News blog

AIM 50 Digest 2 April 2021

  • BY: Andrew Hore |
  • POSTED: 06/04/2021 |

Alliance Pharma (APH) grew its consumer revenues in 2020, but a 14% decline in prescription medicine sales meant that overall sales were 5% lower at £137.5m. Underlying pre-tax profit edged up from £32.9m to £33.5m, helped by the growth in higher margin consumer products. Scar treatment Kelo-Cote sales grew by 12%. The total dividend is 1.6p a share. The $110m purchase of the Los-Angeles-based Biogix, which owns Amberen an over-the-counter brand providing treatments for menopause symptoms, did not make a contribution last year. It should become Alliance’s second largest brand after Kelo-Cote.
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Oil palm plantations operator MP Evans (MPE) is paying a better than expected full year dividend of 22p a share with a further significant increase expected in 2021. Plantation volumes grew by 10% last year, even though some plantations underperformed due to dry weather. Oil palm prices recovered during last year. Pre-tax profit jumped from $10.7m to $28.8m. The crop processed was one-fifth higher in the first two months of 2021.
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Floorcoverings supplier James Halstead (JHD) improved interim pre-tax profit by 3% to £26m on flat revenues and it remains cash generative with net cash of £74.4m at the end of 2020. The interim dividend is 4.25p a share. Demand continues to be robust but there is a shortage of raw materials and distribution costs are rising.
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Video games services provider Sumo Group (SUMO) has benefited from strong demand for video games during the Covid-19 pandemic. In 2020, revenues increased from £49m to £68.9m, while underlying pre-tax profit improved from £12.6m to £14.8m. There were contributions from acquisitions, but there was also organic revenue growth of 24%. Around three-quarters of forecast 2021 group revenues of around £107m have already been contracted.
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Vet practices owner CVS Group (CVSG) generated like-for-like sales growth of 7.8% in the first half and in the first eight months the rate accelerated to 8.2%. Underlying interim pre-tax profit rose from £21.4m to £29.7m. New client registrations were 17% ahead and average client spend increased. Net debt more than halved over 12 months to £44.4m.
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IQE (IQE) reported record revenues of £178m in 2020, but it may not achieve that figure in 2021. Investment in 5G technology has helped the semiconductor wafer manufacturer to increase revenues and return to profit. Photonic revenues have not grown as quickly as expected and the wireless business should continue to generate the majority of revenues.
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Draper Esprit (GROW) investee company Trustpilot floated on the Main Market at the end of March. Draper Esprit generated £78.3m from a share sale and retains a 7.89% stake, which is worth around £80m.
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Renew Holdings (RNWH) has acquired water infrastructure company J Browne Group for £29.5m and this is immediately earnings enhancing. There should be high single digit earnings enhancement. The Enfield-based business provides services to water companies and developers, where it also provides utility connections. In the year to March 2020, pre-tax profit was £5.5m, but there has been a reduction in activity this year due to the new regulatory period for the water industry. Interim figures will be published by Renew on 14 May.
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GB Group (GBG) has sold its employ and comply business to First Advantage so that it can concentrate on its identity data business.
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Gamma Communications (GAMA) increased revenues from £328.9m to £393.8m in 2020. Pre-tax profit improved from £48m to £61.3m. There was a mix of organic and acquisitive growth.
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Broker Numis (NUM) expects interim revenues to be around £110m. Investment banking revenues are even better than those generated in the second half of the previous financial year. The interims will be published on 7 May.
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Central Asia Metals (CAML) is paying a final dividend of 8p a share, taking the total for the year to 14p a share. Pre-tax profit fell from $67.8m to $59.8m in 2020. Net debt was $36.2m.
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Mortgage Advice Bureau (MAB1) reported a small increase in 2020 revenues, but pre-tax profit was 5% lower at £17.8m. The total dividend for the year is 25.6p a share. Mortgage market share increased and current trading is strong.
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Video games services provider Keywords Studios (KWS) increased revenues from €326.5m to €373.5m, organic growth was 12%, while pre-tax profit jumped from €40.9m to €55m. Pre-tax margin is near to the long-term target of 15%. The localisation business did not do as well as the other operations, but trading has improved. There was more than €200m available for acquisitions at the end of 2020, although some of this has subsequently been spent.
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Knights Group Holdings (KGH) has acquired Surrey-based law firm Mundays for £5.3m in cash and shares. In the year to July 2021, Mundays expects to generate revenues of £6.9m. Following integration this business should achieve a pre-tax profit margin of 18%.
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In 2020, revenues fell by more than one-third at Johnson Service Group (JSG) and there was a swing from profit to loss. The important thing is how well the workwear and linen supplier will recover this year and next. The balance sheet is strong and capital investment has been maintained.
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Warehouse REIT (WHR) non-exec Stephen Barrow has bought 200,000 shares at 125.24p each. Pan African Resources (PAF) finance director Dean Louw has acquired 814,800 shares and chief executive Cobus Loots has acquired 1.28 million shares.
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Caledonia Investments has a 4.91% stake in Polar Capital (POLR).

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