So @mikebrisy gave some great analysis. And I wanted to do some checking of my own. It backs up everything mike said. But thought it might be useful for some here.

Upon first glance of the 1H FY2025 Trading Result (unaudited), I thought everything looked in order. I thought PNV was continuing to grow at about the expected rates. 

 But when I dug a little more, I noticed that the growth was not quite what it seemed. 

 From the 1H FY2025 Trading Result (unaudited):

 “Rest of World sales of A$12.9m up 28.6% on STLY A$10.0m including strong performances in UK/I, Spain, Germany, Turkey and Hong Kong. First sales were made in Malta, Portugal and Peru.”

 So 28% growth for RoW Sales compared to the Same Time as Last Year, on a small revenue base is quite underwhelming. And was not expected. 28% means $2.9m extra revenue compared to the H1 FY2024. If we assume each product is about (this is a guess $700 per patient), that means about 4,000 more patients. That feels underwhelming. We are talking about RoW sales for a product that has been widely adopted in the USA. 

 Lets compare with the previous year at the same time (1H FY2024 Trading Result (unaudited))

 “Rest of World sales of $A10.0m up 122.2% on STLY of A$4.5m including strong performances in ANZ, UKI, and the Middle East, also growing sales in India, Hong Kong, and Canada.”

 So we have gone from 122% to 28% in terms of RoW growth for the Same Time Last Year on what is really a small base. 

 To show it graphically:

To understand it better, we need to make some assumptions about what the FY2025 FULL will be, so you can see the concerns better:

I explain it here:

- Take the Blue line (USA Sales) – we see USA as a maturing market. Growth is expected to taper off. So approx. $84 million for the FY25 will be a reasonable result. 

-  Take the Orange line (Row Sales) – The RoW sales should be growing massively. Ie new markets with strong adoption in each of those countries. If we double the H1FY25 result we get about $26 million. As you can see, that would be a tapering off of growth. But we should be seeing increased growth….so around $40 million for RoW.

-  The Red, Light Blue and Green lines represent the Total Sales low growth, average growth and expected 'high' growth results. 

As you can see (I hope the above is clear, and please point out to me any mistakes you can see)….RoW is not on track with the previous USA growth. And I would have expected the RoW growth to be much more than the USA growth. 

This is a key concern that management must address at the next results meeting. 

In particular they need to answer the following:

-  Why has growth in RoW not followed a similar trajectory as the USA market? [There may be very good reasons. For instance, some countries may have very strong bureaucratic processes that slows initial adoption. Or a competitor product has a strong sales team and adoption in that country…but we have a strategy to gain traction in the X years. Or maybe the direct sales approach is not working? But we need to know the reason(s) and what is being done about it, and some guidance for future growth (yeah I know…that may be a stretch)]

-  India has been touted as a massive future market for PNV, but why no news in the update? [I think this was not a good look. It casts doubt on PNV in India. If things are taking longer, tell us why. This was the CEO’s (who I do really like) pet project. He needs to give us confidence in his professional judgement. And if things are not going to plan, tell us, and what the fixes are. What are the 25 plus team in India doing? ]

-  What is happening in the rest of the world RoW? [With all the new countries coming online, we would have expected the combined growth rate to be larger than the USA? To address this question, PNV needs to provide an update on progress in each country and any ‘road blocks’ or issues and what is being done to overcome them.]

I think another major issue is the PNV RoW growth rate when compared to PNV’s competitors (as @mikebrisy pointed out). 

Here is a quick 5-minute analysis of the growth rates of PNV’s competitors:

-      AVITA Medical – 29% growth

-      Vericel – 20-22% growth

-      Aroa Biosurgery – expected 17-22% growth on FY24

-      Integra – IDRT – struggled to find (sorry)

PNV’s RoW growth rate of 28.6% means they have fallen back into the same growth rates as thier competitors. 

Some key questions for management regarding PNV competitors:

-  Does PNV do competitor analysis, and if so, where does PNV think it ranks in terms of growth? Put another way, does PNV think it is still growing faster than it's competitors?

-  Many of PNV's competitors have a portfolio of products. This tends to lock in brands with surgeons and hospitals. How is PNV addressing this approach by PNV's competitors?

Looking at PNV’s growth to date with its current products, my modelling says that a fair value is represented by a SP of about $2.20-2.60. Based on this, I sold about 90% of my PNV holdings at $2.20 (it rose to $2.30 over the subsequent weeks and then dropped below $2.00). I have seen PNV bashed down below $1.00 so I got a bit nervous.

I still like PNV, it’s products and its management. But the above questions need addressing before I buy back in. 

Some triggers for me to buy back in:

-  It drops below $1.60

-  RoW growth is above 40% or an explanation why it has dropped and what they are going to do about it.

-  Significant progress on India (this is not just about the numbers, but it shows that the CEO and leadership team can make the right calls for the business). 

-  New products. We have a great sales team……let them sell other products. We need news on these new products. What are the issues holding them up?

So as you can see....@mikebrisy was spot on. But i'm glad i did the research to back it up. I had fallen away from the numbers, and it was a great chance to reaquaint myself.

Cheers