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Orpea reported a passable level of Q3 revenue, thanks to a progressive occupancy recovery and meaningful price increases. However, the group trimmed further its earnings outlook for the mid-term, mainly to reflect the additional initiatives to rebuild the quality of services and high inflationary pressure, and subject to steeper price increases. We will cut our estimates but we do not expect major changes to our target price as the latter still relies only on the NAV, as a transitionary measure
Companies: Orpea (ORP:EPA)Orpea SA (ORP:PAR)
AlphaValue
For the HY, Orpea reported a further hit to profitability, mainly led by additional initiatives to rebuild the quality of services and inflationary pressures. Heavy financial expenses further levered these negatives. The company has revised its FY guidance downward and will release new mid-term guidance in early November.
Orpea’s Q2 organic growth looked strong but the nursing home activities in France remained under pressure. We don’t see any positive catalysts for the short term and we are comfortable with our current target price.
Orpea has further downgraded its guidance for 2023-25, noting the lingering shadow overhanging the recovery in occupancy at the nursing homes in France and heavier staff costs. An offset effect on liquidity may come from non-recurring tax items and lower capex. Our target price has been further eroded by the gloomy outlook and we reiterate our pessimistic view.
Orpea ended 2022 with a net loss of over €-4bn, including jumbo asset impairments/depreciation of over €-4bn and a tax credit of €0.6bn. The mid-term guidance remained broadly unchanged and the management warned of a larger-than-titanic dilution of 2,500x for existing shareholders under the scenario of a cross-class cram-down, or even worse receivership, and that the 250x dilution in the event of a two-thirds majority validation might be the best outcome. We are convinced by the latter option an
Following an update with Orpea, we again stress that Orpea’s financial and business restoration is no walk in the park, at least for the near- to mid-term. Conversely, the spectacular wipe-out of the existing shareholders in the ongoing financial restructuring prepares the group for spectacular upside potential. As our latest iteration for a target price is c.€0.19 there is only one option: run for now and come back later.
On the brink of Chapter 11, Orpea agreed with investors to raise a total of €2.7bn capital, along with a titanic equity dilution and a 70% cut in unsecured debts. This is an expensive warning about the importance of ESG for all investors, as its business model is reset to protect seniors and staff alike at the expense of profits. We have adjusted our valuation even further downward. When the dust settles (another 18-24 months?) and if Orpea pays back its considerable remaining debt, equity beare
In the long-awaited transformation plan, the group communicated a series of constructive measures to rebuild the business model which has been seriously hit by the ESG scandal, providing a much brighter outlook. However, the expectation of an unparalleled dilution driven by the titanic equity strengthening scheme should further penalize the share price performance. Our downgraded valuation takes into consideration the scenario of the largest possible dilution with the hope of seeing more upside
Some explanations have been provided but we still lack convincing proof and details. The market reaction is expected to remain negative due to high-level tension between executives and (two minority) shareholders. More visibility and the next catalyst should be available on publication of the transformation plan next Tuesday (15 November).
The market reaction is expected to be negative due to deepened concerns about the company’s financial profile and, in particular, its viability, pointing out the seemingly unreliable senior managers according to a public letter from two long-term shareholders.
French retirement homes continued to restore and the remaining activities continued to enjoy a positive trend in the past quarter, as they did in Q2. Further visibility on the future of the group would seemingly be available only on 15 November when the transformation plan is published.
After being suspended at the request of the regulator on 24 October 2022, Orpea’s shares resumed trading two days later at the market opening and plummeted by up to -45% during the day as the group opened an amicable conciliation procedure with its financial creditors, given a further deteriorated in its financial profile. The management intends to save the company via a substantial debt-to-equity conversion, while we consider a recapitalisation bringing in fresh cash unavoidable.
The group’s actual H1 results and H2 financial forecast remain consistent with the preliminary communication, as well as its limited ability to increase residents’ bed prices for the short term to cope with the ongoing inflation. Despite the leverage and gearing ratios looking passable for the current stage, covenant renegotiations might be needed and concerns raised about a breach. The share was slashed another -21% today. We will further downgrade our estimates and valuation to integrate the n
Research Tree provides access to ongoing research coverage, media content and regulatory news on Orpea. We currently have 33 research reports from 3 professional analysts.
Companies: BILN IGP RBN SBTX
Cavendish
Verici’s $8.2m gross raise means the company can now focus on scaling Tutivia and invest further into the development of existing and new products. With a uniquely well balanced Tutivia test, a growing sales team and LCD coverage expected later this year, we forecast Tutivia revenues of $2.6m/$4.5m in FY24E/FY25E. The Thermo Fisher deal was a huge validation of Clarava and Verici’s technology and in addition to licensing/milestone payments, we forecast double digit royalties on net Clarava sales
Companies: Verici Dx Plc
Singer Capital Markets
26th March 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object
Companies: BIRD MBH CHRT INSE KMK FNTL HDD JNEO CCS
Hybridan
SkinBioTherapeutics has reported on the 6-months to December 2023, noting steady revenue growth from lead product AxisBiotix-Ps, progress on the development of SkinBiotix with partner Croda (Sederma) and post-period end, the acquisition of Dermatonics. The company has updated on several positive developments through the start of 2024, including AxisBiotix Acne positive interim results, initiation of research on the MediBiotix Pillar and progress with the oral and inflammation programmes. The com
Companies: SkinBioTherapeutics Plc
Companies: CLBS GHH NANO TRX SAVE TMT GELN
The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (
Companies: TXG NDVA TSVT BCOW Z29 TXG NCYT GNS SUN AMS OMG APH EKF EAH IMM AGL DEMG AGY TSTL IPO GDR ETX TRX HVO CTEC AVO OXB DEST VLG IXI VAL INDV AGR AVCT BAI 123F IMCR BCOW
Hardman & Co
On 18th December 2023 Incanthera announced a deal with Marionnaud in Switzerland to distribute ‘Skin+CELL’, its advanced dermatological solution for the delivery of vitamin B3 for skin protection and cosmetic rejuvenation. This gives Incanthera access to a high-end cosmetics distribution presence in Europe, and in addition, ownership of Marionnaud by AS Watson, the largest cosmetics distributor in Asia, offers significant new market opportunities further afield.
Companies: Incanthera Plc
Stanford Capital Partners
FY EBITDA and EBIT came in materially above consensus FY EBITDA came in at EUR98.8m, down 4% yoy and 12% above consensus. The EBITDA margin was 12.6%. Restated for one-off costs, it was 13.1%, more than 2 percentage points above the guidance. It was fully explained by price increases, notably on X-ray, mix and control of fixed costs. FY EBITA came in at EUR38m, 46% above consensus. 2024 guidance looks conservative Guerbet is aiming for organic growth above 8% (8.8%e). With markets growing at
Companies: Guerbet (GBT:EPA)Guerbet SA (GBT:PAR)
BNP Paribas Exane - Sponsored Research
IRLAB Therapeutics has confirmed the FDA’s alignment with its proposed Phase III programme for mesdopetam in levodopa-induced dyskinesias (PD-LIDs), following receipt of the minutes from its end-of-Phase II (EoP2) meeting held last month. Notably, the FDA has agreed on the primary endpoint being the Unified Dyskinesia Rating Scale (UDysRS), on which mesdopetam demonstrated a statistically significant improvement (p=0.026) in the Phase IIb study (secondary endpoint of that study). IRLAB will now
Companies: Irlab Therapeutics Ab
Edison
Tissue Regenix has reported on strong performance through 2023, noting record revenues driven by product adoption and expanded distribution, positive adjusted EBITDA for the first time and an increased cash position versus H1/23. FY23 revenues grew 20% to $29.5m supported by 25% growth from BioRinse products and 17% growth from dCELL products. Significantly, Tissue Regenix reported its first adjusted EBITDA profit for the year, +$0.9m, supported by revenue growth and cost management. We expect t
Companies: Tissue Regenix Group plc
Companies: Aptamer Group Plc
Turner Pope Investments
Creo Medical has published a trading update for the 12 months to December 2023, during which the company focused on commercialising its core technology. Revenue for the period increased 13% YoY to £30.8m, while the underlying operating loss improved to £16.4m. Operationally, during the period, the number of confirmed users of Creo’s Speedboat range more than doubled over the year, the first procedures with MicroBlate Flex to ablate lung tumours were performed and Creo expects to receive regulato
Companies: Creo Medical Group Plc
Companies: NTQ KMK JNEO DCTA
LungLife AI is a medical diagnostics company focused on the development of AI-supported blood-based tests for the early detection of lung cancer. It has identified a significant medical need for non-invasive, sensitive and specific tests in early-stage lung cancer. The company’s core technology, the LungLB test, seeks to detect circulating tumour cells (CTCs) to identify malignant lung nodules. It aims to apply machine learning/AI (ML/AI) to derive algorithms to increase test accuracy. Following
Companies: LungLife AI, Inc.
This month's feature article is entitled 'Gold and a Chinese Credit Event'. A Western phenomenon? If you own, or are considering owning, gold or gold equities, it’s likely that you’re concerned about protecting your wealth, or the performance of your fund, in the expectation of some kind of financial instability. Maybe your confidence in policymakers is ebbing, or you’ve researched debt bubbles in history and concluded that physical gold and silver have been the safest places to be invested whe
Companies: NBPE ICGT ARBB CSN RECI CLIG HAT AVO STX VTA APAX
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