Small cap movers from the junior market over the past week

A look back at some of this week’s more interesting stories from London’s junior market

While boardroom tussles are nothing new in the City, shareholders in Aussie plant hire and mining services outfit, Management Resource Solutions PLC (LON: MRS), have claimed what could be described a pyrrhic victory for its chairman John Zorbas.

Shareholders Daniel Smith and Nigel Burton had sought to remove Zorbas and finance director Timothy Jones at a meeting on Wednesday, citing “questionable transactions” and the board’s “indifference” to investor concerns.

The issue had been festering since Burton and Brown left the board citing “repeated improper interference in the business” by major shareholder Leon Hogan that was being supported by Zorbas, who became chairman of MRS in April 2017 after URU Metals, where he is the CEO, built up a stake in the group earlier that year.

Hogan himself is also a major MRS investor, having picked up a nearly 8% stake in the company a few months after Zorbas’ appointment.

Ahead of the Wednesday meeting, Smith and Burton alleged that investors had “long been suspicious” of the relationship between Zorbas and Hogan and that their concerns had come to a head after the company acquired Alerion, a seven-month-old drone surveying startup owned by Hogan’s long-time associate Chris Grove, for £1.32mln in March.

Smith and Burton had also previously attempted to refer a £900,000 placing last July to the City regulators after objecting to 49% of the shares being allocated to Hogan, Grove and a Canadian-Cypriot consultancy connected to Zorbas.

However, when the meeting finally took place all motions were defeated by 91mln votes to 75mln, mostly due to Hogan’s 7.9% stake backed by the personal holdings of Zorbas and Grove as well as URU’s 7.9% stake.

Small cap movers from the junior market over the past week

However, while MRS CEO Paul Brenton said he was “pleased” with the result, the 33% plunge in the shares to 2.9p over the week may have left many shareholders wondering if it was worth it.

Meanwhile, it wasn’t an acquisition but a sale that caused a headache for property group Caledonian Trust PLC (LON:CNN) after the shares tumbled 8.2% to 225p on the news that a £15mln sale of its largest property, St Margaret’s House in Edinburgh, would be delayed.

Recruiter Hydrogen Group PLC (LON:HYDG) joined the list of companies blaming Brexit uncertainty for lower demand in an update ahead of tis AGM, with the share sinking 13.8% to 71.5p in response.

Babestation owner Cellcast PLC (LON:CLTV) was also left red-faced after worries that new Kenyan gambling laws could dent its overseas business sent the shares down 29% to 0.5p.

Elsewhere, software tools developer Stilo International PLC (LON:STL) plunged 37.5% to 1.3p after forecasting a material drop in revenues and a loss for its first half due to slower sales.

The AIM All-Share rose 0.16% to 960.2 during the week, while the FTSE 100 was 0.95% lower at 7,278.

Among the risers, project management group WYG PLC (LON:WYG) rocketed 258% to 53.8p after agreeing a £43.4mln takeover offer with US rival Tetra Tech. The purchase price of 55p per share means WYG’s shareholders will receive a 244% premium on the close price from last Friday.

Controversy over its product didn’t stop Equatorial Palm Oil PLC (LON:PAL) rising 5.4% to 1.1p in the week after it agreed a US$20mln loan agreement with multinational Malaysian plantation group Kuala Lumpur Kepong.

Share Talk Weekly Stock Market News, 13th October 2019

Meanwhile, a pair of new contracts from the US sent shares in people screening tech firm Thruvision Group plc (LON:THRU) surging 6.5% to 29.5p.

Uranium miner Aura Energy Limited (LON:AURA) shares were giving off a warm glow as they climbed 30% to 0.65p on the back of a milestone at its Tiris uranium project in Mauritania.

Oiler Volga Gas PLC (LON:VGAS) was also on the up, rising 2.5% to 82p, after it estimated that its underlying earnings for the first four months of 2019 would be ahead of the prior year.


Author Calum Muirhead


Article originally published by proactive investors. Share Talk is not responsible for its content or accuracy and may not share the author’s views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.



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