News blog

AIM 50 Digest 23 July 2021

  • BY: Andrew Hore |
  • POSTED: 26/07/2021 |

Third period trading at ASOS (ASC) is in line with expectations. UK sales were 60% ahead against weak comparatives. Overall sales were 26% higher, but gross margins declined. Freight cost rises and delays are a challenge. There is ma small pre-tax profit downgrade to £196.2m for the year to August 2021. That is down to an increased interest cost due to the £500m bond.
ASOS has announced a joint venture between its Topshop business and US retailer Nordstrom for the North American market. There will also be ASOS brands in the Nordstrom stores, as well as a click and collect service. This will help to improve US customer awareness and recruit more customers.
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International growth and recovery in the UK Out of Home market helped soft drinks manufacturer Nichols (NICL) to grow interim revenues by 14% to £67.4m, with pre-tax profit nearly one-third higher at £8.9m. Net cash is £47.4m and the interim dividend is 9.8p a share.
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Tencent Holdings has launched a recommended 513p a share cash bid for video games development services provider Sumo Group (SUMO) valuing it at £919m. Sumo was valued at £145m, when it floated at 100p a share at the end of 2017.
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In the year to April 2021, Knights Group Holdings (KGH) increased revenues by 39% to £103.2m, including 10% organic growth. The regional lawyer improved underlying pre-tax profit by 35% to £18.4m. Net debt was £21.1m. Management believes that organic growth should accelerate. There is no dividend, but there should be one for the current financial year.
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International revenues grew strongly in the first half at Fevertree Drinks (FEVR) with the UK lagging behind with 4% growth. Importers have been growing stocks ahead of the summer. Overall interim revenues were 36% higher at £141.8m. Gross margins were 44%. Full year revenues guidance is raised to £295m-£304m with gross margins slightly lower than in the first half.
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Trading at Young & Co’s Brewery (YNGA) is ahead of expectations and 95% of the same period in 2019. Young has sold 56 tenancies for £53m. This leaves it with seven tenanted pubs. The focus is managed pubs.
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Learning Technologies Group (LTG) is acquiring GP Strategies for £284m. This adds to the learning and consulting activities and enhances the customer base in the pharma and aerospace sectors. Geographically it strengthens the group in Asia and North America. Mult-year contracts are a significant contributor to revenues. A placing raised £85m at 192p a share. Learning Technologies expects interim revenues to be 29% ahead at £82.5m.
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MP Evans (MPE) increased crude palm oil production by 29% to 161,400 tonnes in the first half of 2021. The average price increased from $541/tonne to $724/tonne. The production and price of palm kernels also increased. The total dividend for the year is expected to be 30p a share.
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In the year to June 2021, Pan African Resources (PAF) increased gold production by 12% to 201,608 ounces, which was better than forecast. Net debt fell by 45% to $33.8m. Pan African expects to achieve gold production of 195,000 ounces this year. 
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Clinigen (CLIN) has signed an exclusive agreement to manage the supply and distribution of seizures treatment Kigabeq in unlicenced markets. Clinigen expects net revenues for the year to June 2021 to reach £455m. However, demand for some products remains weak Net debt will be no more than £317m.
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Audio visual products distributor Midwich Group (MIDW) expects full year pre-tax profit to be above the top of the current analyst range of £23.2m. Interim revenues were £390m with organic growth of 25%. Margins also improved. The interims will be announced on 7 September.
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Alliance Pharma (APH) revenues increased by 24% to £80.9m in the first half of 2021. The increase was 9% if recently acquired menopause supplement Amberen is excluded. Anti-dandruff shampoo Nizoral revenues fell 8%. Prescription medicines sales rose by 12%. Net debt was reduced by £2.7m to £106.7m at the end of June 2021. The interims are announced on 21 September.
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Numis (NUM) expects to achieve a record full year performance even though deal volumes are expected to decline in the fourth quarter. Third quarter revenues were more than £50m, which was better than the same quarter last year.
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Gamma Communications (GAMA) is growing in line with expectations. Cancellations are at low levels and bad debts are negligible. After acquisition spending, net cash was £25.4m at the end of June 2021.
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Like-for-like sales at CVS Group (CVSG) increased by 17.4% and underlying profit will be slightly better than forecast. Debt has been reduced to a point where acquisitions can be sought. The full year results should be published on 23 September.
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IQE (IQE) expects interim revenues to reach £79m, which is similar to the previous year. Demand for semiconductors for 5G products is offsetting lower infrastructure spending. Full year revenues are expected to dip from £178m to £175m. That is dependent on recovery in infrastructure demand.
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DotDigital (DOTD) prompted a forecast upgrade with its latest trading statement. The additional email marketing business due to Covid-19 appears to be continuing. Purely organic growth led to full year revenues rising by 23% to £58.1m. The fastest growth was in Asia Pacific and additional functions have also helped to increase spending. Forecast earnings have been increased from 3.6p a share to 3.9p a share.
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The recovery of linen hire group Johnson Service Group (JSG) is gaining momentum and is on course to return to profit this year. Hotel and catering demand in June was back to more than 70% of previous levels. Workwear demand is nearly back to normal levels. A pre-tax profit of £6.8m is expected in 2021, rising to £46m in 2022.
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EMIS (EMIS) says that underlying profit is ahead of last year and overall trading is slightly better than expected. The healthcare IT services business mix is back to normal with a higher proportion of non-hardware revenues. Net cash is £48m. The interims are published on 9 September.
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Secure Income REIT (SIR) has increased its quarterly dividend by 8.2% to 3.95p a share – ex-dividend on 29 July. The remaining rent concessions expire during the next six months.
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Non-executive director Brian Ashford-Russell sold 50,000 Polar Capital (POLR) shares at 916.641p each and 25,000 shares at 900p each. Naked Wines (WINE) non-executive director Darryl Rawlings bought an initial 15,868 shares at $11.028 each.

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