IXI will survive - they have plenty of cash on the balance sheet. Its not a solvency issue - they just need to right-size the cost base to be appropriate for the level of business which they have.
I'd therefore expect a lot of job losses and restructuring costs, and the business to be meaningfully smaller in 6 months' time.
Given that its guesswork what that business looks like, for me its uninvestable at present - just not my style. For those who like turnarounds, maybe they'd look at it, but its a different investment proposition and equity story to the growth focus from before, so I'd expect some churn in the shareholder base.
Never nice to see these situations, and even less nice to own shares in these companies as I did! |
More news anyone ? |
The March contract news has impacted sentiment but the long-term growth potential remains, comments Investor's Champion. |
Yep, the bargain hunters are out ..
I've put a limit buy at 48p it may never get there, but I'm not so sure I want to pay more |
More news ? |
Can sell 30k but cannot buy 10k atm, |
Price still drifting downward now offer price at 56.8p.
This still appears to be a falling knife. |
PYC seem to have clients with successful clinical trials. Especially to date Bicycle BCYC Merck MRK.DE |
IXI is a quality company but this is going to sting for a while but cancellations are part and parcel of the business when you work in trials. One aspect to keep in mind is when you see a large trial fail you will often see the industry pause new work in that area for a while. You can look at the experience of Cogstate in Australia and COG after a series of high profile AD trials and the initial Aducanumab futility results it took 18 months for that market to properly get back to business. Also these cancellations can cluster if they have other clients working on the same MOA as Huntingdon has been a big focus for IXI. |
IXI bounce back will be a great opportunity |
Try ITX for research purposes. Imho |
I got luckyish too having sold a third in the last couple of days on the immaterial cloud news. Remainder out at 86.5 and 79.95, of which the former I was pretty happy with given it had traded there recently. Can't complain at the profits overall even if a fair chunk given back right at the end. |
I got lucky, as I only had a handful left as I had decided to sell into strength - a previous poster having flagged the high dependency on the one customer which I wasn't aware of - and that MS collaboration RNS provided (which, by the way, I thought was pretty immaterial) the strength.
Not sure you could have avoided it unless you had specific industry (company?) knowledge, and if we only invest in stuff we have detailed knowledge of, then there ain't much time for anything else.
No recommendations I'm afraid, I tend to stick to stable strong balance sheet dividend payers, and dabble a bit in everything else. Recent additions include SCS (modest position) and Norcross (looks more interesting, hoping to add on any weakness) to capture excess funds in UK household (and SA in the case of Norcross) bank accounts which have nothing else to be spent on. Not much IP there! |
Thanks Frazboy. Yes, the customer concentration was flagged, and was a reason why I thankfully hadn't added further my position. I'll watch from the sidelines now and see where the price and next set of results settle down.
Always useful in these situations to think through whether I should have been able to see this coming. Will do that over the coming days.
Its also worth remembering not to beat yourself up too much either. Investing in a probabilistic game - some you win, some you lose, and you cant know the future in advance. You just need to get more right than wrong, and you WILL get some wrong.
On to the next one - any suggestions for IP-rich, high ROCE small/mid caps?!? |
IXI still has great prospect with MSoft deal. Now they can focus on new development. The main contract will still partly continue as IXI products are still essential. Opportunity to top up and make a handsome gain from the current bottom. Keep on as it now means they will not be locked onto a main customer. Future looking bright. Great Product, Price and Position in this multi billion pound market with great potential. |
Good back of the envelope analysis Adam. But they were meant to be expansionary, so I would think that the historic market cap/sales ratio is perhaps optimistic? Although I haven't read the annual report in detail, I hope that very large customer risk and the ability of the customer to terminate it at short notice was flagged.
Best of luck all holders. |
Its difficult to tell where this will end up, but my guess is £7m - £8m revenues next year, given I previously had it as £12m - £13m.
They also mention a £12m order book, and historically their closing order book has historically averaged 2x the next years' revenues (though there is quite a bit of variation). So £12m/2 = £6m plus some new wins gets to the same £7m - £8m area.
They've historically traded around 3x revenues, which would probably now be the cap given the smell factor from this, so based on my revenue expectations, £21m - £24m mkt cap plus £8m cash gets you to £29m - £32m mkt cap, which is 62p - 67p per share. I'd say that it the cap given the sentiment around this now, and woldnt surprise me to see 50p say
Quite annoying - just glad my position wasnt huge and that I was in front of my computer when the RNS came out. |
I wonder whether management had an inkling that this might be coming. They'd previously seemed keen in contract announcements to not allow expectations to get ahead of the game |
Ouch. Out. Act first, think later when profits warnings (or quasi profit warnigns) happen |
2022 revenue was forecast at £11.2m, so £5m loss is 44.6% of this, hence almost 50%. Not quite sure why you are saying 'just', it's pretty disastrous although no doubt the bottom fishers will try to buy the drop. Commiserations to holders. |
I was lucky to spot the rns but couldn't get a quote for my entire holding. Managed 15k at 91p which looks good now. |
... and exactly the opposite of kudos (whatever that is) to whoever bought them! |
How do you work our 50%?Just £2.7m and £5m on FY22 |
Ouch... almost 50% of 2022 revenue down the pan. Kudos to whoever managed to sell 11000 at 1.06 about a minute after the RNS dropped! |
BOOOOOOOOM |
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