Renold rises as profits jump and order book hits a record

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Precision engineering group Renold PLC (AIM:RNO) is in demand after an upbeat trading statement.


As its business recovered from the pandemic, half year revenues rose 22% to GBP95.3mln and pretax profits more than doubled to GBP6.2mln.


Its order book at the end of September stood at a record GBP72.1mln.


Chief executive Robert Purcell said: “The strong trading momentum experienced in the fourth quarter of the last financial year has continued into the first half, resulting in growth of both revenues and profitability.


“Despite the widely reported global supply chain and inflationary pressures that remain present, particularly with respect to materials, transport and energy costs, Renold continues to benefit from geographic, customer and market sector diversity.


“With a record order book at the period end, coupled with the strategic initiatives previously implemented, we approach the second half with confidence, but cognisant of the very volatile and inflationary world we operate in.”


Its shares have climbed 2.29p or 7.39% to 33.29p.


2.27pm: Image Scan in US federal agency and Swedish distribution deals


Image Scan Holdings PLC (AIM:IGE) is heading higher after two positive pieces of news.


The company has won a contract to supply a portable X-ray scanning system to a Federal Agency in the USA. The contract is the first part of a deal that could lead to the purchase of a further twelve systems.


The contract follows on from the sale to a police department bomb squad announced in September, and is the first order from a federal agency.


Chairman and chief executive Bill Mawer said: “I am delighted to add this new US customer to our extensive and growing list of.. users. Bomb disposal equipment is procured at both local and federal level in the US, and it is pleasing to be able to show that we can reach both types of customers.”


Meanwhile the company has also agreed a global deal to distribute portable chemical analysers made by Swedish technology company Serstech.


Image Scan will market the analysers to bomb squads, hazardous material investigation teams and customs organisations through its global distribution network.


Mawer said: “The new agreement fits with our strategy of diversifying the Image Scan product range through a combination of internal development and international partnerships.”


Image Scan shares are up 5.77% at 2.75p.


12.23pm: John Menzies (LSE:MNZS) takes off after Mexican aviation contract


John Menzies (LSE:MNZS), the company which started as a bookseller but is now an aviation services group, has won a key contract in Mexico.


The three year deal involves Menzies supplying ground handling services, including passenger, ramp and cleaning operations, to Mexico’s largest international airline Aeromexico at 15 airports across the country.


The contract follows recent wins with American Airlines, Delta Airlines, Wingo and Air Transat (TSX:TRZ.B).


Menzies chairman and chief executive Philipp Joeinig said: “This is an exciting opportunity for Menzies that significantly increases our operations in Mexico and is testament to our trusted reputation and high standards of service.”


Menzies is up 3.35% or 10p at 308.5p.


11.40am: Zenova on the rise as it wins Australian deal


Zenova Group PLC (AIM:ZED) has seen its shares spark up after winning a contract to supply its products in Australia.


The fire safety and heat management specialist has signed a three year deal with Spark Global Australia, a newly formed subsidiary of a major Australian construction company.


Under the contract, Spark will become an authorised distributor of Zenova products in Australia and has committed to purchase a minimum of GBP2mln of Zenova’s products each year, including Zenova’s insulating render, insulating paint and fire-resistant paint. The initial three-year contract can also be extended if certain conditions are met.


Zenova chief executive Tony Crawley said: “Securing this contract is a significant development for Zenova. It marks the culmination of several months’ work by both parties, including independent testing of our products by Spark, and truly highlights the global potential for Zenova’s heat management and fire safety products.


“Good insulation is vital to reduce energy usage, whether you are heating or cooling a building. With 2020 proving to be one of Australia’s warmest years on record, and experts predicting increasing temperatures going forward, Spark has recognised an opportunity for the use of Zenova’s products in Australia and we look forward to helping them realise that opportunity.”


Its shares have moved up 6.86% or 1.24p to 18.74p.


10.54am: HSS Hire upbeat after refinancing and strong trading


HSS Hire Group PLC (AIM:HSS) is on the move after it unveiled a refinancing package.


The tool and equipment hire firm has entered into a new term loan facility of GBP70mln and a revolving credit facility of GBP25mln to refinance its existing corporate debt.


The move, alongside an equity placing late last year, will cut its annual interest charge from GBP16.3mln to around GBP3mln, driving a significant increase in earnings per share.


It said current trading was strong and it expected full year earnings to be slightly ahead of market forecasts.


Chief executive Steve Ashmore said: “This new refinancing package is another significant development for HSS, adding to the very positive strategic and operational progress that we have delivered over the last few years. It materially reduces our interest costs and improves both our EPS and free cash flow. With a much stronger financial platform and continued trading momentum across our business, HSS is now well positioned to deliver our next exciting phase of growth.”


Its shares are up 4.92% or 1.14p to 18.42p.


9.59am: Bowleven loses more than a third after problems at Etinde project


BowLeven PLC (AIM:BLVN) is on the slide after it warned it may need to raise additional funds to develop its Etinde oil and gas project in Cameroon.


It said an evaluation had shown the project in its current form would not provide Bowleven and its partners a sufficient return under current market conditions.


It is re-evaluating further options, but said any delays in reaching a financial investment decision (FID) could create a high financial risk for Bowleven.


It said: “At the current time, the board considers that existing funds should be sufficient to take the business to FID in 2022, so long as the joint venture partners are not required to make further material investments in development planning prior to FID.


“At FID, we will receive a payment of $25mln from the joint venture partners. However, there are considerable commercial and regulatory issues which have yet to be resolved in conjunction with the uncertainty regarding the optimum development concept. Resolving these issues to permit FID to be reached in 2022 will be a challenge for the joint venture partners and any delays in reaching final resolutions will create a high financial risk for Bowleven. The company may need to raise additional short-term finance to bridge the gap to attaining FID and the receipt of the $25mln payment.”


Bowleven is down 37.5% or 1.5p at 2.5p.


9.02am: Velocys soars by more than a third after fuel deals with two airlines


Shares in Velocys Plc (AIM:VLS) have taken off after the sustainable fuels technology company unveiled deals with two airlines.


The first, non-binding, agreement sees British Airways owner International Consolidated Airlines Group (LSE:IAG) buying an expected 73mln gallons of sustainable aviation fuel from the planned Bayou Fuels biorefinery project in Mississippi, US.


The plan is for a definitive deal to be agreed within the next six months, with an option for IAG to invest in the project development stages.


Velocys has also entered into its first offtake agreement for the sustainable aviation fuel from the project with Southwest Airlines (NYSE:LUV).


The agreement covers the purchase by Southwest of an expected 219mln gallons of fuel over a fifteen-year term starting as early as 2026, when the biorefinery is scheduled to begin commercial delivery of fuel. After blending, this will enable approximately 575 million gallons of net zero1 SAF.


Velocys chief executive Henrik Wareborn said: “We are delighted that IAG, our partner for many years through our work with British Airways, intend to purchase a large volume of SAF from the Bayou Fuels project. This long-dated offtake, encompassing support for environmental credits, will provide certainty of revenue for the project which should enable construction capital financing. We have now secured long term offtake clients for 100% of the expected SAF production and associated environmental credits for the Bayou Fuels facility.”


On Southwest he said the agreement was a major milestone for the project: “It is very encouraging to see Southwest make such a strong commitment to using fossil free fuel as part of its environmental sustainability plan and to see Velocys technology performing a central role in making this possible.”


Velocys shares have soared 39.37% or 2.42p to 8.85p.


Also on the way up is mining group Emmerson PLC (AIM:EML).


The company has climbed 17.7% or 1p to 6.65p after it received a US$46.75mln investment in the Khemisset potash project in northern Morocco from Singapore’s Global Sustainable Minerals.


Chief executive Graham Clarke said: “A major investment, at a premium to our current valuation, and long-term strategic commitment by an investment group of this calibre, is a major endorsement of the Khemisset Project.”




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