Air Partner (LSE:AIR) PLC, the aviation services group, has seen its shares gain some altitute after unveiling new contracts in its safety and security division.
Its Baines Simmons consultancy will has won a contract with Caledonian MacBrayne, the UK’s largest ferry operator in terms of ships and destinations served. Baines will implement a programme designed to ensure open and honest safety reporting and increased staff engagement. .
Meanwhile Redline, a leading provider of global security solutions, has won a new contract with London Gatwick Airport and agreed a 12-month contract extension with Manchester Airports Group, both for the provision of a quality assurance covert testing programme.
Air Partner chief executive Mark Briffa said: “The pandemic significantly impacted our safety and security activities and we are delighted that the division is now experiencing continued recovery and growing momentum, as evidenced by these new business wins for both Baines Simmons and Redline. The work with CalMac highlights the demand for Baines Simmons’ expertise beyond the aviation industry, demonstrating the reach of our offering.”
Air Partner is up 3.28% to 87.89p.
12.54pm: Scottish Mortgage Investment Trust shares hit new peak
Shares in Scottish Mortgage Investment Trust PLC (LSE:SMT) have hit a new record as it continues to benefit from a recovery in technology stocks.
The FTSE 100-listed investment trust is best known in recent years for its highly successful backing of big tech in the US and China, with investments including Tesla, Moderna and Tencent.
With the Nasdaq Composite up just over 1% on Wednesday and forecast to rise another 0.6% at Thursday’s open, Scottish Mortgage is currently up 1.61% at 1448.5p.
Earlier it hit a new all time high of 1457p.
11.34am: Xeros Technology falls as date for break-even pushed further over the horizon
Xeros Technology Group PLC (AIM:XSG) shares are looking a little threadbare after it pushed back the date when it expected to break even.
The company, whose technologies are designed to improve the sustainabilty and economics of garments and fabrics, said COVID-19 continued to disrupt its licensees’ business.
Despite half year revenues rising 58.6% and losses falling from GBP5.4mln to GBP2.8mln, its shares have fallen 7.25% or 14.5p to 185.5p.
It said: “COVID-19 has caused royalty income to be delayed further since we reported our year end results in April. Whilst this impacts our short-term revenues, our licensees commitment to our XTend platform technology remains very high as witnessed by a number of market entries..
“Our proprietary XFiltra platform technology [which addresses microfibre pollution from washing machines] has made significant progress and our ambition remains for our domestic design to be within all washing machines across Europe and ultimately, globally…
“There are many factors that influence the timing to cash breakeven in Xeros with our licensees’ performance against their contracts and the signature of contracts with additional licensees being fundamental to this.
“Under previous assumptions, our expectation was to reach breakeven by the end of 2022. Given the further delays from COVID-19, our best estimate is that cash breakeven will move to the first quarter of 2023.”
10.19am: CVS benefits from boom in pets during lockdown
The nation’s obsession with pets shows no signs of abating, to judge by results from CVS Group PLC.
The company, one of the UK’s leading providers of integrated veterinary services, saw full year revenues rise 19.2% to GBP510.1mln, with strong organic growth and also contributions from nine acquisitions.
Pretax profits soared from GBP9.9mln to GBP33.1mln.
The trend is continuing. In the first two months of the new financial year, sales grew by 17.5% – helped by a couple of price increases – and its margins rose from 18.7% to 19.5%.
Chief executive Richard Fairman said the strong performance came despite a difficult backdrop of restrictions and evolving regulatory guidance.
He said: “These results demonstrate the resilience of our fully integrated veterinary model and our commitment to providing the very highest standards of clinical care.
“We continue to expand and develop our business, and, alongside our ongoing investments in high quality facilities and practices, we have welcomed a number of new vets and nurses to the group, as demand for veterinary services continues to increase in light of rising pet ownership.
“We see a number of opportunities to grow the business, through favourable consumer trends, further improving our specialist offering and by continuing to make investment in support. Although management expectations for the full year are not based on attaining annual growth at the high levels of the first two months, the very positive start to the new financial year is encouraging. We remain focused on providing first class veterinary care and look forward with confidence.”
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “A huge boom in pet ownership over lockdown – there are now over 24 million cats and dogs in the UK – means more trips to the vets and more online pet food orders, and that means a ballooning revenue stream for CVS. What’s particularly impressive is that even when you strip out the effects of lockdowns, growth has been very impressive. Having an organic engine driver is much preferred to relying on favourable market dynamics.
“The group offers a myriad of other services too, which helps pad out revenue and profits. These include a laboratories business which does diagnostics, as well as a cremation service. These alternative sources of income aren’t the main story by any stretch, but they are certainly nice to have.
“Things to watch out for include a very tough labour market in the veterinary sector because of skills shortages. CVS’ good reputation and improved remuneration packages should help it with staff retention and attraction, but it’s an ongoing battle and one CVS has lost in the past. Failure to secure enough high-quality veterinary surgeons and nurses is a risk for the group.”
Meanwhile the company’s equine division was involved in field trials of Bleepa Box, a specialist tool from Feedback PLC (AIM:FDBK, FRA:GZM) that enables medical image transfer from remote settings to the company’s Bleepa platform.
CVS has seen its shares climb 4.37% or 109p to 2604p following the update.
9.05am: Petards accelerates despite uncertainty in rail security business
Petards Group PLC (AIM:PEG), which develops advanced security and surveillance systems, is in the spotlight.
Its shares have jumped 15.64% to 11.28p despite a slightly uncertain outlook as it reported increased sales and profits
Revenues for the six months to the end of June rose from GBP7.1mln to GBP7.7mln and adjusted earnings increased from GBP337,000 to GBP929,000.
Chairman Raschid Abdullah said: “The board expects further progress to be made in the second half year and while some customer delivery schedules are still tending to change at short notice, trading presently remains broadly in line with market expectations and the board expects the group to deliver a cash generative performance for year.”
The uncertain picture relates in particular to its eyeTrain rail surveillance business.
Abdullah said: “[eyeTrain] has suffered the most from lower and uncertain timing of order inflow due to a combination of factors. These include the impact on previously planned rolling stock maintenance and replacement programmes of the COVID-19 induced 77% reduction in passenger journeys in the year to 31 March 2021.
“Furthermore, the UK government’s decision to create Great British Railways has resulted in government exercising more direct control over the train operating companies and a marked slow-down of investment in both new and refurbished rolling stock. This situation is likely to continue until such time as there is tangible evidence of improvement in passenger numbers. In the meantime, the action taken last year to reduce the eyeTrain operation’s cost base was timely, aligning it with currently foreseen demand while maintaining its capability to serve customer needs.
“On more positive fronts, while new project orders are suffering delays, RTS Solution’s rail infrastructure focussed software offering received licence and maintenance contract renewals totalling GBP0.8 million in the period. The board regards this business as having the potential to grow significantly in the coming years and are expecting to see it develop on a broader front by increasing both its range of software applications and its customer base.”
Its defence business is also performing well after a decision to focus on securing smaller orders.
8.27am: Gemfields shines as its mines reopen and it returns to profit
Shares in Gemfields Group Ltd are sparkling after the company’s mines reopened and it returned to profit.
The company, which is behind the Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique as well as the Faberge brand, said half year revenues rose from US$15,000 to US$97,236.
It made a US$39,641 profit in the first six months compared to a US$64,727 loss in the same period last year.
Chief executive Sean Gilbertson said: “We are delighted to announce our return to strong operational and financial performance after the COVID-19-induced horrors of 2020. These results are a testament to the hard work put in by our teams in the first six months of the year, including their textbook re-opening of the world’s largest emerald and ruby mines which produced no new gemstone supply for a year given the need to preserve cash in the wake of the pandemic. With the mines back in full-swing, a much-improved cash position and the step-change in market demand we’ve witnessed in our recent auctions, we are palpably excited about the remainder of 2021.”
Gemfields has jumped 718% or 1.01p to 15.44p.
Also heading higher is PetroNeft Resources PLC.
The company, an oil and gas exploration company operating in the Tomsk Oblast, Russian Federation, has announced it has signed a contract to start exporting oil from its Licence 61 site.
Historically it has sold all of its oil production on the Russian domestic market. It said this provided stability and attractive cash flows but due to a Mineral Extraction Tax (MET) reform that aims to gradually reduce export duty, the export market is becoming increasingly attractive compared to the domestic market.
So starting on 1 October, its oil will be transported to Kozmino port, which is the major Russian oil export terminal servicing Asia Pacific markets, located close to Vladivostok. It said the oil would be priced with reference to Dubai Oil price, which is intrinsically of a higher quality than Urals, the main Russian crude exported to European markets, and is therefore priced with reference to oil in Asian markets, which are typically higher than Europe.
Chief executive David Sturt said: “This is a fantastic achievement by our team in Tomsk, it enables the company to diversify market risk by allowing us to dynamically select between either the domestic or the Asian export market for our crude sales. This will provide the company with the potential to further improve margins which is especially beneficial within the Russian production tax system where MET is a fixed rate per ton of oil produced that is set by the State depending mainly on the international oil price, so any improvements in margins are retained by the Company.
“It is also very important to us as it may open another potential capital stream for investment as we develop our assets. This will help us to increase production, cash flow and reserves.”
Its shares have surged 11.53% to 4.29p.