MOVERS OF THURSDAY 19 NOVEMBER 2020

Francesca Morgan
Market Report
16:16, 19th November 2020


Capita (LON:CPI) FOLLOW shares ticked up 6.07% to 43.17p following positive update

Shares in the consulting, transformation and digital services business have climbed over the past two weeks after the group revealed that Q320 trading was ‘in line with expectations.’

The greater part of Capita's revenues ‘remained resilient’ despite falling in six months to the end of September from £902m to £803m, whilst operating profit jumped from £12m to £36m.

Chief executive, Jon Lewis said, “Our focus on our colleagues’ wellbeing and client service delivery has helped us deliver a resilient performance across most of our operations.”

He added, “Despite the ongoing challenges, Capita has continued to trade in line with our expectations. "We continue to make progress to strengthen the balance sheet with the disposal of non-core assets, including the proposed sale of our education software business.”

CPI price chart

Velocity Composites (AIM:VEL) FOLLOW shares jump 50% to 21.5p despite low expectations

Shares in the supplier of advanced composite material kits to the aerospace sector have soared today despite reporting on Tuesday that it expects to post a full-year loss for FY20.

Despite trading for the first four months of the year to 31 October 2020 being in line with management expectations, the remainder of the year was impacted by the pandemic. 

The Company told investors that it anticipates sales revenues for the year to 31 October 2020 will be approximately £13.6m (FY2019: £24.2m) and that it  expects to report an adjusted EBITDA Loss(1) for the year of approximately £1.8m (FY2019:Adjusted EBITDA  £0.6m).

While current activity levels for the business seem "challenging", Velocity said it remains “cautiously optimistic" over future growth prospects. 

‘Even with a slow recovery in build rates, and with further disruption throughout this winter, it is now once again realistic to foresee growth in the future,’ the company told investors.

It said it is now highly ‘operationally geared, such that any significant recovery in activity, even if only to below pre-pandemic levels, will have a strong positive impact on future profitability. ‘

VEL price chart

Somero Enterprises (AIM:SOM) FOLLOW shares rose 21.21% to 280p with positive momentum

Somero reported that, after positive trading momentum from the end of H1 2020 continuing through H2 2020, it now expects to exceed its previous reinstated expectations for FY 2020.

In the 9 September 2020 interim results statement, Somero reinstated guidance for FY 2020, indicating revenues were expected to approximate US$ 75.0m, adjusted EBITDA was expected to be around $19m, and ending net cash was expected to approximate US$ 20.0m.

Based on ‘the strong, profitable trading and healthy cash generation in H2 2020, the Board said it now expects FY 2020 annual revenues will approximate US$80.0m, adjusted EBITDA will approximate US$21.0m, and ending net cash will approximate US$ 26.0m. 

Somero cited its strong cash generation in H2 2020 which it attributes to effective working capital management and healthy cash collections. It said performance within non-US markets, and the remaining products in its portfolio, are generally in line with previous expectations.

Somero expects to report more on FY20 in January 2021, consistent with prior years. 

SOM price chart

Blue Star Capital (AIM:BLU) FOLLOW shares increased 20.69% to 0.175p with ‘rapid progress’

The investing company which is focused on eSports, payments, technology told investors last month that Dynasty eSports, in which it has a 13% stake, continues to make “rapid progress”.

In Q3 2020, Dynasty inked three separate software-as-a-service (SaaS) agreements to provide its white-labelled platform to two eSports franchise operators and to the largest telecoms carrier in the Middle East to launch a branded Dynasty platform in November 2020.

These agreements are expected to provide contracted SaaS revenues of around $2.8m over the next year.  Dynasty is also progressing a number of prospective platform partnerships which will, should they be signed, on current terms make it profitable at an operating level.

Blue Star currently owns 13% of Dynasty and its stake is valued at £1.3m based on the company's most recent over-subscribed fundraise at approximately £10m, it noted.

"We remain confident that Dynasty will become a sizable business over the next few years and look forward to updating the market on its progress,” said Tony Fabrizi, CEO of Blue Star.

BLU price chart

Aston Martin Lagonda (LON:AML) FOLLOW shares fell by 12.33% to 69.63p after two week climb

Shares in the British independent luxury sports car manufacturer have fallen today after jumping in recent weeks. Despite having more than halved in value since the start of 2020, shares in the company have risen 54% after news of a vaccine lifted investor sentiment.

Yahoo Finance reported that the company’s share price slump from March as a result of the global coronavirus pandemic has only added to the car maker’s woes. After starting 2020 at around 150p, the share price subsequently fell down to 46p by the middle of March. 

‘In the short term, the stock did trade back above 100p, but unfortunately it’s back at the time of writing to 50p. This represents a fall of 66% from the start of the year,’ it reported. 

As of 22 October 2020, AML’s shares were trading at 49 cents a share, down considerably from its nearly $25 IPO float price back in October 2018, CNBC wrote earlier this month. 

In recent weeks, the company announced what it described as a ‘game-changing’ £1.3 billion refinancing package that will hand up to 20% of the company to Mercedes-AMG.

‘The loss-making British luxury carmaker seeks to revive its flagging fortunes, the Guardian wrote last month. As part of the expanded partnership, Mercedes-AMG will provide £286m worth of hybrid and electric vehicle technology in exchange for increasing its stake from 2.3%.

Shares in the company have also rallied more than 25% in the past ten days following the news that Pfizer had received positive early results from its coronavirus vaccine trial.

AML price chart

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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