Aquis weekly movers: ProBiotix Health sets general meeting for 1 November
Invinity Energy Systems (LON: IES) is extending the expiry date of the 8.67 million options, exercisable at 175p/share, held by Gamesa Electric to 10 May 2025. Employee share options will be extended until 21 November 2029. The share price increased 8.11% to 10p.
EPE Special Opportunities (LON: E.OP) has appointed Heather MacCallum as a non-exec director. The share price improved 1.94% to 158p.
FALLERS
Marula Mining (LON: MARU) is finalising negotiations to establish a new joint venture with a Chinese battery manufacturer and lithium offtake partner at the Blesburg lithium and tantalum mine. This would be for a lithium acid leaching processing plant, which could be commissioned by next summer. This will use spodumene from the mine and could produce 2,000 tonnes of high-grade lithium product each year. A subscription of £750,000, which comes through the issue of 15 million shares at 5p each via the AUO Commercial Brokerage LLC subscription agreement, will be used to fund the installation of an ore sorter at Blesburg and the costs of other projects. Gathoni Muchai Investments, where Marula Mining board member Jason Brewer is a director, bought 430,000 shares at 5.96p each. The share price declined 25.5% to 5.125p.
ProBiotix Health (LON: PBX) has sent out a circular for the requisitioned general meeting on 1 November. The meeting has been requisitioned by Seneca Partners and related investors that hold 5.46% in total. Seneca Partners is also an investor in AIM-quoted OptiBiotix Health (LON: OPTI), which is also unhappy with the current management, but a relationship agreement means that it could not requisition a general meeting. OptiBiotix Health and related individuals own 37.95% and will vote in favour of the resolutions. ProBiotix Health wants to block these shares from being voted. The first resolution is to remove the chief executive Steen Andersen and the second is to remove non-exec Frederik Bruhn-Petersen, whose firm recently subscribed for shares, a funding that OptiBiotix Health was unhappy about. Seneca Partners and OptiBiotix Health are also unhappy that the chief executive wanted to leave the Aquis Stock Exchange. The share price is 23.1% lower at 5p.
Oscillate (LON: MUSH) has gained shareholder approval for the acquisition of Quantum Hydrogen and the associated placing, which has diluted the main shareholders. The share price dipped 7.14% to 1.3p.
At the end of the three months to September 2024, Arbuthnot Banking (LON: ARBB) customer deposit balances were £3.8bn and customer loans £2.5bn. Funds under management and administration have grown 18% to more than £2bn in the nine months to September 2024. Arbuthnot Banking has completed its move to new offices in the City of London. Management is assessing the proposed new capital rules and deciding if strategy changes will be required. The Budget could also affect strategy. The share price slid 0.27% to 925p.
AIM weekly movers: CloudCoCo selling managed IT operations
CloudCoCo (LON: CLCO) is selling its managed IT services business for £9.2m. This will discharge liabilities, including the MXC loan notes, and leave cash of £950,000. If the sale does not go-ahead management will need to consider if there is a future for the group. There are also discussions concerning the sale of the Connect business. The focus will be on the product reseller business. The share price soared 160%, having more than trebled at one point, ending the week at 0.325p.
MicroSalt (LON: SALT) had a sharp share price boost on Thursday afternoon and this initially continued on Friday, but the low-sodium salt developer said that there has been no change in trading and operations. That rise meant that the share price moved up to 57.5p, but it ended the week 46.5% ahead at 52p.
Mothercare (LON: MTC) shares returned from suspension 40.4% higher at 5p, the highest level since July, following the 2023-24 results publication and refinancing. There is a new £8m two-year loan facility from Gordon Brothers, which receives 43.4 million warrants exercisable at 8.5p/share. There is also a joint venture with Reliance Brands, which will acquire 51% of the businesses operating in the Indian sub-continent for £16m. In the year to March 2024, underlying pre-tax profit dipped from £3.4m to £3.1m. Overall revenues continue to decline, and Cavendish expects a small loss this year.
An acquisition vehicle set up by Joshua Alliance is offering 40p/share in cash for each share in N Brown Group (LON: BWNG) – the share price has not been this high since February 2023. The Alliance family and related parties already own 53.4% of N Brown. This bid values the fashion brands company at £191m. The chief executive and finance director of N Brown will elect for a share alternative. Frasers Group (FRAS) owns 20.3% of N Brown and is accepting the bid. The share price rose 39.6% to 39.1p.
FALLERS
Emmerson (LON: EML) says that the regional authority in Morocco have made an unfavourable environmental recommendation relating to the Khemisset potash project. The full decision is not yet available. Emmerson had previously appealed against the regional authority’s decision not to approve the project under environmental grounds. The share price slumped 72.1% to 0.725p.
Armadale Capital (LON: ACP) proposes a cancellation of the AIM quotation because it believes that being public does not benefit the company because of the costs. Armadale Capital needs to reduce the cash burn and sell non-core assets. The resources company can be more flexible as a private company. A general meeting will be held on 1 November. The share price has fallen by 70% to 0.06p.
It is taking time to build up sales of the EpiSwitch EPE prostate test in the US and Oxford BioDynamics (LON: OBD) is reducing costs so that its cash lasts longer. Management is taking part of their salary in shares. Other diagnostic tests could be licenced or sold to raise money. Spinning off the US business is another option. There will be an update in January. The share price declined 69.5% to 1.115p.
Graphene technology developer Versarien (LON: VRS) is raising £450,000 at 0.0325p/share, which will fund in-house concrete and mortar testing capabilities and other external testing. Versarien has signed 3D construction printed products. There are commercial opportunities worth £1.6m and related grants of £3.1m. The share price dived 45.3% to 0.0328p.
Kooth contract terminated by Pennsylvania
Digital mental health services provider Kooth (LON: KOO) says the State of Pennsylvania has terminated its contract with the AIM company. The share price of the winner of the Diversity Champion award at the 2024 AIM awards slumped 15.5% to 240p.
The contract started on 11 October 2022 and the end date was extended from June 2024 to June 2025. However, there is a right to terminate with a 30-day notice period. Kooth says that it was negotiating a new contract, and it is unsure what the status of ongoing work will be.
When it was announced, the contract was said to be worth $3m in its pilot year. The services were provided to 30 school districts in Pennsylvania that have 150,000 students. In the interims, it was stated that 88% of students received the support they needed and that an initial tranche of new funding had been rewarded. Management did say that “complexities of negotiating bipartisan agreements in the state have been a key learning”.
Following the launch of a significant contract in California, the US accounted for 70% of revenues in the first half of 2024. Management said at the time of the trading statement that there was a pipeline of new business in the US.
Kooth says expectations for 2024 and 2025 are unchanged. Consensus 2024 pre-tax profit is £5.85m, with £5.8m in 2025.
Earlier this month, Root Capital Fund II sold just over 3.75 million shares in Kooth at 280p each. That is 10.3% of the company and it retains a 25.3% shareholding. Kooth joined AIM in 2020 at 200p/share and Root Capital Fund II sold five million shares at that time.
AIM movers: Boohoo considering options and Mothercare returns from suspension
Mothercare (LON: MTC) shares returned from suspension up 29.2% to 4.6p following the 2023-24 results publication and refinancing. There is a new £8m two-year loan facility from Gordon Brothers, which receives 43.4 million warrants exercisable at 8.5p/share. There is also a joint venture with Reliance Brands, which will acquire 51% for £16m, covering the Indian sub-continent. In the year to March 2024, underlying pre-tax profit dipped from £3.4m to £3.1m. Overall revenues continue to decline, and Cavendish expects a small loss this year.
Autoantibody profiling company Oncimmune (LON: ONC) is raising a minimum of £2m from a placing and subscription at 15p/share, which was a premium to the market price. There will also be the capitalisation of £4m of debt. A retail offer of up to £300,000 has been launched and commitments are required by 31 October. The cash will be used to help build sales. The share price increased 10.4% to 15.35p.
Bushveld Minerals (LON: BMN) has gained regulatory approval to sell thermal coal licences holder Lemur for $100. This will release liabilities of $2.5m.The share price recovered 10% to 0.45p.
MicroSalt (LON: SALT) says that there has been no change in trading and operations despite the recent rise in the share price. That rise continued with an improvement to above 56p, but it has fallen back and is 0.96% ahead at 52.5p.
FALLERS
Approval for further development of the Wressle field in Lincolnshire has been revoked, because of a legal challenge that greenhouse gas emissions were not taken into account in the original decision. Union Jack Oil (LON: UJO) has a 40% interest in the Wressle development and the share price fell 8.51% to 10.75p.Europa Oil & Gas (LON: EOG) owns 30% and the share price dipped 2.56% to 0.95p. A revised application for Wressle can be made with additional data on emissions. The existing production continues.
Online fashion retailer Boohoo (LON: BOO) has signed a £222m debt refinancing and is considering options to maximise shareholder value. A demerger of one or more divisions is possible. This could possibly be the Debenhams or Karen Millen businesses. John Lyttle is stepping down as chief executive. Group net revenues fell 15% to £620m and one-third lower EBITDA of £21m. Profitability should improve in the second half. The share price is 7.78% to 29.4p.
A new Gambling Regulatory Authority of Ireland has been established to cover gambling, betting and lotteries. Mobile messaging and payments services provider Fonix (LON: FNX) says it is not clear if the new legislation creating the regulatory authority covers no-purchase necessary draws. This means it is not expected to change expectations. The share price had a spike up in the past few days and profit-taking has led to a 4.08% dip in the share price to 235p.
Endoscopy instruments developer Creo Medical (LON: CREO) raised £89,000 from the retail offer at 24p. The retail offer was for up to £5m. A placing has already raised £12m and, along with the disposal of 51% of Creo Europe, this should be enough for Creo Medical to reach profitability. The share price fell 2.88% to 20.25p.
FTSE 100 dips despite strength in China-focused stocks
The FTSE 100 consolidated gains on Friday with a marginal step back as strong UK retail sales failed to support the index despite a good showing from commodities companies.
The top of the leaderboard was dominated by miners and other China-focused stocks. Prudential was the top gainer closely followed by Anglo American, Glencore, and Antofagasta.
“It’s been a rocky ride for investors exposed to China but patience is being rewarded,” said Russ Mould, investment director at AJ Bell.
“Having this year gone from being widely unloved to delivering big gains over a short period thanks to the promise of major economic stimulus measures, China’s stock market has moved up and down faster than a newly oiled seesaw in recent days. One minute everyone is excited about Beijing’s ‘do whatever it takes’ mentality to improve the economy, the next minute shares are down amid scepticism about when we’ll see the benefits emerge.
“The needle has now moved back to bullish territory despite the latest figures showing economic growth has slowed again. What’s boosted shares is China’s central bank talking about a plan to encourage non-bank financial institutions to invest in the stock market.”
However, strength in the miners and optimism around China was not enough to lift London’s leading index with UK-focused shares slipped and took the index with it.
Housebuilders were weaker as where supermarkets after a jump in UK retail sales was not enjoyed by the grocers.
“Volumes grew by 0.3% in September, compared to expectations of a 0.3% decline. But the good news was far from evenly spread. Mobile phones and computers performed best, perhaps reflecting the emergence of AI-enabled hardware from multiple manufacturers,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“Supermarket sales volumes were less encouraging, falling 2.4%, impacted by the miserable weather and a pull-back in demand for premium products.”
British American Tobacco was the top faller after announcing an update to litigation in Canada.
Mothercare shares surge higher as trading resumes
Mothercare shares jumped on Friday after the retailer began trading on AIM after a temporary suspension.
Mothercare shares were suspended after delaying the publication of their audited results pending the finalisation of financing for their Middle East operations.
With the funding announced yesterday, Mothercare released results this morning revealing EBITDA of £6.9m – better than analysts expectations. Revenue was down sharply but investors preferred to focus on earnings and the renewed optimism around the troubled Middle East unit.
The combination of certainty around funding and upbeat earnings culminated in a Mothercare share price rising over 30% in early trade on Friday.
“Today’s agreements with Reliance and Gordon Brothers strengthen our operations in South Asia and support a material reduction in our bank facilities and leverage,” Clive Whiley, Chairman of Mothercare, said yesterday following the funding announcement.
“We have worked closely with Gordon Brothers for over five years now and value its ongoing support for Mothercare. The revised facility agreement and related arrangements reflect the strength of that ongoing relationship and trust alongside recognising the accretive nature of the joint-venture to our equity valuation. For Mothercare, the reduction in the required facility size, funded by the formation of the joint venture, and the resulting significantly reduced cash interest cost, greatly improves our flexibility for FY25 and beyond.
“Taking today’s developments together with the inherent strength of the business’s brand, we believe Mothercare can approach 2025 and beyond with a renewed and growing sense of confidence at the opportunities ahead, notwithstanding our ongoing cautious shorter term outlook, given the continuing challenges facing our Middle East operations.”
Botswana Diamonds – At The Current Price These Shares Are Cheaper Than Option Money, While Broker Has A Price Direction 14 Times The Price
Geophysical data collected by Botswana Diamonds (LON:BOD) covers some 375,000 kms, as well as the logs of some 32,000 drill holes – so it is a fair bet that diamonds will be found in due course.
As BOD Chairman John Teeling states:
“Our mineral database in Botswana is simply vast. Too big for timely analysis by humans.
Think of it, over 375,000 kms of geophysical data, and 32,000 drill holes logs.
Massive databases are suited to analysis by computer-based large Data Models and Artificial Intelligence techniques which can analyse substantial amounts of data in a short time.
We feed in the data and create the models from our existing knowledge both theoretical and factual.
The techniques then produce results.
Where it finds inconsistencies or gaps it adapts. It is early stages in both our work and the use of the technique in mineral exploration, but the future potential is huge.
An added exciting bonus for BOD and for Botswana is that the technique will analyse a number of different minerals.
We have always believed that there are more diamond deposits to be found under the sand.
Now there is the possibility of other deposits being identified.”
Massive Database
In fact, the company’s database consists of:
· around 95,000 sq km of data.
· about 375,000 km airborne geophysical data.
· 606 ground geophysical surveys.
· some 228,000 soil sample results.
· and more than 32,000 drill hole logs.
The company holds around 380 gigabytes of data and some 260,000 files – essential fodder of information for enterprising diamond explorers like BOD.
Now Using AI
The company, which raised £250,000 of extra funds in early August, is looking to identify further exploration prospects in Botswana and also in South Africa.
It is now using Artificial Intelligence techniques to scan through its database, which is believed to be the second largest diamond exploration database in Botswana, as it seeks to identify new diamond deposits and potentially other minerals.
The company will utilise Planetary AI Ltd Xplore mineral prospectivity technology which was developed in collaboration with International Geoscience Services Limited.
It enables computers to comprehend, interpret, and reason with data in a manner similar to human understanding, enhancing the effectiveness of information retrieval, integration, and analysis.
This allows computers to understand the meaning and context of geological data in much the same way a geologist would, in order to identify zones of prospective mineralisation based on specific mineral deposit models.
The system acts much like a geologist but can function quicker and more efficiently, with vast data-sets processed through AI that finds logical gaps in the data and learns to correct them.
This exercise is expected to yield fresh insights that will offer drillable targets previously unseen.
Adding To Its Prospects
In the meantime, the group is steadily amassing more licences in some highly prospective areas – like the four Prospecting Licenses in the Kalahari in late May this year.
At that time Teeling stated that:
“I am pleased that we have been awarded these Prospecting Licenses in the Kalahari of Botswana, which we believe will be the next major diamond producing area in the country.
Exploration is a long game, particularly diamond exploration, and we believe the industry is going through a structural change which will see the natural product, particularly from Botswana find its premium niche in world markets.”
Yesterday the group announced that it had obtained a prospecting permit in the Marsfontein region of South Africa, covering five kimberlites known to contain diamonds, over 900.67 hectares.
Teeling commented that:
“Obtaining this permit is very good news – five kimberlites around the mined out and hugely successful Marsfontein mine.
We are particularly interested in the M3 kimberlite which has never been mined.
Our work indicates it is very prospective and we believe it enhances our adjacent Thorny River properties – easy to mine with good potential grades and quality.
The diamond industry overall is currently in a depressed state with a cyclical downturn in demand and a structural change down to the growth of lab grown diamonds.
We believe demand will recover for mined diamonds and lab grown diamonds will take a certain percentage of the cheaper end of the jewellery market.
M3 is almost ready to mine and we will confirm what is there and be ready to mine when prices recover.”
Analyst’s View
Jason Robertson, at First Equity, put out a Buy note on the group’s shares with a Price Objective range of 4.2p to 6.0p.
That aim is several multiples of last night’s closing price of just 0.28p per share, up 5% after a day showing more than tripled daily average volume, at some 4.6m shares traded, valuing the company at just £3.4m.
Robertson considered that it is a very wise move by BOD to position itself for a future market upturn by acquiring new highly prospective diamond ground, which would likely be difficult or expensive to obtain when diamond prices are at cyclical highs.
In My View
The shares of Botswana Diamonds could prove to be an excellent gamble on any success derived from the group’s AI programme.
At the current price it is certainly cheaper than ‘option money’ on what could happen in due course – but strictly for ‘risk-tolerant’ investors.
Pound jumps as UK retail sales rise more than expected
The pound rose against the dollar and the euro on Friday after September’s UK retail sales came in much better than expected.
UK retail sales were expected to fall by 0.3% in September. However, the resilience of the UK consumer has made the economists that make these predictions look a little silly with the actual figure jumping 0.3% month on month.
The upbeat insight into the UK economy helped lift the pound against the dollar and the euro. Indeed, the pound was trading at the highest levels against the euro since 2022 shortly after the data was released.
The reading was at odds with other recent economic data points that have suggested mild weakness in the UK economy. However, retail sales is a major leading indicator of the UK economy so traders were more than happy to buy into the pound and UK-centric stocks in early trade on Friday with the outlook for the UK looking that much better.
“There is little sign in these figures of consumers cutting back ahead of the Autumn Budget. Strong sales of computers, which are traditionally seen as a more discretionary purchase, suggest the UK consumer is in relatively fine fettle. And although food sales were rather weak, weather appears likely to have played a part,” said Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club.
“With UK inflation now below the Bank’s 2% target, paving the way for further interest rate cuts, there is a feeling of cautious optimism in the air. Add it all up and it suggests retailers can look forward to the festive period with a degree of confidence.”
FTSE 100 boosted by strong corporate updates with interest rate optimism rising
The FTSE 100 gained ground on Thursday as solid developments from Rentokil and Entain added to general optimism around UK interest rates.
London’s leading index was 0.5% higher at the time of writing.
“There was enough enthusiasm towards shares in industrials, energy producers and financials to stop the FTSE 100 from going into reverse amid the latest disappointment from China and a slump in profit from packaging group Mondi,” said Russ Mould, investment director at AJ Bell.
A good start to the session for the FTSE 100 was made even better by the European Central Bank’s decision to cut rates by a further 0.25% to 3.5%.
After UK inflation fell to 1.7% yesterday, the ECB’s move to cut rates lends further weight to the view the Bank of England will cut rates in November and possibly again in December. Equity bulls will be over the moon with sustained rate cuts by the world’s major central banks.
Entain
Entain shares jumped 5% after revealing encouraging gaming net revenue figures in their joint venture with MGM and said they saw the UK and Ireland returning to growth sooner than first thought. The new CEO also made an impression with comments on speeding up the improvements to operations.
“Ladbrokes owner Entain’s new CEO Gavin Isaacs is certainly going out on the front foot after just over a month in the job. After the hints dropped in September’s strategy update, it’s no huge surprise to get an upgrade, albeit a small one, in today’s review of the third quarter,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“That’s been helped by underlying online Net Gaming Revenue improving by 9% which included a sooner-than-expected return to growth in the UK & Ireland.”
Rentokil Initial was the FTSE 100’s top gainer as investors cheered the first bit of good news from the pest control company in some time. Investors will be relieved to see Rentokil’s sales grew 3.6% in the third quarter on a constant currency basis following down beat warnings earlier in the year.
There was also cause to be mildly optimistic about North America where the group is taking measures to realign its cost base. The integration of the acquired Terminix into the group was said to be going well suggesting greater synergies in the coming periods.
“While today’s material bounce in the share price for pest control firm Rentokil will be sweet relief for shareholders who have endured a tough period, the move is worth putting in context, Russ Mould explained.
“The shares had been weak heading into the third-quarter update so they are now only modestly higher over the course of the last week and are still down more than 20% since September’s profit warning.
“Investors will have been reassured by the fact full-year targets remain unchanged and by the action taken to boost organic growth in North America and bring costs back under control. The company has also revamped its senior leadership team across the Atlantic.”
Rentokil Initial shares were 9% higher at the time of writing.