Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
At long last, a counterclaim.
Not sure why the 30m in stock & supplier contract termination is not added, perhaps it is to be pursued once the case is decided as B2H says. It would seem extremely unfair to bear these costs if the case is decided th eother way but largely typical of NCYT so far.
Nothing great about Novacyt Karen, its been slow and mismanaged as was the products developed, M&A, expansion before the horse bolted etc have . Hope the SP is not crucified any further
Lets be thankful for this step, 83m represents what 117p per share plus the cloud lifted - 150p? or if it went the other way a drop of 75p to 65p.
I agree with HarChris & BYP! (& incidentally, I enjoy the contributions that both of you make, thanks)
GM got the company into its position. It was a massive achievement & due huge credit. The bonus seems appropriately earned, on the other hand, the business has drifted since end Nov last year when they knew there was a problem with poor communication or resolution with the DHSC. Only one director has bought in to what they have been telling us this year & GM announced he'd rather retire with timing that is linked to his bonus. I feel miffed that the position has been squandered & especially if that is without a penalty on the bonus, there is huge discredit for the outcome thus far.
Contrast this with an example of leadership at POLX recently. They have told shareholders that their new imaging technique has been the subject of close discussions with the FDA concerning its approval and expected it would be granted authorisation last week. The FDA knocked their application back & the SP fell 65%. The price started to recover last week so it was only 50% down on the pre announcement level a week ago. It was announced on Monday that 3 directors had invested £75k each after when the bad news was announced. The SP is now 70% of pre announcement high. IMO the market reacted in support because the directors showed so clearly that believed & bought into the prospects of the business they have presented to the market.
Contrast their BB with this one.
Discussions are factual and informative. Shareholders do not have to research hard for every clue to what the business has been doing but has not RNSd or guessing through suspected subterfuge. No shutting down comments or discussion by personal attacks on contributors as though rampers ramping themselves is a substitute for a plan the leadership believes in.
Some on the BB have asked what more the company could do.
They could believe in their plan & show it OR they could be unconvincing, inconsistent and uncommitted while empowering themselves to issue 30% more shares at a 20% discount.
& no, making comment this is is not because I am short or looking for a lower price. That is just a rampers desperation to close views down & keep a cosy smokescreen over issues LTHs face.
Lets hope the market finds leadership more convincing from Monday.
The lack of traction of contract that the DHSC put on public record with Primer Design would a good place to start building credibility in the uninvested market. To a cynical outsider 250p is just about what the business is worth based on its balance sheet without leaders able or willing to enforce contracts.
That is right, they probably knew all of this back in December & certainly in January..
It goes to show how poor it has been to have an unenquiring BB ramping whenever possible while banging on about how easy & amicable dispute resolution is likely to be.
They will have had certain amounts of physical inventory but there must also be termination clauses in contracts with suppliers for earmarking supply for them (that NCYT are providing for their suppliers but not expecting for themselves from the DHSC).
I disagree with the brentw & pck76's sentiment about not discussing negatives. There has been a heavy censorial strand on this BB in favour of positive only spin and against discussion or questions. Contributors have excluded questioners and shouted their hopes/interpretations centre stage like the force they use will hold back reality. Contributions from outside the gang have been more useful for me (like poidster'. Attempts to figure out what has happened by putting the facts together (such as eg by SteveV recently) have been well worth having even if they can not be proven. One contributor suggested no attempt to figure out what happened should be made if it was not proven as fact - i.e. this is only a forum for positive spin, discussion is damaging, stick your head in the sand. see no/ hear no/speak no non positive. Are we really better of having one of the over optimistic rant dominating us into sedation with the most optimistic hopes?
a summary of teh dispute such as SteveV put forward
Where is Karen to bang on about the dispute being easy and amicable to resolve when we need it?
It could take years but we just don't know enough, it could be resolved soon. It seems clear the DHSC have acted to badly. The RT consortium and Abington seem to have been misled, giving up opportunities of their own, and then ripped off. Their statement that none of their phones have been destroyed and are all available speaks volumes. The GLP is barking up the wrong tree in pursuing one of the victims rather than the massive beneficiaries such as Innova who ought to be asked to make its mobile phones available (but won't be).
GLP seems to be after the business fleecing government story without, as someone said, asking what was going on inside the DHSC?
There was a bad press about goods supplied to the DHSC that were unfit for use such as masks and gowns . Yolanda and Pest Fix were mentioned for supplies that had teh wrong design or should have been double bagged but weren't. I noticed Yolanda had swapped its registered office to an insolvency practice while its case was going on so I had a look at its contract available on Bidstack. Samples of the goods it had to supply were made available in advance to the DHSC so were they at fault for delivering them? They would be at fault if they delivered a different product or was the failure in procurement decisions and governance at the DHSC instead or as well?
It seems like a horrible mess of politics and panic affected procurement in which there is no fairness or propriety guaranteed for excellent UK based suppliers. Lets hope front line opinion in the NHS provides NCYT enough support for a resolution to be reached in the pit of vipers as easily and amicable as they may be dealt with .otherwise they seem indifferent to trashing players such as ABDX with GLP making the travesty all the worse for the victim
I don't post because of the unbalanced enthusiasm for the SP.
Karen told be to trot off when I questioned what might be behind the dispute. She could accept me asking whether it might be product related. The only line she could tolerate at the time was that any resolution would be easy and amicable to resolve.
The financial statements report that product replacement is a possible (not probable) resolution. A potential customer will read that & conclude "there is hardly any dispute with the major client who fully endorses the product" - er NO, wake up Karen.
People seem to have their suspended disbelief so much we have been unable to consider Q1 sales dragged into dispute. If they had not, even Karen might have wondered how a business provides a customer product when that customer has put their account on hold (i.e. hasn't paid for significant pervious deliveries) while paying out huge sums to other suppliers. Who supplies a non paying customer?
It is a tragedy that GM resigned when he had to announce there was a dispute. GM seems to have been wholeheartedly committed to the business and then decided to retire. The explanation can not just be receiving a bonus, it must be business related.
SBI has a higher PE, they also have IIs and for example Chris Mills on the board (not sure what role). Even if he was a non exec what would he do? Someone like him would available for a CEO to sense check a decision, or perhaps corporate governance may require their formal approval of certain decisions.
IMO - could be wrong - the non execs & particularly the Chairman have failed here in either supporting GM somehow. Could he have been left to deal with the DHSC relationship entirely on his own? If so that is a failure, alternatively they approved giving out £41m net of PROmate in Feb without supporting him properly when the DHSC let him down. Perhaps the DHSC has been duplicitous, perhaps not, a business needs its decision makers supported from the psychological blow back of errors, particularly large ones, regardless of the client's choices.
Whatever has happened also reveals weaknesses between the company and its SH base. The investing community in the funds world have a greater and earlier awareness than PIs of the DHSC issue. We have hung on the sparse revelation of information. Perhaps materiality for RNS disclosure has changed through this year so business is less chunky now, in which case an absence of volume metrics leaves the market unable to value the business or its products.
It is revealing that after GM must have started his exit process several products have been announced such as a LFT. None had estimates of their commercial potential. Perhaps he has done his best for us in his twilight phase but commerciality or distribution were just never his cup of tea. Can the same be imagined at eg AVCT or SBI if they ever announced new products? This BoD need another kick for not getting this piece in place sooner IMO.
I'
311 & falling with good old Karen is going to sort it out after banging on how easy & amicably this dispute would be sorted
Perhaps its not a buy out at all, just mismanaged shambles that hasn't been discussed here because all non positive points have been crushed in a hope of holding the SP up
chrisd
I was told to trot off last time I speculated the resolution might not be as easy & amicable as people hoped so thanks for not doing that again.
Considering the scope clues seems is better than waiting in blind hope or faith to me since they were already being discussed on this thread but obviously not to everyone else.
You are right that we don't know. IMO, probably not everyone else's, the doubt has already put off other investors given the SP is 323p. It seems to me at least leaving it like that without an idea what to expect or how long it might take or what issues might be at stake is a dis-service to those already invested & on a BB out of interest in the share but you are right, I don't have to comment.
Good luck
Another quote from AVCT BB
"... then if they can say our test cannot be tampered with to give a positive result then it seems we have another contract winning USP."
Or perhaps it is a USP for PCR or other test methods!
Saw this posted on AVCT by MikeyTT - they have other Friday PM reading over there - this is about kids discovering how to get a day off school with a false positive on an Innova test.
"Whilst talking to some high school students yesterday, one of them mentioned getting off school my producing a false positive result. I enquired how they can achieve this and I was told you just need a drop of Cola, nothing else.
I have now tried this and it gives a positive result after about 30mins. Both lines are in the correct positions.
This just goes to demonstrate how useless these tests are."
Perhaps what they mean is that Primer Design billed DHSC before the product was accepted. You'd think acceptance was someone signing off a deliver but perhaps the batch requires time to test. DHSC paid invoices under terms set out in the contract but perhaps the issue is that Primer Design was hotter on rendering invoices than DHSC was on testing (formally accepting product) & this is the essence of the dispute.
We also know from FOI DHSC spend figures NCYT was paid 33m in Oct & 92m in Nov. (total 125 figure include VAT apparently = 104 revenue in P&L) BUT Primer Design may have raised a further £25m in sales (gross £30m) that DHSC has not paid for teh revenue value in 2020 = £129m
Thoughts for me to be told to troff off again over expressing on this BB:
Q: Could all the milk shake have curdled? A: very remote chance, Primer design must have done its own quality check.
Q: How likely is it that such a massive & urgent scale up had no variation in quality? A: don't know, possible
We know from the DHSC spend figures that payments to all suppliers were stopped in Dec except Innova £286 & Tanner £106m. They even held up rent of lab space to PerkinElmer in Dec.
Q: would there be an opportunity for DHSC to suspend payment because its acceptance process fell behind Primer's delivery rate? A: could be
Q: might it have been in DHSC interest to do this? A: fits suspension of payment to other suppliers at that time
Q: could the dispute have hardened the longer the DHSC did not use the test kits supplied Primer Design? A: don't know
Revenue recognition is an accounting term.
Financial statements measure financial performance DURING a period (i.e. trading result shown in Profit & loss account) and the financial position in terms of its assets and obligations at the END shown in the balance sheet. Standards require comparative figures. P&L and cash flow show how the entity moved from beginning (opening balance sheet) to end of year balance sheet.
The P&L measures financial performance using accounting principles intended to MATCH costs and revenues to the period in which they arose. Trading results would be distorted should costs be accounted in a period different from the period in which associated revenue was recognised.
The business considers its accounting process and publishes in its financial statements the POLICIES. Revenue (or income) for NCYT is recognised in the P&L when it has been earnt meaning goods delivered IRO DHSC (in line with the contract) . There could be situations in other parts of its business where sales are recognised on sale (eg online) or they might also be taken as sales when called off an order. Sales invoices are recovered as Trade Debtors with liability created iro VAT that will fall due when received or however they account for VAT if there is a scheme agreed). Provisions against collection of debts reduce the Trade Debtor figure by the amount they hit the P&L as an expense & when debts are written off a credit goes against the debt & hits the provision & VAT set aside to cover VAT that would have been due had the debt been received.
There are other situations that might occur - for example businesses might raise invoices in advance of sales (like a landlord collects rent in advance), they might deliver goods that are invoiced after the balance sheet date etc. The balance sheet has disclosure headings (defined in law) available to Accrue Income and Defer income (in prepayments and accruals respectively) it also has headings available for Goods in transit, Payments received on account etc.
B2 - IMO I don't think accounting terminology links with Performance Obligation. RNS and financial statement disclosure imply the dispute concerns claim against the product performance with probable & possible resolutions saying nothing about billing or billing price (eg if DHSC had some ground for retrospective beef over prices listed, but redacted to us, in the contract ), resolutions are about replacement of the product or rejection of the sale for some reason.
The French analyst & translation thereof refers to revenue "recognition" in terms of the overstatement of revenue that would have occurred in YE 20 statements should £129m have to be reversed. I'm sorry to say I don't think it can be a billing dispute unless its a twist on price somehow as order & delivery processes are defined in the contract.
I'm pretty sure shearclass would agree though he'd probably not spend time explain the accounting for those not familiar with it.
Liked this bit from NPH FAQs replies - what tests are used?
"At the moment we are providing Fit To Fly certificates using the Primer Design Genesig Covid-19 Real-Time PCR Assay."
Great if it is billing. Seems odd though. If it was a billing dispute if they think the most probable resolution is replacement of product and repayment is possible - why wouldn't they propose a financial resolution such as replacement of invoices with credit. What did the DHSC do, put test kits they'd accepted and mainly paid for into storage in an argument over price? Payment to NCYT stopped at the end of Nov when there seems to have been a moratorium on payments to other DHSC suppliers (other than Innova 286m & Tanner Pharma 106m). Perhaps a commandment arrived from on high to save / chop/ wriggle out x Bn for a Treasury target across DHSC.
Dall - agree.
Initial product expected in the "weeks ahead". What sort of timescale is that. It sounds like obfuscation on missing a deadline, pretending commissioning was the milestone promised while kicking the can down the road for an unspecified amount of time. The weeks ahead could be 4 weeks or 10 weeks or perhaps its Western Australian style WA "Wait Awhile" - call it next quarter or so.
I think this also shows that NCYT decide what would to develop with a formal business case.
Other businesses would rank development projects on the basis of estimation of commercial benefit along with other considerations like risk before picking those that have most likelihood of meeting their requirement for return, which would be based on a plan used to set market expectations. They can lift the prize expected from the development directly from the business case when functionality is announced & the market responds accordingly (as they are being run to meet the expectations that they have set in any case).
No, that's right. Its housekeeping required for other priorities than SNG related consideration
Kev, its less negative than it may seem as sharedealer says. Acacia sold down their share last summer to get 35p or so before the breakthrough rise on Phase 2 results. It didn't make any sense to me but then big decisions made for other reasons can make little sense from other angles.
What is the motivation in holding here? If TB is down to 1.74%, is the plan to let this opportunity fall by the wayside?
"Mid cap" means a number of skills.
This lot could invent brilliance & their sp go down.
We can see other companies struggling to achieve far less but stuffed full of the others skills.
Dealing with financial markets isn't rocket science. It has been done before.