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Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. 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.
Results for its half-year ended 30th September 2017 from Premaitha Health (NIPT) contained some bad news – which sees the shares currently at a depressed little more than 5p, but also many more positive aspects…
On the negative, there was a loss of £4.9 million (though including £1.3 million re. litigation) and increased net debt of £6.6 million (including cash of just £1.6 million), with it stated “if revenues fail to grow at the anticipated pace, or if further litigation-related costs are required, then there could be lower cash headroom or even a cash shortfall”.
However, there was 87% revenue growth, to £2.7 million, and “significant progress in expanding its international customer base and penetrating new markets” - 80% of revenues now outside the UK. It was added “we remain on course to achieve positive pre-litigation cashflows by the end of the current financial year”. Indeed, we gather that December was at breakeven or better.
There was UK patent litigation ruling disappointment in November – and a Form of Order Hearing scheduled for late this month at which the company is currently seeking leave to appeal.
Positive news on that would obviously help, though we note underlying financial progress and, if further finance is needed, multiple potential routes – possibly including, for example, via existing supporter and industry major Thermo Fisher Scientific, or other investors including from Asia.
Meanwhile, there’s continuing international expansion as awareness and recognition of Non-Invasive Prenatal Testing continues to grow and future plans to leverage the company’s scientific and technological platform. On course to achieve positive pre-litigation cashflows by the end of the current financial year, we then continue to look for further expansion in combination with high margins to see a dramatic ramp up in profitability.
We believe that Premaitha will easily deliver seven figure profits in the year starting in less than three months - and with such progress looking far from discounted in a current circa £16.5 million market cap, our stance is still buy.
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