Bioquell Share Discussion Threads

[abcd1234] 20/4/2015 12:48

why the sudden spike at 12noon...??
any info, ?..cheers

[eezymunny] 18/3/2015 08:59

Not much noteworthy stuff in the report. The "we would expect the Bio division to start to generate cash" is for me the most pleasing. I'm minded to stay in as the remaining Bio division is being given such a woeful valuation at this price. Suspect true value a fair bit more than current share price but we need confirmation of completion of Trac disposal, size of cash return, and hopefully the anticipated better trading from Bio. I'll remain of the view that a fairer share price around my guesstimate of 139p but maybe be a lot more or a lot less :)

[bbluesky] 17/3/2015 18:10

I think what is consistently underestimated is the degree of tech behind this company. World leader status for ebola and one of their toys Trac has also grown to market leading status. There is quite a broad portfolio, but they are a "go to" company and in some respects seed capital. Who knows what next?

[eezymunny] 17/3/2015 15:20

The balance sheet is partly dissected in the 2013 AR but not very useful I think. Bio book value about £20m but doesn't say how much of that intangibles.

I'd say we're a bit in the dark about value of Bio biz but at current share price Mr Market says its not much, which may be right or very wrong!

[sladdjo] 17/3/2015 13:07

I had a similar guess to your calcs, Eezy. But valued BIO on TBV, which I guessed at £10 - 15m, depending on levels of intangibles in TRaC. So prob ~10 - 20% undervalued at current levels, tho will get a better idea tmrw.

[eezymunny] 16/3/2015 12:02

Any thoughts on valuation here?

Can we assume no tax to pay on disposal (seems right to me)? Therefore "net proceeds perhaps £43.5m (allowing £1m for disposal costs - wild guess).

Maybe they keep back £4m to leave a comfortable cash buffer for the remaining biz? So perhaps £39.5m returned to shareholders.

So how much would the remaining biz be valued at post cash return? £27.3m turnover in 2014 and modestly loss-making but with action in hand to turn that around?

My guess £4m for the cash plus 60% revenues (wild guess!) would give £20m valuation.

So total value £39.5m (returned) plus £20m valuation for remaining biz would give an share price equiv of 139p. You'd have to get below a valuation of just £10m for remaining biz (which would have net cash of £4m) or for the Trac sale to collapse to lose money from this share price Risk reward still looks favourable here methinks given that Element have signed a "binding share purchase agreement"

Any thoughts?

[cottoner] 13/3/2015 14:10

Also from TU in Jan

We estimate that revenues for the year ended 31 December, 2014 will be approximately £45.3 million (2013: £44.6 million), an increase in the year of some 1.5%. This estimate comprises £27.3m for the Bio division (2013: £27.9m) and £18.0m for the TRaC division (2014: £16.8m). Pre-exceptional earnings before interest and tax are expected to be in line with market expectations.

Trac 2014 Revenue £18M. Subsequntly sold for £44.5M ( 105p per share )

Bio Division 2014 Revenue £27.3M worth ??

[cottoner] 13/3/2015 14:04

Prelim results next Wednesday.

From Jan TU.

The preliminary results for the year ended 31 December, 2014 will be announced on 18 March, 2015.

[bbluesky] 13/3/2015 12:04

Very positive article on the value and longer term on Motley Fool under:" Is Bioquell plc the perfect partner for Shireplc and BTG plc in your portfolio?"

[cottoner] 13/3/2015 11:35

Value of yesterday'd deal now sinking in??

[bbluesky] 12/3/2015 23:38

Topvest respect! Agree the rest of the rest of the business is worth more than 5p so better ahead: world # 1 ebola isolater +? 5p?

Chart watchers will be interested in the l-t picture and the words imv in the NOE were for this traditionally conservative company v +ve. Even before this, debt free, cash rich. Turned the corner (RNS) and turbo charged ahead. Valuation currently being crunched. Numbers will look good.

[cottoner] 12/3/2015 22:30

Snippet from the Mail's Market Report

"Buyers were all over decontamination specialist Bioquell and the close was 28.5p or 35pc higher at 110.5p. They reacted to news of the £44.5million sale of its TRaC services business to Element Materials Technology Group and plans to return the cash proceeds to shareholders. Bioquell has made a tasty turn on the deal as it bought two-thirds of the TRaC business for ‘only’ £331,000 in 2005 and grew it organically.
The sale leaves Bioquell a ‘pure-play’ bio-decontamination business. It provided decontamination services for eight of the nine European and US patients treated for Ebola infection during the recent outbreak.


Read more:

[bountyhunter] 12/3/2015 21:31

Yes just a blip on the long term chart, in the past we've gone from around 80p right the way up to 190p not long after. I would have expected the price to be above 110p after today's news since BQE-TRaC <> 5p/shr imo!...but there's another day before the end of the week...

[topvest] 12/3/2015 20:37

Well I was right on thing that TRaC would be spun off but was thinking of a demerger. Presumably they got a better selling price. Bit disappointed by the share price reaction to put it mildly. Should be at 150p+.

[cottoner] 12/3/2015 18:19

Is Bioquell plc The Perfect Partner For Shire PLC And BTG plc In Your Portfolio?

By Peter Stephens - Thursday, 12 March, 2015

Shares in decontamination specialist, Bioquell (LSE: BQE), have surged by as much as 36% today after the company announced the sale of its specialist testing subsidiary, TRaC, for £44.5m in cash. The company plans to return almost the entire amount to shareholders following the sale of the unit to Element Materials Technology Group, with Bioquell set to focus solely on biological contamination control moving forward.

The deal appears to be a good one for investors in Bioquell, since it works out at 105p per share. And, when you consider that Bioquell trades at a share price of 110p even after the announcement of the deal, it is clear that it remains a relatively appealing investment at the present time. In fact, that’s even more so since it will now be a simpler business, which should allow it to direct resources to what it feels will be a more rewarding space.

Looking Ahead

Of course, Bioquell was a relatively appealing business before today’s announcement. That’s because it has an excellent track record of profitability, with its bottom line having been in the black in each of the last four years and, looking ahead, it has a very bright future. For example, Bioquell is expected to deliver earnings growth of 45% in the current year, followed by 25% in 2016.

Despite this, Bioquell continues to trade on a very low rating with, for example, it having a price to earnings (P/E) ratio of just 16.2. This equates to a price to earnings growth (PEG) ratio of just 0.5, which indicates that Bioquell’s share price could have much further to go over the medium to long term.


Sector Peers

Of course, there are a number of other health care stocks that also offer excellent future potential. For example, Shire (LSE: SHP) (NASDAQOTH: SHPG.US) is forecast to double its sales by 2020 which, if met, would be a truly stunning result at a time when many of its pharmaceutical peers are struggling to even tread water. And, with Shire trading on a PEG ratio of 1.1, it still seems to offer excellent value for money.

Meanwhile, BTG (LSE: BTG) also offers excellent growth potential at a very enticing price. Its bottom line is forecast to rise by 27% next year and by a further 51% in the following year which, when combined with a P/E ratio of 36.6, equates to a PEG ratio of only 0.5. As such, it appears to be worth buying at the present time – even though its shares have already risen by 37% in the last year.

Vast Opportunity

So, with Bioquell, Shire and BTG all having excellent growth potential, they appear to be well worth buying at the present time. Certainly, they may be more volatile than many of their UK-listed peers but, for long term investors, they could prove to be very rewarding investments.

[apfindley] 12/3/2015 15:50

Profits taken here and put into OXS Oxus ready for their $1.2billion arbitration award

[cottoner] 12/3/2015 14:45

BioQuell on TRaC with asset sale

Decontamination device-maker BioQuell’s (BQE) plan to sell a non-core business and return the proceeds to shareholders has been warmly received by the market.

The company jumps 32.9% to 109p on the news that Element Materials Technology has been lined up to buy its testing services business TRaC for £44.5 million in cash.
BioQuell would make a £35.4 million profit, before expenses, from selling the business it has run for the past decade. This equates to 105p a share, a 28% premium to Wednesday’s 82p closing price.

In 2013 TRaC made a £3.4 million operating profit from £16.8 million of sales. Elizabeth Klein, an analyst at N+1 Singer, welcomes the deal. ‘We believe that this is a more than fair value for TRaC, and slightly ahead of what we had argued were the take out multiples for businesses in this area at some two times sales.’

The deal will allow BioQuell to concentrate on driving organic growth its core biological contamination control business, which serves the healthcare, defence and life sciences industries.

Pre-tax profits have fallen in each of the past three years and this is the latest move by management to reverse the trend and improve shareholder value. Cost cutting and adding new products to its offering have been early initiatives.

The deal is expected to close by the end of April.


Investec comments: ‘The divestment, if approved, will lead to a healthy cash return to shareholders and leave Bioquell focused entirely on its biologic contamination business. For investors, questions will likely remain on the Bio division’s future growth but the divestment, if approved, does simplify the investment case and should see a significant re-rating of the shares from today’s level.’

[snowydays] 12/3/2015 12:04

"Sale of subsidiaries by the UK holding company: the UK holding company may wish to sell its shares in its subsidiaries and pass the money onto the investors by way of a dividend. On the disposal of the shares, this is likely to trigger a capital gain on which corporation tax will be payable. The UK holding company may benefit from a relief called the substantial shareholding exemption, which would have the effect of making the entire gain exempt from capital gains tax.

"In order to benefit from this exemption various conditions need to be satisfied. These conditions are fairly complex but they include that the company has to have held at least 10% of the shares continuously for at least one year. The UK holding company and the subsidiary it is selling must both be trading companies, and their activities cannot include to a substantial extent activities other than trading activities. These conditions must be satisfied both before and after the disposal of the shares. There are a variety of other requirements which must also be satisfied, meaning that each transaction needs to be carefully checked to see whether the substantial shareholdings exemption would be available.

"If the substantial shareholding exemption is available, this will prevent the gains being taxed in the holding company and mean that there are more funds to return to investors."

[2niffy] 12/3/2015 12:01

Thanks for that. So £5m for £27.9m of t/o. Not comparing apples with apples, however Tristel trades on 2x t/o. Let's hope we can get it back to a decent level of profitability. Alternatively, it's a fragmented market with high distribution/ marketing costs. Looks ripe for more corporate activity.

[wjccghcc] 12/3/2015 11:04

Assume 20% corporation tax and say 500k fees gives net proceeds of around 37mm. At 108p, that gives a value of 5mm to the remaining businesses which lost 1mm in H1.

[veldtspar] 12/3/2015 10:47

No boom as yet. Iceberg seller?

[2niffy] 12/3/2015 08:26

Anybody got a view as to tax implications and hence the difference between the 105p gross any likely net nos?

[q1w2e3r4t5] 12/3/2015 07:51

150p today? Boom boom. DYOR, not a recommendation to buy!!

[ch1ck] 12/3/2015 07:35

Glad i bought in last month, i expect the shares will be rerated today. Hold on to your hats and shares.

[q1w2e3r4t5] 15/1/2015 07:56

Wow. Strong 4Q from Bio in line with management guidance. But TRAC even stronger after the strong investment made in the business over the past couple of years. Revenues accelerating now?

2010 £12.4m (£6.1m/£6.3m)
2011 £13.6m (£6.6m/£7.0m)
2012 £15.1m (£7.4m/£7.7m)
2013 £16.8m (£8.7m/£8.1m)
2014 £18.0m (£8.4m/£9.6m)

Could they generate £21m in 2015? And this has been a 20% operating margin business. What would this business sensibly be valued at?