Horizon Discovery Group (HZD) announced their interim results this morning. Still not making any profits although the EBITDA losses improved “before exceptional items”, i.e. before depreciation and amortisation which they prefer to ignore.
As I mentioned in a previous blog post, this is one of my speculations in the field of gene biotechnology. In this mornings’ announcement the new CEO said: “In light of this rapid change, and since my appointment as CEO, we have taken the opportunity to refresh our five-year strategic plan. Horizon is uniquely positioned to capitalise on rapidly growing market demand through our scientific and commercial leadership. With limited direct competition, Horizon has strong prospects for growth and is moving swiftly to capitalise on these opportunities. Our goals remain ambitious: to harness the power of the cell in order to be the ‘go to’ provider of IP-rich cell engineering solutions and to establish leadership positions in our key markets, based on a highly scalable and repeatable business model.”
Sounds like they are going to spend more cash, whereas I suggested previously that this is one company that might be nearing profitability in this sector. I also attended the last AGM of Horizon in June and it was clear to me then that this was a company that could be turned profitable very easily (see blog report here on that: https://roliscon.blog/2018/06/19/horizon-discovery-agm-and-chrysalis-vct/ ).
The company also received a tentative bid from Abcam not long ago which they rejected as undervaluing the business.
The interesting thing is that the FT reported today that activist investor ValueAct had acquired another 5% of the company (they already held 5%) from Woodford Investment Management. Between these two companies they now hold 28% of the shares. Although ValueAct may be one of the less aggressive activist investors, it does suggest that change might be afoot.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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