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Good morning and welcome to this edition of “AIM’s Essential Top Ten”, a brief and early roundup of the main news announcements. This morning’s edition includes PMO, SAFE and SDY from the Main Market.
Kibo Mining (LSE:KIBO)
Sanderson Loan Facility Repayment: £1.5 million loan terms have been re-negotiated. It has been converted to equity in the Kibo subsidiary which holds the Mbeya Coal to Power Project. £150k of Kibo shares also issued as a loan conversion fee.
GN view: It never looks good when debt has to be renegotiated. But at least this outcome is better than the alternative! And the lender provides a new £600k facility at the same terms.
McColl’s Retail Group (LSE:MCLS)
Q3 Trading Update: Revenue up 1.8% for the quarter, 2.0% YTD. Like-for-like sales down 1.8%. On track to achieve 1,000 convenience stores by Dec 2016.
GN view: Slightly worrying trend in the standard convenience stores and newsagents. Purchased 298 convenience stores from Co-Op in July; not the best way to grow. But overall, looks to be a solid company.
New World Oil & Gas (LSE:NEW)
Update on Big Sofa and AGM: Continuing to make good progress with possible reverse takeover of Big Sofa, a video analytics company. New World providing a further £100k (on top of previous £500k) to assist with its growth. Oil and gas assets being dissolved/relinquished.
GN view: Good to see progress being made. Might be worth asking what other forms of financing Big Sofa has access to. Lending to a company in advance of a possible reverse takeover by it looks unusual.
Paysafe (LSE:PAYS)
Acquisition of Income Access for CAD 40m: Income Access provides “innovative affiliate technology for businesses to manage their performance marketing programmes”. 25,000 affiliates use its software.
GN View: I generally prefer organic rather than acquisition-led growth but this is sufficiently small relative to the overall size of Paysafe that it can be considered as a bolt-on.
Premier Oil (LSE:PMO)
Lender Discussions Update: Covenant test for 12 month period ending August 2016 waived, replaced by test for 12 month period ending September 2016. Continued monthly deferrals expected until negotiations conclude.
GN view: I continue to believe there is a strong chance the balance sheet at Premier is too thin to enable them to satisfy relaxed (let alone normal) bank covenants. Hopefully I will be proven wrong. Continued deferrals show that the lenders remain patient. But the continued need for deferral says enough on its own and puts the onus on Premier to find a solution.
Redde (LSE:REDD)
Full year results: Like for like turnover up 28%, total turnover up 53% to £379 million. Adjusted EBIT up 55% to £34.5 million. Statutory basis EPS of 8.66p, down 3.5%. Final dividend up 21%. Outlook sounds good with performance since year end ahead of expectations.
GN view: The reduction in statutory EPS reflects a variety of adjustments. Worth analysing those adjustments in Note 6 – I do not treat share-based payments as exceptional. The big picture seems pretty good with the dividend increase reflecting confidence.
Speedy Hire (LSE:SDY)
Response to Toscafund: Strongly-worded letter to shareholders published urging them to vote against the two resolutions proposed by Toscafund at a special General Meeting (to remove the current Chairman and to appoint his replacement).
GN view: I’m not in a position to determine the merits of the arguments, but would simply be wary that it will be difficult for management to concentrate on the company while this issue is ongoing. So hopefully there will be a quick and decisive resolution either way. Also, are the disagreements symptomatic of other underlying problems?
Safestore Holdings (LSE:SAFE)
Q3 update: Like-for-like revenues up 6.6% at constant exchange rates. Total revenue up 6.3% YTD. UK up at a faster rate than Paris. Rising occupancy levels to 74.8%.
GN view: Good company and helpful quarterly reporting. Rising occupancy suggests at a most basic level that expansion could be in the works. I believe that rising demand for these services will be a secular trend.
Sirius Minerals (LSE:SXX)
Financing – Progress Update: Six potential sender lenders have been mandated as part of a “non-binding but mutually agreed term sheet.” Stage 2 capital funding of up to $2.6 billion sought.
Vertu Motors (LSE:VTU)
Pre-Close Trading Update: In line with expectations, record revenues and profits. Aftersales/used cars continuing to grow. But UK new retail vehicle registrations are now softening.
GN view: No new figures in the statement, have to wait until October 12 for actual results. But another piece of evidence that the few car dealerships which are publicly listed look potentially interesting.
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