A busy week indeed for a plethora of small caps, we look back starting with Hurricane Energy as shares rose as high as 8 percent on Friday after the down-and-out offshore UK oil producer announced that it had received acceptances from its subsidiary for the purchase of US$78mln in a US$230mln convertible bonds series.
Anthony Maris, chief executive, highlighted Hurricane’s reduction of third-party funds to US$152mln. He also used US$62mln in free cash. Maris described it positively for the company. It gives shareholders and the company some relief. This is not a stay of execution, but it may reduce the weight of the executioner’s knife.
Hurricane stated that the bond tender was a “proactive liability management exercise” that would provide “certainty for bondholders who accept it”. Although the Lancaster field still produces approximately 10,000 barrels per day of oil, it is still a significant asset and will continue to be – at least for now.
There is no such uncertainty at Somero Enterprises.
This week, the company reached an all-time high. The concrete-levelling equipment company’s half-year results were so impressive that shares rose 14 percent to 536p Florida-based Somero’s technology allows construction companies to install high quality horizontal concrete floors quicker, flatter, and with fewer workers.
The demand for warehouses that can accommodate the increase in online shopping is driving business growth.
The company’s first six-month operating cash flow was $16m, and its underlining profits were $24.6m. It floated in 2006. The board expects full year revenues to be around US$120mln, with underlying profits of approximately US$42mln. Year-end net cash will be close to US$36mln. Chief executive Jack Cooney said that it is “amazingly active” right now.
Accesso Technology, a software company that sells tickets for theme parks in the United States, is another successful US-focused business. Since the lifting of lockdown restrictions, people have been returning to Six Flags parks. Revenue is back at 2019 trading levels of around US$117mln. It added that cash and underlying earnings will outperform current market expectations for the half and a full year. This should send the shares up to 1,005p, or their highest level in more than two decades.
Maestrano rose by more than 10% after Network Rail granted permission for its technology to use across the UK’s rail network. According to AIM-listed company, the kit determines whether another train can fit along a route. This makes it easier for new trains to be introduced onto the network.
Powerhouse Energy was on a rollercoaster ride as it jumped on rumours of a deal to buy German chemicals giant Linde, only for the more serious reality to give it some wind in its sails.
DMG licensed partner has been working with the German company on a technical feasibility report, said the waste-to-energy group. It explained that Linde and HUI are currently in talks to reach an agreement to build a plant in Konin (Poland) using Powerhouse’s technology.
“There is no guarantee that such an agreement will be reached and any agreement concerning the construction of a facility would be finalized. Any agreement regarding the building of a facility would be subjected to material conditions, including financing, permits and planning permission.” Even so, shares were 5% higher at 5.4p on Friday.
IQE, a Welsh-based semiconductor manufacturer, was not in favour at a time of chip shortages. Profits and sales were flat, as was the mood following the numbers. Shares dropped over 10% to 46p.
Aim too had a quiet week, with the all-share index of the junior market down by just over 1%. This is similar to falls in the big caps.
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