Share Talk Weekly Small Cap Movers & Shakers, Saturday 18th November 2023

The AIM All-Share Index experienced a positive week, gaining approximately 2.2%, surpassing the main index by 60 basis points.

On Friday, stocks across various sectors soared in anticipation of promising retail data. However, the outcomes fell short of expectations, with annual sales reaching their lowest point since the lockdown in February 2021.

According to the Office for National Statistics (ONS), retail sales in October decreased by 0.3%, defying the projected increase of 0.3%. Factors such as delayed seasonal purchases, unusually warm weather, and the ongoing disparity between volume and value were cited as contributing factors.

Contrary to expectations, the stock market remained resilient despite these lacklustre figures. Notably, major retail stocks like Next plc and Marks and Spencer Group PLC (LSE: MKS) experienced an upward trend.

SkinBioTherapeutics PLC (AIM: SBTX) successfully raised £3 million, excluding expenses, through a new share placement with investors.

This event was particularly notable – a small-cap company securing a significant financial boost from the equity market. Additionally, the pricing of these new shares garnered attention.

In a market where heavy discounts are often needed to secure fundraising, it was a welcome change to see that SkinBio only needed to reduce its share price by less than 10% to attract investors. The company, which specializes in developing skin health products, saw its shares dip by 2% to 21p, a move attributed primarily to technical factors.

Young & Co Brewery has finalized a deal to purchase the freehold pubs and bedrooms owned by City Pub Group PLC (AIM: CPC), with the transaction valued at around £162 million.

Fortunately, Young’s recognizes the worth of the chain, pricing City Pubs’ shares at 145p each in the deal. This reflects a 65% premium above the three-month average.

However, the news is mixed for staff members. While Young’s plans to streamline City Pubs’ current management, corporate, and support roles, it assures that there will be no significant decrease in the number of frontline staff.

After the announcement of the acquisition, shares of City Pubs surged by over 50%.

In the small-cap alcohol sector, the departure of Nick Devlin, the former CEO of Naked Wines PLC (AIM: WINE, OTCQX: NWINF), seems to have brought a positive shift in the market. The company’s shares saw a 20% increase, recovering from a steep 35% fall that followed the announcement of last week’s interim results and Devlin’s resignation.

In a different industry, Aurrigo International PLC (AIM: AURR), an autonomous vehicles company, experienced a significant drop of over a third in its share value after announcing a plan to raise £3.5 million through a stock sale at a substantial discount to its closing price on Tuesday.

MYCELX Technologies Corporation’s shares declined by 8% to 58.55p by Friday, impacted by an underperforming variable volume contract due to decreased plant activity and a delay in another project, now expected to start before the end of the year. However, it wasn’t all negative for the water-tech firm, as they raised their revenue forecast for 2024 and secured a new $5.4 million project.

In the water sector, Genuit Group PLC (LSE: GEN) saw its shares increase by 12% after the plumbing, heating, and ventilation product manufacturer projected its full-year adjusted operating profit to be slightly higher than current estimates.

Renold PLC (AIM: RNO) also experienced a positive shift, with shares rising over 7% following a 56% jump in adjusted operating profits in the six months leading up to September 30.

Allergy Therapeutics PLC (AIM: AGY, OTC: AGYTF) lost 21% in gains despite reporting successful results from a pivotal phase III trial of its grass allergy vaccine, Grass MATA MPL.

Ondo InsurTech’s shares soared by an impressive 48% after announcing a partnership with Nationwide, a major US insurance and financial services company. This partnership will integrate Ondo’s LeakBot technology into Nationwide’s Smart Home Program.

Lastly, green fuel company Velocys PLC (AIM: VLS) showed signs of recovery, with shares rebounding from 0.3p to 0.73p. This comes after a dramatic 70% drop at the end of October, following news that the company would miss a deadline to finalize a funding deal announced earlier in the year. This rebound suggests growing optimism for a potential funding agreement.

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