Small Cap Movers: Keywords Studios provides double dose of good news


Keywords Studios PLC (LON:KWS) showed the strength of the video games industry with a double dose of good news this week.

The technical services provider, which boasts Nintendo and Google on its client roster, raised its adjusted pre-tax profit estimates to €52mln, well above market expectations for €46mln and the €40.9mln posted a year ago.

It also announced the planned acquisition of Los Angeles-based marketing firm g-Net Media for up to US$32mln, with an initial payment of US$14mln in cash and US$3.6mln in new shares, followed by a potential addition of US$14mln based on performance.

The deal is another link in the chain for Keywords, which has seen its shares climb 44% to 2,235p so far in 2020 thanks to booming demand for videogames from people forced to stay at home during the coronavirus (COVID-19) lockdowns, as it looks to become “the ‘go-to’ technical and creative services platform” in the industry.

After completing a £100mln placing in May, the junior IT firm was also the first example of a listed company since the onset of COVID-19 to raise equity just for acquisitions, Goodbody noted.

According to the stockbroker, the pandemic drove a decade-high surge in capital raising across the City, with 463 companies raising a grand total of £26bn from investors in the nine months to October.

Small-cap broker finnCap Group PLC (LON:FCAP) noted that its life sciences clients alone raised £200mln.

“We are delighted to see the resurgence in the life science sector this year … We believe [it] will continue to prosper in 2021 and beyond,” said finnCap corporate finance director Geoff Nash.

Turning to the wider market, the AIM-All Share index rose 0.7% to 1,038 this week, outperforming a 0.7% dip to 6,311 by the FTSE 100.

Online retailer boohoo Group PLC (LON:BOO) slipped on Friday as it appointed retired judge Brian Leveson to oversee plans to improve governance following last summer’s scandal over poor working practices at its suppliers. Shares have recovered by 33% to 298p since the news broke in July, although investors had mixed feelings about the clothier advertising a pair of trousers for 15p on Black Friday, among other rock-bottom prices.

Among the risers, personalised healthcare company Concepta PLC (LON:CPT) jumped 70% to 1p after snapping up Genome Store, a home-use genetic testing firm, for £280,000-worth of shares.

Graphene firm Directa Plus PLC (LON:DCTA) shot up 34% to 83p after its partner NexTech Batteries unveiled a prototype battery that uses Directa’s G+ pristine graphene nanoplatelets.

Meanwhile, event equipment supplier Arena Events Group PLC (LON:ARE) climbed 28% to 10p after Downing Street said outdoor sporting events would be allowed to host a maximum of 2,000 attendees once the current lockdown ends next week.

Elsewhere, Immunodiagnostics Systems Holdings PLC (LON:IDH) jumped 25% to 250p after two of its COVID-19 test kits, which provide results within 15 minutes, went on sale in Europe.

Among the fallers, LoopUp tanked 46% to 94p after warning full-year revenue and underlying earnings will be below current market expectations because its online meetings software is losing non-business customers.

Ironveld PLC (LON:IRON) slumped 43% to 0.3p after raising £1mln via a fundraising at a 53.8% discount to repay debt and gain some financial stability.

Similarly, Serinus Energy plc (LON:SENX) lost 32% to 2p after raising £15mln from an oversubscribed share issue where the oiler placed shares at a 42% discount, with the proceeds to be used to repay debt and to fund work in Tunisia.

Remaining in the sector, Reabold Resources PLC (LON:RBD) and Union Jack Oil PLC (LON:UJO) lost 26% and 7% to 0.4p and 0.1p, respectively, after a disappointing update on the West Newton project onshore England. A well was drilled as planned but one of the targets did not have enough resources to be developed.

Moving elsewhere, Remote Monitored Systems tumbled 37% to 1p after Braveheart Investment Group PLC (LON:BRH) sold more shares in the data collection and analysis business for £17mln, in part to inject cash in one of its portfolio firms, exiting the investment. In turn, Braveheart  – which got the shares after selling its stake in a unit to RMS last month – slipped 16% to 36p.

Next week, two companies are scheduled to join the junior market: helium gas developer Helium One, with an IPO of £6mln, and diagnostics firm Abingdon Health, with an initial offering still to be finalised.


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