Bioquell Share Discussion Threads

[eezymunny] 19/5/2015 22:02

I'm with you topvest.

We've finally almost got to some sort of sensible valuation here....but then you start to wonder if some daft US outfit will buy us out at 20xEBITDA. That would mean we double from here. I've let a few go today but still holding plenty.

I don't know what to do either. It's tricky IMO.

[strathroyal] 19/5/2015 21:34

I can understand your indecision as ST's article today gave very contrasting values for this sharewith estimates ranging from 150p - 262p, which seems ridiculously wide

For my part, I'm staying put as I feel that Christopher Mills has probably put this inplay and he has had some notable successes lately (NARS, MECOM, CVS and BQE to date), although he is not foot perfect (PSPI and GPG to name but two). I currently hold shares in NAS and was also in OIG but have sold the latter to buy BQE.

[topvest] 19/5/2015 20:19

One was directors' remuneration policy and the other was one of the NEDs and reappointment. Looks like the rest of Bioquell is firmly in play. Interesting times. I can't decide whether to sell or stay on board.

[strathroyal] 19/5/2015 10:17

topvest - do you know what the 2 resolutions were that attracted a large No vote?

[topvest] 18/5/2015 20:03

Looks like there is a bit of a spat with NAS and OIG given some of the voting at the AGM. Chris Mills clearly wants full value realised. There is no point distributing the cash now if another party steps forward quickly for the remaining business. Share price reaction indicates that this is good news.

[bakunin] 18/5/2015 10:52

Well, BQE has almost £15m in property and equipment assets alone.
They have almost £10m in other intangible assets, most of which I presume is capitalized product development costs.
I would imagine that the lion's share of these assets relate to the BIO division, which is where they have pods, cubes and what not.
They've got £48m in cash.
So, I would get 48+30=78, say £75-80m range ie 180p+
Then, there is the CGT to pay on the TRAC disposal.
But, although not being an expert in tax, if they are bought by an outfit with losses that can be offset against this exceptional profit, the full value is retained.
Which would explain the reason for not distributing the cash and for putting the company up for sale in addition to the patent under-valuation of the company by the market.
So, 180p + any premium for the probability of future Ebola outbreaks.

[strathroyal] 18/5/2015 10:46

Presumably they have been encouraged to put themselves up for sale by some of their institutional shareholders (such as NAS /OIG) so I feel it is unlikely that there would be no buyer. AS EM says, it is difficult to put a price on the remaining assets but certainly not one to sell at the present price (149p).

[eezymunny] 18/5/2015 09:25

Hmmm I'd say putting a value of the BIO division is very hard Nakunin. Beauty in the eye of the beholder etc. If anyone is interested I'd be surprised to see it sell for much less than 1 x revenue (c.£27m). That would give us a total value of c. 165p+ (a number mentioned here previosuly). It may, of course, sell for much more than that in these frothy times for Biotech companies. Or nobody may be interested. We'll have to wait and see..

[bakunin] 18/5/2015 08:21

Once again the UK stock market fails to make an accurate valuation of a UK company, even when it is staring them in the face.
BIO division currently valued at circa £10m!
And so, yet another solid UK company puts the "For sale" board up.
Good indication that the company is managed for shareholder value and, thus, is indeed undervalued.

[snowydays] 18/5/2015 08:03

So they've put the "For Sale" board in the front garden now.

[hpcg] 15/5/2015 13:47

I did sell at just below 150 and bought back in this morning. At this price not much downside but with a more than even chance of upside. Depending on price action and a view of the figures I might throw the cash return back this way. I'm anticipating there might be an over reaction on the down side ex return rights.

[eezymunny] 15/5/2015 13:06

AGM on Monday

My best guess a 90p/share cash return announced. Will be interesting see what they say about trading in the Bio division. £27m turnover and £3.9m EBITDA being valued at only c. £12m here. That might be a bit too much, about right, or miles below fair value. We'll have to wait and see, just depends on future trading.

And Bakunin, I'm pretty confident (99%) that there won't be any tax to pay on the TRAC disposal. Large shareholding exemption etc. They have already published a pro forma balance sheet post disposal which seems to confirm this.

[pinkie] 14/5/2015 17:08

Some poor people have to pay 40% tax on Income so better to take the capital value now and reinvest post the payment

[bakunin] 14/5/2015 15:03

Disposal money in the bank and IMS now due.
Missed selling at 150.
Hope the decline isn't to do with what the IMS will say.
At the time of the disposal announcement, they said the BIO division had "improved prospects".
Depending on how much tax they have to pay on the disposal profit, the BIO divison could be valued at as little as £9m right now!
And I thought BIO was always considered to be their core division.

[topvest] 21/4/2015 08:23

I'm a seller at 150p, but not convinced that selling is a good idea at this price given we should be getting a £1 return soon anyway.

[topvest] 21/4/2015 08:19

For what it's worth I think the Bio-Division is worth about £30m (x1 revenue) in it's current state although may be worth more to the right buyer and TRAC is worth c44.5m + a bit of cash and you have a £75m valuation versus the £57m enterprise value. So, still a bit of value here.

[eezymunny] 20/4/2015 17:11

Tx spooky/hpcg
ST's "cash profits" is nonsense IMO as they capex a fair bit of dev't costs (at least that is mentioned!). Target price looks fair to me. I'm inclined to hold for at least one set of results to see how BIO is doing.

[hpcg] 20/4/2015 17:04

Eezy - the synopsis of ST's article is that post disposal the remnant will have revenues of 27mm and cash profits of 3.9mm. Statutory figures are lower once D&A comes off, though its always nice to see a small company with the relative values that way round. He sees fair value and chart based target at 155p per share which still leaves growth unaccounted for and a large discount to conventional metrics applied to healthcare takeovers.

I didn't sell any today either - very strong day and with room to run.

[spooky] 20/4/2015 16:56

Using a fairly conservative valuation metric i believe that the Bio business is worth more than £20 million, but that is an opinion and i might be wrong too.

[eezymunny] 20/4/2015 16:37

The most bizarre thing is an Investec forecast dated 9 April with f/c £4.1m pretax 2015 and £5.8m for 2016. I can't help thinking maybe they haven't adjusted those for the Trac disposal but if they have this might go much much higher (it certainly ties in with company comment "The fundamental drivers underlying our Bio business are strong and we are looking forward to delivering significant value from this business to shareholders in 2015"

Worth looking at the pro forma (post disposal) balance sheet in here

hxxp://www.bioquellplc.com/downloads/press-releases/150417_Circular_FINAL_VERSION.pdf

Net curret assets c. £51.5m and tangible book c. £56m vs market cap c. £58m after today's rise. So BIO division not being attributed much value at all. Only time will tell how it performs going forward but it doesn't feel like selling time yet to me. I might well be wrong :)

[spooky] 20/4/2015 16:23

Well i have sold quite a few today so demand has been pretty strong following the article.

[eezymunny] 20/4/2015 16:18

Anyone have a summary of the article? I find myself owning a terrifying number of these beauties. Interested in how profitable ST thinks the Bio division might be going forward?

[hpcg] 20/4/2015 13:03

That's a detailed write up from Simon Thompson - no surprise that share price is up sharply.

[hpcg] 20/4/2015 12:55

Ah, that's what I was looking for, thanks.

[corbeta] 20/4/2015 12:50

Recommended as a buy on IC web site at that time.