Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Telling me to trot off seems aggressive enough, as a LTH I don't have anywhere to trot off too, thanks. Many contributions closed off over the last few months for not being bullish enough with the contributors being told they can filter retaliation when they don't like it. That might be okay for some if the SP hadn't been significantly revised away from the bullish.
As it is, closure of discussion & the information that people haven't bother to put because of the censorial climate doesn't help us understand what the position with the DHSC has been or what prospects exactly are.
It would be much better to state an explanation so we can gauge in reasonably inclusive dialogue whether this dispute comes from a genuine underlying widescale issue, a political move by Grant Shapps to lower prices, a failure in co-dependencies, or whatever it is. The problem Kaeren is we may have people with information & expertise that just don't supply it.
TV?
Another contributor Paolo111 mentioned a TV report - I'll copy it here - it does seem more plausible that a generic problem with tests that worked until Sep IMO & it would be worth a legal view of how/if the contract demarks liability on this score.
"I expect you all saw the undercover TV documentary last week or two of the PCR testing lab where workers were filmed under cover ignoring known cross-pollution of adjacent cells and just ploughing on to meet management targets, at one lab. No idea whose PCR tests they were. It was a sloppy lab issue really."
it just doesn't help us to attack each other when we read something we don't like in this situation, its painful
Kaeren - Vent your aggression all you want but it is misplaced. I'm heavily into this. there was an RNS with bad news. I've tried to make an honest understanding of it. I took it that this is what this board is for.
I didn't see the tv last week
I saw a post on twitter from a Lab Manager back in Dec that commented about "the milkshakes curdle" about the Primer Design - meaning that something went wrong with the tests he ran (IMO). I messaged him to ask him very politely what it meant saying that I was an investor and interested in what he meant. He didn't reply & after poidster's contributions here I've had in mind that the kits worked but might have been too fiddly for lab managers to deliver the projected numbers on top of their existing workload -i.e. problem being more man/machine than chemical/reagents.
The market would factor in uncertainty as widely in absence of confirmation otherwise which seems to be happening in the SP but it would be useful for us to know if the test kits are beyond the scope of the dispute or not. Or whether there is reputational damage concerning the product to over come as well as the resolution of the dispute.
I don't get it. How can their product go from trusted supplier in Sep to failing in Jan? It could be quality failed during the volume, or machines could not be used as envisaged so contractual failure there for some reason. It would make a big difference when eventually they do set a scope to the dispute or have it resolved. At the moment, I put their failure to specify the extent of contractual dispute down to the poor communication & financial practice the company has generally but perhaps it helps mask their issues.
Its a shame this lets the business down as it has when they seemed so uniquely talented in doing the really difficult stuff so well.
Do we know what was the problem with test kits? Have there been reports of them being substandard, unused or unusable?
We have taken revenue figures are fully earned and now discovered the DHSC has a problem with what was sold. Instead of counting money as in the bank we ought to get a feel for the extent of the problem. Is it 100% of all sales, 20%, only sales of produce from one source? Did the DHSC stop using test kits? What was different about test kits sold Sep - Jan compared to those sold before when Primer Design reputation was built Apr-June?
I think of it the other way round. They got on v well with the DHSC, took on a mega commitment including delivery of machines at expense of other opportunities, it turned out in a dispute. We have yet to measure the extent of the dispute but we know from the transactions processed to the DHSC in Oct & Nov that it must have taken a huge proportion (or all?) of Primer Design effort. We are all knocked back by the RNS but they do say 50% of the revenue was non DHSC & the majority of DHSC was a new product PROMate. 50% is some going from very full DHSC focus & PROmate growth is also promising.
I'm wondering whether the dispute is over Q16 & Q32s being un-useable or largely under used by the DHSC - i.e. mechanically functional but impractical in terms of fitting into NHS departments with full workloads & therefore a bit too fiddly for the output they had hoped for. I'm out of my depth here but imagine if they purchased loads of tests kits, production flowed at a lower rate & the central store went off/ partial or some proportion of obsolescence. Its could be one where two need to tango in the same way and dependencies weren't as specified as they might have been. Resolution is a step back by both in the end and may mean NCYT unwinding YE20 sales to some extent + costs. On the other hand, Primer Design pulled all stops out, can they go from hero to villain just like that? Business should be business for DHSC too so I'm hoping for some 2021 orders and development of a more realistic/matured client base by Primer Design.
Its too bad to go all out in a nationally significant contract in the circumstances of Q3 2020 and end up unwinding revenue & cut out of the ongoing plans 2021.
What would the contract dispute be about? Could it be the function of the reagent & tests or the machines? Probably machines if they hadn't disputed the first half of 2020. Someone here pointed out that the 300 machines had sales values of £10-£15k so £4.5m of the £150m in phase 1. I'm consoling myself with a thought that the disputed element may be marginal.
After all, there were rumblings or discontent about the operation of the machines at the time and a hastily released improvement/simplification of the process - perhaps it was the problems behind that. You can understand not extending to Phase 2 if it was the machines, or how the NHS is able to put the machines into use. Poidster commented on this BB about the labs sitting on top of their ordinary workload & being given these machines to operate in addition. Perhaps they were too fiddly to be worked full tilt in the heat of battle on a hospital lab setting in surge.
It seems very positive that PROmate continues to be supplied through the dispute (so there is something working well & something not so well IMO). We need to know how effectively they may be deployed & how many are in use. It really doesn't help putting planning off till Q2 or "not having visibility of revenue" without financial disciplines to set & monitor sales targets.
Q1 revenue of £72m is about half of what I had taking Jan as £10m pw + two month extension worth £100m, at 80% margin it is a good start to 2021 especially as half of it is from outside DHSC. Perhaps there will be greater resilience in revenue through 2021 because of earlier diversification.
I'm hopeful the other irons in the fire come good. Awful day, think they'll hold SP at 4.50 depending on sentiment until some new expectation & expect brokers to downgrade to £12 GLA
It must be phase 1 IMO as Q4 2020 revenues "may" be affected. Can't say by how much, but it is +ve that PROmate was supplied during the dispute (so not part of dispute) IMO
mine have arrived on HL at numbers scaled down as described above
There was an interesting thing that I don't have a source to quote from on, its hearsay ...I had to visit someone in Frimley Park Hospital over a period of weeks & could only do it after hours. The hospital has an odd layout, a lot of it is on ground level & has wide central access corridors. Many will know the area has strong connection with the armed forces in garrison towns like Aldershot & Farnborough Airport nearby. A member of staff told me that the hospital doubled as emergency auxiliary capacity to support warfare or medical emergency abroad. It might be 2+2 = 5 but thinking about SARS, ebola, I wonder whether that is why NCYT is so close by.
Perhaps procurement was switched to a central route to DHSC from 6 July with Frimley & other NHS service providers calling supplies off from the central stock.
Its funny that the Frimley Health NHS Foundation Trust is only 4 km from Novacyt, at Unit 1 Watchmoor Point Watchmoor Road Camberley Surrey GU15 3AD UK.
The list of trades in the past week show why the SP is down, successive big sells vs little buy back.
My guess, for what it is worth, is that investors have moved elsewhere after the SO4 story changed once the SP recovered from the placing. Its a choice about time scale & belief here & opportunity elsewhere. Top up & hope for delivery or take a tax loss.
I got all I asked for too
thanks for taking the trouble to contribute your view, enjoyable reading. KR & GL
What is the particular benefit or use of testing blood rather than saliva?
The LFTs using saliva had strong results in labs that are less reliable in mass testing.
I wonder whether testing a drop of blood decreases "user error" in a test even if it may be less popular. It would be great if the sample collection method overcomes the scale issue for LFT even it may not be most popular. People do use self applied blood tests sent through the post for other conditions though its hard to imagine suitability for schools.
Just read this
Health and Social Care Secretary Matt Han**** said "I want everybody at UKHSA, at all levels, to wake up every day with a zeal to plan for the next pandemic. "
That statement couldn't have been written any better from interpreting how NCYT operates!
I wonder what the new agency means for procurement of equipment and materials. Would it be right to presume the UKHSA might be a specialist arm working along side NHS clinicians so ultimate customer will be the NHS although perhaps the DHSC might continue procurement function? I'm trying to think how the launch of the UKHSA might affect the placing of contracts & their timing. These arrangements are well organised if we can appreciate how it works, I had myself convinced a new contract would start from today for reagents, obviously wrong, so if not today, how do we roll from here?
31 March? 8 April?
I think Porky is right.
Can anyone think of a better fit for Novacyt skill than under a "new UK Health Security Agency (UKHSA) to plan for, prevent and respond to external health threats such as infectious diseases". It sounds like a brief written for their strengths. A conventional business would have been hell bent maximising sales from their tests when they were approved by WHO a year ago. Instead this lot have focused on the potential calamity that faced the UK, throwing their effort perhaps too single mindedly behind the NHS. By July were off interested in the variant reported from Danish mink & by Q3 signalling development of panel tests for a wishlist of conditions, & by now, we may lament their lack of diversification of customer base but their role in the battle against variants has seemed above & beyond business.
"The primary focus for the UKHSA in its initial phase of operation will be the continued fight against the COVID-19 pandemic" - just their cup of tea IMO
"It will bring together the country’s cutting-edge capabilities in data analytics and genomic surveillance with scale testing and contact tracing capability – combining key elements of Public Health England with the Joint Biosecurity Centre (JBC), and NHS Test and Trace."
Led by Dr Harries ...who "played central roles in the UK’s response to COVID, Ebola, Zika, monkeypox, MERS and the Novichok attacks." Great.
(monkeypox doesn't sound good)
I'm disappointed there was no RNS this morning, it blows my personal theory of what was going on away, my next guess is that the answer ties in with the other contracts coming to end soon.
There is a difference between qualifying for listing as a supplier on NHS Supply Chain (a portal that run procurement checks to provide NHS budget holders a list of accepted suppliers from who they can order what are usually regular supplies eg the gloves you mention) and procurement by the DHSC and some parts of the NHS via a public procurement process as listed on Bidstack in the way other contracts with central government are procured. Not an expert, but my understanding is that a different set of protocols apply, the Supply Chain would vet suppliers and then compare the goods they put forward against alternatives bearing in mind NICE & other guidelines on efficacy & cost). Central government contracts are often for projects, services or pieces of work that may at least be bespoken & might be unique - see what is listed on Bidstack. The publicity is an important control to obtain value for money and transparency in contract awards. The covid experience has been carried out in pressing circumstances, with criticism of some awards, particularly the very public errors & ineffective purchases that have been made but as time goes on the strength of the process shows itself for example in the 22bn tender being bid for.
I'll confess (again) to having been an auditor and also in business including some episodes dealing with government. I look back on sheepishly on some of it, as a tax payer you might want things to work differently but when they obviously don't it can be a lot of fun.
Shaun is talking about closing a Sage system - that is the process for the likes of Primer design to account for their results. It makes sense to run the ledger prior to close as he says, like it would for all of us to run a dummy CGT calc in preparation for 5 Apr close. The gap bwt Xmas & 31 Dec often has a flurry of activity which other contributors here have better experience in managing than me - won't mention names. But, in this case, the DHSC is the client, part of central government & subject to governmental rules. They run their books without accruals (setting aside cost incurred not yet billed), there is a strict invoice basis applied and equally strict check of after date payment.
We all can see how closely GM has worked with the DHSC. IMO there is more than the commerciality a big pharma would have, they are a really excellent supplier. NCYT respect to DHSC protocol, look at the dates of RNSs & contracts, their relationship is highly organised. Its only my guess but all billing will have been with huge propriety. £33m shows on the transaction download for Oct and £92m in November because that was the speediest rate for Primer design could stock DHSC up as they required. I've guessed Dec must be lower £30-35m to leave all other business in H2 £30-35m.
GLA