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STOCK MARKET NEWS – RNS HOTLIST

RNS Hotlist July 4: Corero, Hydrogen Utopia, Jersey, Kooth, Predator, Synectics, Synergia, TM1, Versarien

04/07/2023

RNS Hotlist July 4: Corero, Hydrogen Utopia, Jersey, Kooth, Predator, Synectics, Synergia, TM1, Versarien

Hydrogen Utopia International (HUI), a company specialising in turning non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels, announced that its Irish subsidiary, Alister Future Technologies (AFT), has been notified that it has been successful in its application for an EU grant as part of a transnational European consortium established to foster the fight against ocean borne plastic pollution in the Atlantic regions of Europe. The grant is expected to reimburse AFT for 75% of expenditure of up to EUR450,000 to be incurred by it in Ireland in identifying a solution for creating value from such plastic waste through processing it into syngas and hydrogen. The company said its business strategy from the outset has been to seek third party and EU or other governmental funding for the development of HUI facilities.

Comment: There are three points to note in the wake of HUI’s latest news. First that the EU does not give its cash away to smaller companies lightly, second it would have kicked the tyres of the HUI technology, and thirdly, that the grant in Ireland could be the forerunner of further such grants across HUI’s EU footprint in continental Europe. It is also of course, a decent financial shot in the arm in its own right for the company.

Jersey Oil & Gas (JOG), an independent upstream oil and gas company ‎focused on the UK Continental Shelf region of the North Sea, is pleased to announce that the North Sea Transition Authority has approved an extension to the Second Term of the P2170 “Verbier” licence.

Comment: Perhaps rather surprisingly, shares of JOG did not respond to last month’s farm-out news. They have a second chance to redeem themselves after the latest license extension news, a revisit the dizzy heights of April through 350p.

Corero Network Security (CNS), a provider of distributed denial of service (DDoS) protection solutions, announced significant order momentum from both new and existing customers for its market-leading SmartWall® DDoS protection solutions and services across Q2 2023. A separate update on trading for the six months ended 30 June 2023 will follow later in the month. The orders total $6.0 million (average value per customer of $597,000) over the course of the contract. The company said it was pleased to report strong customer momentum across Q2, including two of Corero’s largest software subscription license sales to date. These key customer wins add to its growing recurring revenue base.

Comment: Ideally, today’s news will give CNS shares the shot in the arm they need, given that they are around two thirds down from the peaks of 2022. The key here is whether the market will appreciate its recurring revenue base. The net cash is around $4.4m so there is no immediate cash requirement. Caraway Group Inc, Panama registered management consultancy business has emerged with 10%. CNS is just under the sweet- point of the earnings curve, which could generate takeover interest if the recovery is too slow.

Technology Minerals (TM1), which is focused on creating a sustainable circular economy for battery metals, announced its 48.25% owned battery recycling business, Recyclus Group will be initiating the commissioning phase at the UK’s first industrial scale lithium-ion battery recycling facility in Wolverhampton, West Midlands. The company said it was pleased that Recyclus will shortly begin the commissioning phase at the state-of-the-art Li-ion battery recycling facility, the first of its kind and of this scale in the UK.

Comment: Shares of TM1 have somewhat retreated from their April peaks, so the RNS today may re-light the fire of earlier in 2023, as investors look forward to Recyclus finally being on tap.

Kooth (KOO), a company focused on digital mental well-being, confirmed that definitive contract documentation in relation to this has now been signed with California’s Department of Health Care Services. KOO said the contract confirms Kooth’s momentum in the US market and follows a pilot contract signed with Pennsylvania State in 2022. The new contract has a minimum total contract value of $188m through to June 2027. Kooth intends to raise £10m at 300p to fund its expansion strategy. The company said it was incredibly proud to partner with California’s Department of Health Care Services to help tackle the growing crisis in youth mental health.

Comment: It would appear that Kooth has blown the lights out as far as this mega contract win, first highlighted in March. With the shares having been firm of late, it will be interesting to see how easily the company raises the £10m it is currently looking for, especially given that at 300p it is well above the overnight 261p close.

Synergia Energy (SYN) updated concerning implementation of artificial lift equipment for the Cambay C-77H well. The company said the workover rig is now scheduled to arrive on the Cambay location on July 12th and to commence workover operations on July 14th. The workover program has been modified at the request of the Directorate of Hydrocarbons. The revised program calls for the removal of the production tubing and milling out of the bridge plug that currently isolates the original four fracked zones from the two currently producing re-frac zones.

Comment: As far as the spring recovery in the share price is concerned, SYN will need to see a decent month of progress in July, to get the rally back in gear. The progress of the workover operations is now key.

Predator Oil & Gas Holdings (PRD), the Jersey based Oil and Gas Company with near-term gas operations focussed on Morocco, announce that the MOU-4 well commenced drilling on 29 June 2023 at the start of the Eid holiday in Morocco.

Comment: Given the recent share price rebound, perhaps one could have been able to tell that drilling was underway at MOU-4. Presumably, a move through say, 20p will hint that MOU-4 has been a decent success.

Versarien (VRS), the advanced materials engineering group, said it will be holding a General Meeting at 10.00 a.m. today, at which the following statement will be provided: The company’s turnaround strategy continues to progress. Its cost base has been reduced significantly in recent months with unaudited LBITDAE (loss before interest, tax, depreciation, amortisation and exceptional items) at a much lower level than in the first six months of the financial year.

Comment: While it may be something of an exaggeration to say that the new powers that be have managed the situation with ease in terms of the turnaround strategy, such a comment seems close to the mark. That said, a fresh break above 2p is needed by the stock to underline that the market is also giving the company the benefit of the doubt.

Synectics (SNX) a contract is announced for around £2.0m, to supply specialist camera stations for Saudi Aramco’s Zuluf development programme. SNX, design and integrate advanced security and surveillance systems that protect people, property, and assets for specific markets where security and surveillance are critical to operations, such as gaming, oil and gas, public space, transport, and critical infrastructure. This is additional to the £3.5m already won with its integration partner 3W Networks, to provide Saudi related Security CCTV systems.

Comment: The pre-Interim to May Trading updated suggested it would be a stronger second half and Interims are to be reported on Tuesday 11th of July. There is net cash of circa £4.0m, which is sufficient to fund organic growth as well as the increased dividend from 2p paid at the full year. The shares drifted from 130p but this announcement supports the management statement that the order book is materially ahead with a significant proportion delivered by the November 2023 year-end last year’s revenue was £39m.

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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