Bioventix PLC (LON: BVXP)  

Bioventix PLC (LON: BVXP) is an FTSE AIM All-Share index listed Company specialized in the development & commercial supply of high-affinity monoclonal antibodies for applications in clinical diagnostics. BVXP has a portfolio of around 20 antibodies that are sold globally to in vitro diagnostics (IVD) companies.

Recent Trend of Dividend Payments

BVXP is following a progressive dividend policy and intend to pay consistent dividend payments. Moreover, it had paid a second interim dividend of 62 pence per share and a special dividend of 38 pence per share on 12 November 2021, while the ex-dividend date was 28 October 2021. Considering the first interim dividend payment of 43 pence per share, the total FY21 dividend stood at 143 pence per share. In comparison, the Company had paid 141 pence per share of dividend during FY20.

(Source: LSE; Analysis done by Kalkine Group)

Growth Prospects

• Promising Outlook: BVXP reported a rise in revenue during FY21 despite the challenging operating environment. The Group also maintained a lucrative dividend policy, which reflects the management’s confidence in the business outlook. The lockdown easing shall support the revival of vitamin D antibody sales.
• Pollution Exposure Test: The Company had witnessed an accelerated progress regarding the development of the pollution exposure assay. Moreover, BVXP will also have a urine lateral flow test featuring a field trial at a UK industrial site.

Key Risks

• Ukraine Tension: The mounting concern over the Russian invasion in Ukraine can continue to weigh on the equity market.
• Record UK Inflation: The annual rate of UK consumer price inflation reached 5.5% in January 2022, the highest since March 1992. Thus, it can adversely impact the London equities.
• Compliance Risk: The Company operates in a highly regulated market, and any non-compliance with rules and laws could lead to penalties and loss of reputation.
• Increasing competition: There is a risk that blood testing manufacturers may opt for alternative antibodies that would affect BVXP’s ability to generate revenue.
• Financial Risk: The Company requires funding for product development programs and commercialization efforts, and any delay or failure to attain the funds could lead to delay in operations and plans.
  

Key Fundamental Statistics & Shareholding Pattern of Bioventix PLC.

Sanford DeLand Asset Management Limited is the most significant shareholder as it holds nearly 1.04 million shares as of 31 December 2021

Financial Highlights (for the year ended 30 June 2021, as on 18 October 2021)

(Source: Company Filings)

• Top-line Growth: During FY21, revenue surged 6% year-on-year to £10.93 million (FY20: £10.31 million).
• Profit Declined Moderately: The profit before tax slightly fell by 1% to £8.12 million (FY20: £8.23 million).
  

Financial Ratios (FY21)

Share Price Performance Analysis 

(Source: Refinitiv; Analysis done by Kalkine Group)

On 03 March 2022, at 08:12 AM GMT, BVXP’s shares were trading at GBX 2,962.00, down by around 1.43% from the previous day closing price. Stock 52-week High and Low were GBX 4,540.00 and GBX 2,957.00, respectively.

From a technical standpoint, the stock price is hovering around the lower Bollinger band, indicating a bullish price momentum. Meanwhile, the 14-days RSI of ~38.66 approaches an oversold territory.

Valuation Methodology: Price/Earnings Approach (FY22E)

Business Outlook

BVXP has a resilient business model, and thus, it continued to follow its established dividend policy. The continued success of the core antibody business and vitamin D antibody brought further progress in FY21. Adjacently, the Company is optimistic about the troponin revenues. The sales related to troponin antibodies grew significantly in FY21 and shall continue the momentum. BVXP had made accelerated technical progress with regards to the research projects, including the industrial pollution exposure project. Overall, the Company remained committed to generating long-term returns for the shareholders with an impressive project pipeline and consistent dividend payments.

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Considering the decent operational progress, strong growth in dividend payments, robust financial ratios, and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation on Bioventix PLC at the current market price of GBX 2,962.00 (as of 03 March 2022 at 08:12 AM GMT), with lower-double digit upside potential based on 27.07x Price/NTM Earnings (approx.) on FY22E earnings per share (approx.).

Note 1: The reference BVXP in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Note 3: Dividend Yield may vary as per the stock price movement.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios. 

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

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