Tag: EKF Diagnostics

EKF Diagnostics AGM Report

This morning I “attended” the Annual General Meeting of EKF Diagnostics (EKF).  This was a “hybrid” meeting with the physical meeting in Cardiff and the on-line aspect run on Zoom which I logged into. It was reasonably well attended both ways with a number of questions posed. The meeting ran for about one hour.

The company benefited greatly from the Covid epidemic when revenue peaked at £82 million in 2021, but it reported losses in 2022 as the epidemic declined and the market changed. Profits are forecast in 2023 however.

I did not learn much from the meeting except they are apparently still looking for a new CEO (they currently have an executive chairman which I generally dislike). As usual with medical companies they have difficulty in selling to the NHS who want to do everything centrally (different to the rest of the world) but they are still selling in Russia and don’t plan to withdraw from that market – profits generated there cannot be repatriated but by increasing their product prices they can obtain a return.

The meeting was difficult to follow because the internet link at the company’s end kept breaking. If companies are going to run hybrid AGMs they need to use reliable technology such as by using the Investor Meet Company platform.

Otherwise the meeting was well run.

I asked one question as to why they had a share buy-back resolution on the agenda which I voted against. Apparently they have no current intention of using it.

The company clearly has ambitions to grow its revenue and profits and the share price does not seem expensive to me on prospective earnings and dividend yield, but readers can no doubt make up their own mind on that.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Inflation and EKF AGM

Inflation is certainly a big problem with the news that it is now at 9% and heading higher in the UK. Most advanced countries have been hit in the same way due to higher energy and food costs but the UK is certainly leading the bunch due to past mistakes over energy policy.

What annoys me is not so much the price inflation as when companies shrink their packaging as happened recently to Kellogs Cornflakes and Nescafe’s Azera Coffee tins, while no doubt maintaining the same price.

I thought the price of microwave ovens had suffered from gross inflation when my wife bought a replacement for £529. That’s after I managed to fry the old one by leaving a potato in it. But looking at the market you can buy a perfectly good one for £60. I don’t think my wife is very price sensitive! She clearly thinks we are rich when with the stock market declining we are getting poorer.

With the sun out, the sky is blue and there is no cloud in the sky it’s difficult to focus on financial matters. But I did watch the EKF Diagnostics (EKF) Annual General Meeting this morning. This was run as a hybrid event run via Zoom with about 9 people on-line and at least one ordinary shareholder physically present. The acoustics were not good though so difficult to hear the questions posed by the one present and at some point multiple people speaking at once was confusing.

There were a number of questions posed on-line or received in advance. I’ll only mention some particularly interesting comments. The company has plans to launch a sepsis test for use in critical care environments in 2023 with clinical trials at the end of this year. That would be of great use as I almost died from sepsis in hospital after a minor surgical procedure a few years back. It can be difficult to diagnose at present.

There were some interesting comments on the difficulty of getting approval for medical devices in China. Regulations are used to block foreign products it appears. The company needs to change its strategy for that market.

The point of care market is growing at 6% per year but there is higher growth in the enzyme market hence the focus on that.

The meeting lasted about 50 minutes and was of some use.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can “follow” this blog by entering your email address below. You will then receive an email alerting you to new posts as they are added.

EKF Diagnostics AGM, Verici DX, Eleco Issues and Boku AGM

I attended the Annual General Meeting of EKF Diagnostics (EKF) today via Zoom. This was one of the better organised electronic format AGMs I have attended. To quote from the company’s web site: “EKF Diagnostics is a global medical manufacturer of point-of-care and central lab devices and chemistry reagents including hemoglobin tests, HbA1c tests, glucose and lactate tests. EKF also manufactures and distributes products associated with COVID-19 pandemic”.  The latter has enabled the company to generate very high revenue growth recently and the AGM statement said this also: “Strong trading continues into the second quarter 2021 and the Board is now confident that trading for the full year will be comfortably ahead of already upgraded management expectations”.

There were a few questions posed by the approximately 50 attendees to the AGM and as they gave the proxy vote figures I asked why they got 11% of votes against the approval of the accounts. Such a level of opposition is unusually high. The answer given was that this was because of a recommendation from a major proxy advisor with the added comment “It’s just stupidity”. This is not a very helpful kind of answer. Why exactly was there a recommendation to vote against? And why was it stupid?

Note that EKF holds interests in companies RenalytixAI (RENX) and Verici DX (VRCI) who are focused on renal disease, the latter on diagnosis of kidney transplant rejection. Both companies listed on AIM last year and have zero or minimal revenue. I recently read the prospectus (admission document) for VRCI. As a transplant patient myself, I have a strong interest in this subject but the company seems to be some way from developing a saleable product or service, i.e. fund raising seems to be for financing research. I won’t be investing in either company until the prospects are clearer. It is very clear that it is possible to list new companies on AIM at present that are not just early-stage ones but pure speculations, but that has probably always been the case. These companies might meet a strong demand for new diagnostic and treatment options for renal patients if they are successful but success is far from assured and large amounts of capital have been raised and expenditure incurred with no certainty of profitable revenue resulting. At least that’s my opinion but anyone who thinks otherwise is welcome to try and convince me.  

Another unhelpful response to a question I received today was from Eleco (ELCO). I have been a shareholder for some time in this construction software company. The company announced on the 26th of April that it had received a requisition notice that covered resolutions to reappoint two directors, that all directors stand for re-election at future AGMs and that the remuneration committee report be approved.

It was certainly unusual that such resolutions were not on the AGM agenda on the 6th of May and the above requisition was ignored (probably too late anyway). It is of course standard practice now for all directors of listed companies to stand for re-election, and a remuneration resolution is also normal at most AIM companies even if not legally required. The AGM was held in a format that discouraged questions also so I did not attend.

On the 14th May the company announced that the requisition notice had been rejected as it did not comply with the Companies Act and the company’s Articles, but gave no further information.

So I sent a question addressed to the Chairman, asking what was the reason for the requisition and exactly why was it rejected. The answer I received from advisor SECNewgate (not from the Chairman) was: “Thank you for your email regarding Eleco. It has been discussed with the Company’s NOMAD and lawyers and we do not believe we need to add any further detail other than that the requisition notice does not comply with the requirements of the Companies Act 2006 and is also contrary to the provisions of the Company’s Articles of Association”.

Hardly a helpful response. Why should the company avoid answering such simple questions? Will they continue to evade answering, which legally could be difficult at the next AGM? If they have one or more disgruntled shareholders who chose to submit the requisition why should not other shareholders know about their concerns? This is just bad corporate governance.

I also attended the Boku (BOKU) Annual General Meeting today. This was another Zoom event with about 10 attendees. The CEO gave a short presentation and the Chairman covered the issue that proxy advisor ISS had recommended voting against the remuneration resolution (there were some votes against). The ISS complaint was apparently that the LTIP was not solely performance based. The Chairman said they needed to match the more normal US remuneration structure, i.e. options based on length of service.

Several questions were posed by attendees after the end of the formal meeting and the CEO gave his usual fluent responses. I questioned the new focus on e-wallets. Surely there were lots of companies offering such wallets? How were they to compete? The answer apparently is by focusing.

Both of the on-line AGMs I attended today were useful events if rather brief and not nearly as good as a physical meeting. It’s also difficult to put in follow-up questions after initial responses. Let us hope we can revert to physical or hybrid meetings soon (hybrid ones will at least make it easier for those with travel difficulties to attend so I hope the electronic attendance option is retained).

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can “follow” this blog by clicking on the bottom right in most browsers or by using the Contact page to send us a message requesting. You will then receive an email alerting you to new posts as they are added.

© Copyright. Disclaimer: Read the About page before relying on any information in this post.

Babcock Price Fall, Segro Placing, TR Property and EKF Diagnostics Virtual AGM

I said in a previous blog post “that I tend to avoid FTSE-100 companies as their share prices are driven by professional analysts’ comments, by geo-political concerns, by general economic trends and by commodity prices. You can buy a FTSE-100 company and soon find it’s going downhill because one influential analyst has decided its prospects are not as they previously thought”.

Indeed that is exactly what happened after I made a recent purchase of Babcock International (BAB). Soon after Shore Capital Markets published a note that said it would be skipping its final dividend. The share price promptly fell by 7% on that day even though they claimed to “retain a buy stance” on the shares.

The last announcement by the company covering the subject of dividends on the 6th April simply said “The Board will consider the final ordinary dividend for this financial year ahead of our full year results announcement [due on the 11th June] taking into account developments over the next two months”. Do Shore Capital have inside information or are they just guessing? Or did they consult the company first? If they were given any relevant steer on this matter, the company should have issued a statement on it. Regardless it’s somewhat annoying even if some moderation of the dividend might make some sense and everyone else is cutting them. I would not be too concerned about the loss of dividend because I never buy shares for dividends alone, but I don’t like to suffer capital losses.

Yesterday property company Segro (SGRO) announced a placing “to take advantage of additional investment opportunities”. There was no open offer but private shareholders could participate via Primary Bid if you were willing to accept the price agreed with institutional holders. The shares issued represented 7% of the existing capital and the placing price turned out to be 820p, a discount of 4.5% to the previous close. I declined to participate, mainly because I have enough of their shares already. One has to ask why they could not have done a proper rights issue as there seemed no great urgency in the matter.

Last night I watched a presentation by Marcus Phayre-Mudge, fund manager for TR Property Investment Trust (TRY), on the internet. This tended to simply confirm my view that this is a well-managed fund which is withstanding the Covid-19 epidemic well. It has avoided many of the property sectors most damaged by the virus. It has a pan-European focus when internet retailing in the rest of Europe is still well behind that in the UK. He said “retailing is in an accelerating structural shift” but he does not “believe the end of the office is nigh”. A very useful and informative presentation via PI World even if he got cut off at the end due to some unknown technical issue. You can see a recording of it here: https://www.piworld.co.uk/

This morning I attended the virtual AGM of EKF Diagnostics (EKF), a medical products manufacturer mainly for diagnostic applications. There were about 12 attendees via a Zoom conference call and it worked quite well. Attendees were asked to register and submit questions in advance, although there was time to ask impromptu questions in the meeting also which were invited at the end.

Voting was done on a poll so the results of that were displayed first. The meeting was chaired by CEO Julian Baines.

I submitted a question about their investment in Renalytix AI (RENX) and its progress, which had been recently listed. I suggested progress was slow but the response was that progress had not been slow at all. However the Covid-19 situation has delayed tests in hospitals in the USA.  Progress on approvals is significant and revenues are expected shortly.

There was a question on the ramp-up of sales in McKesson and the answer was they had slowed significantly. But the company overall was only about 10% down on core products. They had seen business coming back on line in May and June.

Another question related to the Longhorn product which was claimed to be “the world’s safest sample collection product” (very relevant to virus sample collection of course). They are selling millions of these tubes in the USA. There is only one competitor who is allegedly infringing their patents – they are speaking to them “robustly” at present.

There were several other questions and answers of no great significance, but it was certainly a useful meeting and a good example of how any small/medium company could run a virtual AGM very easily. Why do they not do so?

My thanks to EKF for running such an event, which took less than 30 minutes in duration.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can “follow” this blog by clicking on the bottom right in most browsers or by using the Contact page to send us a message requesting. You will then receive an email alerting you to new posts as they are added.

 

© Copyright. Disclaimer: Read the About page before relying on any information in this post.