Character Group (CCT) reported interims to February and while revenue is unchanged at £57.4m, its PBT increased to £2.1m from last years depressed £0.2m. Over the years they have built a strong portfolio of toys and character contacts and two new releases Terror Fried and Coo Zit Ju are doing well. The improved profitability reflects a reduction in selling and distribution costs and resolving a Scandinavian distribution problem. The gross margins are solid at 27% and profits for the full year to September 2024 are set to exceed expectations. The second half includes Christmas sales and is much stronger so if near to previous level of profitability are achieved then the prospective P/E would be less then 8x with a 6% yield. There is no long-term debt and an interim dividend of 8p a share is to be paid. The company have also been a persistent buyer of its shares.
Comment: The 276p price and a market cap of £52m seem to undervalue both the team’s track record and its current trading.
Light Science Technologies (LST), announced an exclusive distribution agreement with agricultural automation provider AgriLogiq Technical Systems (PTY) LTD , which will enable the Company to market and sell its nurturGROW lights in South Africa. LST said it was delighted with this partnership, which is the first of many it is looking to implement globally. It believes there will continue to be a compelling backdrop for its solutions and looks forward to targeting high-growth regions, especially where growers have been less impacted by high input costs and where demand is synergistic with its product base.
Comment: It was suggested yesterday that LST is in the run up to being EBITDA positive, one of the share price sweet spots, and the company is more than backing up this idea with today’s announcement.
Echo Energy (ECHO) announced that it has been active in exploring potential opportunities to secure new assets. As a result of this process, and following a full review of the business, the Board is pleased to announce that it has decided to broaden the Company’s acquisition strategy towards a wider range of natural resources projects. ECHO said its focus is on finding opportunities to generate material value for its investors. Echo’s network and relationships, within Latin America, have presented opportunities across the natural resources spectrum, which it is rigorously reviewing.
Comment: With a market cap of 600k, it could be said that the company doth protest too much regarding its “rigorous reviewing.” It rather looks as though we are at the drawing board stage.
Metals Exploration (MTL), a gold producer in the Philippines, provided a further update on discussions with its lenders in respect of the repayment of the Group’s mezzanine debt facilities. MTL said that in light of the RHL Group’s position in respect of the application of 15% interest to its loans under the mezzanine facilities, MTL (Luxembourg) S.à r.l. (Nick Candy’s investment vehicle, holding 70.7% of the mezzanine debt) is also seeking to receive this interest rate on its own loans to the Company. This would result in approximately US$4.4 million being owed to MTL Lux pursuant to the mezzanine facilities as at 31 March 2024.
Comment: The Nick Candy angle here gives MTL the kind of sizzle, and perhaps even glamour that it might appreciate rather more if it were not in the kind of discussions it is in at the moment. Nevertheless, the stock has been one of the better stock performers of 2024, and hopefully this will remain the case.
Frontier Developments (FDEV), a developer and publisher of videogames, announced the signing of a licence with Universal Products & Experiences for a third Jurassic World game. FDEV said it was delighted to reveal that it is developing a third Jurassic World game to extend its collaborative relationship with Universal Products & Experiences for its best-selling game franchise. Its Jurassic World Evolution game franchise has showcased great creative and technical expertise in CMS games and the strength of its select, develop, launch, and nurture strategy in the genre.
Comment: FDEV has already been one of the better recovery situation on the London market this year, and it helps investors keen on the cause with a decent license agreement today. Hopefully, there will be further momentum in the same vein over the near future.
KEFI Gold and Copper (KEFI), the gold and copper exploration and development company, provided an operational update for the Hawiah Copper-Gold Project in the Company’s minority-owned Gold & Minerals Ltd joint venture. KEFI said exploration near its Hawiah copper-gold-zinc-silver deposit has quickly yielded validating results and unveiled two additional discoveries. The 65,000m Hawiah infill and expansion drilling programme is now more than 75% complete, with excellent confirmatory results. GMCO is also focused on upgrading and expanding the Al Godeyer resource (12km west of Hawiah) through diamond drilling. The enlarged MRE of +30Mt copper-gold-zinc is scheduled to be issued in late 2024 based on the current infill and extensional drilling programme.
Comment: It would appear that the KEFI strategy in terms of its announcements is that if you are going to talk jam tomorrow, make it a very big jar indeed. We look forward to the enlarged MRE later in the year, and presumably the re-rate for the stock ahead of it.
DG Innovate (DGI), the company developing solutions in sustainable mobility and energy storage, announced that it has conditionally raised £786,500 at 0.10p. The Placing was cornerstoned by Norway’s largest financial services group, DNB ASA, which will hold 4.89% of the Company’s enlarged issued ordinary share capital on admission of the Placing Shares. DGI said that the net proceeds from the Placing will provide the Company with short term funding to support the establishment of the joint venture with EVage Automotive Pvt. Limited and other commercial strategies, and also to strengthen the Company’s balance sheet ahead of a proposed move to the AIM market of the London Stock Exchange and an associated fundraise.
Comment: Having recently somewhat blotted its copybook via dealings with a person associated with a director, the company is choosing to butter up shareholders not only with a fundraise, but with the promise of another fundraise. But at least it is moving to AIM, presumably on the basis that at least someone should stem the exodus from one of the most expensive, hardest to raise money on, and over-regulated places to be listed in the world.
Synthomer (SYNT) issued a scheduled update on trading for the first quarter of 2024, ahead of today’s AGM. SYNT said it was cautiously encouraged by trading since the start of the year: while there are signs of improvement in some of its end markets, visibility of a sustained recovery remains elusive at this stage. It therefore continues to strengthen Synthomer’s position for the future, by delivering its specialisation strategy, optimising its portfolio and cost position, and demonstrating the cash generative nature of our business.
Comment: Shares of SYNT were trading at over 40p just a few years ago. Given the skill with which the company has managed to keep itself under the radar, and with a trading update whose language is definitely not in the “we shall fight them on the beaches” category, it may still be a long road back to recovery.
Great Western Mining Corporation (GWMO), which is exploring and developing multiple early-stage gold, silver and copper targets in Nevada, USA, announced its results for the year ended 31 December 2023. The Company is in the exploration, appraisal and development phase and currently has no revenues. Loss for year €952,654 (2022: loss of €792,263). Net assets at year-end: €8.8 million (2022: €8.6 million). Cash at 31 December 2023: €0.10 million (2023: €0.15 million). GWMO said that progress during the report year and subsequent months has been very encouraging and it has made great strides in proving up the potential of its claims. It is particularly excited about a significant upgrade in the copper potential at West Huntoon where the prospect of a major, commercial copper porphyry on the Company’s claims offers the sort of upside that should be highly interesting to investors in mineral resources and provide long term value for shareholders.
Comment: Fans of GWMO are probably best advised to focus on the Chairman’s comment rather than the financial highlights. This is still a play for those who enjoy the thrill of the chase.
Ariana Resources (AAU), the AIM-listed mineral exploration and development company, announced an interim revision to the Dokwe Pre-Feasibility Study in Zimbabwe. Pre-Feasibility Study financial model update on the Reserves at Dokwe North provide a post-tax NPV10 of US$160 million and an IRR of 41% at a gold price of US$2,000/oz. AAU said this substantial update to the Dokwe Project PFS further underscores its assessment that the Project represents a major value-accretive opportunity for the proposed enlarged Company once it completes its merger with Rockover. Notably, the revised PFS only includes the Dokwe North area and there is significant scope to enhance the economics further if Dokwe Central is included.
Comment: After spending years apparently treading water, it does look as though AAU is finally bringing itself into land with a deal of scale, helped along of course by record gold prices.
Strategic Minerals (SML), a profitable producing mineral company, updated shareholders on the current progress and operations at its 100% owned subsidiary Cornwall Resources Limited. SML said that project economics have been bolstered by recent upward moves in Tin, Tungsten and Copper prices even prior to the likely impact of material exploration upside from the existing area and the TVLA. It looks forward to updating the market on the external results from re-examination of the existing cores and findings in relation to the Tamar Valley License Area.
Comment: SML is proving to be a cut above its peers, and not only on the basis of the production. The market is currently missing the boost to project economics commodities prices are currently having.
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