There has been a rise in the number of active registered businesses in England and Wales to 2.7 million which is partly due to the fall in liquidations to 0.6% from a peak of 2.6%.
Last week …
… the FTSE 100 closed barely changed at 6734, the FTSE 250 was 0.2% lower but the Aim All Share at 811 improved 1.3%. Over the last three months the Aim All Share has increased by 12.4%, the FTSE 250 is up 3.35%, while the FTSE 100’s improvement was 1.8%. The good-news-is-bad-news theme, continued particularly in the US where firm manufacturing growth may have restarted the tapering of QE countdown to as early as December.
This week …
… the BOE Interest Rate Meeting on Thursday should continue to be a non-event. There is, however unease that the Governor has nailed interest rates to the wrong strategic mast. Also in the UK the PMIs and production figures to be reported should point to growth. Less plain sailing are US Employment figures on Friday whether, good or bad could be negatively interpreted. The ECB, the Eurozone bank may react to slow growth, high unemployment at 12.5% with an interest rate cut of 0.25% to 0.25%, particularly as inflation is down to 1.2%. Markets should improve this week.
Starvest (SVE) – £1.7m at 4.5p
The finals to September 2013 reported this investment vehicle’s NAV to be 7.44p a 25% decline in the year and the share price is on a 39.5% discount. The core investments are mainly in junior mining exploration stocks. The managers are not active traders and exits and realizations primarily rely on core investments being acquired or growing into mines as added value milestones are funded and achieved. Since around 2011 exploration mining stock values have drifted down BUT since July 2013 the portfolio is reported to have modestly increased. The report contains decent summaries on the progress of its nine core portfolio holdings some of which have been recently funded. The issue has been the value at which further funds to develop the projects can be raised but prices may have stopped falling. Administration cost is around £200k and the rest of the £1m loss were investment values being conservatively marked down. Starvest’s NAV growth is strongly correlated to the speculative fortunes of junior mining stocks but the wide discount could encourage corporate initiatives.
No debts and £257k held in cash.
Learning Technologies (Formerly In-Deed Online (IOL)) – Subject to the GM on 8th November £17.9m at 7p – Current price pre-deal 13.75p
Epic is reversing into Aim listed In-Deed, at a ‘nice’ premium. The deal is for 255m shares at a notional price of 5.88p a share and £1.3m in cash, which is predominantly coming from Epic which is being valued at £16.3m. The proposed new chairman is Andrew Brode and chief executive Jonathan Satchell, have built up and sold one e-learning business, have each agreed to sell 14.285m shares at 7p each. They will each be left with 113.2m shares or a combined 82% of the enlarged group. The new board are experienced in the e-learning sector and of making acquisitions. In the three years to 2012, Epic’s revenues have grown at a compound annual rate of 16.5%. In 2012, the operating profit was £800k on revenues of £6.9m. The UK is still the main market but a joint venture has been started in Brazil and a New York office was recently opened. There is scope for more international growth. Despite being the market leader in the UK, there are a number of potential acquisitions which could broaden the range of services and clients. The aim is to create a business through acquisitions which will have £50m of annual revenues the current share price premium would certainly help.
Avacta (AVCT) – £36.2m at 0.9p
Avacta is a global provider of innovative technologies, consumables and reagents for the life science markets, from drug discovery to diagnostics. Finals to July 2013 reported a 13% reduction in turnover to £2.7m while gross margins increased to 56% from 48% but higher admin costs increased losses by 12.8% to £1.85m. After a period of investment in product development Avacta is confident it can grow its main businesses. After a slow start there were ten sales of the re-engineered Optim 2, an analytical instrument and Optim’s lower production costs could lead to further growth. The canine lymphoma test for the Sensipod has been completed and there should be six tests available by next July. The first commercial licence agreement for the reagents, Affimers has been signed with Blueberry, although significant revenues are likely before 2015. Turnover for the current year to July 2014 could increase to £4m for a loss of around £1.5m, before breaking-even in 2015.
A placing in August raised £4.7m at 0.55p a share and added to the £582k in the bank at the end of July 2013 this will give Avacta enough cash until 2015. A share price consolidation seems enviable.