"Over £1.0m of indicative orders for Genedrive® 96 SARS-CoV-2 kit, pending regulatory approvals" is a very solid start, given that they are working through those regulatory approvals.
More importantly on a 2021 thinking basis.
(2/8)
"Year-end cash of £8.2m"
"expectation remains to sign a new contract with the US DoD in autumn 2020"
"Autumn 2020 timeframe for commercial launch with Inspiration Healthcare Plc" of AIHL test being validated at Manchester and Liverpool hospitals.
(3/8)
In the 12th June presentation piece, DoD contract was expected to be c. £5m over 3 years. So c. £1.7m per annum. Est. 50% margin = £850k
For the AIHL test "Global market value estimated at £40-£65M per year"
Of course that is full Western market, which
(4/8)
won't be fully realised in 2021
UK market around 7% of that with success at Liverpool/Manchester, giving GDR the ability to roll out across Europe.
So for me 10% of that market is very much possible,. meaning c. £4-6.5m in sales depending on route to market.
(5/8)
"Test economics - <£10 to make, £35 to distributors, £50-£85 direct depending on reimbursement / country"
At a conservative average sale price of £40, GDR can make c. 300% per test.
So above sales equates to between min. £3-4.9m gross profit in 2021.
(6/8)
I am acutely aware that GDR is being driven by its Covid image but a longer term outlook is for me more appropriate, given that these contracts should start to be seen in H2 2020 (GDR H1 2021)
Yesterday's closing MC was £53m.
(7/8)
Looking the above figures, GDR is capable of c. min £4-6m gross profit in 2021 without any Covid sales.
Add in the £8m cash and for me, we start to see that at least half of the current MC, is supported by developments outside of Covid test sales.
(8/8)
At 60% gross margin on the Covid test, it really won't take a great deal of sales, to satisfy what is c. £27m of valuation, when considered over a longer time period.
£1m is a solid start and I expect sales to really gain traction over the coming months.
"in the process of registering the Genedrive® 96 SARS-CoV-2 Kit in multiple overseas regions"
"has signed a number of distributors across Africa"
"in discussion with several interested partners to access the US market"
(8B)
"working to ensure that CE marking claims for the Genedrive® 96 SARS-CoV-2 test can be expanded to include a broader range of laboratory systems"
"now validating the data for the ABI 7500 FAST and BioRad CFX96 systems to expand its claims."
(8C)
"our target markets combined with the unique aspects of the CoV-2 Test give us significant confidence in delivering successful commercial outcomes in the near future."
Significant confidence.
(8D)
Driven by what is a market leading product that is entering a market that is short on supply and where it isn't, quality will win the day in the end.
GDR needs a little time to breathe with this but for me, the demand is clearly there.
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1/16
It's difficult to call this market but my view is that assuming no more operational glitches #TGR now steadily re-rates as the operations sign off the various stages to 30ktpa.
2/ Front-end valuations should depend on where graphite prices go but as Syrah demonstrated yesterday (graphite fines not large flake) orders are buoyant.
Forward orders there running at 90,000 tons which are 50% of their current yearly output. So substantial.
3/ Note also Syrah cannot produce for less than FOB C1 $543/t even at 15,000 tons per month output and that's fines.
It is clear after last night's presentation that TGR C1 costs have also risen but this is to be expected in this current market.
1/12
Here are Verde Agritech's expected sales targets for 2022 which were revised in May and offer a significant read across to #HMI and what it can achieve this year and also.
1/9 In a previous #HMI thread, I highlighted that the $600k write-down in the FY2021 accounts meant that trade debtors (so effectively trade receivables) almost doubled between YE 2020 and YE 2021.
1/18
I've been running an extensive exercise on Verde Agritech also a relatively new but expanding fertiliser producer based just c. 70km from #HMI in Minas Gervais in Brazil. The results to date are rather fascinating and certainly worthy of review.
2/ Verde is a TSX-listed producer with a current plant capacity nearly double the size of HMI (0.6Mtpy) but with a phase 2 expansion due to come online in 2023 which would take output to 2.4Mtpy.
So a much bigger operation to come and soon.
3/ Those that remember my 5th July numbers on #HMI sales prices will perhaps remember that they demonstrated a $53.20/t average sale price for 2021.
At the average achieved AUD/BRL for 2021 of 4.054, this equated to an average price of BRL216.
1/7 Based on what I have just talked about if #HMI had received all the monies from its sales in 2021 then this would have amounted to $4.52m and the business would have been profitable at the operating level in 2021.
2/ What's more, the $4.454m paid out in 2021 reflects more accurately the true costs to run the business over the course of one year.
One cannot conclude exactly how much HMI produced in 2021 because the cash receipts reflect payment dates and not when the goods were received.
3/ Inventory was fairly minimal which reflects an operation that leans towards producing to order.
However, the costs associated with administration clearly eat up the vast majority of this with the consolidated statement accounting for c. $3.85m in the period.