Why companies left AIM in November 2023

Andrew Hore
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Why companies left AIM in November 2023

There were nine companies leaving AIM in November. Four were taken over, three got into financial difficulties, one decided to cancel its quotation and one decided to go into liquidation and distribute investments and cash to shareholders. There were no new admissions during the month.

3 November

Global Invacom

Satellite communications equipment provider Global Invacom gained shareholder approval for the cancellation of the AIM quotation. The shares are still traded on the Main board of the Singapore Exchange Securities Trading Ltd. A lack of liquidity and access to capital, plus dup...

Growth: Keeping track of vessels on the seas

Andrew Hore
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Growth: Keeping track of vessels on the seas

This company already has most of its forecast revenues for 2024 in the bag with annualised recurring revenues nearly as high as the forecast. It remains loss making but has a substantial cash buffer that is more than enough to ensure that the business reaches profitability before it runs out. That could happen by the end of 2025.

The company has confirmed that the 2023 results will be comfortably in line with forecasts. Demand for the company’s services is growing on the back of increasing sanctions activity in global trade.

Maritime AI technology services provider Windward (LON: WNWD) ...

AIM new admission: Gas prospects in the UK Irish Sea Basin

Andrew Hore
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AIM new admission: Gas prospects in the UK Irish Sea Basin

Standard list shell Dial Square Investments moved to AIM at the same time as the reverse takeover of EnergyPathways and it subsequently changed its name to the latter. The original intention was to seek a sports management business, but instead it acquired a developer of UK gas assets.

The focus is near-term, low emission energy and it has an interest in a block in the UK Irish Sea Basin. This could help to provide energy security for the UK. The cash raised will fund initial field development before the drilling of wells.

The shares had been suspended at 3.25p and they ended the first ...

Growth: Bundling payments

Andrew Hore
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Growth: Bundling payments

This company may have finally reached the point where it will become highly profitable. It has been on AIM for two decades and has made a small profit in one year. Cash has been pouted into developing the technology and it appears it is just about to pay off.

There was a first half loss, but this could be turned into a profit for 2023. Then, next year the profit is forecast to soar. It is possible that the forecast proves too optimistic, but the trend should still be true. The high operational gearing of the company means that if the revenues are growing the profit will grow faster once br...

Aquis weekly movers: Western Selection returning cash

Andrew Hore
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Aquis weekly movers: Western Selection returning cash

Western Selection (LON: WESP) has sold its liquid investments and it has £14.55m in the bank. It has illiquid investments in Industrial and Commercial Holdings and City Group are in the books for £46,000. The investment company is returning 80.5p/share in cash to shareholders and withdrawing from the Aquis Stock Exchange. The other investments will eventually be sold. Shareholders will be given the option to retain shares until the other investments are sold. The share price jumped 47.1% to 62.5p.

TruSpine Technologies (LON: TSP) reported an interim cash outflow from operating activities of £80,000, down from £508,000 in the corresponding period. There was net debt of £277,000 at the end of September 2023. Discussions continue with Spartan Medical concerning a new redistribution contract. The share price is 13.6% higher at 1.25p.

Marula Mining (LON: MARU) has completed phase 1 exploration activities at Nyorinyori and NyoriGreen projects. An initial report will be received in January. This, combined with assay results, will help to plan phase 2 of the exploration in the first quarter of 2024. The share price improved 7.14% to 13.125p.

KR1 (LON: KR1) had net assets of 76.56p/share at the end of November 2023. The income from digital assets during the month was £939,000. The share price increased 1.66% to 92p.

FALLERS

Tap Global Group (LON: TAP) generated trading revenues of £1.68m, based on trading payment volumes of £181.6m, taking total revenues to £2.02m in the year to June 2023. Revenues for the most recent five-month period were £1m. The company is still losing money. There was £2.3m in the bank at the end of June 2023. Tap Global plans to launch its cryptocurrency app in the US in the first quarter of 2024. The share price fell 4.88% to 1.95p.

Income: Strong track record of payments

Andrew Hore
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Income: Strong track record of payments

Cyclical companies can also be steady dividend payers if boards grow the dividend in a sustainable way instead of in line with the movement in earnings, which can change rapidly because of operation gearing. This company currently has a dividend that is covered 2.3 times by forecast earnings. The shares are yielding nearly 5.7%.

In 20 years, this company has paid 76.2p/share in dividends, even before the latest payment. That is more than the current share price. The dividend payment was much higher back in 2008 and payments did stop in 2013 and 2014 when there was significant debt, but the...

AIM weekly movers: Cautious optimism at WH Ireland

Andrew Hore
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AIM weekly movers: Cautious optimism at WH Ireland

AIM broker WH Ireland (LON: WHI) is seeing signs of improvement with underlying monthly profitability achieved in November 2023 thanks to cost cutting and there was cash of £6.8m. Annualised cost savings of £3.8m have been made. The underlying interim loss doubled to £1.8m with revenues dropping from £14.3m to £10.7m.  The share price jumped 64.3% to 5.75p.

Horizonte Minerals (LON: HZM) has secured a $20m interim funding package provided by major shareholders Orion, Glencore and La Mancha. Interest payments are being deferred by existing senior lenders. Management is reviewing the long-term project funding requirements for the Arafuaia nickel project. Full funding is targeted for the middle of 2024. The share price recovered 40.1% to 11p.

Donald Hamilton has taken a 3.04% stake in MyHealthChecked (LON: MHC). The share price improved 35.9% to 13.25p.

Trading in Enwell Energy (LON: ENW) has been restored following publication of interims to June 2023. The oil and gas producer had to replace its auditor. Interim revenues slumped from $77.2m to $33.1m and pre-tax profit fell from £42.8m to £17.4m. Following a 15p/share dividend, there was cash of $33.8m at the end of June 2023. The share price rose 28.5% to 16.9p.

FALLERS

Shares in fabless semiconductor developer Sondrel (LON: SND) were hit by a trading warning that flagged delays in development and payments and a subsequent shortage of cash. Sondrel expected a £1.7m payment from an automotive component manufacturer, but this will not be received until next year. Additional resources will be required to complete the project. Directors and staff have agreed to defer salaries because Sondrel cannot afford to pay them. More capital will be required by the end of March or earlier if the delayed payments are not made as early as expected. The share price partially recovered at the end of the week, but it was still down 40.1% to 4.85p because of the fundraising concerns.

Africa-focused agricultural company Agriterra (LON: AGTA) reported a decline in interim revenues from $4.96m to $3.58m and the loss increased from $1.35m to $1.6m. There was a cash outflow of more than $2.6m. Net debt was $12.7m at the end of September 2023. There is not enough grain in storage for the second half, so additional imports are required. The share price slumped 37.5% to 0.75p.

Tern (LON: TERN) investee company Device Authority has secured $7.3m in funding, with $4m already. The rest requires regulatory approvals. There will also be $2.1m loan notes converted into shares at the issue price. Tern had a 53.8% shareholding in the identity management technology developer and will convert $1m of loan notes. Device Authority will repay the $175,000 loan from Tern, which will have a diluted stake of 29.5% after the full fundraising. That is valued at £5.9m.  The Tern share price dipped 20.6% to 3.375p.

Autonomous drilling rig developer Tribe Technology (LON: TRYB) has not completed the latest drill rig due to technical issues and it will be delayed until the first quarter of 2024. It should be shipped to the customer by the summer. This means that revenues may be delayed until the next financial year. A field trial of the sample potting and handling system has been postponed. The 5 September placing price was 10p and the share price has declined 14.3% to 8.25p. There is £3.34m in cash left.

Income: Ready for a bounce back

Andrew Hore
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Income: Ready for a bounce back

It has been tough for consumer businesses with people cautious about their spending on items that are not essential. Companies with a strong portfolio of brands and a balance sheet that can cope with short-term downturns will rebound in the medium-term.

This company should maintain its dividend this year, providing a yield of 5.3%, although the dividend is only just covered by earnings. A bounce back in profit in 2024 would enable an increased dividend to be covered more than twice by forecast earnings. Reducing the inventories that have been built up should enable a reduction in net debt....

AIM movers: Sondrel recovers and Panthera Resources cash outflow

Andrew Hore
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AIM movers: Sondrel recovers and Panthera Resources cash outflow

Shares in fabless semiconductor developer Sondrel (LON: SND) have bounced back 36.7% to 5.125p after yesterday’s trading warning that flagged delays in development and payments. That still leaves the share price 36.7% lower. Sondrel expected a £1.7m payment from an automotive component manufacturer, but this will not be received until next year. Additional resources will be required to complete the project. Directors and staff have agreed to defer salaries because Sondrel cannot afford to pay them. More capital will be required by the end of March or earlier if the delayed payments are not made as early as expected.   

Trading in Enwell Energy (LON: ENW) has been restored following publication of interims to June 2023. The oil and gas producer had to replace its auditor. Interim revenues slumped from $77.2m to $33.1m and pre-tax profit fell from £42.8m to £17.4m. Following a 15p/share dividend, there was cash of $33.8m at the end of June 2023. The share price rose 35.7% to 16.9p.

Harland & Wolff (LON: HARL) is advancing negotiation concerning a proposed £200m guaranteed loan facility with UK Export Finance. In January, an independent party will assess an appropriate interest charge. The bank syndicate is being firmed up. There is enough cash until the facility is secured. The share price recovered 21.7% to 14p.

Duke Royalty (LON: DUKE) increased quarterly cash revenues from £6.2m in the second quarter to £6.3m in the third quarter, compared with £5.6m one year earlier. The latest follow-on investment is C$8.6m in Creo-Tech, taking the total invested to C$27.1m (£16m). Next year Duke Royalty will announce a rebranding and repositioning of the business. The share price is 2.31% higher at 33.25p. The yield is nearly 9%.

FALLERS

Minerals explorer Panthera Resources (LON: PAT) reported interims showing a £1.18m cash outflow from operations and investing activities. There was £217,000 in cash at the end of September 2023 and a further £935,000 was raised in December. This cash should last for up to six months. Panthera Resources continues to pursue the Indian government for compensation for the expropriation of gold project assets in the country. The share price dropped 7.41% to 6.25p.

e-Drive systems developer Saietta Group (LON: SED) published interims showing a loss of £7.9m on revenues of £1.4m. Orders have been received that will lead to much higher revenues. Net cash was £500,000 at the end of September 2023. In November, £7.14m was raised at 17p/share. The share price declined 4.17% to 17.25p.

A person associated with Naked Wines (LON: WINE) executive chairman Rowan Gormley acquired 14,392 shares at 58.9736p each. The share price fell 2.63% to 55.5p.

Galileo Resources (LON: GLR) shares have slipped 2.27% to 1.075p, following yesterday’s interim figures. The minerals explorer had nearly £89,000 in the bank at the end of September 2023 after a £1.35m cash outflow during the period.

Harland & Wolff Group Holdings – Waiting on SONIA for £200m 

Mark Watson-Mitchell
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Harland & Wolff Group Holdings – Waiting on SONIA for £200m 

‘Better the devil you know’? 

Just what has SONIA got to do with this multisite fabrication company? 

Investors can’t believe that a 53-year old Eurovision Song Contestant from Liverpool has anything to do with Harland & Wolff. 

Surely, she has no importance in just how the offshore and maritime engineering services group will fare in 2024. 

Skeptical investors would be right in their doubts. 

SONIA will, however, bear strategic importance next year 

This morning Harland & Wolff Group Holdings (LON:HARL) has announced that it has sought and obtained permission to advance negotiations for its proposed £200m guaranteed loan facility with UKEF. 

Under the arrangement UK Export Finance, through its Export Development Guarantee Scheme, will provide 100% guarantees to UK commercial lending banks. 

For HARL this would be a very important conduit towards future fulfilment of its growing Order Book contracts. 

So what is SONIA? 

Some £30 trillion of assets each year are classed under a SONIA rate. 

It follows on from the previously frequently used comparison rate known as the LIBOR. 

It is the interest rate benchmark set by the Bank of England – the Sterling Overnight Index Average. 

Based on actual transactions the rate reflects the average of interest rates that banks pay to borrow sterling overnight from financial institutions and investors. 

Why is this important to HARL? 

With the Ministerial permissions in place Harland & Wolff can start its £200m facility process. 

The UKEF will need to appoint an independent third party to ascertain the appropriate premium rate over SONIA that will be the basis for the £200m facility covering the group’s future business. 

So what does 2024 hold for HARL? 

Already this morning the group’s shares have responded well to this news, rising 13% to 13p. 

The group’s brokers have a 45p ‘sum of the parts’ valuation out on its shares. 

They estimate that the company’s losses will fall to £45.5m (£70.3m loss) for the 2023 year, then almost halving again in 2024 to a negative £23.5m. 

In 2022 the group’s revenues were just £28.0m, this year they are expected to have almost quadrupled to £100.om, while £200.0m of business is expected in 2024. 

It really does look as though Harland & Wolff is getting its act together – will its shares react similarly in 2024? 

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