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Modern Water shares slide on profit warning amid Chinese revenue shortfalls

Last updated: 15:15 21 Mar 2018 GMT, First published: 09:40 21 Mar 2018 GMT

Water flowing from tap

Shares in Modern Water PLC (LON:MWG) slid 9% in mid-afternoon trading to 9.7p after the water treatment company said it expected revenue and operating profits for the year to be below market expectations.

The company said the expected underperformance was primarily due to a shortfall in anticipated revenue from its monitoring division in China as the result of a 2017 change of its product sales model to multiple channels from exclusive distributor.

However, Modern Water added that following the change the division saw an 18% increase in sales for January and February 2018 compared to the same period last year, with a ‘substantially’ stronger order book.

Elsewhere, investment services provider Concha PLC (LON:CHA) saw its shares drop 7.3% to 0.19p despite a significantly narrowed loss in its half-year results compared to the previous period as impairment costs from its investment in Ve Interactive Ltd were not repeated.

The company reported a pre-tax loss of £229,000 for the period, much less than the £3mln reported a year earlier. Last month the UK High Court decided to replace the administrators of Ve Interactive after Concha’s former directors complained about the process by which administrators were appointed.

Concha said it is currently considering how best to leverage the judge's conclusions to compensate for the loss of value it has suffered.

Meanwhile, Moss Bros Group plc (LON:MOSB) shares plunged 23% to 45p after the suits retailer warned that it expects its 2018/2019 profit to be “at a level materially lower than current market expectations” and plans to pay a reduced dividend for full-year 2017-2018.

The high street group, however, said it does not anticipate any change to the previously announced expectations for financial year just ended.

1:35pm: Alpha FX Group PLC shares rise after new service offering accompanies above-forecast results

Alpha FX Group PLC (LON:AFX) saw its shares rise 5% to 520p in lunchtime trading after reporting full-year results that were slightly ahead of market expectations according to analysts at Liberum.

The currency exchanger saw pre-tax profits grow to £5.6mln from £4.3mln in 2016, while its client book grew 39% over the year to a total of 310.

The company also said it was expanding its service offering to support institutional clients with the formation of a new subsidiary, Alpha FX Institutional Limited, as well as appointing Henry Lisney as chief operating officer.

Analysts at Liberum commented: “The shares have been very strong since IPO and trade on a P/E of c24x, but Management have a track record of delivering upgrades and we do not include anything in forecasts for a new institutional venture announced today.”

Meanwhile, Range Resources Ltd (LON:RRL) shares jumped 28% to 0.23p after its drilling arm won a contract with Shell to work over one of the oil major’s onshore Trinidad wells.

The contract is just for the one well with the work expected to take about ten days. Range acquired RRDSL at the end of last year and this is the first contract award so far in 2018.

11:25am: Brave Bison Group PLC shares drop

Shares in perennially loss-making social video company Brave Bison Group PLC (LON:BBSN) fell 5.9% to 0.8p in mid-morning trading after full-year pre-tax losses more than doubled to £17.1mln from £6.4mln previously.

The company also posted a 48% drop in revenue to £9.1mln, caused mainly by a low margin advertising revenue product and the loss of two major clients in the fourth quarter of 2016.

The group has, to use marketing jargon, been “moving up the value chain” but conceded in December the process was taking longer than expected meaning it will take “somewhat longer” to achieve profitability.

Claire Hungate, who took over as chief executive in September, did have some good news.

Underlying losses halved, cash outflows reduced while an 84% reduction in operating losses has the group on the path to profitability, she said.

Meanwhile, Gulfsands Petroleum plc (LON:GPX) saw its shares collapse 72% to 1.25p after it said it would delist from AIM, a move being backed by major shareholders who control 83% of the energy firm's voting rights.

Inhaler specialist Vectura Group PLC (LON:VEC) fell 5.5% to 76.2p as one-off costs meant losses doubled in 2017.

Investors had already received one blow this month when the US regulator knocked back a generic version of Glaxo stalwart Advair until at least 2020.

James Ward-Lilley, Vectura’s chief executive, said: “Notwithstanding the disappointing delays we have seen for our VR315 generic Advair programme, we continue to see substantial value in the development of complex inhaled generics.”

9:40am: Airea PLC shares spike higher as it accompanies full-year results with a special dividend

Airea PLC (LON:AIEA) saw its shares spike higher 31% in early morning trading to 46p after the flooring company accompanied full-year results with a 5p a share special dividend.

The AIM-listed firm saw its 2017 revenue increase to £36.7mln, up from £24.6mln, helped by export sales growth of 58% over the last six months.

However, Airea’s operating profit before exceptional items was reduced to £1.156mln, down from £2.013mln in 2016 reflecting accelerating losses in the residential carpets business, with the exceptional cost of £2.2mln relating to the rationalisation of that business.

Meanwhile, Microsaic Systems plc (LON:MSYS) shares jumped 14% to 2.4p as the company signed a commercial contract with CPI Innovation Services.

The mass spectrometry developer said the project will “focus on examining the potential of the Microsaic Mass Spectrometry (MS) offering as an online, deployable tool for the elucidation of biopharmaceutical or biologic structure during the manufacturing or bioprocessing work-flow.”

And printer ink manufacturer Xaar PLC (LON:XAR) shares leapt 9.3% to 293p after the company raised its dividend despite reporting a fall in full-year profits.

The FTSE Small Cap firm saw its full-year revenue increase to £100.1mln, up from £96.2mln in 2016, though adjusted pre-tax profit slipped to £18.0mln from £19.5mln as its adjusted operating margin was reduced to 18% from 20%.

The company said 80% of its revenue was now derived from businesses launched in the last two years, with its non-ceramic businesses growing 23% in the year.

Proactive news headlines:

Directa Plus Plc (LON:DCTA) has announced an agreement with Italian firm Sartec Srl to jointly develop a commercial-scale industrial system based on the company’s graphene-based Grafysorber product for treating oil-contaminated produced water.

Range Resources Ltd’s (LON:RRL) drilling arm has won a contract with Shell to work over one of the oil major’s onshore Trinidad wells. Range acquired RRDSL at the end of last year and this is the first contract award so far in 2018.

accesso Technology Group PLC (LON:ACSO), which provides queuing technology pioneered in theme parks, enjoyed a strong year and said it remained confident on the outlook for 2018. Revenues for the 12 months ended December 31 grew just over 30% to US$133.4mln, while underlying earnings (EBITDA) were up 29% at US$24.6mln.

Marketing and media analytics specialist Ebiquity plc (LON:EBQ) saw faster revenue growth in the second half of 2017. Revenue for 2017 was up 4.6% to £87.4mln from £83.6mln the year before, pretty much in line with market expectations, with like-for-like (LFL) growth of 0.8% on a constant currency (CC) basis.

Employee services provider Personal Group Holdings plc (LON:PGH) has seen a continuation of record new insurance sales in the first two months of 2018. In its full-year results statement for 2017, the group hailed its fifth successive year of record new insurance sales and it looks like 2018 has continued in the same vein.

Action Hotels PLC (LON:AHCG) said its new operation on Melbourne’s South Wharf has opened ahead of schedule with AUS$3.5mln in advanced bookings. The 347-room operation will be branded Novotel and operated by French hospitality giant Accor.

Cadence Minerals Plc (LON:KDNC) (OTC:KDNCY) said it has been issued shares in Australian-listed Clancy Exploration Limited (ASX:CLY) as compensation for the discovery of third party priority over overlapping licenses in Austria.

Aminex PLC (LON:AEX) has revealed that it is in discussions with Eclipse Investments LLC regarding a possible farm-out of part of its interest in the Ntorya appraisal area in Tanzania. The group noted that Eclipse is a wholly-owned subsidiary of the Zubair Corporation and is the company's largest shareholder. 

Eland Oil & Gas PLC (LON:ELA) has decided to pause drilling operations at the Opuama field, in Nigeria, as the programme had continued to encounter intermittent power problems. It is making arranged for new back-up power engines to be delivered to site, though they aren’t expected until April.

SDX Energy Inc (LON:SDX) (CVE:SDX) told investors it has successfully completed the SAH-2 well, on the Sebou permit onshore Morocco, for production which will begin in a few days. The company said that the well achieved an average flow rate of conventional natural gas of 12.9mln cubic feet per day, seeing a maximum rate of 13.5mln cubic feet per day.

The Marketing Group PLC (NASDAQ OMX:TMG) has announced that its subsidiary TRUTH has undertaken the first successful deployment of an advertising campaign using blockchain smart contract technology. The Nasdaq First North-listed firm said TRUTH - the world’s first global blockchain-enabled media agency - ran the campaign for a national publisher for ten days until 19 March 2018, which saw it fully disclose all fees involved to the client.

Kibo Mining PLC has welcomed comments from Tanzania’s president pledging to support the private sector and indicating an agreement with a new energy contractor is close to being signed. Noting recent comment in the press regarding comments made at the 11th Tanzania National Business Council (TNBC) meeting, the AIM-listed energy and resources firm’s CEO, Louis Cotzee said: "It is heartening to see the winds of change blowing from Tanzania.

Caledonia Mining Corporation PLC (LON:CMCL) told investors it achieved a new production record at the Blanket mine, in Zimbabwe, where it unearthed 56,133 ounces of gold during 2017 - some 11.5% more than in the preceding year. The company, in financial results for the year, reported an average gold price of US$1,243 per ounce (up from S$1,232 in the year before) and it said gross profit amounted to US$26.32mln, up from US$23.49mln.

i3 Energy PLC (LON:I3E) told investors that it will be issuing US$500,000 worth of shares to James Caird Asset Management from the conversion of debt. It noted that following the conversion the investment group retains US$1.5mln of loan notes.

Alba Mineral Resources PLC (LON:ALBA), an investor in the Horse Hill project, has further strengthened its oil and gas team with the appointment of Feroz Sultan as a special adviser. Sultan joins Sue Corrigan who has hired earlier this month as technical consultant.

APQ Global Limited (LON:APQ), the emerging markets income company, announced a further appointment to its International Advisory Council, with Dimieari Von Kemedi who will focus on opportunities in West Africa. The group said Kemedi has had a career spanning civil society, government and private sectors and is well acquainted with social and economic trends in West Africa.

Jubilee Metals Group PLC (LON:JLP) has announced the appointment of Shard Capital Partners LLP as its broker with immediate effect.

Metminco Limited (LON:MNC) (ASX:MNC) announced that today it requested it be placed on a trading halt on the Australian Stock Exchange as it expects to make an announcement to the market in relation to revised terms of the capital raising it initially announced on 5 March 2018.

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