AIM movers: Morses Club, K3 Capital, James Cropper, Midatech Pharma

Digital and home credit provider Morses Club (LON: MCL) says that there is an increase in complaints about its home collected credit division that have been submitted by claims management companies. This could hit the first half trading performance. The share price fell 21.7% to 8.14p and it is less than 5% of its peak in 2019.

The figures for the year to February 2022 have yet to be released and they should be published on 18 August. These results were hit by increasing complaints and were originally expected to be published in May. This led to Paul Smith stepping down as chief executive. The 2021-22 profit forecast was downgraded from £7.5m to £5.6m after the original warning in February. It appears that the current consensus 2022-23 profit forecast of £15.9m. could be sharply downgraded.

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Last year was better than expected for business disposals and tax adviser K3 Capital (LON: K3C) and revenues and EBITDA recovered sharply. In the year to May 2022, revenues improved from £47.2m to £67.5m, with 18% organic growth. EBITDA is expected to increase from £15.7m to £19.5m, compared with analyst expectations of £18.3m. Net cash was £12m at the end of May 2022.

The business sales division had a record year and the tax division more than doubled revenues, helped by acquisitions. The restructuring division also grew and there is growing demand for these services as government support comes to an end. The K3 Capital share price has risen 10.6% to 260p.

Paper and specialist fibres maker James Cropper (LON: CRPR) reported a full year, underlying pre-tax profit of £4m. In March, expectations were downgraded from £4.9m to £3.5m because of high gas prices. The paper making business is cyclical and it made an increased loss. The TFP Hydrogen division, which makes products for fuel cells, accounts for around 30% of revenues and its operating profit before group overheads increased from £6.48m to £8.68m.

Group revenues are higher than pre-pandemic levels and James Cropper has reinstated the dividend this year with a 7.5p a share final dividend taking the total to 10p a share. Net debt is £8.6m. The share price recovered 70p to 1035p, but it is still down by one-fifth this year. Midatech Pharma (LON: MTPH) has gained orphan medicinal product designation from the European Medicines Agency for the development programme for MTX110, a potential treatment of specific types of brain tumour. The orphan product designation is designed to encourage the development of treatments for diseases with a smaller number of sufferers. MTX110 is a technology that enables chemotherapy doses to be delivered directly to the site of the tumour. Midatech Pharma shares rose 5.7% to 9.25p.

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