Let’s see. How can we further shareholder value apart from the free fall. Shall we do a share buyback?, a little acquisition?, maybe a little organic growth? A dividend, employe some sales staff for the enzyme business, find a use in our own business? The choice is endless, but some one needs to make some decisions! Maybe the CEO. I suspect this is yet another stock being hit by redemptions and bot trades, but the update was casual, naive, and lazy . Get a grip! |
Lovely little company looking ripe to be taken private or acquired by a bigger company in the field.
Independent listing not doing it any favours. |
 Feb 13 2025
Hybrid closed-loop insulin pumps improve time in range, but increase ketoacidosis
People with type 1 diabetes require continuous insulin treatment and must regularly measure their glucose levels. With open-loop therapies*, insulin administration is manually controlled, while hybrid closed-loop systems* automatically regulate insulin delivery. A study with the involvement of the German Center for Diabetes Research showed that hybrid closed-loop systems offer improved long-term blood sugar values (HbA1c levels) and a lower risk of hypoglycemic coma, but lead to a higher rate of diabetic ketoacidosis. The results were published in The Lancet Diabetes & Endocrinology.
Recommendation: Monitor ketone bodies closely
Due to the higher risk of ketoacidosis, it is important to provide patients with targeted information and, in case of potential metabolic decompensation, to closely monitor ketone bodies in the blood or urine in order to prevent such adverse events, emphasize the authors of the study.
Full details -
Page 88 -
As previously highlighted. EKF provides two products for detecting ketones and monitoring patient resolution in cases of diabetic ketoacidosis. |
Looking for:
1) New Product Story
2) Mix shift - product mix, dump low margins, geographic expansion
3) Management turn around story - come in to address 1), 2) at least
4) Roll-ups - risky but when done properly makes a bog difference
5) Cheap with quality
We can all argue about it but for me EKF meets at least 3 of these and interested to see if they acquire for some type of roll-up. |
Imho there's certainly more upside on EKF than downside and the financials look quality.
As for the demand dynamics I don't see them going anyway but up and with improved margins compared to the past. Only a matter of time before it begins to show traction on improved top and bottom lines.
Interested to see the CEO of ANCR is on the BoD.
Put money where my mouth is and now hold a decent amount. |
What has been on my mind for a while now is how the worldwide boom in the use of GLP-1 drugs affects and causes ketoacidosis.
We already know the diabetics can experience diabetic ketoacidosis (known as DKA), which is a life-threatening diabetes complication, and hence diagnosing and monitoring it is very important - cue EKF's B-HB and STAT-Site® WB used to diagnose and monitor ketosis.
B-HB: The superior ketone test in hospital settings -
The STAT-Site® WB analyzer from EKF Diagnostics is used to quantitatively determine β-ketones (Beta-Hydroxybutyrate or β-HB) and glucose in whole blood at the point-of-care (POC) e.g. doctors office/clinic -
Even without taking GLP-1's, diabetics are at risk from ketoacidosis, and taking GLP-1 increases that risk. However, what has become evidently clear though (according to medical journals), is that GLP-1 use can also cause ketoacidosis in 'non-diabetic patients', which represents a relatively new B-HB testing market!
Given the mega-blockbuster sales of all-things GLP-1's, especially in non-diabetics, it's a high probability that (unfortunately) the size of the markets for ketoacidosis diagnoses and regular monitoring at the POC, are likely to experience material rates of growth.
Some will recall that EKF stated in a recent investor presentation that EKF has a single B-HB/Glucose test-strip and reader in development, which EKF has IP around. This in-house ability and IP will enable the production of a superior and proprietary product that would compliment their existing B-HB testing business, addressing an 'additional' market of $59m in the US, plus additional opportunities outside the US.
Either way, the B-HB testing market look set for multi-year growth. |
Anyone have a figure to hand for what % of EKF's business goes into the animal diagnostics sector? Probably very small. |
I note Schroders reduced holding announcement yesterday. Has Schroder been the seller, and given that the share ticked up, are they done? Time will tell!
I also note some EKF news -
Transforming Healthcare with Seamless Point-of-Care Connectivity
31/01/2025
The healthcare industry is constantly evolving. One of the most exciting developments is how new technology integrates into everyday practices. From managing electronic medical records (EMRs) to connecting diagnostic devices, innovative solutions can help to make healthcare faster, more efficient, and patient-friendly.
At EKF Diagnostics, we are simplifying healthcare data management with our point-of-care (POC) data management software, EKF Link. Let’s explore how integrations and tools like EKF Link can improve clinical workflow and ultimately enhance patient care.
Full details -
Interestingly, EKF previously reported that they were seeing increased interest from other players in utilising EKF Link. In my opinion, EKF Link is under appreciated in terms of augmenting opportunity. |
Anyone have a figure to hand for EKF revenue from USA market and USA costs, in $? |
Impressive!
Linkedin post 2 days ago -
Gino Rampolla
Senior National Sales Manager at EKF Diagnostics
I am deeply honored to share that we have been recognized as the 2024 Fisher Healthcare Award of Excellence for Private Label Supplier of the Year. This accolade reflects our team's unwavering hard work and dedication.
Note the Fisher Healthcare commentary below the above post -
At the recent Fisher Healthcare National Sales Meeting, we celebrated the invaluable contributions of our partners through our Supplier Awards. These awards recognize the innovation, collaboration, and dedication of our suppliers whose solutions enable healthcare providers to deliver exceptional care. |
Just to add to post 228: That I had incorrectly typed that the current buy back authority had expired, when clearly it's still valid and will expire at the next AGM around May 2025 (unless they utilise clause 'e' for purchases concluded via contracts which may be executed wholly or partly after the expiry of such authority) -
From the Annual Report 2023 -
12. That the Company be and is generally and unconditionally authorised for the purposes of section 701(1) of the 2006 Act to make one or more market purchases (within the meaning of section 693(4) of the Act) on the London Stock Exchange of ordinary shares of £0.01 each in the capital of the Company (“Ordinary Shares”) provided that:
a. the maximum aggregate number of Ordinary Shares authorised to be purchased is 68,014,211 (representing 14.99 per cent. of the Company’s issued ordinary share capital excluding treasury shares);
b. the minimum price (excluding expenses) which may be paid for such Ordinary Shares is £0.01 per share;
c. the maximum price (excluding expenses) which may be paid for an Ordinary Share shall not be more than 5 per cent. above the average of the middle market quotations for an Ordinary Share as derived from The London Stock Exchange Daily Official List for the five business days immediately preceding the date on which the Ordinary Share is purchased;
d. unless previously renewed, varied or revoked, the authority conferred shall expire at the conclusion of the Company’s next Annual General Meeting;
and e. the Company may make a contract or contracts to purchase Ordinary Shares under the authority conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a purchase of Ordinary Shares in pursuance of any such contract or contracts.
Given the strong cash generation and that this aspect is apparently being further considered, it will be interesting to see if the current authority is utilised. |
Share buybacks imply to me that the management has run out of ideas and should therefore now be considered ex-growth. They'll do nothing for the share price on AIM, and I would regard any such action as a warning flag... |
My assessment and opinion with regard to the three points/approaches to deliver further value to shareholders in 2025:
1. Via internal investment to support organic growth:
As this comes first, this appears to be the most likely and preferred option. Which one assumes supports the rationale to accelerate away from the low margin/zero growth products, and more than offsets their loss with internal development that delivers products with much higher margins and growth prospects. Two such avenues spring to mind:
The potential for a new glucose/BHB test which would be a proprietary product that would compliment their existing BHB lab testing business, addressing an 'additional' market of $59m in the US. JB stated at the 2024 half-year presentation that they will have feasibility completed on their new glucose/BHB test by Christmas 2024.
EKF manufactured enzymes utilised internally that enable new EKF manufactured tests and point-of-care products.
2. Enhancing M&A opportunities: This requires a disciplined approach to due diligence and a clear vision, meticulous planning and a strategic approach to integrations. The track record in this regard, especially in terms of increasing shareholder value, does not exactly fill many with confidence!
3. The potential implementation of an additional share buy-back programme:
One assumes that the 1.2m shares currently held in treasury are likely to be cancelled. And that the word "additional" is because there was an authority in place in 2024, which will expire at the next AGM and will be replaced/increased. Nonetheless, providing that management prioritises reinvestment in EKF via development and products with the highest growth prospects and where the returns make sense, it could further improve shareholder returns (as well as implying the shares are undervalued).
Clearly, the management recognise the need for real change and improvement, hence the implied changes and forthcoming changes. Importantly, neither is the market going to reward EKF for the status-quo.
From my perspective, I can see and appreciate the potential. However, evidence and 'delivery' of real positive impactful change that delivers improved shareholder value is now a requirement, anything short of that is not acceptable, with no further apologies accepted from Julian Baines for failure, or even small misses, because that's effectively what we have had for too long now!
Like many others, and in case it's not already clear, my patience has been worn to paper thin!
So, lets hope we are indeed in the trough, and that the absent and overdue positive updates start to flow! |
Broker comment/excerpt via Research -tree -
The strong improvement in margins and cash generation evident in H1 continued into H2 as self-help measures and strong execution from management took effect. Whilst revenues were slightly behind expectations, this is down to an acceleration in the decline of non-core low/no margin product lines and as such, the impact on profitability was muted. The key highlight was stronger than expected cash generation and the significant improvement in the strength of the balance sheet over the year. As a result, the board is looking at options to deploy excess cash to increase shareholder value via accelerating growth and/or returning cash to shareholders. We look forward to hearing more details on this at the prelims in late March. We stay at BUY, with an unchanged TP of 39p.
Upgrade to access full broker note - |
It all depends on what your share cost base is and if you believe changes have been made to strengthen the business and decision processes.
My take is this is a trough and it's onward now but such changes don't happen quickly and historical baggage takes time to ebb away in memory. |
Culling low margin products is usually a sensible management strategy, but I fear that that does not adequately explain the latest dip in anticipated FY 2024 revenues.
Singer (the house broker) had previously forecast FY 2024 revenues of £53m. It is not expecting much good news any time soon, as it has reduced forecast FY 2025 revenues to £53.4m (previously £56.6m) and FY 2026 revenues to £57.1m (previously £60.3m).
And not a word in this TU about revenues from the fermenters' investment (completely botched, on any analysis).You would have thought - and certainly hoped - that such revenues would have more than offset the lost low margin product revenues and that they would start to come through strongly in the revenues over the next few years. Apparently not.
Given this, I am not at all surprised that the market reacted negatively to today's announcement. I had hoped that the bottom had been reached around one year ago and I resisted my temptation to sell out completely at that time, although I did trim my holding. I finally bit the bullet and sold out at a painful loss a few weeks ago. I have simply lost all faith in the current management, who have had more than enough chances. I have simply concluded that there are much better opportunities elsewhere. It is not impossible that the business can be revived, but you (or rather, I) wouldn't bet on it. If I was still shareholder, I would also be alarmed that the company is contemplating further M&A activity, amongst various options. The previous M&A deals have been the stuff of nightmares. |
What is interesting is they could have put in an estimated overall margin (or margin range) vs 2023 but didn't.
Only those bothering to consider the numbers get to see. |
We won't have a say and I guess someone will be doing the maths on the optimum allocation of capital. Growing the business is my #1, especially if they can do so with at least the level of net margin they have now.
For the medium to long term they should be investing for top line growth and the capital gain will more than offset any dividend lost imho. |
If they go for share buybacks I for one would prefer the dividend as would many. |
Good results. Dividend not an issue at this stage-needs to reinvest to keep momentum going but as is obvious from cash generation can be introduced anytime and could be quite decent. Expect ramp up on fermentaation revenue next year-not even in the numbers. |
It has had a good shake-down and tidy-up to become a very cash generative business. Cost cuts and dumping low margin sales.
Excellent cash generation but a slight miss on adj EBITDA and revenue below consensus - can be expected given the transformation it has been going through. Allowing for the revenue miss (-£3.3M) the results per unit of sales are much better than the market predicted and look forward to seeing the final margin figures vs 2023. Good news on the cash front and the amount it is spinning off.
Final EBITDA > £11M so a miss of < 700K. NOISE!
Overall excellent and have tidied up the low margin areas and costs. This is the trough imho.
Expect the market to puke as all it will see is the top line and adj EBITDA miss which are inconsequential.
Ready for 2025.
DYOR etc. |
Just wish that on their options of what to do with the cash they included resumption of the dividend. |
A positive Trading Update released today.
And a positive backdrop in terms of a range on investment opportunities and value creation. |
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