Polynovo Limited

ASX:PNV

Polynovo Limited

ASX:PNV
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$2.12 (+3.4%)
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#12
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Forum Topics PNV PNV ASX Announcements

Pinned straw:
mikebrisy
Added 7 months ago

So here is the annoucement:

ASX Announcement

Key messages

  • August Revenue of $7.7m up 119% in August pcp and 93% YTD
  • YTD revenue is $14.9m vs. $7.7m in prior year
  • US sales in first two months of FY24 were $10.6m up 85.3% over pcp
  • RoW is $2.4m up 78% over pcp


I can't see any promised "upgrade" anywhere.

More detail is given in the release.

My Analysis

OK, so FY24 starts with 2 strong months, in what is normally a lumpy sales business month to month. Hopefully, as it scales, lumpiness should continue to smooth out and maybe we can get to some regular 6-monthly reporting.

These guys are relentless in cherry-picking good news periods and issuing a release, which to me says nothing other than they are peeved that the SP is as low as it is and they are trying to correct that. I think that is a fruitless, pointless effort. The half-year and full-year results will do the necessary work over time. OK rant over, as ranting is also pointless.

There is of course good new in here. In my recent assessment of their annual results, I commented that the US appeared to be slowing with only 34% constant currency sales growth in FY23 over FY22, in a period when the sales force was significantly ramped up. Even though we are not seeing a constant currency comparison in today's release, a two-month burst of 85% growth over the pcp is very good news and would be very strong even after correcting for $A to $US.

In most of my valuation scenarios, my expectation was that the US FY23 over FY22 result was a softer result than the underlying trend, given lumpiness of individual periods. Today's announcement lends some support to that case.

Key Takeaway

I've recently published a detailed, updated valuation of $PNV. Today's announcement contains no material new information, but it supports my overall bullish thesis. If anything, it nudges the likelihood of my lower valuation scenarios of <$2.00 lower in likelihood and is in-line my more bullish view of the business. No updates required as a result of this. I remain a high conviction hold.

No doubt the market will take the short-term sugar hit. But one day the SP will move on from these low levels and never return.

Disc: Held in RL (3.8%) and SM (14.6%)
mikebrisy
7 months ago

Just a few further reflections on details of today's $PNV sales report.

Recent headlines on $PNV presentations have been "Accelerating Global Impact". This key message was initiated at last year's capital raise, with part of the rationale for raising funds being to expand the S&M workforce and also to enter new markets.

By my estimatation, the Sales workforce increased from 64 at EOFY22 to 105 at EOFY23 (data in Annual Reports), an increase of 64% with some 20 of these in India. DW always talks about sales reps. being "working capital" and needing 6 months typically to cover their cost of US$100k p,a, in the US (and of course a lot less in the new emerging markets). But actually, we know from other sources that is can take 2-3 years for a sales rep. to fully develop their capability.

So to have a "YTD" growth rate of +119% is actually very encouraging and it cannot be explain simply by the expansion of the sales force. I think we are liukely seeing the combination of several factors: 1) lag effect of the recent generation of sales reps added over the last 1-2 years starting to hit their straps, 2) new accounts added over the last 1-2 years of commencing adoption and 3) broader applications of clinical use of BTM.

By all indications, ANZ had a quieter FY23 over FY22, simply because nothing was said about it at the FY result. And one thing these guys are not shy about is reporting good results.Which is why it is good to see it feature again in today's report, with Australia report at +128% YTD over pcp. Australia is a relatively mature market, and we know from LinkedIn analysis that there have been few if any sales additions in ANZ over the last year or so. In that context, while recognising lumpiness of results in one quite small market, 128% growth over what is probably an 8-10 week period, is an indication that the product really is getting traction in the market.

The same follows with the UK with 155% YTD growth over pcp coming on the back of FY23 growing by 164% over FY22. The momentum in UK appears to be sustained.

It will be interesting to see what further updates we get at the AGM later this year.

Maybe, just maybe we really are starting to see global growth accelerating!

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