News blog
AIM Digest 8 November 2024
- BY: Andrew Hore |
- POSTED: 11/11/2024 |
Soft drinks maker Nichols (NICL) has set a mid-term pre-tax profit target of £45m, compared with the 2024 forecast of £29.9m. The international business has significant scope for growth, particularly in Africa. The time period involved covers 2025-2030. Target revenues are £225m, so margins will have to improve to 20% to meet the profit target. That could mean earnings of 92.5p/share. Nichols is a highly cash generative business and the cash pile - £52.7m estimated for the end of 2024 - means that there is scope for further special dividends. Singer believes that there could be £170m of cash that can be distributed to shareholders over the next five years.
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Groceries and catering distributor Kitwave Group (KITW) is on course to achieve expectations in 2023-24. Pre-tax profit should improve from £27.5m to £28.5m and next year will benefit from the integration of sites in the South West and the integration of recent acquisitions. Net debt has risen to around £62m because of acquisitions, but this can be reduced via cash generation. Kitwave expects to mitigate higher NI costs. The expected £2m annual increase in costs will not come in until the end of the first half.
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Vertu Motors (VTU) has acquired Burrows Motor Company and it should be earnings enhancing in the first full year. It adds five Toyota, two Mazda and one Kia dealership and generated operating profit of £1.4m last year. The cost will be around £12.5m once the financials are finalised. .
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Hargreaves Services (HSP) confirmed a strong start to the financial year at the AGM. More than two-thirds of expected services revenues have been secured, while HRMS continues to recover. There could be further disposals of land assets with the first tranche of renewable energy assets set to go on the market.
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Digital marketing technology and services provider Dotdigital (DOTD) has successfully improved the performance of the North American part of the business and all regions are growing strongly. In the year to June 2024, revenues were £79m with organic growth of 9%. There was an initial contribution from Fresh Relevance, which is being integrated and launched outside of Europe. Pre-tax profit rose from £15.4m to £16.8m.
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Pan African Resources (PAF) has acquired the 92% of Tennant Consolidated Mining that it does not own for $54.2m in shares. Tennant has the Nobles gold project, which requires $35.7m of development capital. First gold is expected by July 2025. Production could reach 500,000 ounces/year at a cost of $1,300/ounce. Pan African Resources has also commissioned the Mogale tailings operation, which was delivered under budget.
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Brooks Macdonald (BRK) has acquired chartered financial planning firm CST Wealth Management, which has assets under advice of £170m plus 500 clients.
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Building materials supplier SigmaRoc (SRC) released nine-month figures showing revenues 67% higher at £729m and full year revenues should be more than £1bn. That reflects the contribution of the former CRH businesses. On a pro forma basis, volumes fell 3% and revenues were 4% lower. EBITDA increased 88% to £165m, while margins improved 22.6%. Panmure Liberum still forecasts underlying earnings to rise from 7.6p/share to 7.9p/share before the full benefits of the acquisitions accelerate the figure to 9.4p/share.
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Market research services provider YouGov (YOU) traded slightly ahead of the recently downgraded expectations for the year to July 2024 and it is maintaining guidance for 2024-25. In 2024-25, underlying pre-tax profit fell from £57.2m to £45m. This was due to higher staff and technology costs. Organic revenue growth was 3%, but there were variations in different regions. Annualised cost savings of £20m are planned.
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Translation and IP services provider RWS (RWS) says it returned to growth in the second half making up for the first half decline. The 2023-24 pre-tax profit will be around £112m. Net debt was £14m at the end of September 2024. The full year results will be published on 12 December. There should be modest organic growth in revenues this year. Departing chief executive Ian El-Mokadem bought 5,000 shares at 149.4p each, taking his stake to 200,000 shares.
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ITM Power (ITM) has won its first contract for a NEPTUNE V unit to Guttroff Gmbh, which provides services for medical gases, welding supplies and engineering companies. NEPTUNE V is a 5MW containerised electrolyser plant. ITM Power’s proton exchange membrane electrolyser has reached a technical milestone, and it reduces iridium loading by a further 40%. This takes the reduction to more than 80%. Directors have been buying shares.
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IQE (IQE) chief executive Americo Lemos is leaving the semiconductor wafer manufacturer after three years in the role and Mark Cubitt becomes executive chair. Finance director Jutta Meier will become interim chief executive. The focus will be on cash generation and the proposed flotation of the business in Taiwan next year.
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Serica Energy (SQZ) says production via the Triton FPSO has been interrupted due to problems with a single gas compressor. The problem is being identified and repaired.
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Victorian Plumbing (VIC) has appointed Canaccord Genuity as joint broker.
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