SMALL CAP MOVERS: Fabric firm Heiq slumps 40% after profit warning

London-listed Swiss ‘functional textile’ technology company HeyQ gave its investors a good dose of New Year’s blues when it opened January with a profit warning.

The company, which makes fabrics and textiles with anti-odor and anti-microbial properties for the likes of Hugo Boss and Lycra, saw its shares fall more than 40 percent this week as it warned shareholders of a “significant deterioration” in consumer demand during the fourth quarter.

Certainly, in the midst of the cost of living crisis and emerging recession, there is more than a tiny hint of fear and uncertainty that is causing HeiQ’s customers to cut their clothes accordingly, figuratively and literally.

HeiQ said brands are hesitant to invest in new innovative product development and this is leading to delays in key milestones with its partner brands.

It told investors that expected volumes had been ‘pushed’ into next fiscal year, but the stock is now trading at around 30 pence, is down 60 percent over the past six months and is still far from its December 2020 float price of 112 pence.

Shortly before half-time, the company cut its 2023 outlook, brushing off growth expectations – with sales and margins now at the same level as last year, and cutbacks are necessary.

In the broader market, small caps rallied with the AIM 100 index up 2% to 4,034.09 by the end of the first trading week of 2023, broadly in line with the FTSE 100 blue-chips and mid-cap FTSE 250 benchmark.

The genetics company was on the rise Genin code which saw its shares rise 70 percent to trade at 15 pence after being approved by the state of Irvine, California, lab landed license and CLIA certification.

Significantly, it opens up new commercial opportunities as it will enable the health-tech junior to deliver products used for cardiovascular disease risk assessments to patients in 49 of the 50 states in the US.

“An enormous amount of work has been done to obtain these approvals, which represents a significant advance in the company’s commercial program,” the company said in a statement.

Another UK technology stock on the rise was the provider of radio frequency mesh networks CyanConnode which climbed about 31 percent to 17p with news on Wednesday that its Indian subsidiary has received an order to supply its Omnimesh modules to a smart metering implementer in Jabalpur, India.

The order comes from Gujarat-based civil engineering firm Montecarlo Limited and was “won against a very competitive field,” according to Executive Chairman John Cronin.

Meanwhile, in the junior oil and gas sector, there was a frustrating but probably not too unforeseen challenge ahead And energy who noted that it could lose its rights to operate in Ukraine due to its ties to Vadym Novynskyi, described as the owner of a large indirect stake in the company.

Novynskyi is currently under sanctions from the Ukrainian government, and new laws due to take effect at the end of March will allow the government to suspend or revoke mineral or hydrocarbon licenses ultimately owned by those under sanctions.

Sticking to hydrocarbons was for fully operational reasons United oil and gas was among the fallers, as news of a dud in Egypt sent its shares down 28 percent.