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Microsaic Systems – from in December sales to be “substantially ahead” of 2016’s, to now “significantly lower than for 2016”

By Steve Moore | Monday 19 June 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

A “Trading Statement” announcement from Microsaic Systems (MSYS) includes Chairman Eric Yeatman commenting “we are very encouraged with the progress since our 21 March 2017 update, when we introduced our biopharma strategy, specifically around bioprocessing. We are engaging with several of the leading players in the global market for bioprocessing equipment”. However, the statement also includes that “the company now expects its H1 and full year 2017 revenue to be significantly lower than for 2016”. Hmmm.

The latter is with “2017 proving to be a difficult year in our traditional markets” (small-molecule detection), though it attempted to be mitigated with the likes of the “very encouraged” progress with the revised strategy and “confident that the new strategic emphasis is opening significant opportunities for our unique technology”, as well as “off-set by lower overheads as a result of cost reduction plans implemented in H1. The full year loss before tax is expected to be broadly in line with 2016”.

However, that loss was still £3.4 million – on revenue of £0.85 million, with it updated that “the company's cash position at 31 May 2017 was £4.2 million. The company is looking to extend its cash runway, through prudent financial management, co-development income and grants”.

There looks much needed from the “revised strategy” though to, in the company’s corporate-speak nonsense, ensure the “cash runway” does not lead to cash crunch ahoy in relatively short order. The problem though is that, self-admittedly, “it will take time to deliver revenue from these opportunities due to the lead time in developing and marketing new products”.

With, also, this following a December profit warning which sought to mitigate that “sales in 2016 are ahead of those in 2015 by approximately 8%, and are expected to be substantially ahead of this in 2017” and the additional uncertainty in that “the company is progressing in its search for a CEO”, the shares currently remain on the bargepole list.

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