News blog

AIM 50 Digest 1 April 2022

  • BY: Andrew Hore |
  • POSTED: 03/04/2022 |

Palm oil producer MP Evans (MPE) is combining rising production with a sharply higher palm oil price. Fears about the supply of sunflower oil due to the invasion of Ukraine, which previously produced two-fifths of the world’s sunflower oil, have led to switching to palm oil. The palm oil price was already on an upward trajectory, partly due to greater use in biodiesel, and this has given it a further boost.
Production increased by 15% in 2021 and the average mill gate crude palm oil price was $810/tonne. Revenues grew from $174.5m to $276.6m and the high fixed cost base meant that pre-tax profit jumped from $28.8m to $97.6m. Investment in milling capacity is improving efficiency. The total dividend was 5p a share better than expected at 40p a share. The profit and dividend should at least be maintained this year. Analysts are assuming a maintained selling price this year, so there is potential for upgrades given that the palm oil price is currently higher than at any time last year.
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Alliance Pharma (APH) is acquiring ScarAway and the US rights to scar treatment Kelo-Cote for £14.8m. ScarAway is a silicone-based treatment, and it is the second largest scare treatment brand in the US with a 28% market share. Kelo-Cote will become a global brand for Alliance. The deal is immediately earnings enhancing. Kelo-Cote was already the company’s biggest brand generating £48.8m of group revenues of £169.6m in 2021.
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Mortgage Advice Bureau (MAB1) is acquiring The Fluent Money Group for £73m. A placing raised £40m at 1050p a share. This will be materially earnings enhancing in the first full year. The deal may not complete until the second half of 2022. Fluent is a telephone advice broker for second and first charge mortgages plus bridging finance, and it will add 125 advisers. MAB had 1,885 at the end of 2021. Fluent generated revenues of £38.5m in the year to March 2022.
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Legal services provider Knights Group Holdings (KGH) was hit hard after a disappointing trading statement The share price halved when it warned that growth was slower than expected and that there are signs of weaker business confidence among its clients. Underlying pre-tax profit is still likely to rise from £12.2m to £18m, including a contribution from acquisitions.
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Electronic monitoring technology developer Big Technologies (BIG) reported an underlying pre-tax profit of £17.9m for 2021 and an improvement to £21.9m is expected for 2022. The share price soared after Big joined AIM last year, but it has fallen back towards the flotation price of 200p. Directors have been buying shares since the results were announced and there has been a sharp recovery in the share price.
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IP and content services provider RWS (RWS) is paying Euro20m for Liones Holding, which owns the Fonto data driven authoring platform for mission crucial documents. Liones is profitable. The RWS share price has slumped this year. Chief executive Ian El-Mokadem bought 10,000 shares at 352p each, finance director Desmond Glass bought 10,000 shares at 356p each and corporate development director acquired 10,000 shares at 347p each. Non-exec Lara Boro bought 2,450 shares at 393p each.
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James Halstead (JHD) is coping with inflationary pressures. Interim revenues were 5% ahead at £136.7m with the growth coming in the UK and Europe. The focus on higher margin products reduced the decline in margins. Pre-tax profit still declined by 2% to £25.4m. Full year profit is expected to be flat. The interim dividend is raised by 6% to 2.25p a share.
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Vet practices operator CVS Group (CVSG) grew interim like=for-like sales by nearly 10% and it is faster if Covid-related revenues are excluded. The rate of growth is continuing into the second half. Underlying interim pre-tax profit improved from £29.7m to £36.2m. Net debt increased to £63.2m after acquisition payments, although there are competitions concerns about the acquisition. 
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Semiconductor wafers manufacturer IQE (IQE) fell into loss in 2021 as revenues fell 13% to £154.1m. Net debt is £5.8m. New management will use 2020 to build a base for growth in the long-term. This year revenue growth is likely to be in low single digits with much of the growth coming in the second half.
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Pharma services company Ergomed (ERGO) increased its order book to £239.7m at the end of 2021. A pre-tax profit of £21.4m is forecast for 2022. Net cash is £31.2m and it could rise to more than £50m by the end of 2022.
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Keywords Studios (KWS) revenues grew organically by 19% in 2021. The overall growth was 37% to Euro512.2m, while underlying pre-tax profit jumped 56% to Euro86m. Earnings per share grew by 46%. There is a dividend of 2.15p a share. Net cash is Euro105.6m.
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Alaska-focused oil and gas explorer Pantheon Resources (PANR) had cash of $72m at the end of March. The presence of oil has been confirmed at the company’s targets at Talitha #A and Theta West #1. Severe weather meant that operations had to be concluded for the season.
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In 2021, Gamma Communications (GAMA) increased revenues from £393.8m to £447.7m and pre-tax profit improves from £61.3m to £76.7m. The 2022 pre-tax profit forecast has been trimmed from £85.1m to £83.6m.
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Central Asia Metals (CAML) is generating significant amounts of cash and is paying a 12p a share final dividend, which is higher than expected. The total dividend has increased from 14p a share to 20p a share. In 2021, revenues increased from $160.1m to $223.4m thanks to higher zinc and copper prices, while net income jumped from $43.7m to $84.2m. Net cash was $22.7m, excluding restricted cash of $3.5m.
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ITM Power (ITM) has set up a joint venture with energy firm Vitol for 50/50 ownership of ITM Motive, which owns the UK hydrogen refuelling stations constructed by ITM. Vitol will invest up to £30m. ITM will supply Motive with up to 240MW of electrolysis equipment.
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Warehouse REIT (WHR) has acquired a £35m industrial development in Oxfordshire.
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Fevertree Drinks (FEVR) non-exec Domenic De Lorenzo and family have acquired 2,100 shares for 1847.18p each. Soft drinks maker Nichols (NICL) chief executive Andrew Milne acquired 1,464 shares at 1365p each and finance director David Rattigan bought 3,656 shares at 1340p each. Nichols also continues to buy back shares. Polar Capital (POLR) non-exec Andrew Ross bought 15,000 shares at 590.5p each. Smart Metering Systems (SMS) director Jamie Richards has bought 1,345 shares at 743p a share. FW Thorpe (TFW) non-exec Antony Cooper and his wife have sold 5,500 shares at 445p and 7,100 shares at 415p, respectively.

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