Argo Blockchain PLC

Argo Blockchain PLC (LON: ARB) is a United Kingdom-based crypto-mining service provider. It is listed into the main market of London Stock Exchange via a standard listing. It operates an international data centre, which offers a consumer-friendly and low-cost service for the mining of crypto-currencies.

Operational Update (as on 6^th March 2020)
The company announced the following operational update for March 2020. During the month of March, the group mined 333.8 Bitcoin or Bitcoin Equivalent (BTC) against the 337.5 Bitcoin Equivalent in February. This represented the total amount of 918 BTC in the first three months of this year. Based on cryptocurrency prices and daily foreign exchange rates during the period, the business generated mining revenue of £1.8 million in March 2020 (Feb 2020: £2.5 million). ARB generated this income at a 42% of mining margin. In the first quarter of 2020, the revenue stood at £6 million based on currency rates for the current period. The Company's order of one thousand Bitmain Antminer S17+ machines stays on track, which was announced previously.

Share Price Performance

Daily Chart as on 8th April 2020, before the market closed (Source: Thomson Reuters)

On April 08, 2020, at the time of writing (before the market close, at 1:25 PM GMT), Argo Blockchain PLC shares were trading at GBX 4.00, up by 5.26 per cent against the previous day closing price. Stock's 52 weeks High and Low are GBX 11.25/GBX 2.60.

Conclusion
The new hardware is projected to be installed and delivered by the end of April 2020 and will bring Argo's total BTC mining capacity increased by approximately 10% to approximately 730 PH.In North America, the group's mining operations have not been impacted by a coronavirus (Covid-19). All the company’s management and staff are working remotely, and all mining facilities are running as normal. Despite the challenging conditions, the company is on-track. Presently, the volatility of foreign exchange rates and cryptocurrency prices reflecting a downward pressure.

The Group has shown improvement in the current period.Moreover, the volatility in the Bitcoin price during Coronavirus emergency has boosted cryptocurrency activity. The management believes that the company is likely to take advantage in the long run with the increasing cryptocurrency activity due to Bitcoin "havening" offers. The uncertainties caused by Brexit led the company’s advertising sales volumes lower than estimates, while subscription and traffic levels remained unchanged. The Group has several plans to maintain liquidity in case of crisis potentially generated by Covid-19 or any macro-economic uncertainty.

Based on the factors highlighted above, we recommend investors to keep a “Watch” on the stock at the current price of GBX 4.00 (as on 8^th April 2020, before the market close), with support from new catalysts to be evaluated at a later stage. 

Novacyt SA

Novacyt SA (LON: NCYT) is a France-based international specialist in clinical diagnostics. The group deals in diversified diagnostic products used in oncology, haematology, microbiology, LBC, and serology testing.

Recent News
On 8^th April 2020, the company had announced partnership with GSK, AstraZeneca, and University of Cambridge. From this collaboration, the company will assist the United Kingdom national effort to surge COVID-19 testing.

On 6^th April 2020, the company released that the CNR of the Institut Pasteur has approved its COVID-19 test, while CNR represents as a Centre National de Référence des Virus des Infections Respiratoires.  For its COVID-19 test, the Ministry of Health in Thailand and given the approval.

Sales and Manufacturing Update (as on 30^th March 2020)
As of 27th March 2020, Primerdesign has received and sold orders for more than £17.8 million of its CE-Mark. For the test, the rate of demand continues to increase. Its COVOID-19 test is selling over 80 countries, with orders of £1.6 million received in less than two weeks. In Ireland, the company’s COVID-19 test is now being used by the Health Service Executive and orders for 1.1 million pounds tests have been received. The business has committed to purchasing further raw materials to produce a total consideration of 18 million coronavirus tests and, with demand increasing at a growing rate.

Full-year Trading and Operational Update (as on 28th January 2020)
The company released its full-year trading update for the financial year ended 31st December 2019 and provided an operational update. In the year-end, the company's revenues from continuing operations will fall by around 5% (6% at CER) on a consolidated basis to approximately €13.1 million as compared with the previous year (2018). The revenue, excluding the Clinical Lab, decreased by 2% (3% CER). At the beginning of 2020, the company increased the order book from the corresponding time of the last year.

In December 2019, these sales were engendered before the sale of the business and represent an increase of 37 per cent against the previous year which assisted the division in providing positive cash flow in 2020, with a €0.7 million of net cash contribution in H2 FY19. On 31st December 2019, the company held cash and cash equivalents of 1.8 million euro, an increase from the previous year (2018: €1.1 million). The group will also transfer production to its Camberley site by the end of Q1 FY2020 and close its manufacturing facility in Bridport.

Share Price Performance
 
Daily Chart as on 8th April 2020, before the market closed (Source: Thomson Reuters)

On April 08, 2020, at the time of writing (before the market close, at 1:40 PM GMT), Novacyt SA shares were trading at GBX 259.48, up by 20.69 per cent against the previous day closing price. Stock's 52 weeks High and Low are GBX 259.80/GBX 6.03.

Risks Assessments
The pace of development in the healthcare industry and competitive pressure may impact business operations. The Group faces an inherent risk of product liability and associated adverse publicity as a result of the sales of its products. Some more risks are bad debtors, Brexit, and Foreign exchange fluctuations.

Conclusion
In the short-term period, the group is likely to perform well by selling its COVID-19 test kit.In 2020, the company’s management will maintain the  emphasis on improving EBITDA profitability and gross margins while cautiously managing working capital to re-establish stock levels and provide sustainable revenue progress. The planned overhead savings will not only enhance profitability but broaden the group’s cash runway and enable additional investment in rebuilding the supply chain, which is anticipated to be done by the middle of the year th2020. The company started in 2020 with a decent sales order book, new business (VGS Group) and a decent pipeline of new clients for the newly launched PathFlow™ product range in infectious diseases. Currently, the stock is trading near the 52-week high, suggesting that the upside potential might be limited, and the company can face stiff resistance at the current level.
Based on the headwinds faced by the company, we have given a "WATCH" recommendation at the current price of GBX 259.80 (as on 8^th April 2020, before the market close), while any correction with support from few catalysts needs to be evaluated at a later stage.

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.