Ekf Diagnostics Share Discussion Threads

[tongosti] 30/3/2022 09:25

"we are therefore able to benefit from the lower share price."Really?! These (extremely expensive) words help perfectly explain every major blow up in financial history. Fighting a virulent trend is equivalent to fighting Newton's first law of inertia.

[wan] 30/3/2022 08:12

I should have added that, I am very comfortable for EKF to buy back the shares issued at a higher price to fund the acquisition of ADL Health, which as the CFO pointed out, obviously equates to reducing the dilution back levels prior to the acquisition, but also that the buybacks, at lower a share price, ultimately reduce the acquisition costs too. Overall, and also considering the increase in this years dividend, a good use of cash.

In this regard, and somewhat conversely, we are therefore able to benefit from the lower share price (compared to when ADL was acquired).

[wan] 30/3/2022 07:56

Although I have not got access to the full broker note, I don't disagree with James comment in post 2599, that things appear to be misaligned in terms of the presented prospects and rationale for the significant investments and the markets interpretation (some will of course state the market is never wrong!).

Singers price target of 62p, presumably a 12 month target, currently implies circa 40% upside, but that might prove conservative (no bad thing) when EKF are in a position to announce certain contracts that are, in my view, sat 'firmly' in the wings.

However, I also appreciate we are in transition, and in a different place in terms of market dynamics.

My question whether all of these investments and expenditures described can be delivered from existing and future cash resources without the need to raise additional funds, or investors incurring substantial dilution, or for the need to significantly increase debt, was answered by the CFO, Mark Davies (at 41.30 minutes). In short, everything that was announced and discussed yesterday, is able to be funded from existing resources.

This fact may not have been reflected by the market previously (time will tell), and as I alluded to, delivering on all of those elements from existing and future resources implies that there is indeed very bright prospects ahead (in terms of growth), and it's highly likely in my view that there are prospective contracts in the wings.

[buywell3] 30/3/2022 00:57

buybacks --- buywell has never been a fan of these

But the chart is somewhat direly placed at the moment regarding a chart support level

40p seems to be the line drawn in the sand for the buyback contest which might last for some time imo



free stock charts from uk.advfn.com


And consume a lot of cash in so doing

9M at 40p = 3.6M

4M is the max allocated

How long will that last is the question

Which is why perhaps this has been added in the RNS

Any repurchases made following the Company's next AGM being held on 18 May 2022 will be conditional upon a further shareholder approval of the Company's general buyback authority being obtained at that meeting and subject to the limit of 69,589,585 Ordinary Shares, or such other number as would represent approximately 15 per cent of the Company's issued share capital at the time of issue of notice of the 2022 AGM.
The Company intends to operate the Buyback from the date of this announcement until the earlier of the date on which purchase of 9,000,000 Ordinary Shares has been completed, the 2022 Annual General Meeting in the event further shareholder approval is not obtained, or 31 December 2022.


So a further limit of 69,589,585 looks set to soon add to the 9M

At 40p around 28 Million pounds plus the 3.6M = 31.6 M total

From results

Cash at 31 December 2021 of GBP20.3m (2020: GBP21.9m), net cash after borrowings of GBP19.6m (2020: GBP21.4m)

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Here we are wan

This could help with tracking the volume of shares being traded



Easily added to the header --- buywell is sure you know how

[dano15] 30/3/2022 00:45

Even if Covid is on the way out EKF seems to have positioned itself well for future growth. Sounds like some of you chaps haven't quite bought in. I would echo @wan, I also have interest to see what ADL Health can produce in the coming years. Given some time my expectation is this division will be the fastest growing in the company! EKF is way undervalued. The pros certainly outweigh the cons. I fully expect a trend reversal to the positive! Just my 2 cents.

[dano15] 30/3/2022 00:44

Even if Covid is on the way out EKF seems to have positioned itself well for future growth. Sounds like some of you chaps haven't quite bought in. I would echo @wan, I also have interest to see what ADL Health can produce in the coming years. Given some time my expectation is this division will be the fastest growing in the company! EKF is way undervalued. The pros certainly outweigh the cons. I fully expect a trend reversal to the positive! Just my 2 cents.

[buywell3] 29/3/2022 22:18

There are, to be fair, many companies that have had a couple of bumper years on the back of Covid-19

Very decent cash piles have resulted

It is what they do with that cash to grow the business that counts imo

[james188] 29/3/2022 19:47

The problem is that there is a huge disconnect between the upbeat management presentations and the pretty grim Singer Capital Markets note issued today. One of them has to be wrong - and I speak as a long term shareholder.

The SCM note assumes very subdued figures for the next few years despite very significant investment, whereas management is much more bullish. I suggested to the company today that they should consider promoting a more detailed broker note to guide potential investors. Look at the sort of much more detailed briefing that finncap provides for similar companies - but that question was not answered in the time available.As things stand, the market does not believe what the management team is saying.That has to be addressed.

[wan] 29/3/2022 13:59

I appreciate the pragmatic view being taken, which in turn probably represents a relatively conservative scenario for the current year given the longer-term contract that's (presumably) still in place (representing less than half of contract manufacturing revenues for PrimeStore MTM and PBS for the first half of 2021). And perhaps exemplified by the first quarter being in line with 2021, augmented by ADL contributing by significantly exceeding revenues recorded in the final quarter of 2021.

ADL Health is particularly catching my attention, with their wider testing offer, including their current and planned capabilities, as clearly having great potential to broaden EKF diagnostic offering. There is good reason to believe that this could also include producing results for non-COVID test collection kits for the consumer testing market (which they are effectively doing now for COVID testing), a global market which is forecast to experience good rates of long term growth.

Cue - "Having CLIA lab capacity in-house also provides us with a means to strengthen our customer relationships by providing wider testing services, and allows us to build synergistically on the relationships with industry leaders that we have developed over the last two years."

Perhaps it is enough to say for now then, that the combination of significant cash investments being made across the various business divisions, the share buyback (treasury stock can also be used for certain investments/acquisitions etc), the increased dividend, and continuation of a progressive dividend policy, consideration of additional investment in the existing stable of spin-outs and to explore other opportunities with MSIP, along with considering complementary earnings-enhancing acquisitions with key strategic value, effectively demonstrating the growth prospects on offer, and indeed further demonstrating the Boards confidence in the successful delivery of their resulting growth strategy (already being implemented).

So, an important question is, can all of this be delivered from existing and future cash resources without the need to raise funds (or a significant increase in debt), or incurring substantial dilution? If it can, and execution risk aside, it implies that very bright prospects lie ahead, and would appear to align well with Singer's view that any share price weakness as a strong buying opportunity.

I will endeavour to get that question (amongst others) put forward to the live meeting/presentation, as I am unable to attend due to a recent and unplanned change to a prior commitment.

[tongosti] 29/3/2022 11:56

Has any worked out the money one would have lost if acted on corporate cheerleaders' reports? The market is thumbing this down for the same reason it started to do so at 80. Namely, investors had sky high expectations on the business and they still do. No fundamentally driven approach captures this (and that's why 99% of fundamentally driven players get very mediocre results over the longer term).

[wan] 29/3/2022 09:10

Singer Capital Markets has published a new research note on EKF Diagnostics

EKF has delivered very strong FY21 results, ahead of upgraded expectations. The core business is performing well (+14% YoY) and the investment in expanding the offering is beginning to pay off. However, pandemic-related sales look likely to slow materially and ongoing sales into Russia are proving difficult. We rebase our forecasts accordingly, reducing our FY22E revenue & EBITDA by 26%/40% and by 17%/25% respectively in FY23E. We adjust our TP to 62p (from 86p) and would view any share price weakness as a strong buying opportunity.

[pugugly] 29/3/2022 09:05

Mr Market very unhappy with results - Down 12% One year low

[tongosti] 29/3/2022 08:47

Quite a paradigm shift indeed. Massive volumes resuming the trip south. As have said several times, 33 is the next target chaps (and chapesses). For the umpteenth time - listen to what the market is telling you.

[wan] 25/3/2022 07:46

With the paradigm shift in testing firmly in mind, I note an update within news from Myhealthchecked today -

Penny McCormick, Chief Executive Officer of MyHealthChecked Plc, said: " We are delighted with the strong performance that we've seen from The Genome Store business since becoming part of MyHealthChecked at the end of 2020. The acquisition was a natural fit and it gave us the expertise to meet the opportunities that the COVID testing market provided. From this we have established a trusted reputation with customers and built strong commercial relationships with the UK's top pharmacy retailers. We now look forward to further progressing an exciting pipeline of wider testing services for which we will commence commercialisation this Spring."

[wan] 24/3/2022 15:54

One example of demand for sample collection devices and kits (not necessarily COVID related) this side of the Atlantic -

PCR Sample Collection Devices and Consumables
A Tender Notice
by THE COMMON SERVICES AGENCY (MORE COMMONLY KNOWN AS NHS NATIONAL SERVICES SCOTLAND

Duration
23.5 month
Value
£-£40M

Published
16 Mar 2022
Delivery
To 08 Apr 2024 (est.)
Deadline
19 Apr 2022

Description
The supply of sample collection and transportation devices and related consumables, to support Molecular PCR testing platforms across all of NHS Scotland’s National Laboratory Estate.

Tubes are prefilled with a range of transport mediums, individually and also as a Sample Collection Kit (IVD peel pouch kit, containing prefilled tube + sterile swab), individual sterile swabs, replacement coloured screw caps, lysis buffer and associated consumables.

[faz] 24/3/2022 11:42

Buying ahead of results from a low position. Taken a few here (compared with what I used to own); I want to see a clear path for eps growth and an update on the new strategy.

[wan] 24/3/2022 09:18

Following on from my post 2578

Further food for thought -

We know from EKF's first half results that their major industrial partner represented less than half of their contract manufacturing revenues for PrimeStore MTM and PBS for the first half of 2021, and that EKF had already seen a shift to a wider mix of revenues from a broader customer base. With EKF expecting to see the share of revenue contribution from other customers continue to rise as they move through the year.

In addition, with the expectation that sales of these products will continue for the foreseeable future, EKF added two further factory units to their existing site in Cardiff which was opened in January, and have added off-site manufacturing space in Boerne in the US.

COVID-19 testing is only one 'taught' string to EKF's bow in terms of their shift to a wider mix of revenues from a broader customer base. But staying with COVID testing 'for now' (because we know that EKF are producing kits and components for COVID testing).

As an example of how the potential customer base is expanding, since January there has been (and still is!) a distinct increase in FDA Emergency Use Authorisations (EUA.s) for direct to consumer and home collection COVID PCR testing kits (with the latest being Quest Diagnostics, for 4 versions utilising PBS or UTM) -

Individual EUAs for Molecular Diagnostic Tests for SARS-CoV-2
This table includes information about authorized SARS-CoV-2 molecular diagnostic tests. These EUAs have been issued for each individual test with certain conditions of authorization required of the manufacturer and authorized laboratories -



The significant expansion of EUA's for home testing kits fits well with my previous prediction that we are entering a new era representing a paradigm shift where people are empowered to understand their own health in the comfort and privacy of their homes, which will also include consumer-initiated lab testing, in turn offering a very large global growth opportunity for non-COVID related products.

The foundations have been laid, and I purposefully repeat and predict, that such testing will predominantly (and hopefully) be made up of non-COVID related testing. And importantly, such an expanded and broad manufacturing base (able to shift and deliver specific test kit production) will also greatly improve overall pandemic preparedness and response.

[wan] 10/3/2022 15:37

Tongosti...You can in fact read my recent post two different ways! But I don't disagree that the market appears to be constantly giving EKF the thumbs down.

I will be pleased when we 'hopefully' get a clearer line of sight on things post the Results and post the live online presentation relating to the final results at 4.30 pm on Tuesday 29 March 2022.

[tongosti] 10/3/2022 14:10

Someone tell this happy chap the market keeps thumbing this down? Am sure he thinks he's far smarter than the market (50% down and modesty has yet to kick in). Funny world one lives in.

[wan] 10/3/2022 10:29

Food for thought -

We know from EKF's first half results that their major industrial partner represented less than half of their contract manufacturing revenues for PrimeStore MTM and PBS for the first half of 2021, and that EKF had already seen a shift to a wider mix of revenues from a broader customer base. With EKF expecting to see the share of revenue contribution from other customers continue to rise as they move through the year.

In addition, with the expectation that sales of these products will continue for the foreseeable future, EKF added two further factory units to their existing site in Cardiff which was opened in January, and have added off-site manufacturing space in Boerne in the US.

From EKF's Update to Growth Plan -

2. Contract Manufacturing: Molecular diagnostics and other applications
a) Continued expansion of contract manufacturing facilities in UK and USA
b) Demand for manufacturing services driving new opportunities for non-COVID related products.
c) Increased production of components and kits to support COVID sample collection to meet demand from new customers


There was good reason why phosphate buffer solution (PBS) was introduced by EKF, not least that the inactivation ingredients within PrimeStore MTM is considered hazardous to humans or the environment and is therefore not used in direct-to-consumer testing (which uses PBS). MTM can also potentially interact with bleach and other cleaning products used to clean down lab equipment which in turn could release toxic cyanide gas, ultimately limiting the use of PrimeStore MTM to labs where the cleaning protocols do not require bleach (which still represents a large section of the market).

One of my main thrusts in my post 2582, was that there is a more specialised area too, in terms of extraction/lysis buffers etc. And with EKF's Chief Scientific Officer, Luke Daum, who has a lot of experience, and indeed IP, in developing and formulating such products, could mean this might also be an area to watch. In other words, such specialised areas, e.g. where there is obviously a need for an effective inactivating media that is not hazardous, might also provide for a decent opportunity.

In this regard, I note the recent news from Thermo Fisher for new Non-hazardous Viral Inactivation Media (not yet available in the US) -

New Non-Hazardous Viral Inactivation Medium Supports Safe Collection and Transport of SARS-CoV-2
Breakthrough formulation helps reduce the risk of exposure using anon-hazardous formulation and leakproof format during transport and processing


BASINGSTOKE, UK (March 8, 2022) – A new viral transport medium that enables collection and rapid inactivation of the SARS-CoV-2 virus, and stabilizes viral RNA at ambient temperature for transportation and use in in vitro diagnostic testing procedures, is now available in Europe.

Full release -

[wan] 09/3/2022 07:38

Luke Daum
Chief Scientific Officer at EKF Diagnostics

9th March 2022

I am pleased to announce that #EKF Diagnostics and YourGene are stepping up to launch the first ever #NIPT testing pipeline in the USA at our CLIA certified ADL Health testing laboratory in San Antonio, Texas. Dr. Luke Daum (EKF CSO) and the ADL Health team prepare the first #NGS run. It’s been a great week working with our friends from YourGene and growing our service test menu to include important noninvasive prenatal testing for Downs Syndrome (trisomy 21), Edwards Syndrome (trisomy 18), and Palau Syndrome (trisomy 13) using Illumina NGS.

[tongosti] 07/3/2022 09:47

Time is already telling us pal - don't you see you are surrendering all paper profits you thought was yours?43 printing (only 10 points away from my 33 target). PS. Maths 101: if one is down 50% you will need +100% just to get back to break even. No small feat for a few on here of course... gm - how are you these days?

[wan] 07/3/2022 08:00

Today's news duly noted.

Fwiw, at what is clearly a very difficult and challenging time, I think the investment in Verici will deliver above most private investor expectations. Time will tell!

[wan] 06/3/2022 08:26

Numerous publications have been running stories around testing nearer the patient, including within hospitals, doctors' surgeries, and in patients' homes for multiple illnesses/viruses (with some utilising one sample to test for multiple viruses), regarding how this area in particular is likely experience significant growth over the coming years, and is likely to form a significant part of how we see healthcare evolve and grow beyond, and as a consequence, of the pandemic.

These tests will be centred predominantly around PCR (e.g. rapid or home sample collection) and lateral flow type tests, both of which utilise Phosphate Buffered Saline (PBS), or derivatives of that. The fact is, the buffer solution used in many lateral flow tests consists of 99.7% saline solution. Therefore, in my view there are more opportunities for EKF's PBS manufacturing capability, than PCR testing alone. Indeed, PBS (and more specialised buffer solutions), is applicable to a multitude of tests and test 'kits'.

The other substances contained in the buffer solution are important (possibly differentiating the test) but are obviously very low in concentration. The concentrations of those ingredients in the buffer solution are far below the threshold applicable in UK and European hazardous substance regulations, so they do not usually present for concerns when used as an integral part of testing, including tests used directly by the patient.

There is an even more specialised area too, in terms of extraction/lysis buffers etc. And with EKF's Chief Scientific Officer, Luke Daum, who has a lot of experience in developing such products, this might also be an area to watch.

With the US, Europe and the UK (amongst others) committed to sustaining and supporting the growth of a strong 'domestic' diagnostic manufacturing base (becoming less reliant on China) in order to be better prepared for the next pandemic, and emergency responses to other health threats, such as surge testing and surveillance etc, this backdrop is also likely to at least provide a solid secure base for diagnostic manufacturers, especially those who have already demonstrated they are capable.

In short, EKF Diagnostics supply and manufacture test kit components, collation of test kits, and also provide high-throughput laboratory testing to results, and are therefore well placed to address this new era of diagnostics. An era where people are empowered to understand their own health in the comfort and privacy of their homes, which will also include consumer-initiated lab testing, and is likely to represent a paradigm shift, in turn offering a very large global growth opportunity for non-COVID related products.

Overall, and in my view only, the above and EKF's existing diagnostic business should prove to be a winning combination that addresses a substantial growth opportunity!

[wan] 05/3/2022 06:00

Tongosti...I don't ramp, and I don't post to get a thumbs up, or even a thank you. But I also accept I can be wrong in my judgements and assessments. But just like you, I won't prove to be right, or indeed wrong all of the time!

Staying with the backdrop/ direction of travel theme, and a share tip -

How Covid-19 changed biotechnology – and how you can invest
The pandemic has exacted a huge human and financial toll, but it has also transformed scientific research in ways that will deliver huge benefits for healthcare. Matthew Partridge reports.

by: Dr Matthew Partridge
4 MAR 2022

The entire diagnostics industry, from large firms such as Abbott Laboratories to smaller domestic laboratories, has benefited from a “surge in demand”, adds Hermann. Some of this may be about to tail off, but the outlook remains bright. Governments around the world have realised “the importance of having a diagnostics infrastructure in place” to protect against the next pandemic – and to prevent them becoming too dependent on countries like China for supplies.

Overall, biotech achievements over the last two years have “created a spate of exciting potential investment opportunities”, say Thomson and Zhang. “Strong growth prospects” are set to “continue into 2022 and beyond”. Below, we look at some ways to invest.

The need to maintain some domestic testing infrastructure in the UK is good news for EKF Diagnostics (LSE: EKF), says Stifel’s Herrmann. It was one of the few British companies to successfully develop and market a Covid-19 test, but already had a reputation as a manufacturer of diagnostic devices, mainly centred around analysis of blood. Between 2015 and 2019, its sales grew by more than half and Covid-19 further boosted its growth. It trades at 14 times 2022 earning and pays a dividend yield of 2.3%.

Full article -