News blog

AIM 50 Digest 30 December 2022

BY: Andrew Hore |
POSTED: 30/12/2022 |

Serica Energy (SQZ) is using its cash pile to buy Tailwind Energy, and this will make it one of the top ten oil and gas producers in the UK North Sea. The deal values Tailwind Energy at £367m and comprises up to 111 million Serica Energy shares and £59m in cash. The value is based on a Serica Energy share price of 277.5p. Group production will increase to between 40,000 and 45,000 barrels of oil equivalent/day. The deal also adds tax losses of $1.4bn of UK ring fence corporation tax losses and $1.2bn of supplementary charge losses. Serica Energy should have cash of £320m in the bank at the end of 2022, prior to the acquisition going through. There is also £40m of hedging security.
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Savannah Energy (SAVE) has completed the reverse takeover of the Chad and Cameroon assets of ExxonMobil. In 2023, revenues are expected to be $980m and pre-tax profit $354m, although a lower profit is forecast for 2024. This level of profitability should reduce the net debt from $506m to $283m by the end of 2023. This deal was set to be followed by the purchase of additional stakes owned by Petronas in the assets in Chad and Cameroon, but that fell through. However, there is a potential $1.25bn transaction to acquire Petronas upstream assets in South Sudan. Management says that 2022 revenues will be more than $270m.
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North Sea oil and gas producer i3 Energy (I3E) reached peak production of more than 24,000 barrels of oil equivalent/day and this could rise to 26,000 barrels of oil equivalent/day. Maintenance will hold back production during 2023, but average production could reach 23,000 barrels of oil equivalent/day. The monthly dividend is being increased by one-fifth to 0.171p a share.
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Alaska-focused oil and gas explorer Pantheon Resources (PANR) continues to have problems with the Alkaid #2 well due to sand. A specialist rig is available in January to clean out the sand. There was a $48.6m cash outflow in the year to June 2022. There is $54.7m left in the bank at the end of June 2022 thanks to $55m raised from a convertible bond. The fall in the share price will increase the dilution of the bond if it is converted.
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CentralNic (CNIC) is acquiring a portfolio of revenue generating niche websites for $5.2m. The websites should generate annual EBITDA of $1.4m after their purchase, which means that the deal is earnings enhancing. These websites provide the marketing division with exclusive, specialist traffic to monetise. This appears to be the type of add-on acquisition that is part of the revised strategy. A £4m share buyback has been launched. Kestrel has increased its stake to 22.7%.
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Construction materials supplier SigmaRoc (SRC) says earnings in 2022 will be 10% ahead of previous expectations and 2023 forecasts have been raised. Industrial and infrastructure demand remains strong, but residential has weakened. Cost savings have been made. Use of tax losses has also helped earnings, which Peel Hunt forecasts as 7.4p a share for 2022, although they are expected to decline in 2023 because of a higher tax charge on flat underlying pre-tax profit.
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Translation services provider RWS Holdings (RWS) grew revenues by 8% to £749.2 million in the year to September 2022, and underlying pre-tax profit was 17% higher at £135.7 million. There were reduced volumes from some large technology clients, while RWS has stopped working with one client which became a competitor. Favourable foreign exchange movements helped to improve margins. Net cash was £71.9m at the end of September 2022.
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Learning Technologies Group (LTG) is closing one of the two non-core businesses acquired with GP Strategies. The UK apprenticeship business, which had a negative Ofsted report, will be closed in early 2023. The other asset is likely to be sold in 2023.
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DBAY Advisers has taken a 5.56% stake in Alliance Pharma (APH) and this includes a 2.38% shareholding held by AIM-quoted Logistics Development Group (LDG), which cost £5.92m at 46.11p a share. FMR cut its stake from 9.99% to 4.31%.
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Shares in Benchmark Holdings (BMK) commenced trading on Euronext Growth Oslo.
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Mortgage Advice Bureau (MAB1) has appointed Peel Hunt as joint broker.
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Impax Asset Management (IPX) chief executive Ian Simm sold 20,000 shares and finance director Charlie Ridge sold 9,437 shares at 693.5p each. Dotdigital (DOTD) finance director Alistair Gurney acquired an initial stake of 27,000 shares at 93.1p each. Ashtead Technology (AT.) non-exec Tony Durrant acquired an initial 10,000 shares at 317p each. Young and Co’s Brewery (YNGA) non-exec Aisling Meany bought 10 A shares at 1016.32p each.
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Liontrust Asset Management doubled its stake in Midwich Group (MIDW) from 5.1% to 10.1%.

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