Traders Cafe with Zak Mir: Active Energy, Deliveroo, Entain, Helium Ventures, i3 Energy, LungLife, Surface Transforms, Yu Group

Zak Mir
Traders Cafe
07:32, 8th July 2021

After a somewhat mixed bag of IPOs so far this year on the London market, to say the least, it will be interesting to see whether LungLife (LLAI) delivers a return to a more reliable experience for investors. The company, which is a developer of clinical diagnostic solutions for lung cancer enhanced by artificial intelligence, is being admitted to AIM today. This comes off the back of a fundraising for gross proceeds of £17 million, with an Issue price of 176 pence per share and market capitalisation of approximately £45 million on Admission.

While it might be an exaggeration to suggest that Helium has become the new rock and rock for the stock market in terms of the resources space, the likes of Helium One (HE1) have shone a positive light on this area. With this in mind one notes the arrival of Helium Ventures (HEV) to the Aquis market. The company is a Special Purpose Acquisition Vehicle (SPAC) formed to identify investment opportunities and acquisitions, in the upstream natural gas sector, with a particular focus on helium, with the Board of the Company consisting of Neil Ritson, Non-executive Chairman, Jonathan Owen, Non-executive Director and Fungai Ndoro, Non-executive Director.

One of the rules of the stock market is that money flows from the impatient trader to the patient investor. In the case of Canada / UK focused oil and gas group i3 Energy (I3E) it was time to crack open the champagne off the confirmation of the maiden special dividend payment. This will be 0.16p a share, with an ex dividend date of July 15th and payment date of August 6th. Given the way that yesterday’s announcement of new Alberta assets will produce an estimated $31 million in net operating income in the next 12 months, it can be assumed i3 Energy will be more than capable of making similar announcements regarding dividend payouts in the foreseeable future.

Independent supplier of gas, electricity and water to the UK corporate sector, Yu Group (YU.) said it has made a very strong start to the year and expects this positive momentum to continue. A particular highlight was an exceptional end to H1 which saw record monthly bookings of £18.4m in June, an increase of 38% from its previous high of £13.3m in July 2020. The company also noted a strong operational and financial H1 performance and the volume used by its SME customers returning to pre COVID levels.

While the IPO of Deliveroo (ROO) offered up something of an ouch factor to investors, it would appear that ever extending pandemic and the proliferation of the couch potato mentality has been a boon to the company. This point has been underlined by latest metrics providing an update on guidance for the full year alongside an update on trading for the second quarter of 2021 versus the comparable period in 2020. GTV has grown 76% year on year at the group level in the second quarter of 2021 to £1,739m. Orders grew 88% year on year at the group level to 78m in the second quarter of 2021. In the same period orders in the UK and Ireland grew 94% year on year to 38m and orders in the Group's international segment grew 83% year-on-year to 40m. The company said it expects that AOV reverts towards pre-COVID levels, and confirmed its full year gross profit margin guidance, expecting it to be in the lower half of its previously communicated range.

Apart from junk food delivery, another pandemic winner has been the gaming space. This point has been underlined by the latest from sports-betting and gaming entertainment group, Entain (ENT). It has just reported a first half trading update for the period from 1 January to 30 June 2021. Financial highlights here have included a strong performance across the Group with positive trends as markets continue to re-open. Total Group net gaming revenue was up 11% in H1 and up 42% in Q2. Entain has managed to delivered twenty-two consecutive quarters of double-digit growth in Online with NGR up 22% in Q2 driven by sports betting.

There was a trading update from Active Energy (AEG), the renewable energy company focused on the production and development of biomass products, ahead of today's Annual General Meeting. The company said that the commencement of production of CoalSwitch has marked a significant shift in its prospective customers' perception of Active Energy. CoalSwitch is now no longer regarded a concept but a next generation biomass renewable fuel in production and immediately ready for testing by prospective customers. Active Energy added that the level of new customer enquiries, both from within North America and internationally, within the last month is encouraging for the future commercial prospects of CoalSwitch.

There was a knock out update from Surface Transforms (SCE) a manufacturer of carbon fibre reinforced ceramic materials, with plenty of money in the kitty to boot. It served up a pre close trading and operations update for the six months to 30 June 2021. Revenue in H1-2021 grew 34% to £1.2m (H1-2020: £0.9m), with revenues expected to further increase in the final quarter of 2021, following start of production on the multi-year OEM contracts already awarded to Surface Transforms. Cash as at 30 June 2021 was £17.2m (31 December 2020: £1.1m) reflecting the successful £19m fund raise (after fees) in February 2021. A tax credit of £0.6m is expected in August and the drawdown of the £1m Liverpool City Region Combined Authority loan in October.

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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