Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Healthcare
Deinove
Written by
Deinove |
Strategic refocus |
H1 results |
Alternative energy |
3 October 2016 |
Share price performance
Business description
Next events
Analysts
Deinove is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||
While the H116 financial results were in line with expectations, the decision to suspend the Deinol programme was not. Short-term projections will not be affected by the change in strategy as resources will simply be reallocated, but potential for longer-term revenue generation will switch from biofuels to green chemistry and healthcare.
Year |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/14 |
0.2 |
(6.6) |
(94.9) |
0.0 |
N/A |
N/A |
12/15 |
0.5 |
(7.3) |
(66.8) |
0.0 |
N/A |
N/A |
12/16e |
0.5 |
(8.1) |
(77.3) |
0.0 |
N/A |
N/A |
12/17e |
0.5 |
(8.2) |
(64.5) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Emphasis on carotenoids and antibiotics
Despite a reduction in the relative importance of the Deinol (biofuels) programme over the last two years, we had not anticipated its suspension. Deinove will now focus its efforts on carotenoids (Deinochem) and antibiotics (Deinobiotics), with efforts in the latter area boosted by the purchase of the 51% stake of Deinobiotics that it does not already own. Our short-term forecasts remain largely unchanged, aside from the shares to be issued in Q117 to acquire Deinobiotics. In the longer term, revenue from biofuels now appears less likely (we had assumed that Deinove’s technology was deployed in three ethanol plants by 2025) unless a rise in the oil price (probably to over $100/bbl) encourages Deinove to resume the programme. We expect the first revenues from Deinochem in 2018, although the timing of subsequent revenues could be accelerated given the additional resources to be devoted to the project. We assume no revenue from the antibiotics programme and await further guidance from Deinove on the potential timing of preclinical trials.
H116 results in line with expectations
The H116 results appear in line with our FY16 forecasts, with revenue of €0.2m and a net loss of €3.1m, compared to revenue of €0.1m and a net loss of €3.2m in H115. The net financial position (company definition) at the period end was €10.4m compared to €12.4m at the end of FY15, in part helped by the receipt of €1.5m repayable advance from ADEME. Given that we expect no significant change to the rate of short-term cash burn, we believe that previous statements regarding resources lasting until the end of 2017 hold good.
Valuation: Implied value of Deinochem €17m
At c €2.7/share, Deinove has a market cap of €23m and an EV of €20m. Adjusting for the value of Deinove’s holding in Carbios (c €0.8m) and allowing for a valuation of c €5.0m for Deinobiotics (based on an estimated payment by Deinove of 858k shares at €3/share for 51%) indicates a value for Deinochem of c €14m. A share price of €4 implies a value for Deinochem of €24m, while a share price of €2/share suggests a Deinochem valuation of €10m.
Exhibit 1: Financial summary
€'000s |
2014 |
2015 |
2016e |
2017e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
156 |
492 |
500 |
469 |
Cost of sales |
0 |
0 |
0 |
0 |
||
Gross profit |
156 |
492 |
500 |
469 |
||
EBITDA |
|
|
(6,515) |
(7,309) |
(7,428) |
(7,404) |
Operating profit (before amort. and except.) |
(6,520) |
(7,331) |
(8,083) |
(8,159) |
||
Intangible Amortisation |
540 |
634 |
37 |
165 |
||
Exceptionals |
(735) |
(10) |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Operating profit |
(6,715) |
(6,707) |
(8,046) |
(7,994) |
||
Net Interest |
(37) |
(14) |
14 |
(38) |
||
Profit before tax (norm) |
|
|
(6,557) |
(7,345) |
(8,069) |
(8,196) |
Profit before tax (FRS 3) |
|
|
(7,832) |
(7,989) |
(8,106) |
(8,361) |
Tax |
1,374 |
1,633 |
1,435 |
2,118 |
||
Profit after tax (norm.) |
(5,183) |
(5,712) |
(6,634) |
(6,078) |
||
Profit after tax (FRS 3) |
(6,458) |
(6,356) |
(6,671) |
(6,243) |
||
Average number of shares outstanding (m) |
5.5 |
8.6 |
8.6 |
9.4 |
||
EPS - normalised (c) |
|
|
(94.9) |
(66.8) |
(77.3) |
(64.5) |
EPS - (IFRS) (c) |
|
|
(98.5) |
(59.5) |
(76.9) |
(62.7) |
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 |
2,277 |
4,408 |
Intangible assets |
99 |
117 |
80 |
2,465 |
||
Tangible assets |
1,407 |
1,055 |
900 |
645 |
||
Investments |
797 |
796 |
1,297 |
1,298 |
||
Current assets |
|
|
4,650 |
15,359 |
11,269 |
7,114 |
Stocks |
` |
0 |
0 |
0 |
||
Debtors |
2,110 |
2,393 |
2,423 |
2,290 |
||
Cash |
966 |
11,932 |
7,812 |
3,789 |
||
Other |
1,574 |
1,034 |
1,034 |
1,034 |
||
Current liabilities |
|
|
(2,203) |
(2,719) |
(2,630) |
(3,067) |
Creditors |
(2,203) |
(2,719) |
(2,630) |
(3,067) |
||
Short-term borrowings |
0 |
0 |
0 |
0 |
||
Long-term liabilities |
|
|
(4,555) |
(6,512) |
(9,400) |
(10,632) |
Long-term borrowings |
(4,550) |
(6,497) |
(9,385) |
(10,617) |
||
Other long-term liabilities |
(5) |
(15) |
(15) |
(15) |
||
Net Assets |
|
|
195 |
8,096 |
1,515 |
(2,177) |
CASH FLOW |
||||||
Operating cash flow |
|
|
(7,691) |
(7,324) |
(7,434) |
(7,221) |
Net Interest |
(37) |
(14) |
14 |
(38) |
||
Tax |
1,374 |
1,633 |
1,323 |
2,505 |
||
Capex |
(1,338) |
(289) |
(500) |
(501) |
||
Acquisitions/disposals |
1,307 |
756 |
(501) |
(2,550) |
||
Financing |
4,051 |
14,257 |
90 |
2,550 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net cash flow |
(2,334) |
9,019 |
(7,008) |
(5,255) |
||
Opening net debt/(cash) |
|
|
1,250 |
3,584 |
(5,435) |
1,573 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
3,584 |
(5,435) |
1,573 |
6,828 |
Source: Company accounts, Edison Investment Research
|
|