors and clinics for then to offer our tests to patients. Again no sales take place no revenue is generated so no contract. The clinic offers our test to a patient who agrees to the test. This agreement may well be contractual as a fee - the "consideration" will be paid. Both the patient and the doctor/clinic also have "capacity" to carry out the procedure but if it is contractual it will be between them.
Money then flows from the patient to the doctor/clinic on to the Lab and then on to us. I hope this explains why It is impossible for Yourgene, or indeed any body else, to put a value on the agreement they signed with the lab at the point of signing. I don't believe they ever did. This is why I also asked Goggins about the value of "X" because he thought there was a financial threshold that had to be crossed. I don't see how there could be given the sales model as above.
twix also refused to consider my point re TPG by again asserting that ALL notable contracts increase the sp. TPG signed multiple contracts with blue chip customers for millions of £s with no real effect on the SP for 2 years. He refused to except this in spite of it being factual.
To close. I'm not against opinions being posted as opinions, that is one reason why the board is here. However I am against opinions posted as facts.
Well after this I hope so.
To Goggins and Twix. There are two points I wish to make. One is about contract announcements affecting the SP and the other is contracts in general.
Wonderful Contracts to not always improve the SP. I hold TP Group who are in aerospace and defense and supply kit and services. They are in a similar position to Yourgene in that their revenues have started to increase significantly recently and profit and dividends are, if not in sight, then just around the corner.
TPG has a forward contracted orderbook of 50% more than it's revenue which is some 50 Mil. In addition it's orderbook is growing faster than it's revenue. This acceleration has been notable in the last 18 months or so. however in spite of this terrific achievement the SP has stagnated at some 7p for 2 years.
If you look at it's contract announcements you will see that the headline says the amount of the contract and who it's with. The body of the announcement then gives the details and importantly the time scale. One can then evaluate the announcement. However by stating the partner the "capacity" of the partners is shown. IE are they both capable of fulfilling the contract - one by delivering and one by paying? By announcing the value and the duration of the contract they are demonstrating "consideration" - this is the willingness for one to deliver and one to pay. Capacity and Consideration are cornerstones of contracts and without them there is no contract.
Now let us look at the announcement that were common over 18 months ago with Primatha that you both miss. The counter signatories were largely anonymous so capacity could not be demonstrated. That doesn't mean they couldn't do it. No mention was made about sales projections or targets so no time scales were included and there was no monetary value mentioned. There were good reasons for this because of the staged sales channels. The end customer was a patient of a clinician who was a customer of the lab concerned. To complicated too accurately predict. Therefore no consideration was involved. Therefore no contract.
There where many announcements made by Primatha but they didn't seem to effect the SP in any meaningful and sustained way. However in the last 12 months in spite of you both being disappointed by a lack of them the SP has doubled!
I hope you both appreciate the above is based on facts. There might be an odd mistake so please feel free to comment.
Hi twix, I'm uncertain about your concern re "no contract rns for 18 months". The revenue has doubled in the 1st 6 months of our current year and the sp is 50% higher than it was 12 months ago. What contract are we missing?
Hi Ralphie - Yes indeed all quiet - almost to the point they never was!
Many thanks for the excellent link though I will have to inwardly digest further when my Friday lunch and subsequent afternoon engagements wear off a bit!
I'm looking forward to the 2nd December. Although we've only had the excellent revenue figures I'm sure there will be other good news. The US revenue started in August and I would like to hear about progress there - it is apparently the largest market so has massive potential.
I rather like Rees style. He seems to be able to look ahead and share his vision but then slips in - almost as an aside - really momentous stuff like the US opening.
The US aerospace is apparently quite insular so opening up Martinsville was a bit of a masterstroke. The bit I liked was the actual selection - not just approval. We managed 2.65 Mill for the second half so hopefully we have some production capacity somewhere although Martinsville itself is at capacity. With the Houston presentation and the S Korea expedition hopefully generating interest it's difficult to see how we can accommodate all the potential!
One of our drawbacks is the year lead for acquiring new reactors. although May will be the 1st delivery it will be used to migrate to the new site and not actually add to capacity. You would have thought that by now we could have accelerated production. However if that's not possible then we may well need to place a new order in say February/March for 2021 delivery. I'm guessing this could give us cash flow problems as we would have 4 reactors on order which have built in stage payments. Hopefully this could be addressed by borrowings and not another cash call. As I've said before production constraints may be a nice/new problem to have but it is a concern.
However once over this hump the road ahead appears to be a clear path to success. Onwards and upwards folks.
Coggins you are wrong. The sp is not in the gutter. Over the last 3 years I have bought in 8 times and am some 30% in profit. My best buy was in January '18 at 4.77p. Please be factual in future.
PS The continuing revenue increases will increase the SP.
Hi Coggins . I'll make a little bet with you. I bet that the 6 month growth revenue slide in the presentation showing the last 3 years will continue upwards - and as an extra, da-da it will rise exponentially! You are so far behind.
Curmudgeon Coggins comes to life! This is a company advancing on many fronts. Increasing sales - tick. Increasing products - tick. Increasing geographical footprint - tick. Increasing shareholder communications - tick. Retaining winging shareholders - tick. Never mind - you can't win them all!
Many thanks indeed redjester. I thought there was some sort of hold up and you're explanation is illuminating. I can see now why GMR are saying cash positive by the end of 2020. The basic business case is though, as you posted, extremely good with an ongoing potential. For me the 2020 half and full years figures will be crucial. Again thanks.
I've been trying to work out how the above works. if you're a maker of widgets say then you may sell directly to a customer or distributer and you get paid and you've ticked that box.
My guess is that the recent agreement with Kindred say brought no direct income. Do we have to wait for our games to be distributed on their websites - say Step 1? Then when a player downloads or plays a game they make a payment to Kindred - Step 2. At some point determined by either Date, volume of players or cash amount we finally get paid - Step 3.
If this is roughly how it works then, in my view, because of this extended sales process we will have to see just how quickly signing a licencing agreement turns into actual revenue before we see sustained SP rises. Although, arguably, the most important step is signing agreements we have to wait for third party customers to actually pay and for revenue to eventually come to us. Not to sure if the above is the definitive way it works but I think our sales process is a little longer than some.
I have to say that once the transition to a full licencing model is completed we should go from strength to strength. The beauty of a licence is that once it's granted there are almost no costs involved so revenue is largely profit - happy days.
Your quite right gazshot the poster certainly sounds like an employee and as there are only 7 employees (Inc Directors) it shouldn't be to hard to work out who it is - unless of course it's somebody pretending!
Not to sure on the ethics of this if it is an employee but as utarsaints says - stand by for the deletion.
Perhaps there is an order or two coming on down the turnpike. But if one goes back well over 2 years to the famous 20 Mill acquisition fund raise in July '17 there has been a dozen or so contract announcements plus 3 total take overs plus a partial acquisition and the SP has failed to move. It has been stagnant at around 7p over this time.
This years revenue could be double Decembers 2017 figure and this should be a second year of profits - albeit curtailed a little by 1st half losses. The last 2 years or so has seen phenomenal growth in almost every aspect of the company and real expansion of the range we offer.
So the question is - has the market woken up at long last and is Cinderella going to the ball?
Sage4 32 Flex is coming in 2020. This is able to process 32 NIPT results at once. This will save time and money and is expected to be a real sales boost on the illumina platform.
Todays announcement would appear to be a different product although to my untutored eye there appears to be similarities. However the FLEX bit is now trade marked so perhaps the Sage 32 flex may have a name change? Anyway it's another new product to provide more sales.