Deinove — Update 30 March 2016

Deinove (EG: ALDEI)

Last close As at 20/12/2024

0.64

0.00 (0.00%)

Market capitalisation

14m

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Research: Healthcare

Deinove — Update 30 March 2016

Deinove

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Healthcare

Deinove

Finance secure until end 2017

FY15 results

Alternative energy

30 March 2016

Price

€3.69

Market cap

€32m

Net cash* (€m) at 31 December 2015
*Company definition

12.4

Shares in issue

8.6m

Free float

65%

Code

ALDEI

Primary exchange

Alternext

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

12.2

(9.8)

(49.3)

Rel (local)

11.4

(3.3)

(42.0)

52-week high/low

€8.95

€2.90

Business description

Deinove designs, develops and markets technologies in biofuels and biochemistry by harnessing the properties of the Deinococcus bacterium.

Next event

AGM

10 May 2016

Analysts

Graeme Moyse

+44 (0)20 3077 5700

Roger Johnston

+44 (0)20 3077 5722

Deinove is a research client of Edison Investment Research Limited

Deinove made significant scientific and technical advances in 2015, signed important commercial agreements and improved the financial positioning of the company. The first commercial revenues are expected in 2018 and the company believes it has sufficient financial resources, without further equity drawdowns (€10m unused facility), to last it until the end of 2017.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/14

0.2

(6.6)

(98.6)

0.0

N/A

N/A

12/15

0.5

(7.3)

(81.5)

0.0

N/A

N/A

12/16e

0.4

(8.3)

(82.4)

0.0

N/A

N/A

12/17e

0.5

(8.5)

(84.7)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

FY15 results in line with expectations

The net loss for the year of €6.4m (-2% vs FY14) was in line with our forecasts (Edison estimate -€6.4m). Better than expected revenue of €492k (Edison estimate €220k) and marginally lower costs than forecast were offset by a slightly less favourable financial result than anticipated and a lower income tax credit than we had expected (€1.6m vs Edison €1.78m). The net cash position of €12.4m at end December 2015, bolstered by grants, milestone payments, tax credits, the recent equity issue (€10.0m net) and the drawdown of the Kepler Cheuvreux facility (€4.6m) was also ahead of our forecasts(€12.1m). The €12.4m is said to be sufficient to last until the end of 2017 without further equity drawdowns.

Scientific and commercial progress

FY15 also witnessed a number of significant business developments. Both the Deinol project (third payment – €1.2m from Bpifrance) and the Deinochem project passed important research milestones triggering payments (first payment – €1m from ADEME). Towards the end of 2015 the Deinol project also achieved the production of ethanol at 300L scale and Deinove reached the first milestone of the animal nutrition project with Avril. Investment made by Deinove allowed it to automate the genetic and metabolic engineering platform, install new fermenters and establish a new R&D platform for the production of muconic acid. Alongside scientific progress, Deinove signed new partnerships agreements with Flint Hills (animal nutrition) and Tyton and Arbiom (biomass) and issued 12 new patents.

Outlook and valuation

Deinove will seek to advance towards commercial deployment across all its major research platforms in 2016, but with a major focus on carotenoids. It will also continue to attempt to broaden the ultimate commercial application of its technology through signing additional partnership agreements. We have updated our forecasts and expect the first commercial revenues in 2018. A DCF valuation based on our cash flow assumptions suggests that, using an 11% discount rate and no terminal value, Deinove could be worth €10/share.

Exhibit 1: Financial summary

€'000s

2014

2015

2016e

2017e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

156

492

400

469

Cost of sales

0

0

0

0

Gross profit

156

492

400

469

EBITDA

 

 

(6,515)

(7,309)

(7,456)

(7,468)

Operating profit (before amort. and except.)

(6,520)

(7,331)

(8,275)

(8,424)

Intangible Amortisation

540

634

37

37

Exceptionals

(735)

(10)

0

0

Other

0

0

0

0

Operating profit

(6,715)

(6,707)

(8,238)

(8,387)

Net Interest

(37)

(14)

(31)

(102)

Profit before tax (norm)

 

 

(6,557)

(7,345)

(8,306)

(8,526)

Profit before tax (FRS 3)

 

 

(7,832)

(7,989)

(8,343)

(8,563)

Tax

1,374

1,633

1,254

1,279

Profit after tax (norm.)

(5,183)

(5,712)

(7,052)

(7,247)

Profit after tax (FRS 3)

(6,458)

(6,356)

(7,089)

(7,284)

Average number of shares outstanding (m)

5.3

7.0

8.6

8.6

EPS - normalised (c)

 

 

(98.6)

(81.5)

(82.4)

(84.7)

EPS - (IFRS) (c)

 

 

(102.3)

(72.6)

(82.0)

(84.3)

Dividend per share (c)

0.0

0.0

0.0

0.0

Gross margin (%)

100.0

N/A

N/A

N/A

EBITDA margin (%)

N/A

N/A

N/A

N/A

Operating margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed assets

 

 

2,303

1,968

1,612

1,220

Intangible assets

99

117

80

43

Tangible assets

1,407

1,055

736

380

Investments

797

796

796

797

Current assets

 

 

4,650

15,359

9,751

4,003

Stocks

0

0

0

0

Debtors

2,110

2,393

1,971

2,082

Cash

966

11,932

6,746

887

Other

1,574

1,034

1,034

1,034

Current liabilities

 

 

(2,203)

(2,719)

(1,591)

(1,606)

Creditors

(1,441)

(2,602)

(1,474)

(1,489)

Short-term borrowings

(762)

(117)

(117)

(117)

Long-term liabilities

 

 

(4,555)

(6,512)

(8,765)

(9,894)

Long-term borrowings

(4,550)

(6,497)

(8,750)

(9,879)

Other long-term liabilities

(5)

(15)

(15)

(15)

Net Assets

 

 

195

8,096

1,007

(6,277)

CASH FLOW

Operating cash flow

 

 

(8,453)

(6,679)

(7,947)

(7,579)

Net Interest

(37)

(14)

(31)

(102)

Tax

1,374

1,633

1,039

1,293

Capex

(1,338)

(289)

(500)

(601)

Acquisitions/disposals

1,307

756

0

0

Financing

4,051

14,257

0

0

Dividends

0

0

0

0

Net cash flow

(3,096)

9,664

(7,439)

(6,988)

Opening net debt/(cash)

 

 

1,250

4,346

(5,318)

2,121

HP finance leases initiated

0

0

0

0

Other

0

0

0

0

Closing net debt/(cash)

 

 

4,346

(5,318)

2,121

9,109

Source: Company accounts, Edison Investment Research

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Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Deinove and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
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New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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