Angle - Full year results

Angle plc is a long standing holding of mine:-

http://michae1mouse.blogspot.co.uk/2012/12/a-new-angle.html

I have written several blogs since buying the shares at around 27p in 2012 (see above).

Angle released their full year results this morning, and I am very encouraged with the approach and progress they have made towards commercialisation of their Parsortix liquid biopsy device.

I commented on ADVFN this morning:-

http://uk.advfn.com/cmn/fbb/thread.php3?id=34862319&from=2819

Post 2829

"The report reads very well and I am more than happy to wait patiently as developments continue, particularly now revenues are beginning to build. £361,000 of revenues since first sales in December which is marginally ahead of forecasts.

The strategy that they have pursued is now beginning to pay off in spades, and there are strong signs that they are going to be a market leader in a very large and developing market place. The portability of the Parsortix device is clearly a key differentiator, alongside the ability to harvest the cells and the high specifity and sensitivity.

It's also telling that research centres are finding additional uses for the device at their own cost.

Holding tightly."

Interestingly, even though revenues are in their infancy, it should be noted that gross margins are high. First sales of £361,000 produced gross profits of £254,000. In other words a margin of 70%. Wonderful.

As revenues improve going forward then these large gross margins may see profitability sooner than anticipated. £10m (at the current margin) would produce £7m in gross profit. Operating expenses were around £5.5m which would generate a £1.5m profit.

The research market is estimated to be worth £250m alone. £10m in revenues would be just 4% of this market. The clinical market is far larger of course. £300m just for Ovarian cancer.

Whilst I would anticipate that operating expenses will increase as the current trials take place (Ovarian cancer trials have been initiated in the US and Europe), the percentage rise in sales should  outstrip the increases in costs in the not too distant future.

Of course my calculations are very simplistic, but quite frankly that usually gives me enough idea of how future earnings will pan out. Sometimes it takes longer than expected, at other times it's sooner.

The key point is that the device is gaining very favourable reports by key opinion leaders and this will drive sales forward at a pace. Gross margins are and will continue to be excellent.

Angle plc won't even need to gain a large percentage of the research or clinical markets to be a very profitable and cash generative company.

The company is also currently well funded.

As the weeks, months and years pass by I am getting more and more confident of my holding here.