Alumasc profits fall but foundations laid for strong second half

Jamie Gordon
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Alumasc profits fall but foundations laid for strong second half
Sustainable building and engineering product supplier Alumasc Group (LON:ALU) posted a slight downturn in its half-turn results, due to challenging market conditions. However, the company’s outlook appears more positive. Owing to operational changes and political tensions, the group had to content itself with ‘resilient’ results. The company’s revenue narrowed to £41.1 million for the six month period ended 31 December 2019, down from £44.3 million for the same period a year earlier. Similarly, the Group’s statutory profit before tax dropped from £3.4 million to £2.1 million, while underlying profit before tax remained flat at £2.3 million at the end of both half year periods.

Further, Alumasc net debt widened from £5.1 million as of 30 June 2019, to £6.6 million at the end of the calendar year.

However, the company were pleased to announce its underlying operating margin had improved to 6.1%, up from 5.4%, and its triennial pension deficit valuation at 31 March 2019 was ‘significantly lower’ at £22.4 million, versus £33.0 million in 2016.

Alumasc comments

Responding to the posting of the results, company Chief Executive Paul Hooper, stated:

“In light of the challenging market conditions in 2019, we acted swiftly to restructure and reposition the Group in the second half of our last financial year. This underpinned a resilient H1 profit performance.”

“The Group’s pension deficit and cash funding requirement are significantly reduced.”

“With an increased order book of £23.6 million, up over 10% on six months ago, strong contract pipelines and the Group’s usual seasonal trading bias towards the second half referenced in the Outlook Statement, the Board’s expectations for full year performance remain unchanged.”

“The Board remains confident in prospects for the medium and longer-term performance of the Group in view of our leading specialist market positions in water and energy management, addressing climate change and the growing sustainability agenda.”

Strong second half expected

Looking ahead, the company’s outlook statement read:

“Group order books in the six months to 31 December 2019 were up by £3.0 million to £23.6 million, with encouraging trends across the Group, except for Levolux where we are being deliberately selective and cautious with order intake in line with the turnaround plan. Contract pipelines are strong at both Alumasc Roofing and Gatic, with a £1m project recently secured by Alumasc Roofing expected to deliver a positive impact in the second half year.”

“We anticipate that Alumasc should benefit from its usual seasonal second half trading bias. This could be more marked in the current financial year as we expect Levolux to return to profit in the coming months as it trades out of underperforming contracts from a significantly lower overhead base.”

“More broadly, with around two-thirds of Group revenues relating to the management of the scarce resources of water and energy in the built environment, and circa 75% of the Group’s products sourced from recycled or recyclable materials, the Group should benefit from the growing sustainability agenda as well as from increasing business confidence and positive market indicators in the UK economy following the recent General Election and EU Withdrawal Agreement.”

Investor notes

Following the update, the company’es shares rallied 5.14% or 5.50p to 112.50p per share 04/02/20 17:07 GMT. Analysts from Peel Hunt echoed the positive Alumasc outlook, upgrading their stance from ‘Add’ to ‘Buy’. The Group’s p/e ratio stands at 8.63, their dividend yield is generous at 6.53%.

Numis equities trading performance “very strong” post General Election

Jamie Gordon
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Numis equities trading performance “very strong” post General Election
For the four month period ended 31 January 2020, institutional stockbroker and corporate advisor Numis Corp (LON:NUM) posted strong results, with performance ahead of the comparable period the year before. Revenue was in line with management expectations. Despite the pause in corporate activity caused by the General Election, Investment Banking revenues were materially ahead of the prior year based on a material increase in average deal fees. The company added that while transaction volumes for the year-to-date remain broadly in line with the previous year, they expected activity to pick up as the year progressed.

The real highlight came with the Group’s equities trading, which was ‘significantly ahead of the comparable period’. Strong market activity post General Election saw the company’s Institutional Income and trading book deliver consistently during the four month period.

Numis added that following its recent engagement with institutions, it thought its payments for Research and Sales for the full-year would be broadly in line with expectations.

Numis looks ahead

Discussing its strategy and outlook, the company’s statement read:

“We remain focused on executing our strategic objectives and establishing Numis as a diversified investment banking business. Private markets transactions have delivered a meaningful contribution to our Investment Banking revenues since the start of the financial year following the completion of a number of transactions for both UK and international companies. In addition our Equities business has now launched an electronic trading product which is targeted at capturing incremental revenue from new and existing clients, as well as enhancing our execution capabilities beyond UK Equities.”

“Our investment across the business over recent years alongside our strong corporate client base assists in ensuring Numis is well placed to capitalise on an improvement in market conditions and deliver revenue and profit growth.”

Investor notes

Following the update, the company’s shares dipped 1.38% or 4.00p to 285.00p per share 04/02/20 16:35 GMT. The Group’s p/e ratio stands at 32.84, their dividend yield is moderate at 4.15%.

SEC Newgate rallies 13% – results meet expectations following merger

Jamie Gordon
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SEC Newgate rallies 13% – results meet expectations following merger
Research, communications and advocacy group SEC Newgate SpA (LON:SECG) announced on Tuesday that it expected to post strong full-year results following its merger with Porta Communications in September 2019. It said results for the joint group were expected to be in line with management expectations. Forecast unaudited consolidated total turnover is EUR 47 million, alongside consolidated unadjusted Operating Profit of c. EUR 2.3 million and consolidated unadjusted PBT of c. EUR 1.6 million. The company added that its net debt at the year’s end was expected to be c. EUR 9.0 million, excluding the impact of IFRS 16 adjustments.

SEC Newgate comments

Fiorenzo Tagliabue, Group CEO, stated:

“The unaudited consolidated figures reflect the significant progress we have made since the merger in September 2019. Our three-year Strategic Plan is being implemented, an example of which was our replacement €3 million banking facility secured with Deutsche Bank S.p.A., on preferable terms with no security or covenants, reflecting the improved financial stability of the Group.”

“Our agile teams are now working together across the communications spectrum building and protecting brands, reputations and business. We are committed to creating positive change for our people, clients and shareholders and have had a strong start to the new financial year.”

Investor notes

Following Tuesday’s announcement, the SEC Newgate shares were up 13.70% or 5.00p, to 41.50p per share 04/02/20 11:50 GMT. The Group’s p/e ratio is 4.71, their market cap stands at £9.70 million.

Western Equities salved by WHO statement on Coronavirus

Jamie Gordon
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Western Equities salved by WHO statement on Coronavirus
Western equities were soothed by the WHO statement on Coronavirus on Tuesday afternoon, which stated that ‘we are not in a pandemic’. After worries of a potentially deadly virus spreading across the Eurasian land mass, the trends so far appear to suggest the illness lacks the potency of previous pandemics such as Ebola, and doesn’t emulate the contagious potential of well-known illnesses such as mumps and measles. At present, some 425 people have been killed by the virus, with over 20,000 infected. The World Health Organisation has attempted to deflate the hysteria surrounding the illness, instead opting to focus on offering advice and reassurance, alongside advice for reducing the risk of Cancer on World Cancer Day. Responding to the relative calm of health experts, Western market indices crept upwards, before being buoyed by the Dow Jones’s lively start. British Foreign Secretary, Dominic Raab, has encouraged British citizens to leave China if possible, and said the government were continuing their efforts to evacuate UK nationals from Hubei province, where possible. Speaking on the Coronavirus and the reaction of Western equities to today’s developments, Spreadex Financial Analyst Connor Campbell stated,

“With the Dow Jones joining in with the rebound, there was no reason for the European markets to slow down on Tuesday.”

“Sentiment was helped by the World Health Organisation stating that ‘currently we are not in a pandemic’. Add onto that another injection of $71.5 billion into the banking system by the People’s Bank of China, and the country’s continued attempts to halt the transmission of the coronavirus, and the Western indices were free to go on rebounding.”

“The Dow Jones was clearly feeling much healthier. In one massive leap it reclaimed more than 400 points, almost taking it back to the 29900-plus levels struck before its 2% plunge last Friday. This surge came despite Alphabet’s (NASDAQ:GOOGL) 4% decline, investors upset at the Google-parent’s slowing ad revenue growth in the fourth quarter.”

“The DAX and CAC rose 1.6% and 1.4% respectively, like the Dow recovering the brunt of last Friday’s losses. The FTSE, meanwhile, rose 1.2%, the buoyancy provided by its swelling commodity stocks countered somewhat by sterling’s own rebound.”

“The pound rose 0.2% against the dollar and 0.4% against the euro, investors tentatively buying the currency at its recent lows after it was dealt a blow by last week’s conflicting trade statements from Boris Johnson and Michel Barnier.”

Escape Hunt solves recreation market puzzle and books a strong full year

Jamie Gordon
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Escape Hunt solves recreation market puzzle and books a strong full year
Escape Hunt (LON:ESC) tapped into the strong demand for escape rooms among friends looking for an alternative to a normal night out, and work dos with a twist, posting good progress across its full-year fundamentals. Across its owner-operated sites, the group’s unaudited revenue bounced from £1.1 million to £3.8 million year-on-year for the full year.

Additionally, the company’s most mature sites delivered like-for-like sales growth of 34% during the final quarter of FY19. During December, like-for-like sales jumped 70% across all eight of the group’s owner-operated sites.

The company added that its EBITDA was ahead of management’s expectations, and its number of UK game rooms widened from 38 to 49 during the year.

Regarding its franchise estate, the company delivered revenue of £1.0 million, which was in line with 2018. Its EBITDA was in line with expectations and ‘good progress’ was made with its US franchise partner.

Escape Hunt comments

Company Chief Executive Richard Harpham commented:

“We are pleased with our progress in FY19. The performance of our owner-operated sites continues to give us confidence in the proposition and opportunity in the UK. The signing of the US franchise deal marked a significant step in accelerating the growth of our franchise business. Finally, we have made significant steps towards reducing the average unit build cost underpinning our confidence in the underlying returns profile for the business.”

“Our ambitious growth plans are centred on driving growth in our existing sites and expanding our footprint, which is underpinned by leveraging our market-leading brand. We remain excited by the significant opportunities ahead of us.”

Investor notes

Following the update, the company’s shares have dipped 5.97% or 0.93 p to 14.58p per share 04/02/20 15:04 GMT. The Group’s market cap stands at £4.11 million, Peel Hunt analysts downgraded their stance from ‘Buy’ to ‘Hold’ on the company’s stock. Escape Hunt performed well in 2019 with demand for escape rooms gaining momentum over time. The increasing diversity of activity-focused recreation and leisure opportunities, and the potential for the trend bubble to burst, both perhaps weigh on investors’ confidence in the company going forwards.

Arc Minerals confirm copper mineralization in Zambia

Ishen Patel
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Arc Minerals confirm copper mineralization in Zambia

Arc Minerals Ltd (LON:ARCM) have told the market about a new discovery at their Zambia copper operations.

The firm said that recent drilling at the Musweme prospect has confirmed the presence of copper mineralization. Interestingly, this brings the number of mineralized targets at Zamsort up to four, which was a pleasing take for shareholders.

As a result of the update, shares have jumped on Tuesday afternoon. Shares in Arc Minerals trade at 2p (+3.80%). 4/2/20 15:02BST.

The exploration company also said additional assays from its Cheyeza East prospect showed further near-surface intersections of copper mineralisation.

Nick von Schirnding, Executive Chairman of Arc stated:

“The identification of Muswema as another mineralised target is excellent news and confirms that our license areas are developing into a potentially significant source of copper. Additionally, the fifth hole at Muswema has intersected significant amounts of sulphide mineralisation at depth, assays for which are still pending, and importantly it’s the first time we have seen sulphides on this scale in our drilling to date on our licenses. This important development means Muswema becomes another key focus of our drilling strategy when we recommence shortly following the end of the rainy season.

It is also pleasing to report another set of strong results from Cheyeza East. The weathering profile now extends down to over 80m in places which means these near surface copper intersections would in effect not require any drilling or blasting to be excavated nor much crushing and grinding, which will have a significant positive impact on the overall economics for this prospect.”

Arc Minerals’ deal with Zaco Ltd

In July, the firm saw its shares rally after it acquired a 5% interest in Zaco Ltd.

“Following the discovery of the large West Lunga target (as per the announcement dated 4 July 2019), Arc Minerals has purchased a further 5% interest in Zaco from Rémy Welschinger, a Non-Executive Director of Arc, for a total consideration of 1,414,000 New Ordinary Shares of no par value in the share capital of the Company (“New Ordinary Shares”).”

The deal with Zaco reinforces the hungry nature of Arc to develop and grow, which will please shareholders. In the update, Arc highlighted the benefits of this interest and shareholders will note that the firm is constantly looking for opportunities to expand its’ horizons.

November success

A few months on, Arc added to their recent run of good news as they tapped into further high-grade copper assays.

ARC Minerals Ltd announced othat it had discovered additional near surface, high grade copper assays from its maiden diamond drill exploration programme at its Cheyeza East project in Zambia.

The Group also posted a series of highlight high grade copper assay segments, the most impressive of which was 3.67% Cu over 5m from 34m.

Certainly, Arc Minerals have had a good few months and shareholders should be excited for the development and growth that is to be seen across 2020.

Rockrose continue strong start to 2020 with Cotton gas field acquisition

Ishen Patel
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0
Rockrose continue strong start to 2020 with Cotton gas field acquisition
Rockrose Energy (LON:RRE) have said that they will complete a 100% acquisition of the Cotton gas field in the UK. The Cotton Gas field forms part of the UK sector of the Southern North Sea, and the deal terms are yet be disclosed. Rockrose have signed a sale and purchase agreement to acquire Speedwell Energy Ltd, which owns all of the Cotton gas field. The purchase comes at an impressive time for the firm, who have pledged to grow across 2020 and increase volumes of operations. The Cotton gas field lies 100 kilometers east of Scarborough between the Kilmar and Garrow Fields, where Rockrose hold a 15% interest in both sites. The field was initially discovered in 2009 by well 43/21b-5Z, which encountered a gas column of up to 1,260 feet over six gas bearing sandstone units. Rockrose have told the market and shareholders that a draft development plan has been prepared by Speedwell for submission to the UK Oil and Gas Authority. Once regulators have given the green light of approval, then Rockrose have the all clear to ensure that production and development can commence. Rockrose intend to commence further studies and observations on the field before taking a final investment decision, which has been affected by both volatile oil and gas prices tied in with an uncertain macroeconomic environment. Andrew Austin, Executive Chairman of RockRose, said: “This acquisition gives RockRose the option of a significant amount of production and reserves in an area of the Southern North Sea Gas Basin in which we already have other producing assets. We look forward to carrying out further evaluation of the discovery prior to committing to FID.” Richard T Strachan CEO of Speedwell Energy Limited added: “Having identified the potential in Cotton some three years ago, which was a relinquished asset going nowhere, to one now where we have a draft Field Development Plan and a delivery team in place capable of bringing Cotton through to First Gas, we are delighted that RockRose will now take over Cotton and are looking at how to potentially take it forward and we wish them all the best as they do so.”

Rockrose deliver on expectations

Rockrose gave shareholders a confident update a few weeks back for its 2020 operations and made it clear that they expect to meet 2019 guidance. The firm said that in 2019, a pro forma production was in line with guidance of roughly 19,200 barrels of oil equivalent per day. Excluding shutdowns and other variables, annual pro forma production was about 20,500 boepd, with about 21,000 boepd produced in December. Average production for 2020 is expected to be around 21,000 which shareholders will be thoroughly impressed with. This figure reflects a 9.4% rise year on year, and this accounts for planned shutdowns including the Forties pipeline system in mid-June for three weeks. The company has guided for a dividend of 25 pence per share, giving a total dividend of 85 pence across 2019. Expenditure in 2019 was $80 million, which was below previous guidance. Another impressive stat for shareholders to be excited about. For 2020, capital expenditure is guided at about $200 million – which the company said will lead to higher production. At the year end, total cash was $370.7 million, of which $54.9 million is restricted. Cashflows have been underpinned by enhanced production following completion of the Marathon acquisition and the Company remains debt-free. Rockrose have made an impressive start to the year with the new acquisition proposal whilst keeping shareholders sufficed with their expectations, and the firm will hope that this can translate into a good run of results. Shares in Rockrose trade at 1,875p (+3.02%). 4/2/20 14:53BST.

Genedrive shares dive 64% as losses double

Jamie Gordon
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0
Genedrive shares dive 64% as losses double
Genetic test developer Genedrive (LON:GDR) saw its shares go into free fall as its losses widen year-on-year. During the six months ended December 31 2019, the company’s losses stood at £2.57 million, widening from £1.38 million for the same period a year earlier. Further, its loss per share grew from 7.0p to 8.9p The company reported revenues and other income had narrowed from £.15 million to £0.6 million on-year, due to slow commercialisation of its HCV ID kit. It also stated that its focused R&D spend decreased from £2.5 million to £2.3 million, while its finance costs widened £0.4 million to £0.8 million. It added that its cash position dropped during the half year, from £5.2 million to £3.5 million.

Genedrive comments

CEO of the company, David Budd, commented: “The Genedrive® instrument has been proven to perform exceptionally well in the field as demonstrated in HCV study data and AIHL CE marking studies. The challenge for us remains exploiting its performance and driving revenues as we progress to our strategic goal of material revenues from our assays. We are very excited in the potential of AIHL, which has obtained CE marking in the period, and whilst we are cautious on meeting our short-term revenue expectations, we also remain confident in the long-term potential of the DoD and the HCV markets and are keenly focused on this important next stage of the Company’s evolution.”

Investor notes

Following the update, Genedrive shares have dropped 64.29% or 13.50p, to 7.50p per share 04/02/20 14:37 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on the company’s stock on Tuesday. The group’s market cap is £2.79 million, their dividend yield is unavailable.  

Power Metal Resources find ‘gold nuggets’ at Alamo

Ishen Patel
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0
Power Metal Resources find ‘gold nuggets’ at Alamo
Power Metal Resources PLC (LON:POW) have said on Tuesday afternoon that they have seen gold at their Alamo project located in Arizona. The firm particularly highlighted the presence of gold nuggets within the project area, however shareholders have not been so confident in the update. Shares in Power Metal have dived 10.69% to 0.31p across Tuesday trading. 4/2/20 14:24BST. Power Metal said: “This sampling demonstrated the presence of coarse, near-surface gold while the topographical surface morphology supports a likely proximal hard-rock source for the gold. The findings also provide some support to reports that some 60 ounces of gold nuggets have been recovered within the project area (the largest nugget reportedly weighing approximately 5 ounces).” Yesterday the firm said that one of its investee companies, in Katoro Gold PLC (LON:KAT) had transferred ZAR5 million to Blyvoor Gold Operations to commence a joint venture project. Paul Johnson Chief Executive Officer of Power Metal Resources plc commented: “We are pleased with the progress made regarding our assessment of the Alamo Project. The identification of a potential porphyry engine for the phenomena seen at surface is of particular interest. In addition, we are encouraged by the confirmation of near-surface gold nuggets, through a very limited metal detecting exercise and the potential for a proximal bedrock gold source within the Project area. We now need to ensure that the claims package is complete and covers the prospective ground with a sufficient buffer and will undertake some additional work to ratify our assumptions to date. We will discuss in greater detail the terms of a potential transaction upon conclusion of our due diligence. I look forward to providing our shareholders with further updates in due course.”

Power Metal December update

Power Metal Resources saw their shares spike in December, following an announcement which showed progress on their Alamo project. The Alamo project is a package of mining claims covering an area of approximately 340 acres and is situated in west-central Arizona, the company said. Power Metal will take over subject to due diligence, this includes nugget verification and geochemical sampling. The firm will pay Carrabba and Nye $25,000 – through the issue of 4.9 million shares – during the due diligence period, which may test shareholder patience. The period can be extended, which Power Metal will then be forced to issue a further 2.9 million shares, at the same price. The shares have been priced at 0.4p, which reflects a slight undervalue to the current trading price. It seems that Power Metals have agreed a deal which encourages the investment into the firm, and also raise funds to expand further operations. Power Metal can then earn the 60% stake in the project by spending $1.1 million on property payments and exploration costs. The company said it would expect to pay a “modest” $150,000 in the first year. Despite progress at the Alamo project, it seems that shareholders have not held much faith in the company as reflected in today’s stock price movement.

Mattioli Woods report strong half year as revenue rises 3.8%

Ishen Patel
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0
Mattioli Woods report strong half year as revenue rises 3.8%
Mattioli Woods (LON:MTW) have told shareholders on Tuesday that they have seen their interim earnings rise in the first half of its current financial year. The firm added that it is well positioned to carry on its growth strategy and make progress across the remainder of its financial year. Commenting on the results, Ian Mattioli MBE, Chief Executive Officer, said: “I am pleased to report revenue increased by 3.8% to £30.3m (1H19: £29.2m) for the six months ended 30 November 2019, with improved organic growth of 1.8% (1H19: 1.3%) primarily driven by increases in discretionary portfolio management, direct SSAS and SIPP and property management fees. This organic growth was supplemented by a full six-month contribution from the Broughtons and SSAS Solutions businesses acquired in the prior financial year, which are performing and integrating well. The wealth manger told the market that pretax profit had risen 7.1% in the half year period ending in November 2019, giving a total of £6 million from £5.6 million one year ago. Additionally, shareholders would have been further pleased as Mattioli Woods saw revenue growth of 3.8% from £29.2 million to £30.3 million across the six month period. Mattioli Woods said that the main source of its revenue was primarily fee based, however on an organic basis the firm noted that revenue did rise steadily by 1.8%. This was driven by increases in discretionary portfolio management, direct small self-administered schemes and self-invested personal pension and property management fees. “Adjusted EBITDA margin increased to 28.4% (1H19: 26.4%), with additional efficiencies and cost savings realised following the planned restructuring of our client facing operations and the migration of acquired pension portfolios onto our proprietary MWeb administration platform. In addition, the adoption of IFRS 16 decreased other administrative expenses by £0.4m, representing £0.4m of the increase in adjusted EBITDA and 1.3% of the increase in adjusted EBITDA margin.” added the CEO.

Mattioli remain confident

The firm has delivered some impressive results over the last few months, and the sentiment was made aware in the comments from the CEO as he continued: “We believe the benefits of operating a responsibly integrated business allows us to secure great client outcomes including controlling clients’ costs whilst delivering strong, sustainable shareholder returns over the long term. The Board remains committed to growing the dividend, while maintaining an appropriate level of dividend cover. Accordingly, the Board is pleased to recommend the payment of an increased interim dividend, up 15.3% to 7.3p per share (1H19: 6.33p). “In addition to the positive contribution from recent acquisitions, the Group generated an increased share of profit from Amati of £0.3m (1H19: £0.2m), whose total funds under management had increased to £510.2m (31 May 2019: £452.8m) at the period end. “In December 2019, we were pleased to follow the Broughtons and SSAS Solutions transactions with the acquisition of The Turris Partnership Limited, which provides chartered financial planning and wealth management advice and has over £65m of client assets under advice. “Clients need long-term advice and strategies more than ever before. More than a decade of low interest rates and evolving client preferences, including environmental, social and governance considerations, have created challenges for people seeking to generate income, while preserving and growing their capital. While we anticipate greater client activity and increasing inflows into our bespoke investment services following the UK General Election result in December 2019, there remains some uncertainty around the exact shape of Brexit. “We will continue to provide quality solutions, maintaining our focus on client service and continuing to adapt our business model to the changing market, integrating asset management and financial planning to build upon our established reputation for delivering sound advice and consistent investment performance, while looking to reduce clients’ costs. “We plan to build on the progress achieved in the first half of this financial year, advancing our strategic initiatives, such as the development of new products and services and our own IT solutions where possible. Our profit outlook for the year remains in line with management’s expectations and we believe the Group is well-positioned to grow, both organically and by acquisition, to continue delivering sustainable shareholder returns.” Shares in Mattioli Woods trade at 860p (+2.38%). 4/2/20 13:16BST.
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