gretel
19 Apr 2017
New update from Davy Stockbrokers Davy Stockbrokers issued a positive update on VENN last week. It's client-only, but there's a summary here:[link] 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 VIEWVenn 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."
gretel
18 Apr 2017
Hybridan's new note 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 2018ETotal Income 11.64 18.24 19.29 21.22PBT* 0.72 0.27 1.27 1.57Update31 March 2017Venn’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 athree-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 slowdownin FDA drug approval for
gretel
05 Apr 2017
Re: 50% of m/cap in cash/liquid assets In summary then, VENN now have against a £10m m/cap:- £3m of cash- £1.9m of Integumen shares at the current 4.5p bid price- a business turning over 18m euros and rising- forecast earnings per Hybridan at 31st March of:this year - 1,58p EPS (£1.1m PBT)next year - 1.79p EPS (£1.36m PBT)The current m/cap is crazy on those figures. Even if you discount the Integumen shares, and halve the analyst forecasts, the valuation remains extremely low. IMHO anyway.
gretel
05 Apr 2017
Integumen IPO is this morning RNS re the Integumen IPO today, of which VENN have 25% worth £2.1m at 5p per share (42.245m shares):[link] to see the ongoing benefit to VENN: "Venn is well placed to handle the clinical, registration and other technical requirements of Integumen's expanding product and technology portfolio"Here's Integumen's own RNS (good ticker - SKIN....):[link]
gretel
31 Mar 2017
50% of m/cap in cash/liquid assets Let's assume the Integumen IPO happens on 5th April with no premium at all.In that case, VENN would have around £3m of cash, plus over £2m of shares in Integumen. In which case £5m, or more than 50% of VENN's current £9.9m m/cap, would be covered by liquid assets, leaving the core business in for very, very little.One might assume in a rational market some might see that as a good investment opportunity!A new RNS from Integumen confirming their intention to float and details of their four acquisitions to date:[link] worth noting that VENN may distribute their shares in Integumen to VENN shareholders:"In the event that integumen completes the aforementioned transactions and successfully lists its shares, the board of Venn will decide whether to retain the investment in Venn or distribute the shares to Venn's shareholders".
gretel
30 Mar 2017
Re: News: Integumen to IPO, and results An RNS update on the Integumen IPO is just out:[link] holding is very slightly increased. VENN will now have 25.59% of an £8.25m m/cap based on a 5p admission price, i.e £2.1m of shares. Admission date is still 5th April.
gretel
22 Mar 2017
News: Integumen to IPO, and results A confusing set of results, with core EBITDA at first glance well below Hybridan's forecast for one? It would be useful to see an analyst report to identify any discrepancies.The reassurance is that (1) the business appears to be growing strongly and scaling up, and the m/cap is good value at only £10.5m relative to historic and growing 18m euros turnover, and (2) Integumen have a few minutes ago confirmed they will definitely IPO:[link] will have 25.26% of an £8.16m m/cap based on a 5p admission price, i.e £2m of shares. Admission date is 5th April.So that stake alone would account for 20% of VENN's m/cap.
conor00
06 Mar 2017
Venn Looks to me that this company is priced to fail, which seems unlikely. Positive update on 2016 sales and on-going momentum into 2017 suggest Venn is going places. I bought a few more.
gretel
03 Mar 2017
Good trading update today with revenues bang on expectations for last year. And the business is evidently continuing to thrive given the 5.7m euros of orders already booked this year.The share price fell to a ridiculous level imo based on small investors' stop losses being hit/the trading update taking longer than prior periods. Hopefully back to 25p-30p now.An update on EBITDA as per last year would have been preferable, but I suspect that discussions with auditors as to what to separate out above and below the line for Innovenn etc will go to the wire for the year end dependent on what happens and when with Integumen.It shouldn't be long before we get an update on the Integumen IPO, at which point no doubt the year end figures will be finalised. So hopefully further positive news flow soon!
gretel
18 Nov 2016
RNS : Integumen IPO on track Great to see the sale of Innovenn proceeding smoothly and now completed per today's RNS:[link] IPO process takes some time - perhaps 2-3 months for a small cap like Integumen - so hopefully it may happen before Xmas, otherwise I can see it floating in early January.I expect the share price to move up nicely from here. With 2.39p EPS forecast this year, and 2.68p EPS next year, we now have a core business on almost a single-figure P/E, with cash in the bank, and a sizeable stake in a company about to IPO for a few more £m's.
gretel
08 Nov 2016
RNS re new 2.5m euro contract win Great news - and since it starts immediately it will contribute to this year's results too, so the 2016 numbers should be extremely impressive given what we know.From now on, the markets will clearly see VENN's high and increasing profitability, which prior to the Innovenn sale was obscured by the expenses incurred in setting up and investing in Innovenn.This is reflected in the new analyst forecasts of 2.35p EPS this year 2.63p EPS next year. It's easy to extrapolate a 35p share price based on this alone, compared to the current 25p.On top of this, VENN will now have a 70% stake in Innovenn/Integumen (or 30% if all the potential acquisitions go through). This could be worth a few £m in itself, especially post-IPO. VENN's current m/cap is still only £15m.
gretel
04 Oct 2016
Exciting spin-off news today VENN will initially own 70% of a Newco (Integumen) which is to be set up as a consolidator of healthcare technologies, by converting its loan to Innovenn into shares in Integumen.Integumen is to buy 3 more businesses in close order and will float on AIM "in due course", which I'd suggest is pretty quickly. Once the acquisitions go through (assuming they do), VENN will own 30% of the enlarged company, at which point VENN will either retain the shares or distribute them to shareholders.This will crystallise a £0.96m profit for VENN in this year's accounts.The theoretical sale price of £4.74m is much more than I was thinking would be raised, though of course it's not cash.Exciting stuff...
gretel
22 Sep 2016
Another impressive appointment Excellent new NED appointment - ex-Perrigo and Elan senior VP should bring in lots of contacts and potential new business:[link]
gretel
13 Sep 2016
New Chairman appointment Not only an impressive appointment today - with the stress on the M&A aspect - but also good to see TR splitting the CEO and Chairman roles, which should please VENN's institutional shareholders.
gretel
24 Aug 2016
RNS : interims on 28th September [link] to see that as well as a briefing for analysts, there's another presentation which all investors can attend in the evening. VENN are evidently one of the more progressive companies around.
