News blog

AIM 50 Digest 27 May 2022

  • BY: Andrew Hore |
  • POSTED: 29/05/2022 |

Marketing services firm Next Fifteen Communications (NFC) is making a recommended bid for advertising agency M&C Saatchi (SAA).  Rival bidder AdvancedAdvT (ADVT) says that it will not increase its offer, although it does not believe that the Next Fifteen bid reflects the underlying value of Saatchi, and it is considering its options. AdvancedAdvT and chief executive Vin Murria together own 22.3%. Next Fifteen is offering 0.1637 of one of its shares and 40p in cash for each Saatchi share. At a Next Fifteen share price of 1266p, the bid was valued at 247.2p a share. The Next Fifteen share price has subsequently fallen to 1092p. That means that the Next Fifteen bid is worth slightly less than the AdvancedAdvT offer.
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Fevertree Drinks (FEVR) is maintaining its guidance of revenues between £355m to £365m and an EBITDA range of £63m-£66m. On-trade sales of mixer drinks are recovering in the UK and growing elsewhere, as are Off-trade sales. US production is being scaled up. Non-exec Jeff Popkin bought 5,045 shares via the US OTC quotation at $19.76 each.
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Tracking technology company Big Technologies (BIG) was one of the most successful new admissions last year, but the share price has been drifting back towards the 200p a share placing price. The AGM statement helped the share price move back to 289p. In the four months to April 2022, revenues were 18% higher at £13.9m and monthly recurring revenues are £3.9m. That means that Big Technologies is already on course to reach full year revenues and further growth would spark an upgrade. Net cash is £52.6m.
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Oil and gas producer Serica Energy (SQZ) will be hit by the energy profits levy. Net cash was previously expected to reach £523m by the end of 2022, but the new tax means that this has been downgraded to £437m. A continuation of the tax next year leads to a decline in net cash from £911m to £670m at the end of 2023. That cash level is similar to the current market capitalisation.
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Aquaculture company Benchmark (BMK) is on course to further improve profitability this year and the improvement could accelerate next year. There are plans for an Oslo listing. Interim revenues were one-third higher at £79.2m, while the reported loss was reduced. EBITDA more than doubled from £7.1m to £16.8m. Chief executive Trond Wilkinson bought 50,000 shares at 50.2p each and non-exec Yngve Myhre bought 76,401 shares at 44.5p a share.
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Domain name and online marketing services provider CentralNic (CNIC) continues to enjoy strong growth in its online marketing division. Quarterly revenues were 86% ahead at $156.6m and annualised organic growth was 53%. Pre-tax profit was $7.2m, or $15m excluding amortisation and share based payments. Net debt fell 18% to $61.3m during the quarter and it could fall to $46.3m by the end of the year. If trading continues to be strong, then there could be forecast upgrades later in the year.
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Mortgage Advice Bureau (MAB1) had a strong first quarter despite the weakening of the home sales market and more advisers are being recruited. Mortgage completions were 11% higher at £5.8bn. Refinancing activity has been strong. There are 2,046 advisers. The acquisition of Fluent, a telephone advice broker for second and first charge mortgages plus bridging finance, should be completed in the second half.
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Peel Hunt upgraded its 2022 earnings forecast for Gamma Communications (GAMA) by 6% to 71p a share following the AGM of the telecoms and networking services provider. Inflationary pressures are being managed and average revenues per user could rise thanks to the launch of contact centre services.
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Victorian Plumbing (VIC) reported a dip in interim revenues from £140.7m to £133.9m, while underlying pre-tax profit slumped from £18.6m to £4.8m. Gross margin fell from 44% to 39% as the focus was on increasing market share rather than pushing through price rises to cover higher costs. Trade revenues grew by 18%. Net cash was £33.7m at the end of March 2022. There should be year-on-year growth in the second half, but margins will continue to come under pressure.
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Interim figures from engineering services and construction company Renew Holdings (RNWH) were slightly ahead of forecast thanks to stronger rail infrastructure demand. Pre-tax profit was 21% ahead at £21.8m. That is before a £1.1m provision for a former business. The interim dividend is 17% higher at 5.67p a share. The pension deficit problem is being sorted out for a one-off payment of £1.5m. The business is set to achieve 2021-22 pre-tax profit expectations of £53.2m.
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Young and Co’s Brewery (YNGA) returned to profit in the year to the end of March 2022. Revenues jumped from £88m to £309m, while adjusted pre-tax profit was £41.8m. This was achieved even though there were still trading restrictions for part of the period. total dividend is 18.81p a share, which is covered three times by earnings. The sale of 56 tenanted pubs raised £53m and net debt fell to £173.8m. Trading is recovering. In the first 13 weeks of the new financial year, revenues were well above pre-pandemic levels. In the most recent five weeks revenues were 38.5% higher than in the same period of 2021.
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The Indonesian palm oil export ban effective from 28 April has been lifted after less than four weeks and MP Evans (MPE) expects a return to normal sales.
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In the first four months of the year, Smart Metering Systems (SMS) has grown its index linked annualised recurring revenues by 6% to £91.4m, following the application of the annual inflation adjustment on 1 April. Smart meter installations are accelerating. The first grid-scale battery storage asset commenced operation in January. There was cash of £63.3m at the end of April 2022.
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Residential rental and student accommodation properties developer Watkin Jones (WJG) is on course to meet full year expectations, even though interim profit was lower. There was an additional cladding provision of £28m that will be spread over multiple years. The interim dividend was increased by 11.5% to 2.9p a share. A sale of developments means that Watkin Jones is well on the way to achieving a full year pre-tax profit should be £55m, rising to £75m next year.
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Advanced Medical Solutions (AMS) has received FDA approval for LiquiBand XL, which can close longer wounds than the existing versions. It combines surgical mesh and glue. The product will be launched in the US in the third quarter. This adds $60m to the addressable market.
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Warehouse REIT (WHR) has confirmed its intention to apply for a premium listing. 
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Baring PE Asia Fund decided not to make an offer for RWS (RWS).
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Just over 37% of the votes on the Abcam (ABC) AGM resolutions for approval of the annual report on remuneration and the remuneration policy. There were 33.7% of votes against the remuneration report of Keywords Studios (KWS).
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Electrical and power accessories supplier Volex (VLX) executive chairman Nat Rothschild bought 5,000 shares at 244.8p each and 30,000 shares at 259.9p each. Nichols (NICL) manager sold 2,527 shares at 1445p each. Central Asia Metals (CAML) non-exec Dr Mike Armitage bought 16,156 shares at 247.58p each.

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