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AIM 50 Digest 23 February 2024

  • BY: Andrew Hore |
  • POSTED: 25/02/2024 |

Airline and tour operator Jet2 (JET2) edged up its pre-tax profit guidance for the year to March 2024 to £510m-£5125m. There was seat growth of one-fifth in the winter period and higher margins achieved. There should be further growth in seats booked in the summer. Cost pressures could hold back profit next year.
Self-storage sites operator Lok’nStore (LOK) increased first half revenues by 4.9%, helped by higher prices. The balance sheet remains strong. Loan-to-value was 3.7% at the end of July 2023 and it not expected to peak at much more than 13.3% after the investment in new capacity. Part of the debt has been fixed at a lower interest charge and the outlook remains positive for the growing market. Forecast net assets are 1021.4p/share, rising to 1091.9p/share. If interest rates are reduced there could be a further boost to NAV.
Technology-based IP services provider RWS (RWS) has closed its share repurchase programme having spent £49.7m buying back 5.33% of the share capital at 239.2263p/share. All the shares will be cancelled. The outlook for the business remains the same as before with flat pre-tax profit of £120m the consensus forecast, but a small increase in earnings because of the share buy backs. RGM Capital has reduced its stake to below 3%.
Pan African Resources (PAF) produced 98,458 ounces of gold in the six months to December 2023. All-in sustaining costs were slightly lower at $1,287/ounce, but the full year figure is likely to be higher. Interim pre-tax profit increased 47% to $42.4m. Net debt rose from $53.7m to $64.3m. The Mogale tailings retreatment project should be up and running by the end of 2024 with annual production of 50,000 ounces at a lower cost than current projects.
HSBC argues that profit warnings from other electrical and power products suppliers should not be seen as bad for Volex (VLX). Destocking in medical and industrial markets has hit other companies as lead times get back to normal, but Volex has a broader spread of activities. The consumer and electric vehicles have already gone through the destocking phase and data centre demand remains strong. Medical business is mainly based on contract manufacturing, and this is backed by client orders. HSBC maintains its 2023-24 pre-tax profit forecast at $74m, rising to $90m next year. The movement in the US dollar against the pound has hit the share price and the target price has been cut by 4% to 480p, leaving plenty of upside from 289p.
Panmure Gordon initiated research on soft drinks maker Nichols (NICL) with a buy recommendation and a target price of 1260p.

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