News blog
AIM 50 Digest 6 December 2024
- BY: Andrew Hore |
- POSTED: 09/12/2024 |
Electrical and power accessories supplier Volex (VLX) wants to acquire fully listed TT Electronics. In fact, it has made more than one offer. The first offer was 129p/share and the latest is 62.9p/share in cash and 0.233 of a Volex share, which was valued at 139.6p/share when it was announced, although the Volex share price has fallen since then. TT Electronics does not want to enter discussions, and management has rejected the approach saying it fundamentally undervalues the business. TT Electronics also revealed that it has rejected an indicative offer from another party.
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Engineering services provider Renew Holdings (RNWH) managed to beat the recent upgraded expectations for the year to September 2024. Growth has come from acquisitions, but organic growth was 17%, up from 10% the previous year. Full year revenues improved from £922m to £1.07bn, while underlying pre-tax profit increased from £62.7m to £69.9m. The total dividend was raised from 18p/share to 19p/share.
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Floorcoverings supplier Victoria (VCP) reported a 7.5% decline in interim revenues to £586.8m. Underlying EBITDA was 45% lower at £50.2m. Annualised cost savings of £32m have been secured or planned. A full year pre-tax loss is forecast.
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Hargreaves Services (HSP) expects a strong first half from its services division and its German associate. Work on HS2 is continuing and there is more work to come at Sellafield. The land division should be stable with the timing of deals important there. Some disposals are possible in the second half. There was net cash of £15.7m at the end of November 2024. There could be £150m of disposals over the next few years. NAV is 583p/share.
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Electrolyser technology developer ITM Power (ITM) has delivered £15.2m of revenues in the first half, which is well on the way to the full year forecast revenues of £20.6m pencilled-in by Zeus. Cost savings mean that the full year EBITDA loss guidance has been changed from £35m-£40m to £32m-£36m. This means that cash at the end of April 2025 should be between £170m and £180m. That compares with £230.3m at the end of April 2024. ITM Power is increasingly focused on adding industry partnerships and commercialising its technology. Management expects customer interest to accelerate over the coming year, but the timing of any contracts is uncertain.
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Automotive testing firm AB Dynamics (ABDP) improved full year revenues by 10% to £111.3m and it generated £27.9m from operations. Net cash is £28.6m. The total dividend was raised by one-fifth to 7.63p/share. Trading continues to be strong and profitability should be ahead of expectations.
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James Halstead (JHD) is doing well in the Middle East and the Americas, which is offsetting European weakness. The floorcoverings supplier is managing to maintain its margins in the initial weeks of the financial year. Full year pre-tax profit is expected to edge up from £56.2m to £57.4m.
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Impax Asset Management (IPX) reported a slight reduction in assets under management to £37.2bn at the end of September 2024. Full year revenues fell 5% to £170.1m. Underlying operating profit dipped from £58.1m to £52.7m and a sharper decline in profit is expected this year. Additional costs, including National Insurance, are a major factor in the increase in costs.
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Learning Technologies Group (LTG) is recommending a 100p/share cash bid from technology investor General Atlantic. That values the company at £802.4m. The plan is to accelerate the current strategy. E-learning services provider Epic Group reversed into AIM cash shell In-Deed Online eleven years ago. Epic was valued at £16.3m and the shares issued at the time were valued at 5.88p each. Since then the company has been built up through a combination of acquisitions and organic growth. A pre-tax profit of £78m is forecast for 2024. However, Learning Technologies has not delivered on its strategy set out in 2022 because of economic weakness and difficulty in financing acquisitions.
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Software developer FD Technologies (FDP) intends to return £120m to shareholders following the disposal of First Derivatives for £205m net. The £32m of debt will be repaid. The core business had first half revenues of £39.5m and annual recurring revenues are £74.6m. Net revenue retention is 110%.
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Information management and geospatial software provider IDOX (IDOX) grew strongly in the year to October 2024. Revenues and adjusted EBITDA will be in line with expectations. Revenues will be one-fifth higher at £87.6m, including recurring revenues of £54m. A dip in margins means that growth in EBITDA will be slower with an improvement from £24.5m to £26.1m. Net debt was £10m at the end of October 2024. Order intake was £89m. The purchase of geospatial software company Emapsite has helped to scale up the geospatial activities. Further acquisitions are likely in this sector. The full results will be published in late January.
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Semiconductor wafers supplier IQE (IQE) has completed the sale of its Pennsylvania site and received $2.5m with $3m more expected by the end of 2024. Production has moved to North Carolina. Former boss Drew Nelson has increased his stake from 3.39% to 4%.
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Serica Energy (SQZ) says that there has been another problem with the Trion FPSO in the North Sea, which has led to suspension of production. There is an issue with a compressor seal. Full repairs will not be completed until next year. Production for 2024 is forecast to be approximately 35,000-36,000 barrels of oil equivalent/day, down from the previous guidance of 37,000 barrels of oil equivalent/day. In the first nine months of the year, it was 37,800 barrels of oil equivalent/day, although the third quarter was much lower. The gas price is higher, though. Net cash was $27m at the end of September 2024. Serica Energy is assessing potential acquisitions and considering a move to the Main Market.
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Gamma Communications (GAMA) is also planning a move to the Main Market, and this could happen in the middle of 2025.
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RWS Holdings (RWS) has appointed Ben Faes as chief executive, and he will take the role in January. He has worked at AOL and YouTube.
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Ashtead Technology (AT.) chairman Bill Shannon has acquired 13,000 shares at 550p/share.
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