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AIM 50 Digest 2 September 2022

  • BY: Andrew Hore |
  • POSTED: 04/09/2022 |

The Competition and Markets Authority (CMA) intends to seek a competition disqualification order against Alliance Pharma (APH) chief executive Peter Butterfield. Alliance Pharma is one of four pharma companies that the CMA says infringed competition law. Alliance Pharma is appealing the decision and a £7.9m fine. The appeal should be heard next year. The investigation related to prochlorperazine and infringement was between June 2013 and July 2018. Alliance Pharma out-licenced prochlorperazine to a distributor in 2013 at a fixed transfer price and says that it did not profit from any market sharing agreement. Last year, the drug generated revenues of £700,000.
Budget airline and tour operator Jet2 (JET2) says that trading is in line with expectations, which means that Jet2 should return to profit in the year to March 2022. Average load factors are 1.4 percentage points below the 2019 equivalent with package holiday customers a greater proportion of the business. Capacity has increased by 2%. The balance sheet is strong enough to cope with any trading disappointments and Jet2 should end up increasing market share.
Strong trading momentum continues at domain name and online marketing services provider CentralNic (CNIC) and existing forecasts could be upgraded again later in the year if growth continues at current levels. A further boost to earnings is expected from a refinancing of the company’s bonds. The main growth is coming from the online marketing division where revenues jumped from $96.4m to $257.8m. In the six months to June 2022, group revenues increased from $173.8m to $334.6m. Annualised organic growth was 62%. Excluding amortisation and share-based payments, pre-tax profit improved from $9.5m to $32.5m. Profit was boosted by the foreign exchange gain rising from $1m to $3.7m.
Volumes are getting back to pre-Covid levels at Johnson Service Group (JSG). Hotel and catering linen demand is more than 90% of past levels, while workwear did not suffer the declines of the rest of the business. Most of the company’s energy costs are fixed well into next year and cost increases are being passed on, although there could be pressure on margins with some delays in passing on extra costs. In the six months to June 2022, revenues jumped from £99.6m to £176.2m, while the company swung from a loss to a pre-tax profit of £11.2m. Dividends are being recommenced with an interim of 0.8p a share. There is also a £27.5m share buyback.
Aquaculture products supplier Benchmark (BMK) increased third quarter revenues by 28% to £36.3m with a particularly strong performance by the genetics division. Sales of salmon eggs were 39% higher and shrimp sales were 164% ahead from a lower base. Investment in additional capacity in Iceland and the US is beginning to pay off. Health revenues have quadrupled due to the growing CleanTreat revenues, but this is from a relatively low base. In the nine months to September 2022, underlying operating profit fell from £7.3m to £5.6m.
Oil and gas company i3Energy (I3E) produced an average of 19,502 barrels of oil equivalent / day, which is more than double last year but there have been delays in bringing additional wells into production. Net operating income guidance has been cut from $241m to $200m for 2022 and the capital budget is $97m. The newer wells should boost production in the current quarter and there will be news concerning initial production from the new wells. Even though, production is currently slightly lower than forecast WH Ireland is maintaining its full year forecast at 21,077 barrels of oil equivalent / day. The company expects to peak at more than 24,000 barrels of oil equivalent / day.
Alaska-focused oil and gas explorer Pantheon Resources (PANR) says a report by Baker Hughes AHS indicates that the Theta West #1 well penetrated a world class petroleum system with abundant good quality reservoirs. The previously indicated recoverable resource is 1.7 million barrels of oil, which is 10% of the estimate of oil in place. Flow testing will be the most important thing for determining whether the Pantheon Resources wells are commercial.
Trading in the shares of Revolution Beauty (REVB) has been suspended because the accounts for the year to February 2022 have not been published. The auditors have come up with problems concerning revenue recognition, bad debt provisions and stock provisions, which will have a material effect on the 2021-22 results.
JCB Research has reduced its stake in ITM Power (ITM) from 7.95% to 6.98%.

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