HSS Hire expects full year earnings to beat forecasts, as it cuts debt with GBP55mln disposal

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HSS Hire Group PLC (AIM:HSS) has seen its shares power up after saying full year results would be ahead of current market expectations.


The tool hire business climbed 10.2% or 1.89p to 19.39p as half year revenues rose 22% to GBP150.5mln and earnings jumped 37.2% to GBP38.3mln.


In the current three months revenue and earnings are above management forecasts.


It has also reduced its debt with the sale of heating, ventilation and air-conditioning business All Seasons Hire to Cross Rental Services (“CRS”) for GBP55mln in cash.


Steve Ashmore, chief executive officer, said: “The first half of 2021 has been one of significant progress and I am very pleased with what we have accomplished. We started the year with strong momentum and trading continued to improve over the period, with second quarter revenues at 102% of 2019 levels, EBITDA and EBITA margins up and ROCE at a record level. This strong performance, combined with the post balance sheet date sale of All Seasons Hire, has allowed us to reduce leverage to around 1.0x, well below our 2.0x target, completing the final element of the strategic plan set out in 2017: to Delever the Group, Transform the Tool Hire business and Strengthen our Commercial proposition.”


14.14pm: 7Digital strikes a bum note after contract delays hit results


Music platform 7Digital Group PLC (AIM:7DIG) is out of tune after its latest update.


Half year revenues rose 6% to GBP3.3mln but its operating loss increased from GBP1mln to GBP1.9mln.


The company signed long-term contracts with seven new licensing customers during the period, and a further two since then, as it continued its strategic expansion in its key growth markets of fitness and wellness, social media and artist monetisation.


But some contracts the company had expected to sign in the second half have been delayed until the first half of next year.


So full year revenues will be slightly below expectations and it will not achieve positive earnings this year.


It hopes some of the contracts, which represent significant revenue, will be signed in the near future.


It is also in advanced discussions over a banking facility, which are expected to conclude shortly.


Chief executive Paul Langworthy, said: “We are currently in advanced negotiations with multiple new customers representing significant revenue. However, the pace of closing deals is dependent on our clients completing their licensing deals with labels and in some instances we have found this is taking longer than we had hoped.


“In the second half, we plan to accelerate our stated strategic vision to align ourselves, through innovation, with the interests of the artists as well as consumers of their music. Alongside consolidating our leading position in our core segments of fitness and wellness and social media, our aim is for 7digital to become a leading platform providing artist services beyond traditional streaming such as creating direct-to-fan opportunities including NFTs, livestreaming and merchandising on a global scale. As a result, we remain very confident in the outlook for the business in the medium- to long-term and the opportunities ahead.”


Meanwhile its shares are down 45.71% or 0.4p at 0.48p.


11.50am: Parsley Box plunges after stock and staff shortages bite


Investors have lost their appetite for shares in Parsley Box Group Plc (AIM:MEAL).


The company, which specialises in delivering ready meals to the over-60s, is down 30.02% or 29.6p at 69p after it said it was being affected by the current staff and supply chain problems.


It said revenues grew 18% to GBP17.8mln in the eight months to the end of August, with products shipped up also up by the same percentage.


But labour issues thoughout its supply chain and stock issues meant it decided to reduce investment in marketing, and this is likely to continue until the current constraints recede.


So it now expects full year revenue to be around GBP25mln, slightly ahead of last year, with “a consequential impact on the group’s loss before tax.”


It did say it was encouraged by the early signs from its third quarter product releases.


Chief executive Kevin Dorren said: “Delivering our product innovation plan remains the focus for the business as we navigate our way through the widely reported supply chain disruption. The second half of the year has been further impacted as we took the disappointing decision to pull back on planned marketing investment. However I, and the board, firmly believe that Parsley Box’s long term growth prospects are unchanged.”


Russ Mould, investment director at AJ Bell. said: “Having listed in March at 200p, the company issued a shocking update over the summer which pulled the price down. The stock has slumped even further … after further setbacks.”


10.46am: Fox Marble gains ground after cutting losses


Fox Marble Holdings PLC (AIM:FOX) has built up a good gain after its latest update.


Shares in the marble quarrying and finishing company, which is focused on Kosovo and the Balkans, have climbed 5.51% to 1.41p as it reported slightly improved half year losses of EUR0.7mln, down from EUR0.8mln.


The improvement was helped by controlling its costs, as well as a rise in revenue from the sale of processed marble products from EUR0.1mln to EUR0.2ml despite a slow start to the year as projects were delayed by weather and COVID-19. Since the half year sales have improved further, with EUR0.3mln of revenue recorded in the two months to the end of August.


Further sales agreements worth in excess of EUR579,000 were signed in 2021 for processed marble to be supplied to projects in Kosovo over 2021 and 2022 from its factory in Prilep.


But it said the block marble market continued to falter, as high shipping costs have further damaged the market following the initial COVID-19 shocks.


It is in dispute with the Republic of Kosovo over a breach of investment law and is claiming EUR195mln. It said English barrister Samuel Wordsworth supports the claim and added: “The company’s legal team has now identified Fox Marble’s choice of arbitrator of the three that will sit and adjudicate the claim and will be notifying such choice to the Republic of Kosovo shortly.”


Chief executive Chris Gilbert said: “The company has been navigating the challenges of a global pandemic and the ensuing impacts on the marble industry. Whilst the international block market continues to falter, we are seeing continued progress in the processed marble market in Kosovo “


9.32am: Zoltav Resources drops by a third after financing warning


Zoltav Resources Inc (AIM:ZOL) has lost around a third of its value after it warned it might have to leave AIM.


The Russia-focused oil and gas company said half year revenues rose by 37% and profit before tax surged by 1131%, helping by rising sales and gas prices and the lack of an impairment charge which hit the previous year’s figures.


But Lea Verny, independent non-executive chairman, said: “The company made further progress on the East Bortovoy project and is in the advanced stages of negotiations for project finance with two major Russian banks. The board believes a development of the East Bortovoy fields is essential to ensuring the long-term financial security of the Company.


“It should be noted that the terms of both project finance packages potentially available to the company include conditions which are likely to restrict intra group transfers and cash outflows from the group’s main operating subsidiary, Diall Alliance.


“As a consequence, the company would be unable to maintain the listing of its ordinary shares on AIM on an ongoing basis. Further updates will be provided in due course.”


He added: “In the event that Diall Alliance is unable to secure project financing in the near term, it will be unable to service its current loans, including its credit payment due to Promsvyazbank at the end of October 2021, due to a cash shortfall which is expected to arise in the fourth quarter of 2021.”


On top of that Zoltav has been unable to repay or refinance a loan from shareholder ARA Capital Holdings Limited and will convene a meeting for investors to approve the issue of new shares at 27p each to pay off the debt.


Zoltav is down 34.52% or 14.5p at 27.5p.


8.49am: B90 Holdings (AIM:B90) takes a successful gamble


B90 Holdings (AIM:B90) PLC has placed a winning bet on an overseas deal.


Shares in the online marketing and operating company for the gaming industry have jumped 19.23% or 2.26p to 14.01p after it agreed to buy certain assets, including the domain, business IP and 100% of the operations of Oddsen.nu, a Norwegian sports-bet affiliate site.


It will pay the vendor, Performance Media SIA, a total of around EUR4.37mln (approximately GBP3.7mln) in cash and shares for Oddsen, which has been operating in Norway for more than 20 years.


Last year the assets being acquired generated EUR781,000 of revenue and net profits of EUR616,000.


B90 has also raised GBP1.24mln (before expenses) through a subscription of 8,888,465 new ordinary shares with certain existing and new investors at a price of 14p a share. This will be used to fund the cash part of the deal and increase working capital.


On top of that it has agreed with certain creditors to convert outstanding liabilities and will settle them, along with finders’ fees relating to the fundraising, amounting to GBP70,994, via the issue of 507,102 new shares at 14p each. Furthermore, as part of the agreement with new chief executive Ronny Breivik, 280,000 new shares will be issued as part of his agreed remuneration.


Paul Duffen, executive chairman, said: “The acquisition of Oddsen continues the transformation of our business. Coupled with the fundraise,which gives a strong indication of the support that our stakeholders have for our growth strategy, our business now has a real operational and financial platform from which to grow.


“This transaction adds a valuable new domain to our online real estate; increases our affiliate marketing capability; and takes our operations into Norway, which is an attractive, stable and well-established market for sports betting. We believe that the acquisition is an important step into owning proprietary software and taking control over valuable parts of the value chain in our industry. We consider it a strategic acquisition that can be used as a platform to be rolled out in other markets as well.”


Also heading higher is OPG Power Ventures PLC (AIM:OPG).


Shares in the the developer and operator of power generation assets in India are up 5.28% to 12.37p after it reported an increase in full year profits from GBP14.5mln to GBP21.6mln.


Chairman Arvind Gupta said: “We are proud to report that OPG was comfortably in line with full year market expectations despite the disruption caused by COVID-19 and unfavourable market conditions. OPG delivered very strong cash generation and achieved a significant reduction in debt during the year.”


The company said that while challenges to the economy would continue in the current financial year – not least rising coal prices – it has “strong foundations, allowing us both to manage the ongoing COVID-19 situation and to pursue growth sustainably. The company’s medium and long-term fundamentals remain unchanged with strong cash flows and a reduction in debt enabling the long-term profitable business model, responsible growth and sustainable returns to shareholders.”


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