Intelligent Ultrasound Share Discussion Threads

[bmcollins] 12/12/2024 13:37

I was hoping for some hard news by now, at this rate our IUG Christmas present could be a Hogmany one or even later than that !

[bamboo2] 27/11/2024 07:10

Capital return update



Intelligent Ultrasound Group plc (AIM: IUG), the ultrasound simulation and education company, announces that the Company has completed all the necessary administrative steps (including court approval) for the reduction of capital. This is now subject to registration at Companies House before it becomes effective after which the Company will issue a further announcement confirming registration. Once effective, the Group will have the distributable reserves required to make a material return of capital to shareholders.



The Group therefore expects to confirm the plans for its Simulation Business and the exact amount of money to be returned during December 2024.



In an update on the current year's trading the Group confirms that, as at 22 November, Group unaudited revenue was £8.1m (same period in 2023: £9.2m), with £7.4m (same period in 2023: £8.4m) from continuing operations and £0.7m (same period in 2023: £0.8m) from discontinued operations. Cash at bank was £39.6m.

[40 fathoms] 20/11/2024 20:12

@petomi - If memory serves me correctly in the circular they said they would update the market if there was any change to the timetable.

They also said that it would take 2 or 3 days, after the court order, to register the capital reduction at Companies House. Only once this has been registered is the capital reduction process complete. This would suggest we should hear something tomorrow or Friday.

[petomi] 20/11/2024 17:08

Slightly odd that there has been no update following the court hearing on the capital reduction schedule for Monday. (From 15 Oct RNS: "The capital reduction is expected to be confirmed by Court Order on 18th November, after which further details on the Company's plans for its Simulation Business will be announced.")

Of course they may still be working on the forward plans for Simulation, which will influence the size of the capital return, and/or canvassing shareholders, but one would expect the capital reduction to be RNSed unless the court hearing was delayed?

At least there has been some buying interest today

GLA

[40 fathoms] 06/11/2024 14:09

@bmcollins... Yes, although I expect it will likely be December when we finally see cash. How much we see, I think much will depend on whether they opt to acquire something or pursue organic growth. My hypothesis, given they are pretty good at it, is that they will likely look to develop more internal platforms/products.

In total, including the initial acquisition, they invested approximately £12 million into the clinical AI business line. This investment encompassed significant development, validation, and regulatory approval costs and time, these elements would not be needed for any new simulation platforms, so one might expect development costs to be substantially lower.

My guess is that that they will focus on developing one or more new products internally and potentially expand their direct sales force in to Europe and ROW. This should not need more than £5/6 million to do this comfortably. So I am hoping to see a 10p to 10.5p capital return, increased investment in the sales team and a plan that sees us develop new products that could drive sales to +£20 million and profit to +£5 million within 3 or 4 years.

[bmcollins] 06/11/2024 03:29

@40fathoms
I was thinking about the effects of the upcoming capital reduction being planned for this month last weekend so for me your post is rather helpful, thanks.
I guess that a lot depends on how much the distribution of funds to shareholders is as to whether or not the board may be tempted to retain more than they need and use it to "accelerate progress" which is always a possibility in these situations?

[40 fathoms] 05/11/2024 23:06

We are @2 weeks away from understanding what shape the business will take going forward. Probably a good time to start trying to understand of what is an appropriate valuation for the simulation business.

Based on 1H report cashflow breakeven for the business ex clinical AI is @£11.5mn. The simulation business should do @£10mn and it did @£11mn. So if with new investment NHS spending comes back on-line it is possible/probable that it will be cashflow positive positive in FY25.

[40 fathoms] 23/10/2024 02:54

While we wait to find out how "material" a material return of capital is and my expectation remains between 80% and 90% of the GEHC proceeds, it worth remembering that we should be receiving interest on this cash at a rate of about £165,000 per month. That is likely result in a total of @400k between cash receipt and any distribution. This represents a decent and unforecast bump to revenue.

[bmcollins] 08/10/2024 14:42

On a weak day like today what a pleasure to have this somewhat contrarian stock in the portfolio.

[powen1979] 03/10/2024 02:08

However it will have its compliance with the BPR regulations for the IHT money under threat (albeit the budget might do for this anyway) which could present a significant institutional headwind until the cash is redeployed or distributed?

[40 fathoms] 01/10/2024 23:38

Net Cash @40 million (interest income at @140k per month)
Market Cap @34 million
Annual Revenue from Simulation Business @10 million
Gross Margins from Simulation Business @65%
Simulation Business essentially at cash flow breakeven.

So much for the Efficient-market hypothesis. The simulation business and 6 million in net cash is excluded from the current share price.

[bamboo2] 01/10/2024 12:11

1 October 2024



Intelligent Ultrasound Group plc

(the "Group" or the "Company")

Completion of sale of Clinical AI Business



Further to the announcement on 18th July 2024, Intelligent Ultrasound Group plc (AIM: IUG), the ultrasound AI software and simulation company, is pleased to announce it has completed the sale of its Clinical AI Business (Intelligent Ultrasound Limited and certain other clinical AI related assets) to GE HealthCare for an enterprise value of £40.5 million on a cash free/debt free basis.

[bmcollins] 27/9/2024 09:13

Thanks for that Jane

[jane deer] 27/9/2024 08:53

Section 2 of the circular (page 7) clarifies that the return could be a dividend or the return of capital through the purchase of own shares.

There is a tax section in the circular (section 3) but it clearly has not been properly proof-read. It just includes the disclaimer about not relying on it for tax advice, without any actual comments on the tax situation for UK shareholders.

[bmcollins] 27/9/2024 08:08

Presumably our anticipated distribution will be treated as a dividend for tax purposes thus attracting income tax unless held inside a tax free wrapper, ISA/SIPP etc ?

[bamboo2] 27/9/2024 07:00

Morning 40F, I guessed at £30-35m

It largely depends on the longer term plans for the rest of the co.

[40 fathoms] 27/9/2024 06:38

Impossible to tell from this announcement if it was £1 or £40 million they would have to complete this step to distribute any proceeds.

My gut feeling is we will see a distribution of @£35 million.

[bamboo2] 27/9/2024 06:30

Any guesses as to the size of the return of capital?

[bamboo2] 27/9/2024 06:27

27 September 2024

Intelligent Ultrasound Group plc

(the "Group" or the "Company")

Reduction of Capital: Posting of Circular & Notice of General Meeting

Further to the conditional sale of the Clinical AI Business to GE HealthCare for £40.5 million expected to complete on 1st October, Intelligent Ultrasound Group plc (AIM: IUG), announces that it is proposing to undertake a reduction of capital as the preliminary step to provide the distributable reserves required to return capital to shareholders. The reduction of capital will be subject to shareholder approval and a court approval process.

The Company has today posted a Circular to shareholders, including on our website, setting out the reasons for the capital reduction, and including a notice of the General Meeting to approve the resolution, which will be held on 15th October at the Company offices in Cardiff.

The capital reduction is expected to be confirmed by Court Order on 18th November after which further details on the Company's plans will also be announced.



EXPECTED TIMETABLE OF PRINCIPAL EVENTS [2024]

Publication of this Document 27 September

Latest time and date for receipt of Forms of Proxy for the GM 11 October

General Meeting 15 October

Court directions hearing 4 November

Court hearing to confirm Capital Reduction 18 November

Registration of Court Order and Effective Date Expected to take place 2 business days after the Court hearing to confirm Capital Reduction

[40 fathoms] 17/8/2024 23:47

A valid concern on AIM, but I would suggest that it is unlikely to apply here for the following reasons

- TOP 5 shareholders hold @57% and all are closed ended investment vehicles.
- Unit being sold accounts for less than 10% of revenue.
- Unit being sold is loss making and would have remained so if they had developed product pipeline.
- After the sale the business is at cashflow breakeven with obvious sales growth possible.
- The board is among the more competent and professional on AIM.

[parsons4] 17/8/2024 07:11

Like most other deals of this nature the market is concerned about how well the management can perform going forward with what is left !!! The problem is that they will leave quite a few $million in the bank which also guarantees their lifestyle !!

[40 fathoms] 15/8/2024 09:07

@HootStox - it is still under consideration, practically it is most likely to be a capital return or a tender offer. @bmcollins is correct, whatever the event there will be a declared date for participation. This has not happened yet so any shares purchased before that date will be able to participate.

@Route1 - Nothing declared yet but they have said they will do so after the transaction has closed, current estimate for closing is 1st October. They will have @12p of net cash at this stage and have said they will distribute a "material" amount of it. We have not been told yet what "material" means in pounds, shillings and pence. They have said that they will present details of the capital return and the results of the strategic review of the simulation business prior to the transaction closing.