Joined the holders in CBF this morning. Looks like a recovery going on here and I here whispers well speculation of new contract wins. The company seems to be moving away from DNA and focusing on protein and virus production and they seem to be far more focussed.

The company have restructured their sales and marketing team and appear to be more aggresive in their actions.

Fixed and variable costs have also been attacked and the company is working from a lower cost base. The companys order book is higher than it as been for a while and I beleive quarterly profit will be achieved.

Chart also looks strong and shows a break up.

Pointers To Recovery.

From last results 11th Jan.

Sales improvement in the second half of the financial year due to switch
from DNA to proteins and virus.



Restructuring of sales and marketing to address US market.



Restructuring of the Oxford and Keele facilities.



Broadening of customer base - 12 new customers in 2004.



The 4.8m Oxford Facility completed on time and to budget.



Contracted business for financial year 2005 stands at 2.7m.



Financial:


Revenue: H2 2004 up 30% to 2.0m compared with H1 2004 1.5m
FY 2004 down 42% to 3.5m (FY 2003: 6.0m)

Gross margin: H2 2004 49% compared with H1 2004 39%
FY 2004 45% (FY 2003: 57%)

Loss before tax: H2 2004 reduced by 17% to 1.03m compared with H1 2004 1.24m
FY 2004 2.27m (FY 2003: 0.82m profit)

Cash at bank: Sept 2004 3.2m compared with Mar 2004 3.8m (FY 2003: 7.3m)

Loss per share: FY 2004 12.3p (FY 2003: 6.9p earnings)

Director Speak

Commenting on the results, Peter Fothergill, Executive Chairman said:

'Our second half improvement and the current position of our order book are
significant achievements. Management moved rapidly during the year to focus
sales and marketing in the US and from DNA to virus and protein production. This
was no mean feat and we are cautiously optimistic for the future.'

Company Outlook Statement.

Management is actively seeking to broaden the customerbase particularly in the US biotechnology clusters and is examining ways toexpand the service offering including later stage manufacture and there by developing longer-term relationships which can reduce the impact of the high levels of clinical trials failure. These initiatives are already beginning to gain traction with contracted business currently 2.7 million for the financial year 2005 ('2005'), with 52% from North America. If this improvement continues Cobra will recover value for its shareholders.

Fundies.

Presently loss making but looks like the corner has been turned. Awaiting next trading update/results.

Beta.

Fairly High.

Conclusion

Highly Speculative, but the rewards if recovery does take place could be very rewarding.



cheers GF.