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RNS Hotlist August 3: Coro, Creo, Horizonte, Kodal, LifeSafe, Maintel, Mkango, Omega, Polarean, Sareum, Streaks AI, Tirupati, Union Jack

03/08/2023

RNS Hotlist August 3: Coro, Creo, Horizonte, Kodal, LifeSafe, Maintel, Mkango, Omega, Polarean, Sareum, Streaks AI, Tirupati, Union Jack

Tirupati Graphite (TGR), the specialist graphite producer and developer of sustainable new age materials, announced its Audited Final Results for the year ended 31 March 2023 (FY23).  Operating margins were up due to actions taken to mitigate weather conditions and increasing capacity across Madagascan projects to 30,000tpa. Post year end, the company was ramping up production and sales with a target to achieve 75 – 80% of rated capacity at the earliest possible.

Comment: TGR is entering the phase of its life cycle when it is all about ramping up production, meeting targets, and of course generating revenues. In its third year on the London market, all of this seems imminent.

Streaks AI (STK), a UK-based generative AI platform, announce that it is entering into a partnership with WeShop, a community owned social commerce platform that combines shopping with social media and has a network of over 1,300 influencers with a combined reach of over 50 million followers. STK said that it was thrilled to join hands with WeShop, a trailblazer in the social selling domain. Together, we will redefine customer service and engagement, enabling brands to build stronger connections with their audience. This partnership marks the beginning of a new era, where AI and social selling merge to create unforgettable experiences for customers.

Comment: Streaks AI delivers a logical, creative and eye catching deal with WeShop, something that leverages the best of both platforms. The social selling concept looks to be right on the money, when partnered with AI.

Sareum Holdings (SAR), a clinical-stage biotechnology company, announced that it has agreed terms on an Equity Prepayment Facility of up to £5 million with RiverFort Global Opportunities. with an initial deposit of £2 million, expected to be received by the Company on 4th August 2023. SAR said its lead candidate SDC-1801 is progressing well in its development. SAR said this agreement with RiverFort provides important support for the trial and general working capital. This funding, if fully drawn, alongside anticipated tax credits, allows it to complete plans for the Phase 1b portion of the trial once the Phase 1a part is concluded, and provides cash runway into Q4 2024.

Comment: Sareum gets a decent chunk of change from Riverfort, which should be a decent runway for the company to deliver on its plans. Set against this backdrop one would expect the recent share price pullback to stabilise.

Coro Energy (CORO), the South East Asian energy company with a natural gas and clean energy portfolio, announces that it has received an indicative funding proposal from and is now in advanced talks with Capton Energy regarding possible co-investment solutions for Coro’s Vietnamese rooftop solar projects. The company said it was delighted to be working with Capton Energy, who have both a substantial balance sheet and strong experience in renewables deployment.

Comment: Coro has been the smart small investor’s choice for quite some time, with perhaps the only thing missing being a decent deal as a company maker. Today’s news may be what gets the stock over the line.

Omega (ODX), the specialist medical diagnostics company, announced its audited results for the year ended 31 March 2023, a year which has overseen the final steps of restructuring a business now focused on promoting a personalised and functional approach to health. The company said this year has seen the final steps in the withdrawal from the Global Heath business through the divestment of the loss making CD4 business and the full relocation to our Health and Nutrition manufacturing site in Ely, Cambridgeshire. It has started its journey into the U.S. market and entered into two agreements with established testing laboratories which will be installing and validating its core food sensitivity testing product, FoodPrint®.

Comment: Like many so called Covid plays, it has been quite a job for companies like ODX to pivot into non-pandemic conditions, after the bubble a couple of years ago. This process seems to be nearly complete.

Creo Medical Group (CREO), the medical device company, provided an unaudited trading update for the six months ended 30 June 2023. Total revenue in H1-2023 of £15.7m, a 15% increase vs H1-2022 : £13.6m. The company said Creo has made considerable strides across all areas of the business over the past six months, not only in terms of attracting the necessary funding to provide it with a clear path towards break even, but also in terms of the rapid pace of adoption and recognition that the Company is now achieving globally. This has been reflected in the significantly improved performance in both its core technology revenues and its number of confirmed users.

Comment: Creo stands out in its space as being a potential significant growth situation. This point has been underlined in the revenue jump for the H1 2023, and one would expect this momentum to continue.

LifeSafe Holdings (LIFS), a fire safety technology business. announced its intention to raise gross proceeds of up to, in aggregate, approximately £0.94 million by means of a placing of new Ordinary Shares to certain institutional and other investors at 37p. The company said looking ahead to FY23, the revenue market expectations were revised from £5.5 million to £6.5 million in February 2023. The strong performance observed in the first half of FY23 has further surpassed these expectations, reflecting the company’s consistent success across its key consumer, wholesale and industrial sales channels. Furthermore, the Board believes that the company’s ongoing product development augurs well for future growth and market expansion.

Comment: The share price of LifeSafe has been on hold as the market awaited the funding news we have received today. Indeed, it has thus far chosen to ignore the sales outperformance, something which one would now expect to be back in focus.

Maintel (MAI) are reporting its interims to June on the Tuesday 19th September. Its Trading Update anticipated delivering virtually unchanged EBITDA of £3.7m and Revenue up slightly to £47.5m, having won new business with Provident, Harrods, Unify, Angus Council and IDH. After a few years of ‘plenty of profits’ this cloud based and managed communications provider crashed into losses at the Finals with £4.9m. The management are focused on strategic changes to optimise the Company’s market and product strategy to deliver sustainable future profitability. The elephant in the room is the increase in debt to £21m which is around the same as the mkt cap.

Comment: The management appear have been rather blind-sided by the investment and business cycles, and so fundamental changes will need to be made, especially with regard to the debt pile.

Mkango Resources (MKA) announced that, further to the previous announcement on May 16, 2023, Maginito Limited has completed the transaction to increase its ownership in HyProMag Limited to 100% for a cash and share consideration. The consideration payable to the selling HyProMag shareholders comprises £1m (C$1.7m) in cash and the issue of 9,742,031 Mkango common shares equivalent to £1m (C$1.7m) at a price equal per share to 10.26p.

Comment: MKA has been aggressive this year in its deal making, a point underlined by the HyProMag deal’s recent history. Hopefully, the market will start to reward MKA via its share price from current levels near one year support.

Union Jack Oil (UJO) a UK focused onshore hydrocarbon production, announced that material landmark net revenues in excess of $17,000,000 have been achieved from the Wressle hydrocarbon development, located within licences PEDL180 and PEDL182 in North Lincolnshire on the western margin of the Humber Basin. The company said the $17,000,000 net revenues achieved to date from Wressle (UJO 40%) has been transformational and continues to bolster the company’s Balance Sheet, complemented by additional cash-flow from the Keddington oilfield (UJO 55%).

Comment: UJO continues to remind the market of its revenue generating prowess, something which has been under-appreciated in the recent past, especially given the resurgence in the oil price of late.

Polarean Imaging (POLX), a commercial-stage medical device company, announced it has received 510(k) clearance from the FDA for the company’s specialised MRI chest coil to now include Philips 3.0T MRI scanners for the visualisation of the Xenon-129 (129Xe) nuclei. The company said Polarean continues to develop and launch new devices and accessories that empower sites to perform modern respiratory imaging, enabling as many clinicians as possible to use its technology for their patients. This FDA clearance also further supports its recently announced collaboration with Philips, by expanding its product line to be compatible with their advanced MRI systems.

Comment: Most companies receive rather more benefit in terms of their stock market rating when successfully dealing with the FDA as POLX has done. Perhaps today’s news, with the shares right on year lows, could be enough to start turning the tide.

Kodal Minerals (KOD), the mineral exploration and development company, announced a conditional prepayment of $3,500,000 as part of the funding package for the Bougouni Lithium Project announced on 19 January 2023. The company said it was very pleased to have received the support of the Hainan Group with the Prepayment for some of the subscription agreement, allowing it to continue to advance the Bougouni Lithium project while it works towards completion of the Funding Package.

Comment: Today’s cash injection for KOD reminds us that the stock has effectively halved since its April peak, something which appeared out of kilter, even before the funding package news.

Horizonte Minerals (HZM), the nickel company developing two Tier 1 assets in Brazil, reports that it is continuing to make good progress on the construction of its 100%-owned Araguaia Nickel Project Line 1. The company is targeting first metal in Q1 2024. The company said whilst the key focus is the construction activities at Araguaia, it is making good progress on the Line 2 Feasibility Study which is scheduled to be published later this year. The proposed expansion has the potential to double the annual nickel production to 29,000 tonnes per year.

Comment: With first metal fast approaching, it would be expected that shares of HZM’s great rebound since the autumn to resume, and even accelerate.  In this company we have had a decent illustration of how to execute a project, despite the slings and arrows of the recent past.

Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.

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