Beacon Energy shares jump on German well progress

UK Investor Magazine
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Beacon Energy shares jump on German well progress

Beacon Energy shares rose on Monday after providing an update on operations at its Schwarzbach-2 well in the Erfelden field, Germany

The company announced that sand jetting operations using a coiled tubing unit have been completed at the Schwarzbach-2(2.) well. Beacon now expects to resume production at the well in the coming days after reinstalling the rod pump.

The impact of the sand jetting on production rates will only be known once output has stabilised after restoring pumping, Beacon said. The company plans to provide a further update once this occurs over the next several weeks. After the well has been fully cleaned from the jetting work, expected in April 2024, Beacon intends to replace the rod pump with an Electrical Submersible Pump to maximise production.

The project has faced a number of delays and today’s news will be welcomed by investors.

Beacon Energy shares were 7% higher at the time of writing.

“We are pleased to have safely completed the sand jetting operations to stimulate the well and are now working to recommence production in the coming days with the rod pump,” said Beacon Energy Chief Executive Officer, Larry Bottomley.

“We remain fully focused on establishing optimal production from the SCHB-2(2.) well as quickly as possible following this well stimulation operation and ultimately the installation of the ESP.”

“We look forward to the results of this operation and providing an update to shareholders in due course.”

Why Zoo Digital’s recovery could be further delayed

Andrew Hore
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Why Zoo Digital’s recovery could be further delayed

Film localisation services provider Zoo Digital (LON: ZOO) was hit by the directors’ and writers’ strikes in Hollywood. The latter dragged on and although it has ended film and television productions have been further delayed. That means that there will be a higher than expected loss in 2023-24.
The share price recovered when there was an agreement with the actors’ union, but last month’s warning led to a slump to 33.4p, which is below the low during the strike. The share price has fallen by 49% so far this year, having declined by 63.2% during 2023.
There has been a slower than expected pick ...

Aquis weekly movers: Newbury Racecourse and Arbuthnot Banking director buys

Andrew Hore
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Aquis weekly movers: Newbury Racecourse and Arbuthnot Banking director buys

Newbury Racecourse (LON: NYR) non-executive director Dominic J Burke bought 3,000 shares at 700p each, taking his stake to 6.51%. The share price improved 9.72% to 592.5p.

Arbuthnot Banking Group (LON: ARBB) chairman and chief executive Sir Henry Angest acquired 100,000 shares at 990p each, taking his stake to 57.3% of the voting shares. The share price increased 2.53% to 1015p.

Diagnostic products developer EDX Medical Group (LON: EDX) is raising £4.01m via a subscription at 12p/share. The share price moved up 2.33% to 11p. Founder Professor Chris Evans subscribed for 6.25 million shares. The other investors were high net worth individuals.

FALLERS

Oscillate (LON: MUSH) has a 12.75% stake in Psych Capital (LON: PSY). The investment company is pleased about the news that Psych Capital has been awarded a grant for a phase 1 POC study in Israel of psilocybin-assisted therapy for anorexia nervosa patients. The Oscillate share price is 8.33% lower at 0.55p.  

Alex Albertini has been appointed as a non-executive director of SulNOx Group (LON: SNOX). He has experience in the shipping industry. The share price dipped 1.41% to 35p.

Marula Mining (LON: MARU) has amended the terms of the Q Global Commodities subscription of up to £3.75m at 3.75p/share so that the money can be subscribed by another affiliate. This cash will be invested in battery metals mining projects in Africa. There is an option to subscribe up to a further £4.78m at 10p/share. The share price edged up 1.18% to 10.5p.  

AIM weekly movers: Sondrel recovers after late payment received

Andrew Hore
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AIM weekly movers: Sondrel recovers after late payment received

Semiconductors developer Sondrel (LON: SND) has clawed back some of the share price loss in the past six months. The share price jumped 95.7% to 9.98p, having been as high as 13.5p. Sondrel revealed that it had received £1.5m form the customer where payments had been delayed. This has enabled deferred payments to be made by Sondrel. New business opportunities are being negotiated. Even so, Sondrel needs to raise more cash before the end of March to put it on a sound financial footing. The October 2022 placing price was 55p.

Artemis Resources (LON: ARV) has halted trading in its shares on ASX. Earlier in the week, the company said it has discovered spodumene bearing pegmatites with Li2O grades of up to 1.82% at the Mount Marie prospect in the Greater Carlow project. This is the first tangible proof of spodumene bearing pegmatites and it could be part of a lithium corridor according to WH Ireland. Assay information is being assessed and should be published on 13 February. The share price improved 93.5% to 1.5p.

Helium One Global (LON: HE1) continued its rise last week even though it was curbed by a fundraising. Itumbula West-1 has flowed a high concentration of helium to surface. A measured helium concentration of up to 4.7% equates to nearly 9,000 times normal background levels. The well results will be evaluated. The company raised £4.7m at 1.5p, which is still a 650% premium to the share price prior to positive drilling news. The share price increased 59.3% to 2.195p

RF components and systems developer Filtronic (LON: FTC) has won a £7.8m contract for ground station antenna amplifiers for a leading global supplier of LEO satellite communications equipment. It also released interims with revenues 1% ahead at £8.5m. The cost base has been increased to cope with future growth, so there was a swing from profit to loss. Cavendish has raised its full year revenues expectations from £20.5m to £23.5m and pre-tax profit estimate has more than trebled from £800,000 to £2.5m. The share price is 58.2% higher at 40.5p, which is the highest it has been for nearly ten years.

FALLERS

In-game advertising technology provider Bidstack (LON: BIDS) has been unable to issue additional convertible loan notes to Irdeto because it has not been able to provide information to Bidstack to enable a shareholder circular to be issued. Shareholder approval is required for the convertible issue. Bidstack had drawn down £600,000 from the convertible loan note facility but does not expect to make any more draw downs. The €3m payment from commercial partner Azerion is running out with cash of £1.4m at the end of January and this will run out by the end of March. A strategic review has been initiated. The share price dived 59.1% to 0.225p.

Verditek (LON: VDTK) has agreed terms to sell its solar business and become a shell. The buyers are the holders of secured convertible loan notes in return for the surrender of £528,340 loan notes and £50,000 in cash. The company will transfer the shareholder loan to the new company for nominal consideration. The bondholders are providing Verditek with a loan facility of up to €100,000 to fund the operating costs of the solar business. If the deal does not go ahead by the end of February Verditek will be running out of cash. A new management team is interested in joining Verditek and there are plans to raise £300,000. The share price slumped 43.3% to 0.085p, which is a new low.

Adam Wilson is stepping down as chief executive of coal supplier Bens Creek (LON: BEN) once a replacement has been found. Lower metallurgical coal prices led to a shortage of cash last year and $13 of convertible loan notes were issued to 29.9% shareholder Avani Resources. That cash should have lasted until the end of 2024. The company blames poor weather in West Virginia for interrupting production and delaying trains transporting coal. Avani Resources has offered another $5m as a working capital facility. While details are worked out Avani has advanced $1.25m. A 12-month offtake agreement for 40,000 short tons of coal is being negotiated with Avani Resources. The share price slumped 34.3% to 5.75p – a new low. The October 2021 placing price was 10p.

Pharma company Aptamer Group (LON: APTA) admits that it will not achieve the expected revenues of £3m in the year to June 2024. Interim revenues were less than £1m. There are more than £1.4m of signed deals for prospective laboratory-based services. There is enough cash to get through to later this year. The share price slid 34.2% to 0.625p, which is a new all-time low.

Evgen Pharma in dispute with partner

Andrew Hore
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Evgen Pharma in dispute with partner

Sulforaphane-based medicines developer Evgen Pharma (LON: EVG) has issued a notice of dispute with Stalicla its partner in autism spectrum disorder and other neurodevelopmental disorders. The share price has fallen by more than one-quarter to 1.1p, which is a new all-time low.

AIM-quoted Evgen Pharma licenced the global rights for SFX-01 in neurodevelopmental disorders and schizophrenia. The initial payment was $500,000 with a further $500,000 due on completion of the human volunteer phase 1 study. That was completed in August 2023. The dispute resolution process has been started so that the payment is received.

In January, Stalicla raised $17.4m in a Series B fundraising and a credit facility.

Evgen Pharma had a cash of £3.7m at the end of September 2023. That was after a cash outflow from operations of £1.3m.

AIM movers: Bens Creek chief executive resigning and assay results from Artemis Resources next week

Andrew Hore
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AIM movers: Bens Creek chief executive resigning and assay results from Artemis Resources next week

Artemis Resources (LON: ARV) has stopped trading in its shares on ASX. Earlier in the week, the company said it has discovered spodumene bearing pegmatites with Li2O grades of up to 1.82% at the Mount Marie prospect in the Greater Carlow project. This is the first tangible proof of spodumene bearing pegmatites and it could be part of a lithium corridor according to WH Ireland. Assay information is being assessed and should be published on 13 February. The share price improved a further 84.9% to 1.525p, which is nearly doubled over five days.

The Centers for Medicare and Medicaid Services has published a draft local coverage determination for Renalytix (LON: RENX) for KidneyIntelX and kidneyintelIX.dkd. The Medicare price is $950/test. The specified coverage is for patients with diagnosed Tupe 2 diabetes and Stage 1-3b Chronic Kidney Disease. The share price recovered 31.7% to 13.5p.

RF components and systems developer Filtronic (LON: FTC) shares continue to rise following the £7.8m contract for ground station antenna amplifiers for a leading global supplier of LEO satellite communications equipment. It also released interims with revenues 1% ahead at £8.5m. The cost base has been increased to cope with future growth, so there was a swing from profit to loss. Cavendish has raised its full year revenues expectations from £20.5m to £23.5m and pre-tax profit estimate has more than trebled from £800,000 to £2.5m.The share price is 15.8% higher at 36p.

FALLERS

Adam Wilson is stepping down as chief executive of coal supplier Bens Creek (LON: BEN) once a replacement has been found. Lower metallurgical coal prices led to a shortage of cash last year and $13 of convertible loan notes were issued to 29.9% shareholder Avani Resources. That cash should have lasted until the end of 2024. The company blames poor weather in West Virginia for interrupting production and delaying trains transporting coal. Avani Resources has offered another $5m as a working capital facility. While details are worked out Avani has advanced $1.25m. A 12-month offtake agreement for 40,000 short tons of coal is being negotiated with Avani Resources. The share price slumped 21.2% to 6.5p. The October 2021 placing price was 10p.

Cambria Africa (LON: CMB) will not release its accounts to August 2023 by the end of March so trading in the shares will be suspended on 1 March. The company is awaiting the completion of the $1.74m disposal of its shareholding in AF Phillips. Properties in Harare worth $2.3m are being marketed. There is $1.45m in the bank. The share price dipped 19.6% to 0.225p.

Kinovo (LON: KINO) reported a mixed trading statement. The 2023-24 profit is expected to be in line with expectations even though revenues are likely to be below forecast. However, the legacy DCB projects are delayed and will cost much more than the £5.72m expected. The underlying 2023-24 pre-tax profit id forecast to be £5.8m. The share price slipped 10.5% to 55.5p.

Premier African Minerals (LON: PREM) has released a new SAMREC compliant mineral resource on the Zulu lithium and tantalum project. Li2O contained in spodumene is 107,366 tonnes and the direct conversion to spodumene concentrate is 1.79 million tonnes. The share price fell 8.33% to 0.33p.

Tesco to sell banking arm to Barclays in £700m deal

UK Investor Magazine
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Tesco to sell banking arm to Barclays in £700m deal

Tesco shares ticked higher on Friday after the supermarket announced it would dispose of its banking arm as part of a strategic partnership with Barclays.

Supermarkets have faced calls from shareholders to streamline their businesses and focus on core operations.

Tesco will sell its banking arm to Barclays in a deal worth up to £700m and will receive annual income from Barclays for the use of the Tesco brand.

Tesco said it plans to use the proceeds of the sale to launch a share buyback programme.

Tesco shares were 1% higher at the time of writing.

“Tesco shareholders are in-line for an incremental share buyback after selling the bulk of its banking operations to Barclays for around £600m,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

“Tesco is streamlining the balance sheet, having parted ways with its credit cards, loans and savings operations. Doubling down on the core food business is a trend we’re seeing many of the grocers adopt, as they reduce exposure to non-core activities and get ready to win the price wars, which have been raging since cost of living pressures soared. The move makes a great deal of sense, and adds weight behind one of Tesco’s main attractions – its ability to return cash to shareholders.”

Block Energy’s $501m prospect

Andrew Hore
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Block Energy’s $501m prospect

Block Energy (LON: BLOE) has published an independent report covering the gas resource within Licence B in the Republic of Georgia. This shows headline recoverable 2C gas resources of 1,072bcf, which is slightly larger than the company’s own estimate and this can help the gas producer to farm-out the acreage.

Oilfield Production Consultants was commissioned to prepare an independent engineering report covering the development of the gas resource at the Patardzueli-Samgori fields. It calculates an unrisked NPV of $501m in the mid-case (the range is $227m-$745m). At 1.05p, up 7.69%, Block Energy is capitalised at £7.1m.

The farm out process should begin shortly, and the opportunity could be attractive to some large oil and gas companies. Block Energy believes that the gas prospect extends into its neighbouring licences.

Tennyson Securities reckons that a Chinese company could be the front runner for the farm out, because of the agreements between the Georgian and Chinese governments.

AIM movers: Sondrel share price recovers and ex-dividends

Andrew Hore
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AIM movers: Sondrel share price recovers and ex-dividends

Semiconductors developer Sondrel (LON: SND) has clawed back some of the share price loss in the past six months. The share price jumped 114.3% to 12.75p. Earlier this week, Sondrel revealed that it had received £1.5m form the customer where payments had been delayed. This has enabled deferred payments to be made by Sondrel. New business opportunities are being negotiated. Even so, Sondrel needs to raise more cash before the end of March to put it on a sound financial footing.

Touchstone Exploration (LON: TXP) revealed positive results from the Cascadura-2 well in Trinidad. Testing is planned in the third quarter. Drilling costs were $6m. The Cascadura-3 well will be drilled before the end of the month. The share price improved 16.3% to 53.5p.

Tower Resources (LON: TRP) has received notification from the Cameroon authorities of the extension of the first exploration period of the Thali production sharing contract to 4 February 2025. Tower Resources will have to drill a single well. Financing discussions continue. The share price is 11.6% ahead at 0.024p.

Timber company Woodbois (LON: WBI) says 200 million warrants have been exercised at 1p each. This £2m will be used to scale up production and improve efficiency. Management is in Gabon implementing strategic initiatives. Management has entered into a term sheet for a $5m facility. Full year results should be issued in May. The share price increased 9.15% to 0.775p.

FALLERS

Advanced coatings services provider Hardide (LON: HDD) traded in line with expectations with revenues of £5.5m in the year to September 2023, but the most recent quarter has been weak. Demand from the oil and gas sector has been hit by destocking. Currently, this year’s revenues are expected to be flat and Hardide will continue to lose money. Interim chief executive Steve Paul joins this month. Hardide wants to raise £1m for working capital, so it is not surprising that the share price dipped 23.1% to a new low of 7.5p.

Sanderson Design Group (LON: SDG) achieved pre-tax profit expectations of £12m in the year to January 2024, partly due to licence agreements. Brand sales fell with the UK down 11%. US brand sales were 7% higher. Pre-tax profit is likely to be flat this year with improved revenues offset by higher costs. The share price is 11.5% lower at 112p.

Revolution Beauty (LON: REVB) is rationalising lower margin products and growth in revenues will still be in low single digits this year. The focus is on the Revolution brand. Full year EBITDA is expected to be between £11m and £12m. The £32m debt facility is extended until October 2025. The share price fell 8.59% to 29.25p.

Online marketing services provider XL Media (LON: XLM) says 2023 revenues fell from $71.8m to $50m and EBITDA declined from $17.8m to $12m. The company moved into net debt. The share price decreased 8.33% to 6.6p.

Ex-dividends

AB Dynamics (LON: ABDP) is paying a final dividend of 4.42p/share and the share price fell 10p to 1765p.

Greencoat Renewables (LON: GRP) is paying a dividend of 1.6 cents/share and the share price is down 1.7 cents to 87.9 cents.

Impax Asset Management (LON: IPX) is paying a final dividend of 22.9p/share and the share price is 16.5p lower at 505.5p.

Renew Holdings (LON: RNWH) is paying a final dividend of 12p/share and the share price fell 14.5p to 832.5p.

Victoria Plumbing (LON: VIC) is paying a final dividend of 0.95p/share and the share price decreased 0.5p to 85.6p.

Venture Capital Trust activity picks up in early 2024 after slowing last year

UK Investor Magazine
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Venture Capital Trust activity picks up in early 2024 after slowing last year

Venture Capital Trusts (VCTs) invested £506 million in new and follow-on investments in small private companies and companies listed on the Alternative Investment Market (AIM) last year. This represents a 28% decrease from 2022, when VCTs invested £705 million.

The decline mirrors a wider slump in venture capital investment across the UK and Ireland. According to the Pitchbook European Venture Report, total investment across the venture capital industry fell 46% to €19.4 billion in 2023, down from €35.6 billion in 2022.

“Last year VCTs’ investment in private companies slowed due to challenging investment conditions. It took time for businesses to adapt to higher interest rates and sluggish economic growth which impacted valuations and deal times. However, VCT investment activity held up better than the broader venture capital industry,” said Richard Stone, Chief Executive of the Association of Investment Companies (AIC).

The lion’s share of VCT investments – £454 million – went to 251 private companies. A further £52 million was invested in 24 AIM-listed companies. In 2022, VCTs put £658 million into 341 private companies and £48 million into 22 AIM companies.

Despite the annual decline, VCTs have provided consistent support for private companies and AIM-listed firms over the past three years, investing a total of £1.89 billion between 2021 and 2023.

“The first half of 2023 was certainly sluggish in terms of quality new opportunities, in line with the trend across the market, due to uncertainty arising from the Budget turmoil in late 2022,” said Ewan MacKinnon, Partner, Maven Capital Partners, managers of the Maven VCTs.

“However, in H2 2023 and early 2024 we’ve seen an encouraging increase in activity and opportunities as economic conditions have improved and deal flow has now largely recovered across our UK regional teams.”

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