News blog

AIM 50 Digest 10 March 2023

BY: Andrew Hore |
POSTED: 13/03/2023 |

Soft drinks maker Nichols (NICL) revealed that Vimto International grew by 16% in 2022. The updated strategy will mean that the OutofHome division will be slimmed down, and the focus will be the packaged drinks business. In 2022, group revenues grew by 14% to £164.9m and pre-tax profit grew by a similar percentage to £25m. The dividend was increased by one-fifth to 27.7p a share. The core UK business increased revenues by 3% on the back of the strength of the Vimto brand. The benefits of the OutofHome business restructuring will show through in 2024. Singer forecasts flat 2023 pre-tax profit of £25.2m. Net cash could be £63.6m by the end of 2023.
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Semiconductor wafers manufacturer IQE (IQE) says 2022 figures are in line with expectations, but weaker demand for end products means that inventory is being built up leading to reduced customer orders. Revenues are expected to decline by £30m in the first half of 2023, which is more than one-third of the total in the first half of 2022. This is a highly geared business, so there will be a large increase in the reported loss. This is a cyclical business, and the problem relates to stock levels. Longer-term prospects remain good.
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Victorian Plumbing (VIC) says revenues have grown by 10% in the first five months of the current financial year. Margins are also improving. The plumbing supplies retailer is one of the poorer preforming AIM flotations from 2021.That was because it floated at the peak of the lockdown DIY market. Ever since then, trading has been disappointing. The latest news suggests that a recovery has commenced. Victorian Plumbing’s market share is around 19%. A 20-year lease has been agreed on a new distribution centre in Lancashire. Peel Hunt forecasts a recovery in pre-tax profit from £15.7m to £17.9m, which is still well below the 2020-21 level. The interim figures will be published on 23 May.
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Digital marketing technology and services provider Dotdigital (DOTD) revenue growth accelerated in the first half, helped by currency movements. In the six months to December 2022, revenues were 9% ahead at £33.8m, but pre-tax profit fell from £8.9m to £7.7m, with investment in the team and additional marketing holding back short-term profitability. There was a slight dip in margins because of the growth in lower margin SMS. Contracted annualised recurring revenues are £51.9m, so this underpins second half revenues. Professional services income has been weaker. Average revenues per client improved from £1,422 to £1,573. Net cash reached £49.6m by the end of 2022.
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Brooks Macdonald (BRK) increased funds under management by 4% to £16.2bn through a combination of inflows and performance. Interim revenues were 5% down at £59.8m and underlying pre-tax profit was 18% lower at £14.5m. The interim dividend is 28p a share. Net cash is £38m.
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Johnson Service Group (JSG) full year figures were in line with expectations. The hotel and catering linen management business is nearly back to pre-Covid levels and workwear rental has been resilient. Revenues were 42% higher at £385.7m, while pre-tax profit improved from £9.4m to £38.2m. Cost increases have been passed on. The dividend is 2.4p a share. Regency Laundry, which focuses on four and five star hotels, was acquired for £5.75m after the year end and a new facility is planned in the South East. Chief executive Peter Egan bought 25,000 shares at 117.0659p each following the results.
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Benchmark (BMK) increased first quarter revenues by 36% to £54.5m with increased adoption of EctosanVet and CleanTreat health products helping. There was a small profit, compared with a loss in the first quarter of the previous year. There was an £8m cash inflow. Non-exec Yngve Myhre bought 200,000 shares at 38.35p each.
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Oil palm plantations operator MP Evans (MPE) has acquired additional land near to its Simpang Kiri estate at a cost of $14.3m, or $6,800/hectare. This will scale up the estate and provides scope for a new mill once yields build up. finnCap assumes a value of $20,000/hectare for the group plantations. The 2022 results will be published on 21 March.
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Alaska-focused oil and gas explorer Pantheon Resources (PANR) says flow rates from the Alkaid #2 well were 505 barrels/day of liquids and 2,300mcf/day of gas. The rates improved only slightly after cleaning out the well. There are investor doubts about how commercial the reservoir can be. This could hamper the terms for any farm-out. Further geological work is required.
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Construction materials supplier SigmaRoc (SRC) has used the cash from the recent fundraising to make two acquisitions for £12m. Belgium-based concrete plants operator Goijens Concrete Group was acquired for five times recurring average EBITDA for the years to 2020 to 2022 before cost savings. Finland-based limestone supplier Juuan Dolomiittikalkki was acquired for six times recurring average EBITDA for the years to 2020 to 2022 before cost savings.
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CentralNic (CNIC) full year results were slightly better than expected even after all of the upgrades in the past year. Revenues were $728m, while EBITDA was $86m. A maiden dividend of 1p a share was announced.
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DBAY Advisers has increased its stake, which includes the Logistics Development Group (LDG) holding, in Alliance Pharma (APH) from 8.03% to 9.88%.

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