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AIM 50 Digest 5 February 2021

  • BY: Andrew Hore |
  • POSTED: 08/02/2021 |

ASOS (ASC) has acquire the Topshop, Topman, Miss Selfridge and HIIT brands, but not the associated stores. The total cost is £265m. The Topshop brand in particularly could help ASOS make further inroads into international markets. More than one-third of the Topshop sales are in the US and Germany. The brands had generated annual revenues of more than £1bn and possibly more than £150m are online. There are also partnership revenues, including with Nordstrom in the US. Not all these revenues will necessarily continue to be generated under new ownership. ASOS expects to invest £30m in additional working capital. There will also be a £20m restructuring charge. The deal should be earnings enhancing in its first full year (2021-22). Sandrine Jackson, the wife of non-exec Luke Jensen, bought 1,995 shares at 5002p each.
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Keywords Sudios (KWS) achieved 12% organic revenue growth in 2020. Overall revenues grew from Euro326.5m to Euro373m. Earnings per share jumped from 48.8 cents a share to 61.2 cents a share.
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Silence Therapeutics (SLN) raised $45m (£33m) via placing at the equivalent of $7.50 a share. The cash will be used to support the development of the treatment pipeline based on the messenger RNAi GOLD platform. The first clinical data from the platform will be published in the first half. There is also data due for two treatments.
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Residential and student accommodation developer Watkin Jones (WJG) generated around one-quarter of revenues from build-to-rent last year. Build-to-rent is set to be a growth area for many years. In the year to September 2020, revenues dipped from £374.8m to £354.1m, while pre-tax profit fell from £50.4m to £45.8m, excluding £14.8m provision to replace cladding on previous developments. A final dividend of 7.35p a share is being paid, conforming to the two-times cover policy, down from a total dividend of 8.35p a share.  Net cash was £94.8m at the end of September 2020, excluding lease liabilities.
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Video games services provider Sumo Group (SUMO) has acquired Poland-based PixelAnt Games, which was founded in July 2020 and has 13 developers, for an initial £250,000. Sumo says that adjusted 2020 EBITDA will be at least £16m. The annual figures will be published on 31 March.
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Video games developer Frontier Developments (FDEV) increased its interim revenues from £32m to £36.9m. Earnings per share jumped from 9.4p to 15p. Net cash was £34.9m at the end of November 2020.
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IQE (IQE) says that 2020 revenues were ahead of its expectations during November. They were £178m and this was enough to put the semiconductor wafer manufacturer back into profit. There was strong demand for smartphones.
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Fevertree Drinks (FEVR) reported a 22% decline in UK revenues during 2020, but most of the decline was offset by international growth. Total revenues fell 3% to £252.1m. There was a decline in sales to pubs with increasing demand from other outlets. The market remains uncertain.
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Second half revenues gradually improved at healthcare IT provider EMIS (EMIS) and full year revenues were flat. Pre-tax profit could improve to £43.3m.
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Audio visual products distributor Midwich Group (MIDW) expects 2020 pre-tax profit of £14m. Trading continues to be impacted by lockdowns.
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Regional legal firm consolidator Knights (LON: KGH) has been trading better since the original Covid-19 lockdown. In the six months to October 2020, revenues were 45% ahead at £46.2m, although £19.1m of the increase was from acquisitions. That means that like-for-like revenues were lower, but the fact that there were limited revenues in the early weeks of the period held back the six-month result. Underlying pre-tax profit improved from £5.3m to £6m, but earnings per share were flat at 5.93p. Net debt was £14.4m at the end of October 2020, but there is a credit facility of £40m so there is plenty of cash to help finance further acquisitions. Chief executive David Beech and chairman Bal Johal have sold 15.7 million and 300,000 shares respectively at 390p a share.
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Mortgage Advice Bureau (MAB1) revenues are estimated to have increased by 3% to £148m. There was a significant recovery in the second half and full year pre-tax profit will be well ahead of expectations. This year has started strongly.
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Pan African Resources (PAF) increased gold production by 6% to 98,386 ounces in the six months to December 2020. Net debt was almost halved to $65.2m. Management expects full year production to be 190,000 ounces.
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Floorcoverings supplier James Halstead (JHD) says it is trading at normal levels, but there are upward pressures on costs. Interim profit should be flat. The interims will be published on 31 March.
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ITM Power (ITM) increased interim income from £3.8m to £4.4m, although most of the income was in the form of grants. There is currently £187m in cash.
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Alliance Pharma (APH) says overall 2020 revenues fell by 5% to £137.5m. Underlying pre-tax profit should be marginally higher than expectations. Consumer healthcare brands increased sales by 1%, while prescription medicine sales fell 14%.
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Serica Energy (SQZ) averaged production of 23,800 boe/day during 2020 at an operating cost of $14/boe. Due to the mix of gas and oil the average sale price was $20/boe. The gas price has subsequently strengthened.
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Healthcare and industrial products supplier Scapa (SCPA) has agreed a 210p a share cash bid from Schweitzer-Maudit International Inc, which values the company at £402.9m.
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Learning Technologies Group (LTG) says that 2020 revenues will be at least £131m with one-off revenues declining and recurring revenues increasing to 80% of the total. Operating profit could slip from £41m to £40m.
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Like-for-like sales growth at CVS Group (CVSG) was 7.8% and profit margins improved in the first half.
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Digital marketing services provider DotDigital (DOTD) says there was 22% organic increase in interim revenues thanks to higher customer spending.
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Marketing services provider Next Fifteen Communications (LSE: NFC) says that fourth quarter trading was better than expected. Full year revenues should be 9% ahead in the year to January 2021 and that includes modest organic growth. Technology focused business has been strong. Net cash is £10m and a final dividend is expected.
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Warehouse REIT (WHR) raised £45.9m at 121p a share, which is a 2% premium to NAV. Two more warehouses have been acquired for £13.9m.
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Secure Income REIT (SIR) is paying a quarterly dividend of 3.65p a share.
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Downing has reduced its stake in Volex (VLX) to below 3%.

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