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AIM 50 Digest 28 October 2022

  • BY: Andrew Hore |
  • POSTED: 30/10/2022 |

Third quarter trading figures from CentralNic (CNIC) sparked a further upgrade for the online marketing and internet domains supplier. Zeus has increased its 2022 pre-tax forecast from $57.8m to $68.7m, while net debt is expected to be lower than previous forecasts at $47.6m. There could be net cash by the end of 2023. So far this year, organic growth has been 66%, which is up from 62% at the half-way stage. The current forecast assumes that the rate of growth slows in the fourth quarter. Debt facilities of $250m have been secured to finance any suitable acquisitions that are found, and the interest rate will be lower than on the bonds currently in issue. Domain name services provider Intellectual Property Management Company Inc has been acquired for an enterprise value of $7.6m.
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Floorcoverings supplier Victoria (VCP) is acquiring US distributor International Wholesale Tile (IWT) for $28.5m (£24.9m). This will help Victoria to sell more of its Europe produced tiles in the US. There could be a further payment payable over the next four years, which is dependent on achieving growth and earnings targets. This will be capped. Florida-based IWT distributes ceramic, stone, glass and vinyl tiles and revenues have been growing at an annual rate of 11.6% over the past decade. In the year to March 2022, IWT generated sales of $63.2m and EBITDA of $7m. Most of IWT’s business is in Florida, which is growing at a faster rate than the US as a whole.
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Marketing services provider Next Fifteen Communications (NFC) won the company of the year award at the 2022 AIM Awards. Mortgage Advice Bureau (MAB1) won the AIM transaction of the year for the acquisition of The Fluent Money Group for £73 million. This acquisition will be materially earnings enhancing in the first full year. Alan Foy of Smart Metering Systems (SMS) was the entrepreneur of the year. He held the role of chief executive from 2007 before stepping down last March and he is no longer on the board.
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Aquaculture company Benchmark (BMK) says fourth quarter trading was strong and the momentum is continuing into the new financial year. EBITDA will be in the range of £30m-£31m thanks to better than expected trading in all three divisions. There was strong demand for salmon eggs, which helped the genetics division. Net debt was £47.5m at the end of September 2022.
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Content and IP services provider RWS Holdings (RWS) says results for the year to September 2022 will be in line with expectations. Revenues grew by 8%, although this includes an additional month from SDL. There were reduced volumes from some large technology clients, while RWS has stopped working with one client which became a competitor. Growth is also held back by a move to SaaS contracts. Favourable foreign exchange movements offset this weakness and margins are improving. Net cash was £71m at the end of September 2022.
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Identity services provider GB Group (GBG) has reported interim figures. A reduction in cryptocurrency activity held back the growth of the identity business. On a pro forma basis, excluding one-off revenues in the previous year, there was 10% growth in the period. Interim revenues will be £133.8m, up 22.5% including initial contributions from acquisitions. Net debt is £132.6m. Full year expectations are unchanged.
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Construction materials supplier SigmaRoc (SRC) like-for-like revenues are 19% ahead in the first nine months of the year and it is on course to nearly double pre-tax profit from £28.1m to £55m. The share price has been on the slide for more than one year, but it moved up 7% to 45.05p, which is less than eight times prospective 2022 earnings.
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Interim results from FD Technologies (FDP) led to a trimming of full year expectations. In the six months to August 2022, revenues improved from £128m to £147.4m and it returned to profit, helped by a foreign exchange gain. Peel Hunt still expects 2022-23 EBITDA to be £37.3m, up from £31m last year.
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Semiconductors manufacturer IQE (IQE) has signed a multi-year supply agreement with a global consumer electronics company based in Asia. This is for 3D sensing applications and the supply has commenced.
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Electrolyser technology developer ITM Power (ITM) has manufacturing problems so output and revenues will be at the lower end of previous guidance, which probably means revenues of little more than £23m. There will be a £3m increase in warranty provision. ITM Power shares have fallen by four-fifths this year.
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Peel Hunt has initiated coverage of Ceres Power Holdings (CWR) during October. Cash is forecast to fall to £73m at the end of 2026, and then cash starts to increase.
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Pantheon Resources (PANR) says that there are positive early indications of oil production from the Alkaid #2 well.
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Jet2 (JET2) has new bank facilities of up to £300m, which is £100m more than before. The £150m short-term facility has been repaid. Jet2 has agreed to purchase 35 Airbus A320 aircraft.
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Abcam (ABC) is holding a general meeting on 11 November to obtain shareholder approval to leave AIM on 14 December.

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