SMALL CAP MOVERS: Watkin Jones slumps after profit warnings; Joules rebounds 50%

I watched the second series of Industry, the BBC drama about young people working in the city’s pressure cooker – mainly to see if this fictional account of the goings on in the Square Mile matched the reality (it didn’t). ).

Still, it’s an entertaining romp, which made me laugh when Harper, one of the main characters, is reprimanded by Eric, her boss, for using the term “canary in the coal mine.”

Strong words removed, here’s Eric’s answer (and I’m paraphrasing): ‘Please. That’s a poncy term used only by financial journalists. No one in our industry would be that arrogant.’

Well, I’m getting a dispensation for being (nominal) a financial journalist.

And when I saw Tuesday’s trading update from Watkin Jonesbuilding property for the student and buy-to-rent sectors, I wondered if it was a preview of what’s to come – not just for the builders, but for the wider, overburdened UK property sector.

If this is the case, then Watkin Jones is the classic ‘canary in the coal mine’.

WJ was one of AIM’s biggest losers this week, as its shares plunged more than a third after sounding the profit alarm, blaming softer profit margins and a volatile market backdrop. Analysts immediately lowered their forecasts.

With a net present value of £75 million, or about 30 pence per share (while the current market price is close to 94 pence), it has the financial means to weather the approaching storm.

There was also bad news for PCF group, which fell 44 percent this week after it said it wanted to raise growth capital as it explored “transaction options” after an alleged bidder ran away. It also said its banking activities would stop granting new loans.

Although it’s been a bumpy week for the markets, the direction of travel has been largely positive, especially for the US tech-led Nasdaq index, which has recovered 2.85 percent of its value over the past five trading days.

This positivity crossed the Atlantic to push into British small caps, with the AIM All-Share rising 1.2 percent.

It was a great week if you are a recent investor in Trellus Healthwhose shares rose more than 80 percent in the wake of what was clearly seen as a reassuring update on progress in interim results.

The company, which has developed a solution that helps people cope with chronic health problems, spoke at length about the accelerated commercial progress.

Probably a more anodyne explanation for the market reaction was the reduction in the company’s cash burn, which should see the £21.5 million it has in the bank until 2025.

Now look away if you bought the shares at the May 2021 IPO for 40p – even after this week’s progress, they are currently trading around 13p.

joulethe bombed-out luxury apparel group that dismissed rumors it was considering launching insolvency proceedings called a CVA last week saw a Lazarus-like rebound in the price of its stock, which jumped about 50 percent.

A snooping around the legal registrations revealed this truffle-like nugget – that a guy named Richard Teatum has emerged as the owner of an 8.9 percent stake in the company.

Whether it is the same Richard Teatum – the entrepreneur and former mechanic who invested in the publicly traded car salesman Vertu – has not been confirmed, although it seems likely.

Still, it will be interesting to see how the Joules turnaround strategy plays out and whether Mr. Teatum will recoup his investment.

Stakes: Richard Teatum has emerged as the owner of an 8.9% stake in Joules

Holding on to the winners, Europe Metalsup 21 percent, had a good week after it announced a £5.4 million deal that would allow a Canadian mining developer to monetize its lead-zinc discovery in northern Spain.

Poolbeg Pharmathat is developing a new shot for severe flu rose nearly 30 percent after an update on his patent law and after he told the market that its director, Jeremy Skillington, had dived into his own pocket to buy stock.

It was probably the last action that raised the boat. Investors are positive about these types of stock purchases as they are seen as aligning management and shareholder interests with the former seen as “skin in the game.”

Finally, there was a boost for investors in See machineswhich is at the forefront of eye-tracking technology.

It announced on Thursday it was working with Canadian auto parts maker Magna International to develop a rear-view mirror that can monitor what’s happening inside the car, specifically the driver’s seat.

The deal involved £58m in additional investment which, a City broker said, wiped out any lingering concerns over financing. The stock rose 22 percent.