[source: Belluscura]
GOING LIKE A TRAIN
The news just keeps getting better & better for Belluscura (BELL), a next generation portable oxygen enrichment firm.
This morning CEO Bob Rauker said US sales of its best-in-class, portable oxygen concentrators (POCs, X-PLO2R) have been “very strong” since the soft-launch in Sept’21.
In fact, already delivering 377 units - or 25% above consensus expectations (Dowgate at 300 assuming an ASP of $1,100/device) & 150% above initial targets (150).
Adding that BELL was also making encouraging progress wrt launching the product overseas, "having [already] received enquiries from distributors globally".
The only ‘quality’ issue being successfully managed (Re global supply chain bottlenecks), has been to obtain sufficient quantities of parts (eg silicon chips) to satisfy the excellent demand.
As such, the Board has “significantly increased inventory levels of key components & other raw materials to pre-empt any potential disruption on production levels”.
In turn, sensibly deploying some of the £17.5m raised from the IPO in May at 45p/share. But nonetheless still leaving a hefty Dec'21 net cash pile of £15.6m vs Dowgate's $18m.
Elsewhere, development of BELL's two follow-on POCs (ie X-PLO2R CX & X-PLO2R DX) are similarly progressing well - with commercial launch on track for Q2 & Q3’22.
Finally wrt valuation, Dowgate’s previous target price was 150p/share. Here anticipating revenues & adjusted EBITDA to rise to $111m (ASP $2,000 with $11m of aftermarket revs) and $34m (30.6% margin) respectively by 2025.
Hence in light of today's positive update, I look forward to further updates about Q1’22 trading & FY22 guidance at the prelims in mid-February.