SMALL CAP CHANGES: Challenger exchange Aquis’ party crashes
Challenger Scholarship Takeover has had a string of successes this year, from surpassing AIM in terms of new IPOs – numerically, but not in volume – to landing new technology clients at home and abroad, including the Central Bank of Colombia.
The exchange’s share price also rose to record highs not seen since early 2022, peaking at 500p in July.
Unfortunately, a profits warning this week threw a spanner in the works, when Aquis announced that its annual results would fall by £1m after a landmark technology contract was not renewed.
Update: Aquis has announced that its full year results will suffer a £1m hit due to the failure to renew a landmark contract
Chief Executive Alasdair Haynes was devastated, saying: ‘While it is disappointing that our trading has been impacted in the short term by a single contract, I am pleased with the progress we continue to make in laying the foundations for delivering our strategic objectives.’
Aquis is not only a stock exchange, but also a technology provider for other market makers.
Despite the setback, the AIM-listed group said it plans to step up investment in the technology division, which Panmure Liberum said underscores the “long-term opportunities for the business”.
But that wasn’t enough to avert an 18 percent drop in the stock price.
The broader AIM All-Share Index had been performing well until Wednesday, when share prices took a major hit on all fronts.
Labour leader Keir Starmer not-so-subtly hinted at imminent tax rises in the October budget, warning us that the budget will be “painful.”
For some, this is more true than others: “those with the broadest shoulders should bear the heaviest burdens,” he noted.
That’s when financial services stocks plummet.
AIM closed Friday down 0.5 percent from the previous Friday, a disappointing result compared with the FTSE 100’s 0.8 percent gain.
The blue-chip index was supported by strong performances from a diverse group including Bunzl, easyJet and BAE.
Nanoco Group plc, the London-listed supplier of materials for infrared sensor applications, fell by a third after it announced the loss of a key European customer.
Broker Peel Hunt was not coy in his assessment of the news: ‘This strategic shift reduces Nanoco’s chances of commercialisation in 2025 to zero. The company expects revenues to be 25 per cent below consensus and the company to decline from a low starting point for the coming years.’
The broker said there is “potential for Nanoco to be used in a reverse takeover.”
Audio interface manufacturer Focusrite plc was the latest to warn of disruptions across the Red Sea and the associated shipping costs.
“Product introductions were planned for the final quarter, but the benefit from this was offset in August by a significant reduction in inventory policy by a major reseller,” the company said in a trading statement. Shares plunged 18 percent.
Shares in Quiz plc also fell 18 percent on Thursday after the online fashion retailer said it was still struggling and had turned to its founder and largest shareholder for financial help.
The company reported a loss of £5.2m for the year ended March, compared with a profit of £2.3m the year before. Liquidity shrank significantly, with cash reserves falling to just £300,000.
To stabilise the business, Quiz is in talks with Tarak Ramzan for a £1 million loan.
Among the biggest fallers in the mining sector were nickel minnow Uru Metals Ltd, down 29 percent; Critical Metals plc, down 35 percent after an operational update; and Tertiary Minerals plc, down 21 percent after announcing it had been denied a Swedish mining concession.
In contrast, small-cap coal miner Bisichi Mining plc surged, rising 46 percent on Friday, in response to a stellar half-year report.
Shareholder London & Associated Properties plc, with a 42 percent stake, also benefited, rising by around 29 percent on the prospect of attractive dividends from Bisichi’s growing cash position.
Earnings per share rose to 18.33p from a loss of 3.18p in the first half of 2023.
Bisichi attributed this to ‘a significant improvement in mining production and lower mining costs at Black Wattle Colliery, the Group’s South African mining operation.’
Greenroc Mining plc rose 29 percent as investors cheered the acquisition of land for a sustainable industrial park in southern Norway.
In the biotech sector, Faron Pharmaceuticals Limited led the way, rising 19 percent after receiving accelerated approval from the U.S. Food and Drug Administration (FDA) for its lead candidate, bexmarilimab, for the treatment of relapsed or refractory myelodysplastic syndrome (r/r MDS) in combination with azacitidine.
Peel Hunt called bexmarilimab “a very interesting addition to the oncology landscape.”
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