AIM weekly movers: Weak fertiliser demand hits Harvest Minerals

Andrew Hore
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AIM weekly movers: Weak fertiliser demand hits Harvest Minerals

Beacon Energy (LON: BCE) says that the Schwarzbach-2 well in Germany has encountered good quality oil-bearing reservoirs. They were found 25 metres higher than prognosis. The well could potentially materially increase the company’s production. The share price jumped 68.9% to 0.152p, which is the highest it has been since April.

Glantus (LON: GLAN) is recommending a 33.42p/share bid from Basware Oy, which values the software company at £17.8m. This compares with the May 2021 placing price of 102p/share, which indicates the extremely poor performance of Glantus since it floated. Initial investors will get less than one-third of their money back. The share price increased 57.5% to 31.5p.

Pathfinder Minerals (LON: PFP) has completed the sale of IM Minerals Ltd for an initial £1m. The general meeting special resolution enabling more shares to be issued only just achieved the required 75% vote in favour. Paul Barrett has been appointed as an executive director. The share price improved 42.9% to 0.75p.

The LungLife AI Inc (LON: LLAI) share price recovered 38.6% to 106p after director buying at the beginning of the week. Chief executive Paul Pagno bought 7,123 shares, which more than doubled his stake, and David Anderson also acquired 7,123 shares. They were all bought for 69.84p each.

FALLERS

Harvest Minerals (LON: HMI) has been hit by weaker fertiliser demand in Brazil, which has continued in July. So far this year, 36,000t has been supplied. On top of this there are advanced sales of 33,000t that were not recognised in 2022. The second half should be the busiest for the Brazil-based company, but fertiliser orders are still being delayed because of low crop prices. The 2023 invoiced sales target has been cut from 120,000t to 70,000t. The share price slumped 43.1% to 1.85p.

Aptamer Group (LON: APTA) has gained two new contracts worth £219,000 with an existing pharma customer. The Optimer binders provider will generate the revenues in this financial year. There are plans to reduce the annual cost base from £6.4m to £3.5m. This could help to achieve the target of reaching breakeven in two years. The £3.6m placing at 1p/share has been completed. The share price fell 38.5% to 1.2p.

Serinus Energy (LON: SENX) reports that lower oil and gas prices mean that interim revenues slumped from $29.3m to $8.9m. There was a $400,000 cash inflow. Net cash was $2.5m at the end of June 2023. A full year loss is forecast. The share price declined 35.1% to 2.4p. It would have been lower with out director buying. Chief executive Jeffrey Auld bought 250,000 shares at 1.95p each and 250,000 shares at an average price of 2.1p, while James Causgrove acquired 250,000 shares at an average price of 2.2p.

Tremor International (LON: TRMR) increased second quarter revenues by 13% to $80.2m in a tough AdTech market and $65m of annualised cost savings have been achieved. However, the second quarter revenues were 10% lower than forecast. The operational gearing of the business means that finnCap has slashed its 2023 earnings forecast from 45.4 cents/share to 18.9 cents/share. The share price slipped 33.6% to 167.9p, which is less than one-third of the offer price when the company joined Nasdaq in June 2021.  

Tribe Technology launches retail offer ahead of AIM flotation

Andrew Hore
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Tribe Technology launches retail offer ahead of AIM flotation

Tribe Technology has raised £4.5m at 10p/share ahead of its AIM admission and small investors are being given the chance to apply for shares via a retail offer. They can subscribe for up to £400,000 of additional shares in the Northern Ireland-based manufacturer of mining equipment.

There is a potential global surface drilling market of $2.2bn. There are 1,400 RC drilling rigs used in exploration and grade control.

Nominated adviser and broker Allenby is acting as coordinator of the offer. The minimum subscription is £50 and the offer closes at 12pm on 25 August – although it could close early if oversubscribed.

The retail offer is available through intermediaries listed on the website: https://www.bookbuild.live/deals/WJQKJ1/authorised-intermediaries. There are 25 currently listed, but nearly all of them are awaiting confirmation. The intermediaries include Hargreaves Lansdown, AJ Bell and Interactive Investor.  

Autonomous drilling rigs

Tribe Technology was founded in Perth, Western Australia in 2019 by chief executive Charlie King prior to setting up a factory in Northern Ireland. It is developing autonomous drilling rigs. These rigs will help to improve safety and increase productivity.

Tribe Technology plc is the new holding company for Tribe Technology Group. This is an early-stage company with minimal revenues and making losses, but management says that there are orders worth more than £10.5m.

Prior to the flotation, an agreement with Anglo American has been announced for the deployment of a TTDS GC 700 RC drill rig.  

There was a £150,000 provision for an onerous contract in the 2021-22 accounts of Tribe Technology Group and debt was £700,000 at the end of June 2022.  There was cash of £232,000.

Most of the money raised will go towards working capital to enable the orders to be fulfilled, as well as on development and sales.

Investors have a chance to get involved at the start of a potentially significant business, but there are still risks at this stage of development.

FTSE 100 breaks beneath 7,300 as US bond yields surge and Evergrande files for bankruptcy

UK Investor Magazine
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FTSE 100 breaks beneath 7,300 as US bond yields surge and Evergrande files for bankruptcy

The FTSE 100 sank again on Friday as US bond yields soared and a major Chinese real estate company filed for bankruptcy.

Anyone waiting for lower prices to start buying may soon take a genuine interest in London’s Bluechips.

The FTSE 100 was trading down 0.8% to 7,248 at the time of writing on Friday and is now down 4% year-to-date.

“Whether it’s the brewing crisis in the Chinese property market, the surge in US bond yields on fears rates will stay higher for longer, or the big drop in UK retail sales, things are starting to look a bit ugly out there,” said AJ Bell investment director Russ Mould.

“News China real estate giant Evergrande has filed for bankruptcy protection in the US would have prompted some alarm in isolation, but when you combine it with its peer Country Garden’s decision to suspend payments on some of its bonds and the words ‘dominos’ and ‘falling’ start to come to mind.

“China-exposed stocks on the FTSE 100 like Prudential and the miners are taking heat on Friday morning, helping to put the index on course for yet another down day. The FTSE is currently demonstrating all the pep and get up and go of a teenager at 8am on a school day.”

The selling wasn’t extreme, but it was broad, with 90 of the FTSE 100’s constituents trading negatively shortly after midday on Friday.

Miners such as Antofagasta – down 3% – were weaker but not catastrophically. The Chinese property crisis isn’t anything new, and the sector has been ins steady decline for a couple of weeks.

Airtel Africa was the biggest faller giving up 3%.

Defensive names, including British American Tobacco, National Grid and Imperial Brands, provided minor support, but the gains were nothing to write home about.

Beacon Energy – oil & gas company shines a light on its Schwarzbach-2 well on the Meletta reservoir, with well nearly 1.5bn shares traded in first couple of hours

Mark Watson-Mitchell
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Beacon Energy – oil & gas company shines a light on its Schwarzbach-2 well on the Meletta reservoir, with well nearly 1.5bn shares traded in first couple of hours

The star performer this morning has been Beacon Energy (LON:BCE), the full-cycle oil and gas company whose shares have risen nearly 42%, with some 1.47bn traded as I write.

Today’s news that has excited the market concerns the announcement that the company’s Schwarzbach-2(2.) well has encountered good quality oil-bearing reservoirs in the Meletta-Schichten sandstones and the Pechelbronner-Schichten sandstones within the Stockstadt Mitte segment of the Erfelden field, which is onshore Germany.

Initial analysis of an electric wireline logging programme shows porosity ranges above pre-drill expectations in the Meletta sandstones and the Pechelbronner-Schichten (PBS) sandstones. 

No water-bearing sands were encountered in the Meletta or the PBS oil-bearing intervals that were also encountered c.25m higher than prognosis, which has positive implications for the pre-drill reserve estimates.

Beacon now plans to undertake reservoir clean-up, production testing and install the production liner to bring the SCHB-2 well into production over the next month, through the existing Schwarzbach facilities.

The company commented that the data from the SCHB-2 well will help to de-risk the 2C contingent resources of 2.4mb assigned to the adjacent Schwarzbach South segment which will be targeted at a later stage.

Analyst David Mirzai at SP Angel stated that the SCHB-2 well was anticipated to have low geological risk as it was twinning the SKM1 well drilled by Exxon in 1986, which proved hydrocarbons in the Stockstadt Mitte segment in the PBS sandstones and the shallower ME sands.

However, he notes that the reservoirs were both intercepted shallower than predicted with the PBS being a thicker interval with more sand and of better quality than pre-drill estimates, which implies volumetric upside to the pre-drill reserve range.

He concluded that shareholders should look forward to the completion of the SCHB-2 development well, which should materially boost production and cash flows to further drive the investment story.

The shares are now trading at 0.145p, up 0.430p.

AIM movers: Beacon Energy discovery and Tremor continues to decline

Andrew Hore
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1
AIM movers: Beacon Energy discovery and Tremor continues to decline

Beacon Energy (LON: BCE) says that the Schwarzbach-2 well in Germany has encountered good quality oil-bearing reservoirs. They were found 25 metres higher than prognosis. The well could potentially materially increase the company’s production. The share price jumped 37.3% to 0.14p.  

Further director buying continues to push up the share price of Serinus Energy (LON: SENX). Chief executive Jeffrey Auld has bought 250,000 shares at an average price of 2.1p and James Causgrove acquired 250,000 shares at an average price of 2.2p. The share price recovered 21.4% to 2.55p.

Audioboom (LON: BOOM) chief executive Stuart Last bought 1,083 shares at 183.5p each. This helped the share price recover 6.76% from its 2023 low to 197.5p.

AI-enhanced cybersecurity company Smarttech247 (LON: S247) is going to sell its VisionX security, monitoring and rapid response platform via Amazon Web Services Marketplace. This will broaden the potential customer base. The share price is 3.17% ahead at 32.5p.

Alien Metals (LON: UFO) has advised its lender Bennelong that it wants to cancel the second tranche of funding, which was £500,000 of convertible securities. Bennelong has $500,000 of convertible securities and 10 million warrants. This follows the recent placing raising £2m at 0.2p/share. The share price moved up 2.7% to 0.19p.

FALLERS

Tremor International (LON: TRMR) fell a further 8.83% to 160.55p following the forecast downgrades yesterday. Second quarter revenues were 10% lower than forecast. The operational gearing of the business means that finnCap has slashed its 2023 earnings forecast from 45.4 cents/share to 18.9 cents/share.

Spectral MD (LON: SMD) has sent shareholders a circular for the merger with Nasdaq listed Rosecliff Acquisition Corporation 1 and cancellation of the AIM quotation. The share price slipped 4.85% to 49p.

Trafalgar Property Group (LON: TRAF) raised £125,000 in a placing at 0.1p/share. This will provide additional working capital. The share price declined 4.35% to 0.11p.

Plant Health Care receives Brazilian approval for sugar cane and coffee product

UK Investor Magazine
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0
Plant Health Care receives Brazilian approval for sugar cane and coffee product

Plant Health Care announced on Friday its new biochemical fungicide PHC279 has been approved for use on sugar cane and coffee crops in Brazil, the world’s largest producer of both. PHC279 stimulates the plant’s natural defenses to control diseases like orange rust and coffee leaf rust.

The environmentally friendly fungicide is expected to be widely adopted by Brazilian farmers who spent over $46 million controlling sugar cane diseases and $127 million on coffee diseases in 2021/22. PHC279 was submitted for approval in December and received swift regulatory approval from three Brazilian agencies in under a year.

PHC279 originates from Plant Health Care’s natural protein technology platform PREtec. The company continues to scale globally, growing relationships with major distribution partners. Plant Health Care is on track to achieve $30 million revenue by 2025 through new product launches and organic business growth.

‟Building on the success of Saori use in soybeans and the continued growth of H2Copla use in sugar cane, this new registration will bring the benefits of PHC279 to sugar cane and coffee growers and expand Plant Health Care’s current business in Brazil,” said Jeff Tweedy, CEO of Plant Health Care.

“This product will help Brazilian farmers sustainably produce crops and supports the Company’s vision to be a leading global provider of peptides for agricultural production.”

Everyman receives Barbie and Oppenheimer boost after slow first half

UK Investor Magazine
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0
Everyman receives Barbie and Oppenheimer boost after slow first half

Everyman Media Group PLC reported a 6% drop in revenue to £38.3 million in the first half of 2023, compared to £40.7 million in the first half of 2022. EBITDA also fell 23% to £5.8 million from £7.5 million.

The decline was attributed to major film releases being delayed until the second half of the year. Revenue and profitability are expected to improve in the second half with major titles like Dune: Part Two, Wonka, The Hunger Games: The Ballad of Songbirds & Snakes slated for release.

However, recent box office hits Barbie and Oppenheimer released in late July delivered record admissions and £10.6 million in revenue for the month.

These are encouraging numbers for the company that demonstrate to investors cinemas can still pull in crowds. Everyman remains confident full-year results will meet market expectations.

The cinema chain expanded to 41 locations in the first half, with new venues opened in Northallerton, Plymouth and Salisbury. A 42nd cinema is slated to open in Marlow in October.

“Everyman remains an affordable and popular choice for consumers. The record week of admissions we saw in July demonstrates both the value of original content, and the fact that cinema remains as relevant as ever. Alongside this, we continue to see increasing demand for our high-quality food and beverage offering. The all-encompassing Everyman experience leaves us very well placed to satisfy consumer demand for premium entertainment,” said Alex Scrimgeour, Chief Executive Officer of Everyman Media Group

“None of what we do would be possible without the incredible Everyman team both in our venues and head office. I would like to take this opportunity to thank them all for their hard work and willingness to go that extra mile for our customers. We have added three carefully selected new venues to our estate and we look forward to building on the significant momentum we have seen in July and August.”

AIM movers: EQTEC secures contract with Idex and ex-dividends

Andrew Hore
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AIM movers: EQTEC secures contract with Idex and ex-dividends

EQTEC (LON: EQT) has signed a contract with Idex Group to provide engineering design for the French Market Development Centre. This is worth €440,000 and should be completed by the end of 2023. There could be further licence and services revenues of €15m over the next two years. Idex Group acquired the centre from EQTEC in July. The share price improved 4.35% to 0.18p.

ITM Power (LON: ITM) had £283m of cash left at the end of April 2023, which was more than expected. Last year, revenues were £5.2m, compared with guidance of £2m, and this year could rise to between £10m and £18m. Net cash should be more than £170m at the end of April 2024.  The share price rose 4.12% to 90.71p.

Alliance Lithium (LON: ALL) says Piedmont Lithium has exercised the option to acquire an initial 22.5% interest in its Ghana portfolio of assets and it will fund the first $70m of Ewoyaa’s development expenditure plus 50% until the lithium mine is built. The total cost is expected to be $185m. The POSEIDON 20MW electrolyser has been launched. The share price increased 3.73% to 21.55p.

Maritime tracking technology developer Windward (LON: WNWD) continues to add new commercial clients and annualised recurring revenues have reached $27.6m. Interim revenues grew from $10.9m to $12.8m. Costs are being reduced and the loss fell from $6.48m to $5.45m. There was a $4m cash outflow from operating activities. There is still $17m in the bank and as the cash outflow reduces that will be enough to reach breakeven. Additional EU sanctions against Russia should help the take up of Windward’s technology. The market appears reassured and after a few weeks of drifting lower the share price is 3.66% higher at 42.5p.

FALLERS

Tremor International (LON: TRMR) increased second quarter revenues by 13% to $80.2m in a tough AdTech market and $65m of annualised cost savings have been achieved. However, the second quarter revenues were 10% lower than forecast. The operational gearing of the business means that finnCap has slashed its 2023 earnings forecast from 45.4 cents/share to 18.9 cents/share. The share price slumped 29.3% to 179.55p, which is around one-third of the offer price when the company joined Nasdaq in June 2021.  

Intelligent Ultrasound Group (LON: IUG) revenues were 3% to £6.1m, even though the previous period included £1.4m of one-off orders. AI revenues jumped 144% to £700,000. Cash fell from £7.2m to £3.3m, partly due to the timing of invoices, but the second half outflow should be lower with £3m in cash forecast for the end of 2023. The 8.51% share price fall to 10.75p seems more about profit-taking after a recent rise rather than any real disappointment with the figures. The second half forecast assumes a significant jump in AI revenues, which are set to be the main propellant of growth. Intelligent Ultrasound could breakeven next year.

Horizonte Minerals (LON: HZM) is constructing the Araguaia nickel project in Brazil and there was a large cash outflow during the first half because of that. So far, $329m has been spent on the construction out of a total estimated cost of $537m. The company still has liquidity and funding sources of $344m to fund the rest of the development. The share price is 2.36% lower at 145p.

Packaging manufacturer Robinson (LON: RBN) reported a 4% decline in revenues to £24.3m with price rises not enough to offset a 12% fall in revenues. Operating profit fell by two-thirds to £500,000. The second half should be better and full year operating profit should improve from £2m to £2.2m. The share price fell 2.63% to 92.5p.

Ex-dividends

Enerqua Technologies (LON: EQT) is paying a final dividend of 1.2p a share and the share price is unchanged at 106.5p.

Iomart (LON: IOM) is paying a final dividend of 3.5p a share and the share price is 2.5p lower at 92.5p.

Jarvis Securities (LON: JIM) is paying a dividend of 2.25p a share and the share price is 2.5p higher at 122.5p.  

Niox Group (LON: NIOX) is paying a dividend of 2.5p a share and the share price fell 0.5p to 67.7p.

FTSE 100 tracks US stocks lower after Fed indicates more hikes

UK Investor Magazine
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0
FTSE 100 tracks US stocks lower after Fed indicates more hikes

The FTSE 100 was lower on Thursday after a poor finish to US stocks last night following the release of the Federal Reserve’s minutes.

Investors have been locked into a game of cat and mouse with the Federal Reserve on the trajectory of interest rates, and last night’s minutes suggest the Fed is not yet done raising rates.

The FTSE 100 was trading down 0.3% after US stocks fell on further rate hike fears last night. The S&P 500 closed down 0.76% at 4,404 overnight.

“The fight again inflation in the United States is still ongoing, with the minutes from the Federal Reserve meeting indicating that another rate hike is still on the table, which has the potential to push the US into a deeper downturn,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Reaching the target rate of inflation of 2% is proving a very hard nut to crack. Policymakers only have the blunt tools of rate hikes to do it, so they risk sending splinters of pain across the wider economy.”

China’s economic woes took a backseat on Thursday, with a late rally in Asian stocks spilling over into the FTSE 100’s China-focused stocks, among the few gainers. Rio Tinto, Prudential and Standard Chartered were the top risers gaining 1%-1.3%.

The general risk-off tone in markets is being demonstrated by the FTSE 100’s cyclical sectors failing to lift the index. UK banks were marginally higher on Thursday.

Housebuilders were lower ahead of tomorrow’s UK retail sales data, which could reveal a slowdown in spending and a weakening in the UK’s consumer health.

BAE Systems was the FTSE 100’s top faller after announcing the acquisition of Ball Aerospace for $5.5bn.

We wrote earlier this week that the FTSE 100 was in a descending triangle technical formation and looked set to test the 7,200-7,300 region.

Tekcapital’s portfolio companies build momentum, MicroSalt IPO on track

UK Investor Magazine
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Tekcapital’s portfolio companies build momentum, MicroSalt IPO on track

Tekcapital has issued an update on their portfolio companies including Belluscura’s $15m in orders, progress in the MicroSalt IPO and a summary of developments at Innovative Eyewear.

Tekcapital has a portfolio of four privately-held and publicly-listed companies including Belluscura, Innovative Eyewear, Guident and MicroSalt.

Each company was born of university technology identified by Tekcapital as having a significant commercial opportunity.

Tekcapital’s process, strategy and ability to select technologies with substantial market demand received a major endorsement this week after Belluscura received $15m in orders for their portable oxygen units.

Tekcapital founded Belluscura, raised seed capital, and filed patents to protect its intellectual property, before floating the company on AIM in 2021.

This week, Belluscura announced a step change in the adoption of their portable oxygen units with $15m worth of orders from retailers for their new DISCOV-R model. The company said they had received similar levels of interest from healthcare providers which suggest they expect further orders before long.

Should Belluscura secure further orders from healthcare providers to the tune of $15m, the total order flow could generate $30m revenue which would make the current £58m market cap very good value.

‘We are excited to see Belluscura gaining commercial traction with their announced orders for over 6,500 units for their next-generation DISCOV-R portable oxygen concentrator, with estimated potential revenues of $15 million,” said Dr Clifford Gross, CEO of Tekcapital.

“This underscores Tek’s investment thesis that commercialisation of advanced intellectual capital in the oxygen therapy space can result in the potential for better and significantly more affordable oxygen concentrators. As such, we believe Belluscura is now well placed to help improve the lives of a great number of people who require supplemental oxygen.”

Tekcapital has an 11.16% take in Belluscura.

MicroSalt

Tekcapital hope to replicate the success of Belluscura with its low-sodium food technology company, MicroSalt.

In today’s portfolio company update, Tekcapital provided an insight into the highly anticipated MicroSalt IPO saying the company was making steady progress and that they were hopeful that MicroSalt would list its shares this year. This is a key step in crystalising value for Tekcapital’s shareholders.

MicroSalt has developed a salt which contains 50% less sodium than traditional table salt, without sacrificing taste.

MicroSalt has two main consumer products in SaltMe! crisps and salt shakers which are stocked in thousands of stores across the United States and will now be available in the Philippines through two new partners.

However, it is the B2B market that could create the most shareholder value.

Earlier this year, MicroSalt signed a strategic partnership with US Salt to supply low-sodium salt in bulk for use in US Salt’s products. It’s these types of partnerships which could yield the highest revenue for MicroSalt.

US Salt, founded in 1893, gave MicroSalt their vote of confidence when the deal was announced.

“US Salt is looking forward to working with MicroSalt® to help with our low-sodium initiatives. Sodium is a worldwide concern in the food industry, and we believe Rick and his team are the industry leaders that can help propel our future growth,” said Bob Jordan, Vice President of Sales & Marketing of US Salt LLC.

Today’s update alluded to ongoing negotiations between MicroSalt and ‘key players in the snack food industry’. Although Tekcapital did not mention specific companies or potential order sizes, one would be forgiven for speculating that should these negotiations bear fruit, the resultant revenue for MicroSalt could be substantial.

Innovative Eyewear

The most interesting part of today’s update concerning Innovative Eyewear was news Nautica, Eddie Bauer and Reebok licensed smart eyewear is expected to launch by Q1 2024. When these products launch, it will dramatically increase Innovative Eyewear’s revenue generation capabilities.

In addition, Lucyd has launched its 2.0 Lucyd app which features an easy-to-use voice interface for ChatGPT.

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