Share Talk Weekly Small Cap Movers & Shakers, Saturday 11th June 2022

Here’s a look at the winners and losers in the small-cap space this week.

According to the Press Association, it is understood that the two partnering companies have placed a takeover approach for Boots by one of India’s wealthiest men, and a US private equity firm launch a £5bn takeover bid for Boots.

According to fresh reports as of Friday, one of India’s most powerful men has teamed up with a US-based private equity firm in a bid for the retailer’s takeover. Apollo Global Management and billionaire Mukesh Ambani, whose firm Reliance Industries began working together in April to explore a possible move.

There’s been much recent speculation over the potential sale of the retail giant. Just a few days ago it was reported the owners of Asda could be on the brink of withdrawing their bid for Boots over a disagreement on price.

Boots is the UK’s largest retailer with more than 2200 stores. Boots revealed an increase in sales in the three months ending February in its most recent financial results. This was due to a rebound in footfall on high streets.

Caspian Sunrise PLC (AIM: CASP) appears to be not as Russian-looking as one might think. This cheered up the market.

The shares rose 28% to 5.05p, back to pre-invasion levels. This was because the company stressed that its oil was Kazakh oil and not Russian oil.

We are now into the fourth month of Russian sanctions and we have received several requests to set out in greater detail how these sanctions have affected us to date and our expectations for the future.

It is only an accident that the current delivery system takes it through Russia. We sell oil in Kazakhstan to international oil traders who can then export it anywhere in the world. The company stated that the Kazakh government will soon rename the oil from Kazakhstan in order to distinguish it from Russian oil.

“To date, we have not had any problems accessing the Russian pipeline network to transport our international oil. We don’t believe that there will be many obstacles in this regard no matter how many sanctions are in place.” It stated that no matter what happens, it is unlikely that these pipelines will be closed.

Bowleven PLC (LON: BLVN) an Africa-focused oil & gas company, was the best performer this week after it announced it had a new partner for its Etinde permit, which is located off Cameroon.

New Age (African Global Energy Limited), the operator of Etinde, informed the company that New Age had signed a definitive agreement with Perenco SA’s subsidiary to transfer all New Age’s participation in the Etinde permit and the operatorship of Etinde JV to Perenco.

Bowleven will still be entitled to a final decision payment of US$25mln by its Etinde JV Partners, which would include Perenco after the transaction is completed.

The company’s shares rose 80% after the news.

Netcall PCL (AIM: NET) customer engagement software company, increased profits guidance after signing a multi-year agreement with S&P 500 international financial service firm.

The initial three-year subscription period for cloud subscriptions is US$19mln. It is expected that the revenue will generate similar margins as Netcall’s overall margin. This will make a significant contribution to the group’s revenue and profit.

This week, the shares rose 22%

IG Design Group PLC (LSE: IGR) saw a 42% increase in its stock after it extended the term to 31 March 2024.

Stewart Gilliland (chair of the stationery-paper bag company) stated that “our seasonal order book is strong” and that the revised facility provides sufficient funding to meet our working capital needs.

After a positive statement by the company, the annual general meeting of ParityGroup PLC (AIM: PTY), the recruitment group was likely to be a happy one.

According to the company, cost reductions in 2021 have allowed it to invest in capabilities in areas that are stronger in the market and can offer new business opportunities in the second half of the year.

29% more parity shares

Renalytix PLC (AIM: RENX) saw a 23% increase in this week’s stock after the company announced that its KidneyIntelX bioprognostic testing system successfully risk-stratified adult diabetics and early-stage chronic renal disease patients (stages 1 through 3) for key clinical outcomes including death and hospitalisations for heart failure.

Steven Coca, co-founder of Renalytix, stated that these results demonstrate the potential for KidneyIntelX enriches clinical trials for patients at greater risk for complex conditions. This could increase trial efficiency for pharmaceutical companies2.

It is safe to say that the results of the drilling of Clontarf Energy‘s (AIM: CLON) exploration well in Western Australia’s Sasanof-1 by PLC were a disappointment.

The well was plugged and permanently abandoned after no commercial hydrocarbons were found. De-mobilisation activities then commenced.

The shares were quickly abandoned by investors and the oil exploration company lost around three-quarters of its value.

eve Sleep PLC (LON: EVE) was also on the move, a humble mattress maker that attempted to pretend it was a sleep science company. It even used the all-lower-case first name of the company, which was incredibly pointless and trendy.

It decided to sell the company because it felt it needed additional investment to expand its reach into “the wider space of sleep wellness”.

The shares were floated at 101p in May 2017, when it was valued at £140mln. However, this week the shares fell 39% to a penny, with a market capitalisation of only £3m, ouch.

ADVFN PLC, (AIM: AFN), has been the focus of a power struggle over the past years. The market was likely wondering why this week when the shares lost a third of their value after a trading update.

The company stated that sales this year were disappointing with the run rate generally flat, sales below previous six-month periods and down year-on-year.

The company stated that advertising sales were particularly disappointing, reflecting a weaker market for financial media.

It deserves to be given full marks for not sugarcoating the bad news, leading with some inconsequential positive news and then burying it in paragraph 12. However, the bomb about suspending dividend payments was dropped in the fifth paragraph.

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