Pendragon accelerates as it raises full year profit forecast

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Shares in Pendragon PLC are motoring after the car dealer raised its profit guidance for the year.


It said its performance in the third quarter remained strong, with the widely publicised shortfalls in new vehicles due to semiconductor shortages mitigated by higher margins and cost savings.


So it now expects full year profits of around GBP70mln, up from its previous forecast of GBP55mln to GBP60mln.


It is cautious about possible further disruption from COVID-19 to its local markets and the global supply chain.


But it added: “The board continues to believe the group’s strategy positions it well to respond to the ongoing market uncertainty and to capitalise on any resultant opportunities.”


Its shares are up 8.29% or 1.45p at 18.85p.


Rival Motorpoint Group PLC, a used vehicle specialist, is also upbeat.


First half revenues grew by 57%, with online sales up 53% as it continued to move towards being a digitally led business.


Due to the reduced supply of vehicles in the market, it expanded its range from cars under three years old to under four years.


It said trading was in line with its expectations and it was well placed to deal with any potential headwinds.


Its shares have added 5.2% to 374p.


2.16pm: Revolution Bars cheered by higher than expected demand


Investors in Revolution Bars Group PLC (AIM:RBG) have been toasting its latest update.


The company, which owns the Revolution and Revolucion de Cuba brands, said it had benefited from pent-up demand since reopening, and it had performed ahead of expectations in the second half of its financial year.


Its bars saw sales growth of 17% when compared to the same period two years ago (i.e. pre-pandemic).


And despite cautioning about any new restrictions if there is a renewed escalation of COVID-19 – especially in the key Christmas period – its shares are 12% stronger at 25.2p.


11.50am: Block Energy out of favour as oil and gas production falls


Block Energy PLC (AIM:BLOE), the exploration and production company focused on Georgia, is under pressure after reporting lower production and problems at a key well.


In the third quarter it produced 34.6mln barrels of oil equivalent, down from 42.6mln in the second quarter.


Revenues in the three months fell to US$901,000 from U$1.165mln in the second quarter, as it failed to take full advantage of the soaring oil price.


It said well WR-B1a was currently undergoing clean-up operations. Productivity at the well appeared to be being restricted owing to the natural fractures being clogged with loss circulation material used to prevent the large drilling fluid losses experienced in its previous West Rustavi wells.


The clean-up programme has been designed to dissolve the loss circulation material, requiring chemicals with a 14-day lead time to be sourced from a supplier outside Georgia. The results will be published once the clean-up programme and production testing have been completed.


Meanwhile preparatory work continues on JKT-01, which is planned to be next in the two-well programme. Concurrently, the ZJ-40 drilling rig will be undergoing routine maintenance.


The company said it planned to improve the near-term production performance from its mature fields with a programme of cleaning and pump replacement, to get the benefit of the currently high Brent price.


Block shares have slumped 28.26% or 0.65p to 1.65p on the news.


10.21am: Hardide sees renewed demand from industrial users for its advanced coatings


Hardide PLC (AIM:HDD) has manufactured a share price rise with its latest trading update.


The company, which makes advanced tungsten carbide and tungsten metal matrix coatings for engineering components, said improvements across all its key markets had come through in the closing months of its financial year.


It received GBP2.5mln worth of orders in the second half, up 52% on the previous six months. With revenues from some of those orders pushed through into the first half of next year, it expects second half sales to be in line with the previous six monhts.


Overall, with the company keeping a tight grip on costs, it said its full year loss would be in line with expectations and it forecast an improved performance in 2022.


Highlighting the signs of recovery, Hardide said: “One major customer, whose demand reduced significantly in late 2020 due to the pandemic-induced downturn, is placing orders again for delivery in the first quarter of 2022.


“Demand from a major UK-based oil and gas customer is also returning. In addition, large project-based orders from a US customer for sand screens have been placed recently for delivery in the first quarter of 2022.”


Meanwhile the power generation, industrial pumps and aerospace markets are also showing improvements.


In addition the company pointed to the potential of moving into the electric vehicle market.


It said: “Testing and evaluation of our coated components are also progressing with a large US-based manufacturer of electric vehicles. Indications of the coating’s performance are positive, and more progress is expected in the next few months. The company is also working on other developments for applications in various sectors of alternative energy production, including solar, nuclear and gas turbines.”


Hardide shares are up 13.55% or 5.2p at 36.2p.


9.30am: Sosandar (AIM:SOS) heads higher as strong demand for autumn range boosts sales


Shares in Sosandar (AIM:SOS) are in vogue, after the online women’s fashion brand issued a positive update.


First half revenues jumped 184% to GBP12.2mln, a higher figure than it achieved in the whole of the previous full year.


September proved a record month thanks to strong demand for its autumn range, both on its website and through third parties such as Marks and Spencer, Next and John Lewis.


Sales grew across a wide variety of product categories including knitwear, dresses, leather, coats and denim, as its strategy of broading its range paid off.


It took the decision to bring in stock early for autumn, anticipating early demand for partywear, coats, boots and knitwear as events opened up and workers returned to offices.


It said sequins, Christmas jumpers and fur coats are already best sellers.


A fundraising in May should allow it to meet the growing demand.


It has seen a continuing improvement in losses, and margins rose to 56.5%, up from 52.3% this time last year, reflecting a higher proportion of full price sales compared with the comparative period which was impacted by actions taken as a consequence of COVID-19.


It said it had not any material impact from supply chain disruption and it is well stocked for the autumn season across both its own site and third parties and has good visibility of incoming goods.


Despite the external pressures, with a strong first half and a record start to autumn trading the company expects its full year results to be in line with market expectations.


Sosandar (AIM:SOS) shares are up 12.62% or 3.18p at 28.38p.


8.26am: Fusion Antibodies fired up by R&D deal with US biotech business


Fusion Antibodies PLC (AIM:FAB) is in demand after it signed a collaborative R&D agreement with a US biotechnology start-up.


The company, a spin out from Queen’s University Belfast which helps develop antibodies for therapeutic drug and diagnostic applications, said it would receive a minimum of US$1.83mln in fees over the next two years.


Under the terms of the deal Fusion will provide its discovery and engineering services in relation to the research and development of several pre-determined projects.


There is a framework for increased fees depending on how the work goes. The US company has made an initial cash payment of US$318,000 to Fusion with the remainder payable at pre-agreed intervals.


Should a product be successfully developed, registered and commercialised , Fusion will be entitled to royalty payments based on a percentage of sales figures of that product.


The US start-up is backed financially by a US based biotechnology investment company which is active in life science investments.


Fusion chief executive Richard Jones said : “We are delighted to have agreed this important new contract with a key player in the biotech industry. The agreement has a minimum contract value of US$1.83 million which is very significant. Furthermore, weare especially pleased that the project will take place using our RAMP platform, highlighting that this technology continues to gain traction in the marketplace.”


Fusion shares are up 15.47% or 17.4p at 129.9p.


Elsewhere Kanabo Group PLC has climbed 9.23% or 1.43p to 16.93p after the medical cannabis business signed a partnership agreement with MedoCann Pharma Ltd to develop new products with exclusive distribution rights for the German and UK markets.


Medocann produces medical-grade cannabis products with an indoor hydroponic facility located in central Israel and a library of proprietary cannabis genetics all grown in a fully controlled environment, without the use of pesticides or insecticides.


The partnership agreement between Kanabo and Medocann will focus on the co-development of new and novel strains from flowers and extracts made for specific medical indications through the combination of Kanabo’s preclinical data on the effect of cannabis on different illnesses and Medocann’s genetics bank, breeding and strain development expertise. The new strains and extracts will be used to launch new co-developed medical cannabis products.


Kanabo chief executive Avihu Tamir said: “Medocann’s hydroponic, precisely-grown cannabis is considered the best in Israel and is the only one cultivated without the use of pesticides. Kanabo aims to bring these unique strains to patients in the UK and German markets through the Materia Malta production facility.”


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