We start this month’s round-up with news of not just one but three new faces, all of which joined the market recently.
First up is One Health Group (OHGR:AIM), a provider of NHS-funded medical procedures, which raised £7.8 million before listing costs through a placing of shares at 180p to fund its first surgical hub.
The site is expected to deliver revenue of £6 million to £9 million per year, and the company says it will be earnings-enhancing within its first year of operations.
Investors seemed to like the story, with the shares closing at 192.5p on their first day of trading.
Also joining AIM was Wellnex Life (WNX:AIM), an Australian distribution company focused on consumer health and wellness products, which raised £5.2 million before expenses by placing shares in the UK and in Australia where the stock is listed on the ASX exchange.
Wellnex develops, licenses, markets and distributes its own consumer healthcare brands through leading retailers in Australia, with selected brands available in the UK through Superdrug and TK Maxx stores, while it also has a distribution deal with Haleon (HLN).
The stock was indicated at 32p on the first day of trading, slightly higher than the placing price of 31.75p per share.
Finally, we have Citius Resources, shortly to be renamed Harena Resources (HREE), which joined the main market and began trading last week with a market cap of £12.4 million.
The firm owns 75% of the Ampasindava rare earth project in Madagascar, one of the most significant deposits outside China, which controls 90% of rare earth refining, representing a supply-chain risk for Western companies.
Rare earth elements are used in military applications like parts for jet engines and nuclear submarines, in motors for electric vehicles and robotics, and in renewable energy infrastructure such as wind turbines.
On the first day of dealings, the stock lost 0.75p or 25% of its value to 3p per share which wasn’t the most auspicious of starts.
HANDBAGS AND GLAD RAGS
Long-suffering shareholders in fast-fashion group ASOS (ASC) must have been rubbing their eyes after the stock price rose by more than a third at the end of last week.
After the market closed on 19 March, the company revealed Danish billionaire Anders Povlsen had raised his stake to just below the 30% threshold which would trigger a mandatory bid.
Povlsen already controls the Topshop brand and there has been a flurry of internet rumours it could return to the British high street, in the same way as Boohoo (BOO:AIM) has resurrected the Debenhams name.
ASOS followed this up on 21 March with a bullish trading statement and a prediction first-half EBITDA (earnings before interest, tax, depreciation and amortisation) would top estimates thanks to higher full-price sales and lower costs.
Analysts at Panmure Liberum noted the firm’s full-year EBITDA target relied on sales recovering to flat from down 13% in the first half, which they say seems unlikely, and cautioned ASOS still has over £500 million of debt to pay off.
Meanwhile, there were acrimonious exchanges this month between engineering consulting firm Ricardo (RCD)) and its second-largest shareholder Science Group (SAG) after the former responded publicly to the latter’s written proposal to replace the company’s chair, audit chair and a non-executive director or face a general shareholder meeting to approve the changes.
As the board of Ricardo pointed out, Science Group isn’t a long-term investor but opportunistically amassed a 15.2% holding over the course of a few weeks when the shares were trading at a 15-year low.
The board also noted Science Group had adopted ‘similarly aggressive tactics’ in connection with its takeover of TP Group, and at Frontier Smart Technologies before its subsequent takeover, and advised shareholders to take no action.
In response, Science Group accused Ricardo of deflecting attention from the company’s poor performance and ‘destruction of shareholder value’ and described the board’s response as ‘a breach of confidentiality’ which undermined trust between the two.
Far from backing down, the board of Ricardo criticised its part-owner’s ‘aggressive approach’ and said its attempts to engage in constructive discussions had been rebuffed ‘while Science Group has continued to build its shareholding to take advantage of the company’s low share price’, the same strategy it employed previously.
Shares is settling in with popcorn and fizzy drinks to see how this one plays out.
RIDING INTO THE SUNSET
We end this month’s round-up with the news that after 22 years as manager, Neil Hermon has decided to retire from investment trust Henderson Smaller Companies (HSL).
Indriatti van Hien, co-manager for the last nine years, will continue to run the fund ‘according to its fundamental ethos’ said the firm.
The trust, which was founded in 1887 and aims to find ‘overlooked treasures’ among UK smaller companies, is one of the AIC’s (Association of Investment Companies) ‘Dividend Heroes’ and has beaten its benchmark over 10 years.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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