Ekf Diagnostics Share Discussion Threads

[wan] 09/11/2023 16:31

Hear more about EKF Life Sciences, and our latest developments in Enzyme fermentation, custom bioprocessing, and contract manufacturing -

8th November 2023

EKF is showcasing its products and services at MEDICA 2023, held in Düsseldorf, Germany, between 13-16 November.

EKF delivers diagnostic technologies and biotechnology solutions that empower healthcare and medical providers to make informed clinical decisions through point-of-care testing and life sciences applications.

[wan] 07/11/2023 14:17

As a key EKF customer, Fresenius-Kabi's recent Results and news flow is worth keeping eye on -

[james188] 26/10/2023 07:14

The RNS talks about the potential for long-term strategic partnerships. In other words, they do not currently exist. If the revenues currently contracted were significant, that would have been announced. So, there is obvious potential, but clearly they took a flyer on this and it is high risk. A big call and I hope that they got it right. We simply do not know. At present, it is a cash drain. We need to see some figures.

[wan] 26/10/2023 06:44

A very positive update from EKF regarding the official opening of their new state-of-the-art Life Sciences manufacturing site.

[wan] 28/9/2023 13:17

Recoding of the Interim Presentation -

The Q&A from the Interim Presentation is now available, and it would appear that a large percentage of the questions came from James and myself. The Q&A is available on the Q&A tab in the above link

[james188] 27/9/2023 15:55

The presentation and the ensuing Q&A is available on the InvestorMeet Company website, which you can sign up to for free. It is really useful facility and for that reason it is used by a significant number of AIM listed and other companies. As well as the live presentation, I expect that IMC/EKF will update with written responses to all the questions submitted in the next few days.That may or may not provide additional information.

I concentrated on the two major projects in my post, but there were a number of other points. As wan has mentioned, we learnt that the Elkhart facility is going to be closed and operations moved to South Bend. That looks to be sensible, but why was it not even mentioned in the Interims. It is clearly material.

Finally, I agree that Julian Baines always comes across as genuine and honest - and I think that he is. Quite rightly, he kicks off the presentation with a mea culpa. He completely took his eye off the ball, presumably because he was looking to exit short term. He has now had to completely reverse that plan, presumably because of pressure from Christopher Mills and other major shareholders. As I say, he needs experienced help.

[james188] 27/9/2023 15:15

The company has undertaken two new projects requiring material investment amounts post COVID.

The first was ADL Health, which was an unmitigated disaster for which heads had to roll. Just what the board was doing in approving this deal is completely beyond me. The end result was that empty assurances soon evaporated and the deal had to be unwound resulting in a huge loss.

The second project (or series of projects) is the investment in new enzymes fermentation capacity at South Bend.To paraphrase the line in Field of Dreams, the company seems to have decided that "if we build it, they will come". I spent pretty much my entire career sorting out the financial arrangements for for projects were lenders and investors were heavily reliant upon the revenues from projects once built, commissioned and operational. South Bend appears to be a classic textbook example as to what not to do. Why more time was not spent in understanding the requirements of customers - and signing up at meaningful deals in advance is another question that I meant to ask yesterday, but I had already asked a considerable number of questions.

What we learnt on the IMC call yesterday is that the process has been completely shambolic. Costs are out of control (expected capex of $16m against the budget (which I assume would have included a contingency) of $9.75m. On top of that, the project is running very late because the commissioning process and the needs of end customers were not understood. That is very basic mismanagement. Add to that the fact that we were told that the team at South Bend did not tell senior management the truth as to what was going on. Why management did not get a grip much earlier on is also beyond me. I would complete the clear out by firing the non-execs, who have been completely ineffectual, at best.

I did ask what steps were being taken to strengthen/replace the on the ground team and to ensure much better communication about the project. Julian Baines cannot run the whole show and I very much doubt that he is going to relocate to South Bend. I did not get an answer to that question, presumably because the company is still trying to work out the best way out of this mess.

I could go on, but I will leave it at that for now. I am a shareholder and so I want the company to succeed. To have any chance of success (or even survival), there needs to be a root and branch review and much better ongoing management, which has to involve new experienced people coming in, notwithstanding the necessary cost saving measures that were outlined yesterday.











The second project 9or series of related projects)

[wan] 27/9/2023 11:11

Coverage by the IC, with a "We remain on hold for now." -

EKF Diagnostics' turnover hit by plant delays
The company needs to open a new fermentation facility so it can confidently move beyond its Covid contracts
September 27, 2023
By Jennifer Johnson

[wan] 27/9/2023 07:42

Briefly, a lot was disclosed during yesterdays meeting, which was needed.

Overall the meeting was helpful and informative in terms of understanding (most of) what had gone wrong. Importantly, it was very useful in understanding the current approach and strategy going forwards, which now also includes further cost reduction and operational efficiency measures, with EKF subsequently set to become very focused on high-margin and high-performing products and services.

Although, in my opinion, the financial targets are very cautious and set relatively low (which the management acknowledge), the management are now laser focused on delivering profitable growth, and they are cautiously confident in beating the revised guidance by a wide margin.

It's good news that the South Bend facility is very near to completion (by October 25th) with all the new fermenters now installed, but what was new, was that over the next 6 months the Elkhart enzyme facility will be closed and transferred into the new South Bend facility. South Bend already has very healthy margins (and so does Elkhart), but the transfer of Elkhart into South Bend will apparently have a very positive impact on both productivity and margins.

In my view, with the financial guidance and share price set low, and with South Bend set to start delivering high value, high margin contracts, the potential upside is relatively high.

[wan] 26/9/2023 15:36

It is a lot to catch up on depending on your interpretation/view point, but it depends if you want to make turnover comparisons to periods that include COVID related revenues, and the level of new investment across fermentation and POC manufacturing initiatives that will drive growth.

[hopeful holder] 26/9/2023 15:18

I hold here but....10M cash burnProfit making to loss makingTurnover down by a third....That's a lot to catch up on to get back to a reasonable business...

[wan] 26/9/2023 13:41

I am sure I won't be the only one looking beyond the realignment measures, as there is a lot of potential to be realised in my view.

And not just limited to the new fermentation opportunities and contracts, but I note the following from todays Presentation (with my ' ' emphasis) -

South Bend 'will' deliver in 2024, primarily targeting customers in
diagnostic, biologic, and pharma markets
(END)

Most will understand the description of diagnostics (perhaps more of which later) and indeed pharma markets. And just in case some were wondering about biologics, this reference is almost certainly referring to, but not limited to, agriculture. Think of this in terms of the phasing out of the routine use of synthetic fertilisers, insecticides and pesticides which have come at a significant cost in terms of impacting various aspects of the environment, biodiversity, and human health (not to mention the development of resistance to some of those synthetic options).

I look forward to the meeting later today.

[wan] 26/9/2023 10:00

Presentation for the meeting later today is now available -

[wan] 26/9/2023 09:48

Singer Capital Markets has published a new research note on:
EKF Diagnostics Holdings plc.

Interims in line – new forecasts for Life Sciences

Interims are in line and show strong growth from key product lines, which bodes well for future sustainable growth. Having already rebased our FY23 estimates to remove any contribution from the delayed South Bend facility, we reintroduce FY24 & FY25 forecasts to reflect the revised schedule of revenues ramping up. These show group revenues on an improving trend and EBITDA margins strengthening towards 22%. The shares trade on an FY24 EV/EBITDA multiple of sub-10x, falling to 8x in FY25. There is clear value at current levels and, at ~25p, we believe there is a strong buying opportunity.

[carlosdanger] 14/9/2023 13:17

Here's a few EKF "fundamentals" to ponder: CSO: goneCEO: goneCFO: goneGlobal Biz Guy: goneDirector of Scientific Affairs: deceased1-day: -1.59%5-day: -4.64%1month: -10.21%YTD: -56.80%MAX: -93.08%

[tongosti] 14/9/2023 10:45

Technicals lead fundamentals is the lesson (not only here but across the equity complex). Former relates to facts with the latter relating to individual perceptions and opinions (everyone has one). This is why not many saw this coming at 80+ as fundamentals "had not changed". Guess what - now that "they have changed" this is down -70%! Out of the blue? Nah not really. Depends on the framework one uses in this unbelievable game.

[faz] 14/9/2023 08:09

A once well run compnay has again messed up and mess costs money. And if I need a bus I've never caught to get me somewhere I dont promise to be there on time, like they have. Filling in the gaps - thats what some here have been doing with a sunny coloured pencil for a very long time. When an investor sells, it means they can invest in something else with their money. But when someone emotionally invests in a company it so often results in losing more money and more precious time than is sensible. Here endeth...

[wan] 14/9/2023 07:22

I have had a response back from Walbrook -

In short: In the end EKF choose not to enter into a consultancy agreement with Mike Salter after his departure and in terms of the timescales that are now in place the company has restated these to reflect more realistic expectations for revenue generation and the Company is confident that these timelines are in-line with what will be delivered.

It is EKF's belief that there is additional value to customers from providing additional downstream fermentation services.
(END)

I think we can assume that we will be getting a lot more detail and information from the Presentation in two weeks time, not to mention an interesting Q & A session!

From my perspective, I am encouraged by a familiar and firm grip that is now being reinstated.

[james188] 12/9/2023 16:57

I agree. I fear that EKF has simply punted on contracts for the fermentation programme and is being predictably screwed by potential end customers, who have the whip hand.I have absolutely no idea who is running the show over in the US, after Mike Salter was removed and ditto the short lived Luke Daum (ex Chief Scientific Officer), who I guess was also pushed out because of the total ADL Health disaster.Is Julian Baines going to relocate to the US for a period?

We have had zero information as to whether EKF has decent/any contracts in place for the fermenters (I asked and had no response, so I assume not).

Julian Baines appears to have been leant on to continue in a role that he has said very clearly that he does not want. So why on earth have they canned the process to recruit a long term CEO? I hope that the institutional shareholders and the NEDS are asking someone very searching questions.

To say that the patience of shareholders (I am one) has been tested is an understatement. When is the company going to get a grip and start performing?

[mpage] 12/9/2023 16:26

wan, the downstream bit does impact on the upstream part because there's no point in doing a huge brew if you cannot quickly isolate the end product to the specificity demanded by the customer.

I'm guessing that the companies which do the validation/verification part have been overpromising. I'm assuming this is just your usual delay -but they have to tell the market as it has implications for FY revs.

And then there is the downstream section. This is, perhaps, more of a concern.

Fermentation creates a big messy brew. Downstream processing is the essential step of sieving out and delivering the required enzyme with minimal contamination. It is part and parcel of the whole operation.

Perhaps the customers have said they require say 99.9% purity (and/or adhere to some EU regulation) and the US lab now needs to do some additional work to meet this requirement. That's just my guess.

What would be helpful is for EKF to provide much more detailed trading statements - like proper quoted companies do!

[wan] 12/9/2023 14:18

mpage...on the one hand I tend to agree, but I am also assuming that it must also be the case of who he was relying on for those assessments (it's a specialised area). But I am not losing sight of the fact that we were also told that revenue projections for the new fermentation facility were conservative.

Putting aside the comparison of apparently where we were and where we are now, what I fundamentally do not understand is how a 'downstream' element has impacted the upstream scale-up.

In relation to customer needs for downstream processing: I don't understand how this has only recently become apparent, and how in turn that has impacted scale-up revenues as it is an 'essential' step in the manufacture of enzymes and involves further processing steps of the materials collected during the upstream stage to transform it into a finished product (which is quite often done by the ultimate end-user).

If downstream processing elsewhere is either not available/practicable, are EKF now looking to provide this as an 'additional' service to that previously envisioned, thereby enhancing the fermentation opportunity (for both internal and external products)?

Or is it a case that there are improved, or indeed better, contract options available for 2024 (including EKF branded products) for the increased capacity from a fully audited high-spec fermentation facility which are in short supply in the US?

I have asked a few questions via Walbrook early this morning, but I have not received an acknowledgement or response yet!

[mpage] 12/9/2023 13:14

Own Goal: The executive Chair needs to learn the value of underpromising and overdelivering. Who now will believe any statement issued by him?

17 May 23 AGM 'remain on track for operational activity and validation by end of Q3'

One month later 20 June TS 'remain on track to have all of our new fermentation capacity installed and validated towards the end of Q3 2023, with all but the largest fermenter becoming operational over the summer.'

Less than three months later 12 Sept TS 'validation and verification had not been sufficiently factored into current timescales for installed equipment to become fully operational. . . . Consequently, the Board is removing any guidance for fermentation revenues for FY 2023.'