The British growth markets in 2023 have largely been plagued by a lack of funding.
However, recent activities hint at a potential turnaround, especially in the mining sector.
The week started strong with Empire Metals Ltd (AIM:EEE) announcing a successful £3 million funding round to bolster its drilling initiatives in Western Australia. The investment interest exceeded expectations, with shares offered at a 10% markdown from the previous week’s closing price.
Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) wasn’t far behind, raising £4.5 million privately by Wednesday at a 3% discounted rate.
But the spotlight was undoubtedly on Yellow Cake PLC (AIM:YCA), a leading player in AIM’s top-10 list. They managed to sell 18.7 million new shares on Thursday, in a highly sought-after offering. Raising £103 million, it was among the most significant capital inflows in the junior market this year, especially notable given the minimal 2% discount.
Given the trend of hefty discounts nearing 60% this year, these smaller markdowns almost felt like a comparative boon.
Meanwhile, in biotech, N4 Pharma PLC (AIM:N4P) saw its share price drop by 30% following its decision to release 35 million new shares at £350,000 to acquire a significant portion of Nanogenics Ltd, a company innovating in lipid and peptide-based delivery systems.
Shield Therapeutics (LSE:STX) also dived into fundraising, raising £6.1 million and launching a retail offering at an 18% discount. This followed their $20 million debt announcement, aimed at advancing their iron deficiency solution, Accrufer, which led to a 30% drop in their shares post-announcement.
The AIM All-Share Index mostly declined this week, but saw a boost on Friday morning.
The surge might be due to weekend enthusiasm or the positive revision of economic growth data from the Office of National Statistics. The index recovered from its weekly low beneath 724 points to surpass the 727-point mark.
The ONS reported that the UK’s GDP for the second quarter remained steady at 0.2%. However, the first quarter’s estimate was adjusted upwards to 0.3% from an initial 0.1%.
The most recent quarter’s growth was predominantly fueled by a 1.2% uptick in the production sector. Additionally, the household saving rate rose to 9.1%, a jump from the 7.9% of the prior quarter.
Despite this, at the moment, AIM’s overall weekly performance is down by 1.4%, while the FTSE 100 blue-chip index experienced a smaller decline of 0.6%.
The junior market experienced significant downturns, especially in the media and entertainment domains this week.
tinyBuild Inc faced a considerable setback. Its stealth horror game series, Hello Neighbour, saw a 40% drop in value. This came after the company recognized its difficulty in achieving profitability for the ongoing fiscal year, given the large pre-tax losses in the first half.
In the realm of video games, Bidstack Group PLC (AIM:BIDS, OTC:FTBGF) also faced scrutiny. This emerged after the group, specializing in in-game targeted advertising, shared its half-yearly figures on Friday. With shrinking revenues and margins, the company’s stock price plunged by over 40%.
Videndum PLC (LSE:VID), a firm providing production and creative services to the film sector, suffered a nearly 50% blow. This followed revelations about the negative effects of Hollywood strikes on the firm. During Videndum’s half-yearly earnings discussion, the company revealed that writers’ strikes led to a 24% decline in revenue, resulting in a £50 million loss, in contrast to the £16.4 million profit the previous year.
Shareholders of Tasty PLC (AIM:TAST) expressed disappointment after the restaurant conglomerate’s mid-year report on Wednesday. The group has been significantly impacted by inflation, with rising expenses in labour, food, and utilities affecting its bottom line. Their underlying earnings plummeted nearly 60% to £1.1 million, while revenue only saw a marginal increase of 0.9% to £21.7 million. Consequently, the shares nosedived by over 30%.
In 2023, IPOs targeting the smaller market segments have been scarce, as a cautious sentiment has prevailed, sidelining all except the most resolute entrepreneurs.
However, Substrate Artificial Intelligence (OTCQB:SUIAF), under the leadership of Ivan Garcia, is gearing up for action. The company is eyeing a forthcoming listing on the Aquis Exchange, with plans to eventually transition to AIM.
Substrate is establishing a distinctive niche in the densely populated AI sector. Their unique selling point is a patented, biologically mimicked learning technology, a brainwave of Bren Worth, the co-founder and CTO.
To bolster its prospects, Substrate has integrated businesses spanning fintech, energy, agri-tech, human resources, and healthcare, offering avenues to deploy its AI. A highlight of their strategy is that Substrate is already generating revenue – currently standing at an impressive annual €12 million euros (£10.4 million).
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