Share Name Share Symbol Market Type Share ISIN Share Description
Venn Life LSE:VENN London Ordinary Share GB00B9275X97 ORD 0.1P
  Price Change % Change Share Price Shares Traded Last Trade
  +0.00p +0.00% 6.90p 15,000 08:00:00
Bid Price Offer Price High Price Low Price Open Price
6.50p 7.30p 6.90p 6.90p 6.90p
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Pharmaceuticals & Biotechnology 15.3 -0.8 0.8 8.9 4.16

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Date Time Title Posts
17/5/201812:58one to follow for great potential is VENN1,172
24/3/201619:04Venn Life Sciences......rapid growth and potential !294

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2018-05-22 07:18:447.1015,0001,065.00O
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Venn Life Daily Update: Venn Life is listed in the Pharmaceuticals & Biotechnology sector of the London Stock Exchange with ticker VENN. The last closing price for Venn Life was 6.90p.
Venn Life has a 4 week average price of 6p and a 12 week average price of 5.25p.
The 1 year high share price is 15.75p while the 1 year low share price is currently 5.25p.
There are currently 60,284,263 shares in issue and the average daily traded volume is 38,732 shares. The market capitalisation of Venn Life is £4,159,614.15.
yump: Nothing in the statement, so share price does nothing. Perhaps on these occasions the market is rational. The absence of negatives (possible revenue hit) is I suppose a positive and may mean that they would actually have posted a revenue gain, if the delayed work hadn't been put back to Q1 2018. I don't know why they can't just say they're on the acquisition trail. To be fair though, the world is full of people who seem incapable of just saying what they mean clearly and what are called 'presentation skills' seem to involve padding out simple stuff with a load of waffle. There's some good examples in the headers for tech. stocks on here.
glasshalfull: rivaldo - I note this morning's acquisition by Ergomed of PSR, "an international niche contract research organisation". They're paying €5.7m for a business with €4.7m of annual revenues and €0.34m EBITDA. VENN are forecast to make €18.5m revenues this year, with €0.9m EBITDA. On a PSR basis, this would value VENN at around €22.5m. On an EBITDA basis this would value VENN at around €15m. This compares to VENN's current m/cap of €8.6m. - - - - - - Appreciate you highlighting Rivaldo. PSR are a far smaller CRO & goes to show the lowly valuation VENN are currently on. I've been picking up stock recently - & some more today - as I envisage that Private Equity or competitor may soon cast their eyes in this direction & determine that they could offer a decent premium & still acquire VENN on a fairly low multiple of turnover or EBITDA. As you've pointed out, VENN are forecast to deliver €18.5m turnover this year & had turnover of €18m last year which is a respectable size business that a bidder may see as an opportunity to build economies of scale with an existing business, or perhaps build a business around it in terms of Private Equity initiating a buy/build model. VENN's share price is down 50% in the last 12 months & market cap £7.6m with EV of £5.0m. I reckon something will give in the next 6/12 months! Kind regards, GHF
rivaldo: I for one will be extremely happy for the directors if the share price exceeds the 45p required for full vesting: "The options vest in three equal instalments when the Company's share price trades at 25p, 35p and 45p for twenty consecutive days." Most options are exercisable either at the current share price or, in some cases, with no exercise price at all - pure profit. VENN's options tonight strike me as rather shareholder-friendly. And also an indication that perhaps the bottom has been reached.
rivaldo: Cheers basem, appreciated. Personally I follow the fundamentals, and they're telling me that VENN is fundamentally undervalued. That will be the case even if VENN fails to achieve Hybridan's forecast £1.27m adjusted PBT, which I'm not sure they will. If VENN were to achieve only 50% of that - say a £600k PBT - if you combine that with the almost €3m cash pile, the investment in SKIN and the value of the core business as outlined in my post 1005 then VENN is worth considerably more than the current share price. In a small-cap like this, one or two larger sellers can easily drive the share price down to silly levels given the propensity of others to follow them out on a drifting share price, the hitting of stop-losses etc. I believe that's what happened here. As spooky says, it looks like the share price has hit a bottom and is starting to lift itself off that bottom now. The solid H1 update and the confidence for the full year should continue this into and onwards from the H1 results next month.
rivaldo: Hybridan brought out a new note on Thursday envisaging a 30p+ share price on delivery of 2017 forecasts. Their forecasts are: this year : €1.83 EPS, €3.62m cash pile next year : €2.07 EPS, €4.03m cash pile "Solid H1 2017 After a lacklustre full year results released in March 2017, the growing Contract Research Organisation providing drug development, clinical trial management and resourcing solutions to pharmaceuticals, biotechnology and medical device clients today provided a trading update for the six months ended 30 June 2017. The new financial year started well with the Company securing contract wins in January and February with a value of €5.7m. Total revenues for the Company were ahead compared to the same period last year at €9.11m (H1 2016:€9.06m), with the client and revenue mix well balanced and strong rates of repeat business. Moreover, we understand that Venn, has successfully introduced and delivered cross selling between early and late phase client bases. We estimate that the Sedana contract announced in November 2016 and the €5.7m contracts won in January and February this year will contribute €4.3m in fee income in the current year. The Company has a strong proposal book, which should begin to turn in to business wins now that the full R&D lifecycle proposition is up and running. In addition to this, solid first half performance brings confidence around full year revenue expectations. The sector continues to see growth, with encouraging trends in outsourcing likely to continue. We would expect that Venn continues to evaluate complementary acquisition targets which could at least in part be funded from its current balance sheet depending on size. The Company is well positioned to accelerate its win rate particularly with Biotechnology companies where its offering of a full lifecycle service combined with a customer-centric flexible approach sets it apart from the competition. The shares of Venn have slid by 11% over the past 3 months, and given this trading update and its potential to meet expectations for full-year results, it presents a potential buying opportunity for investors. Delivery of our 2017 forecasts should see a recovery in the share rating and we see scope for the shares to surpass 30p over that horizon which would put the shares on a 16.5x 2018 earnings rating. Cash and cash equivalents remained strong at €3.4m at 31 December 2016 and we are forecasting for FY 2017 cash and cash equivalents of £3.6m. With that said, a HY 2017 cash of €2.9m puts the Company in a strong cash position."
rivaldo: Davy Stockbrokers issued a positive update on VENN last week. It's client-only, but there's a summary here: Https:// "Post FY 2016 results forecast update; valuation remains attractive Apr 13 2017, 11:45 IST/BST Company Report 4 page(s) Sectors: Pharma and healthcare COMPANIES: Venn Life Sciences DAVY VIEW Venn is a small, fast growing Contract Research Organization (CRO) that is strategically positioned to take advantage of structural drivers in the outsourcing market. Near-term execution will be pivotal for company profitability as it seeks to leverage its full clinical service capability across Europe. We believe there is plenty of upside in the current share price. Venn is trading on a forward two-year P/E of 11x and an EV/EBITDA of 4.3x."
rivaldo: FYI here's Hybridan's summary and new forecasts from 2 weeks ago: "Continuing growth not recognised in current price. Underlying fundamentals remain strong. €m 2015A 2016A 2017E 2018E Total Income 11.64 18.24 19.29 21.22 PBT* 0.72 0.27 1.27 1.57 Update 31 March 2017 Venn’s full year results last week highlighted some of the growing pains associated with high growth companies and bedding down significant acquisitions. The impressive 57% top line growth was tempered by a fall in EBITDA and the market has not reacted favourably, with the shares down 17% since the results and 28% on a three-month view. Fundamentally the growth drivers remain in place and increased levels of business and new systems in place should help to overcome some of the issues seen with resource allocation during 2016. With year-end cash of €3.4m, the balance sheet remains strong. We have reintroduced forecasts and see this as a year where profit growth can outstrip revenue growth, as the Company uses its human capital more efficiently reducing the need for contractors. However, we are applying more conservative margin and revenue growth assumptions than previously, reflecting the lower profit base from 2016. We see little need to expand headcount in the short-term allowing Venn to benefit from an operational gearing effect. We estimate that the Sedana contract announced in November 2016 and the €5.7m contracts won in January and February this year will contribute €4.3m in fee income in the current year. With the five-year backlog (€23m in September) typically being front end loaded, it is reasonable to assume than VENN has visibility on another €9 to €10m in this year. Business wins should accelerate now that the full R&D lifecycle proposition, and depending on timing, a double digit(€m) performance in contract wins could generate in the region of €4m in fee income in total. Adding on an estimated 6% in pass through costs and leaving ‘other income’ (mainly grant income) flat, brings us to a to a total income of €19.3m. Our 7.3% EBITDA margin expectation should be achievable (industry leaders can be over 20%) should utilisation rates improve. This translates to EBITDA of €1.4m which translates to adjusted PBT of €1.27m (growth of over four-fold albeit from a low base) and adjusted EPS of 1.83c. It is not the case that Venn is overstaffed, but that activity has been somewhat lumpy. The Company is seeking to address this by diversifying into more smaller ticket projects to complement its increasing win rate of major projects. In 2018 we have simply assumed that Venn can grow revenues by another further 10% organically and that it will be able to squeeze out a few more percentage points on EBITDA margin up to a margin of 8% on total income. This brings us to total income of £21.2m and adjusted PBT of €1.56m. The recent fall in the share price leaves Venn trading at an EV/Sales of under 0.5x and a 2017 adjusted PE of 10.18x. The sector trades on a mid-teens PE rating and a significantly higher EV/Sales rating of over 3x. Given Venn’s size and capacity to win market share and benefit from operating leverage its long-term revenue and profit growth prospects are arguably superior subject to execution risk. Venn continues to assess complementary acquisition targets which could at least in part be funded from its current balance sheet depending on size. Delivery of our 2017 forecasts should see a recovery in the share rating and we see scope for the shares to surpass 30p over that horizon which would put the shares on a 16.5x 2018 earnings rating. Within our forecasts we believe there is some latitude to improve in terms of both margin progression and earnings growth. Venn is well positioned to accelerate its win rate, particularly with Biotechs, where its offering of a full lifecycle service combined with a customer-centric flexible approach sets it apart from the competition. Last year’s slowdown in FDA drug approval for Big Pharma creates a supportive backdrop for companies developing more drugs targeted at niche patient populations and plays well to Venn’s customer base and skill set."
adamb1978: My very belated notes from the management presentation last week: - management team: CEO came across as very credible. My fear was that, given the sector and size of the company, he would be quite spivvy and unreliable. He actually came across as the opposite of that - someone who wouldn't just think twice about things....more think about a dozen times and quite cautious! The CFO was quite young and I didn't think explained answers well - he seemed to know what he wanted to say, but just couldn't get it out. This is a small co though, so a stellar CFo would be a surprise - Financials: rule of thumb in the industry is €100k revenue per employee, which means that these can make €20m revenue with their 200 people. Also industry rule of thumb is 15% EBITDA margin is good (checking one comp - Quintiles - this appears to be very achievable). On this basis they should be able to make €3m EBITDA and given that there is little int, tax or D&A, implies EPS of perhaps 4p - Q1 this year was weak - largely as a result of new employees coming on board and therefore taking a while to generate run-rate revenue. Hence why turnover was nearer €9m than €10m in H1 - M&A: looking at smaller targets in Eastern Europe - 25-30 people. So €2.5m - €3m additional revenue and presumably at higher margin given lower cost. The implication was that they're already in discussions with a couple targets so I'd expect to hear something about this in the coming months. Using a similar multiple to VENN, this implies €2m cost, though poss lower price given location and scale of targets, so maybe €1m - €2m price? He was adamant that they could fund this from cash resources, and they do have €2.6m net cash - Working cap spike in June: attributable to a large customer taking a long time to pay. Customers are generally much larger so he said that they pretty much always do pay, but sometimes it takes longer than ideal. Typical level is 10% - 12% of turnover (I haven't checked this) - Innovenn spin-out: exactly as announced this morning. VENN shareholders get a 30% stake in a listed combination with these other assets and then raising capital from third parties. Personally I'm viewing this as blue-sky upside, but it does have the immediate benefit of making VENN more profitable - H2 started well. I asked a question about KPIs and utilisation rates. CFo said that Jul and Aug utilisation rates were higher than the 70% rate which represented a decent level. So my figures: - as above, for 2017 market forecasts of £16m and 2.36p EPS look very, very light - for 2016, market forecasts are £14m and 2.27p from what I can see. The £14m certainly looks light based on the logic above. For the bottom line, you need to adjust for Innovenn costs which would now be presented as discontinued operations so actually H1 from continuing ops would have been profitable, perhaps 0.2p EPS. For H2, simplistically assume €10m revenue and €9m opex so €1m EBIT (=PBT=net inc). E1m net income is around 1.3p - 1.4p EPS and then you need to adjust out the Innovenn costs which get you to around 1.6p - 1.7p. Therefore I can see how this year comes in somewhere close to 2p, and if utilisation rates are higher then you could see how you get to 2.5p (e.g. by t/o being say €500k higher). I expect the company to manage down expectations for the year slightly to nearer 2p but whatever you pick, the PE is no more than very low double digits. Upside from this over the long-term comes from: - the continued buy and build strategy which in this industry should be possible. Some basic figures suggest that a small acquisition could easily increase EPS by say 0.5p, so put say 5p - 8p on the share price - there's a few global large cos in the industry which could gobble VENN up easily - the Kinesis acquisition large year seems highly complimentary - the Innovenn spin-out is blue sky upside. The presentation I found very reassuring and if you look forwards to 2017, this feels very very cheap (6x PE?). I believe this is an accurate summary - happy to answer any questions! Cheers Adam
timbo003: There were approximately 20 attendees at the meeting last night which included around 10-12 private investors, Tony Richardson (Venn CEO), Jonathan Hartshorn (Venn CFO), Anna and Leanne from Walbrook and a few folk from some city brokers (Shard, Beaufort and possibly others). The Walbrook events at the Rocket Bar tend to be fairly informal with lots of questions asked during the presentations which is a good format given that the venue is a licenced bar. TR’s presentation was basically an overview of the company’s origins, its current business and its future strategy. As is often the case, it was the Q&As that helped reveal the most interesting nuggets, the majority of which I have detailed below (in no particular order): The Innovenn division is currently loss making, when the Innovenn technology was acquired from Evocutis plc in 2014 (for £210k) it was hoped that it might add value to the business and hence to the share price, this has not occurred so the decision has been taken to divest this part of the business. Venn have investigated a number of disposal routes and they are now actively pursuing one of these options (a spin out). If all goes according to plan it sounds like we may hear something in the next couple of months or so and shareholders would own shares in the new spin out. The two analysts that currently cover Venn attribute zero value to Innovenn. Should the spin out go ahead a value would be attributable to the spin out shares and Venn would be free from a loss making division, this should have a positive effect on profits and hopefully have a knock on effect on the share price. Venn’s biggest clients are largish US biotechs who wish to conduct small to medium size clinicals in Europe. Venn do have Big Pharma clients but they tend to use Venn for small discrete programs of work. Big Pharma tend to select big CROs for their large phase III studies as they are the only ones with the scale and capabilities. There are no immediate plans to expand geographically outside of Europe, although Venn may consider one or more small bolt on acquisitions for Eastern Europe where they are under-represented. Some US based clients have indicated that it would be useful if Venn had some US presence, so they may acquire a small business in the US or increase headcount modestly to give themselves some local US capabilities. Small acquisitions may not ncessarily be funded through the issue of equity and may be financed with debt. In response to a question on future placings, TR did say that if there were to be another equity raise, they would look at ways to include an open offer with any institutional placing. Venn do not have a dedicated phase I unit (which would require considerable Cap-Ex) and they do not have capabilities to conduct large multi country Phase III studies for large Pharma, so they will stick to what they do best, i.e. small phase II and phase III studies. In response to a question on how are PIs supposed to know what market expectations were for the company, we were told that Venn were currently covered by two different brokers and that they do not intend to commission paid for research from service providers such as Hardman or Equity Development. If shareholders gave TR/JH their contact details they would ensure that they were on the distribution lists for research updates. The last acquisition was Kinesis, this was a complementary business as Kinesis was focused on early stage clinical development activities, whereas the existing Venn business was later stage, since the acquisition there was been considerable cross selling of services between the two businesses. There were some staff losses following the Kinesis acquisition, but this is often the case when a privately held CRO is acquired, some staff feel a loyalty to the old owner and do not feel comfortable moving across. The rates charged to clients for contracts on a time and materials basis are between 80Eur/hr /person and 250 Eur/hour/person, with the rate depending on the level of expertise of the staff involved. The effect of Brexit has been fairly neutral so far, although we don’t know what will happen from a regulatory perspective and no one knows where EMA will be located (currently it’s in Canary Wharf). Ireland should be a winner as far as the Pharma industry is concerned (assuming Brexit goes ahead) as it will be the only remaining English speaking country in the EU. The current potential pipeline of projects is around 20m Euro, which is a lower figure if you risk adjust, although 50% of next year’s forecast revenue (forecast around £18m) is in the bag. If a Client puts a project out to tender they may typically approach 3 CROs. Venn’s current hit rate for tendered contracts is around 1 in every 2 (to 2.5) which is an improvement from a year or so ago when it was more like 1 in every 3. After the official close of the meeting it was a free bar and canapes so like most other attendees, I was in no rush to leave so opted to hang around for another hour or so just shooting the breeze. (Please feel free to copy or plagiarise on iii, LSE or wherever)
paleje: I wondered about that too, they don't mention it at all but in their June note they state a target of 43p which definitely didn't include anything for the Innoven spin-off. The link for it is now directed at the 03 Aug note but the content was pasted on here and I've copied it below, the last para is the one. Would they have added 5p based on that last contract announcement, I wouldn't have thought so but then again it plus the possible Innoven spin-off would surely come to more than that. I'm veering towards the 'more to come' side. June article:- This was on 3i's website, numbers as mentioned above but I hadn't seen the last para before about the share price, if it's already been posted sorry:- REISSUED 2015E is replaced with 2015A – ALL NUMBERS REMAIN UNCHANGED. The growing European Contract Research Organisation (CRO) has reported final results for the year to December 2015. Revenue growth of 135% to €11.47m exceeded our already upgraded revenue forecast of €11.2m. Underlying Group EBITDA showed a €1.9m swing from a €1.53m loss to a profit of €0.39m vs our forecast of €0.49m. We attribute this shortfall to development costs at Innovenn. EBITDA attributable to the CRO business was €0.8m. Depreciation and amortisation charges were €0.46m vs our expectation of €0.22m. The company underwent a step change in scale via the acquisition of Kinesis in Q4 which we understand contributed circa 12% to FY revenues owing to the short period under ownership. With €4.4m revenue booked in Q1 vs €2m in Q1 2015, and the commencement of successful cross selling of services across the enlarged client base, we have confidence in our €17m FY2016 revenue forecast, growth of 48% which we forecast to result in a more than fourfold jump in underlying EBITDA to €1.75m and an adjusted profit of €1.6m equating to adjusted EPS of €0.027c reaching €0.032c by 2018. There is however scope for faster revenue growth and greater margin progression. The company finished the year with cash balances of €3.8m, a strong base from which to negotiate potential acquisition opportunities in Central and Eastern Europe that are being explored as well as selective organic expansion into other areas. Innovenn, Venn’s innovation division, has made good progress with both Labskin and Clarogel through their development phases. These are currently being commercialised. Venn intends to reposition this business such that it has an independent footing, its own source of funding and a value that can be clearly established. The shares are on an adjusted PE multiple of 12.4x for 2016. Innovenn made an EBITDA loss this year of €0.44m. If we simply add back a similar figure to our forecast for next year this puts the company on a sub 10x PE rating, as if it were the CRO business on its own. Even at a share price of 43p (74% above the current share price) this rating is only at 16x these pro-forma earnings broadly in line at the sector, and does not take into account any separate value for Innovenn which has two differentiated market ready integumentary products targeting growing markets.
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