Mike Ashley’s Frasers Group’s interest in distressed retailers continues to grow by the day.
On the menu this week Hornby plcthe model train maker whose roots go back to the early 20th century.
Fraserswhich, in addition to Sports Direct, has interests in boohoo, Currys and Asos, increased its ownership stake in Hornby – whose products are already in Frasers’ GAME stores – to 8.9 per cent according to an announcement on Friday.
“Hornby’s portfolio of unique heritage brands is already part of GAME’s product offering and we look forward to exploring opportunities to further leverage our scale in retail logistics and distribution. This is consistent with our strategy to pursue strategic interests to enhance value for all stakeholders,” said Frasers Chief Financial Officer Chris Wootton.
“We look forward to exploring commercial opportunities by working together to unlock the full potential of Hornby’s much-loved brands,” said Hornby boss Olly Raeburn.
Going even further, Frasers Group increased its ownership stake in Hornby – whose products are already in Frasers GAME stores – to 8.9 percent in an announcement on Friday
“Profit warnings are more frequent than the number 8 bus to London Victoria,” said Russ Mould, investment director at AJ Bell on Hornby.
But long-suffering Horby shares soared to the top of the small cap scene after Friday’s announcement, adding 40 per cent to 29.2p.
Things were less encouraging for the small-cap stock market as a whole, with the AIM All-Share Index down about 10 points, or 1.3 percent, to 748 for the week.
The leading index also underperformed, with the FTSE 100 closing 24 points lower, largely thanks to a mid-week dip after several weak results from leading companies (hello HSBC) pushed the index lower.
Weak economic growth forecasts from Nina Skero, boss of the Center for Economics and Business Research (CEBR), did not help either.
Yet there were some notable gainers in the AIM market, not least Marlowe plc.
Marlowe plc shares rose 48 percent, the strongest among the AIM ranges, as the software company announced the sale of some of its assets to Inflexion Private Equity for £430 million.
The proceeds represented 121 percent of Marlowe’s market capitalization, with the money intended to pay down debt and return cash to shareholders.
“The achieved valuation demonstrates the substantial potential within our business and will reset our capital structure, providing Marlowe with strategic agility,” said Chairman Kevin Quinn.
Advertising and promotion minnow SpaceandPeople plc had a better than expected second half of 2023, mainly thanks to the Brand Experience business, the launch of the ‘Rock Up and Pop Up’ retail kiosk service and the further recovery of the German retail activities.
Sales were around £5.8m, up from £4.7m in 2022, and shares rose 23 per cent for the week.
Harvest Minerals Ltd continued to make gains after the AIM-listed fertilizer producer reported an order target of 70,000 tonnes for 2024 at the end of last week. Shares rose another 28 percent this week.
Empyrean Energy plc led the charge in the energy sector, with investors welcoming an update to the Mako field development project in Indonesia, where key commercial terms have now been approved by the government.
It is seen as an important milestone that now allows the project operator to finalize full gas sales agreements and move the project closer to production. Empyrean shares rose by 27 percent as a result.
Powerhouse Energy Group plc shares rose by a quarter after announcing a groundbreaking five-year framework agreement with Australia’s National Hydrogen.
This deal marks a significant expansion for Powerhouse as it could deploy its advanced waste-to-energy technology in Australia, Italy, Switzerland and Hong Kong.
TomCo Energy plc witnessed a technical write-down after £300,000 of new funds were raised through an equity raising process, with the proceeds providing working capital to continue the project in Utah.
Shares fell 40 percent.
Shares in Horizonte Minerals PLC were halved after the announcement that the bill for the completion of Brazil’s nickel mine had almost doubled to $1 billion.
Despite the setback, Horizonte expects to spit out its first metal in early 2026, which seems optimistic considering the additional money needed has yet to be found.
Finally, it would be remiss not to mention the most important listed companies CAB Payments Holdings plcwhich has parted ways with its CEO after a disastrous period since it went public in July last year.
CAB has lost 70 percent of its value since its IPO, most of which followed a profit warning just three months after the IPO.
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