News blog

AIM 50 Digest 8 July 2022

BY: Andrew Hore |
POSTED: 10/07/2022 |

Veterinary practices operator CVS Group (CVSG) has unwound the purchase of Quality Pet Care due to competition authority objections concerning regional market share and sold it for £9m. The CMA has clarified that 30% market share and 15 minutes driving time between vets are the core criteria for competition decisions. That still leaves plenty of scope for expansion. Management decided it was better to sell the whole business instead of disposing of individual practices. The acquisition was agreed in August 2021 and CVS is making a loss of around £12m on the disposal. CVS has spent £3m of the cash raised on a two-site veterinary practice in North Lincolnshire.
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Woundcare supplier Advanced Medical Solutions (AMS) generated interim revenues of £58m, which is nearly 50% of the full year forecast of £120m. LiquiBand XL is on course for a third quarter launch in the US. There could be pressure on margins next year.
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Airline and tour operator Jet2 (JET2) more than trebled revenues in the year to March 2022, but the loss from continuing operations also increased from £369.9m to £388.8m. Seat capacity increased from 2 million to 7.1 million and average load factor edged up from 66% to 69.2%. The company’s own cash is £1.08bn. The prospects for this year depend on the aviation sector returning to a level of stability, as well as future bookings which have tended to be later than in the past.
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Investment manager Polar Capital (POLR) reported a decline in underlying pre-tax profit from £78.4m to £70.8m in the year to March 2022. Although earnings fell, the total dividend was raised from 40p a share to 46p a share. Assets under management were £22.1bn at the end of March 2022. This year’s forecast has been downgraded due to the uncertainty in the markets. The 2022-23 pre-tax profit estimate is 12% lower at £53.1m, with a larger reduction the following year.
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Impax Asset Management (IPX) reported a 9% decline in assets under management to £34.5bn. Peel Hunt expects this level to be maintained at the end of the financial year, compared with previous expectations of £38.9bn.
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A positive DFS for the Mogale gold tailings storage facility suggests it could add 50,000 ounces to Pan African Resources (PAF) production by 2025. This will require investment of $161m, which should be within the company’s resources given the level of cash generation. Mogale has an initial life of 13 years, and it could be extended to 21 years. Construction could begin by next March.
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Young and Co’s Brewery (YNGA) revenues were 39.7% higher in the first thirteen weeks of the financial year. Like-for-like growth was 34.9%. Nine pub and hotel acquisitions made last year will make a full contribution this year. Simon Dodd has become chief executive.
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Broker Numis Corporation (NUM) generated third quarter revenues of more than £40m, which represents an increase on the run-rate in the first two quarters. Merger activity is increasing. The Dublin off should open by the end of the summer.
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Ceres Power (CWR) has signed an agreement with Shell to provide a solid oxide electrolyser demonstrator in 2023. This will produce hydrogen for use in industrial processes.
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Analysts have been cutting their target prices for Fevertree Drinks (FEVR). Peel Hunt has cut its target price from 1900p a share to 1600p a share. There are concerns about consumer spending.
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Naked Wine (WINE) chairman Darryl Rawlings bought 74,500 shares at 193 cents each. MP Evans (MPE) non-exec Michael Sherwin bought 2,250 shares at 885.1p each.
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Jonathan Esfandi has increased his stake in Benchmark (BMK) from 18.54% to 20.03%.
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Revolution Beauty Group (REVB) has appointed Liberum as joint venture.
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Candy Davies has been appointed as finance director of RWS (RWS). Gamma Communications (GAMA) deputy chief executive Andrew Belshaw has become interim chief executive.
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CareTech Holdings (CTH) is recommending a 750p a share cash offer from a private equity backed management bid vehicle. This values the social care services provider at £870.3m. There is an alternative offer that enables shareholders the choice of taking non-voting shares in the bidder.
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The bid document for EMIS (EMIS) has been published. EMIS had net cash of £53.6m at the end of June 2022.
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Secure Income REIT (SIR) has left AIM and the FTSE AIM UK 50 index following its takeover by LXi REIT.

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