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Lighthouse Group succumbs to profit taking

A look at the day's major movers, including Bidstack, NAHL, Flybe, Stobart Group and AO World
Flybe aeroplane
Virgin Atlantic joined forces with Flybe's other suitor, Stobart Group, to acquire the troubled airline

Lighthouse Group PLC (LON:LGT), the national financial advisory group, issued a short, seemingly innocuous trading update that nevertheless hit the shares.

The shares tumbled 2p to 22.9p after the company said results for 2018 are likely to be in line with market expectations.

They have been on a good run this year, rising from 21.825p at the end of 2018 to 24.9p last night, so this could simply be a case of profit taking.

"The board is delighted to report another period of growth for the business,2 said Malcolm Streatfield, the chief executive officer of Lighthouse.

“Our advisers continue to deliver quality advice to our customers and the annualised revenue production per adviser and levels of recurring revenue continue to build,” he added.

1.30pm: Deja vu all over again for Starcom

“Starcom plunges as it suffers order delays” was the headline on Proactive in February 2017.

As the old line has it, it’s deja vu all over again as the telematics pioneer’s shares shed a fifth of their value on Friday after an order in North Africa was delayed.

The company sealed a deal worth roughly US$1.1mln in November of last year for an initial order of its Helios advanced units plus related software and the shipment was expected to complete by the end of 2018.

Unfortunately, although the minister of the relevant government department that is the end user for the units has approved the release of the funds for payment of the order, there has been a delay in handing over the ackers.

Payment is now expected by the end of January. As a result, and assuming that payment is received as promised, the hardware component of the order value will be recognised in 2019’s first half results rather than in the 2018 financial statements; however, the related software component of the order value amounting to around US$0.2 million is expected to be recognised in the 2018 financial statements.

Revenues for 2018 are still expected to slightly exceed market expectations of US$5.9 million but underlying earnings (EBITDA) are now expected to be roughly; the market had been expecting EBITDA in the region of US$485,000.

11.45am: Bidstack: what is wrong with this picture?

The first trading update from Bidstack Group PLC (LON:BIDS) since cash shell Kin Group reversed into it caught the market on the hop.

Bidstack provides technology that inserts adverts into natural advertising spaces within video games, which cannot be excluded with ad-blocking software.

READ Kin Group unveils £6.8mln reverse takeover of video game-focused software firm bidstack

Its client list includes Sports Interactive, which develops the Football Manager (FM) series, and the FM title got a lot of mentions in the year-end trading update, with the company saying it expects trading in 2018 to have been in line with market expectations, “with particularly good traction for FM19 in Asia”.

The period since completion of the reverse takeover and admission to trading on AIM in mid-September 2018 has seen good growth in the business on several fronts, Bidstack claimed.

During the year, the company generated its first material revenues, of more than £300,000, in line with market expectations.

The share price reaction – down 7.4% at 4.4p (below the 6p September placing price) – suggests that market expectations might have been a bit higher than Bidstack's management was anticipating.

The stocks clearly has its fans in the Twittersphere although others seem disgruntled at the lack of progress or the market’s lack of understanding of what the company does.

It sounds like they need to make a call to Proactive’s broadcast team.

10.30am: NAHL issues a profit warning after a disappointing fourth quarter

The bad times continue for NAHL Group plc (LON:NAH), the company behind the national accident helpline.

The shares lost a fifth of their value after the company issued a profit warning.

They now trade at 88.2p, down from 185p a year ago.

“The group has had a disappointing end to the year. Consequently profits and adjusted earnings per share for Financial Year 2018 are expected to be between 5 and 10 per cent below board expectations,” the personal injury legal services provider told the market on Friday.

Heightened competitor activity in the personal injury division depressed enquiry volumes and increased consumer acquisition cost in the fourth quarter.

Based on the previous year's performance, the board had pinned its hopes on the division's performance during December would bail it out somewhat but this proved not to be the case. This, coupled with a persistently difficult housing market, has resulted in a 2018 performance below expectations, the company said.

9.45am: Flybe shareholders look like the big losers in the Virgin Atlantic/Stobart Group deal

While the proposed takeover of Flybe Group PLC (LON:FLYB) has done wonders for the Stobart Group share price, Flybe’s shares have plummeted.

“Ouch, any Flybe shareholder hoping for a healthy premium from any takeover bid should look away now,” suggested Russ Mould, the investment director of AJ Bell.

“A paltry £2.2m or 1p per share is being offered to investors in the company’s equity as part of the rescue deal unveiled by a consortium which includes Virgin Atlantic and Southend Airport-owner Stobart.

“To put that sum in context it compares with £215mln valuation at IPO back in 2010 and even 12 months ago the regional carrier was valued by the market at closer to £100mln,” he noted.

The shares lost four-fifths of their value at 3.05p, valuing the company at £35.48mln.

Ouch, indeed.

9:15am: Stobart wanted after getting into bed with Virgin

Stobart Group Ltd (LON:STOB) soared higher in early trading on Friday on news the Southend airport owner has teamed up with Virgin Atlantic and a New York-based hedge fund to acquire cash-strapped Flybe Group PLC (LON:FLYB).

Flybe, still one of the UK’s best-known airlines despite its troubles, put itself up for sale back in November after a slump in first-half profits.

Stobart, Virgin and Cyrus Capital have formed a joint venture called Connect Airways which will house the Flybe business, as well as Stobart’s regional airline, Stobart Air, which is being acquired in a £40mln deal.

Shares in Stobart were up 9.6% at 164.6p in early deals.

Trying to predict which retailers would issue profit warnings after Christmas trading has proved a tricky task; some might have put electricals and white goods retailer AO World PLC (LON:AO.) in the running for a disappointing Yuletide period but it confounded the doubters.

The retailer reaffirmed its guidance for the full year while Black Friday boosted sales to record-breaking levels in November.

“The BRC [British Retail Consortium] has been highlighting that the white goods market has been tough, but today’s Q3 update reveals that (aka AO World) is still on track, with total UK revenue up by 4.4%, after a successful Black Friday trading period,” reported independent retail analyst, Nick Bubb.

READ AO World surges as it reaffirms full year guidance after Black Friday boosts November sales to highest ever

It was a case of “A-O, let’s go” for the shares, which rose 5.4p to 129.6p in early deals.

Proactive news headlines:

Stobart Group Ltd (LON:STOB) has teamed up with Virgin Atlantic and a New York-based hedge fund to take out cash-strapped Flybe Group PLC (LON:FLYB) in a cut-price £2.2mln deal.

Berkeley Energia Limited (LON:BKY) shares rose on Friday although it said it has received no official notice regarding official approvals for its Salamanca uranium project after reports emerged in the Spanish media.

ANGLE PLC (LON:AGL) has revealed its cancer detection device played an important role in research that may one day help prevent the spread of cancer around the body. Scientists at the University of Basel, Switzerland, used ANGLE’s Parsortix liquid biopsy to isolate metastatic circulating tumour cell clusters - a group of cancer and other cells tethered together as a single mass.

Drug developer ValiRx Plc (LON:VAL) has confirmed its peer-reviewed article analysing the used of lead drug, VAL401, has now been published online in the European Journal of Drug Metabolism and Pharmacokinetics. The academic work focuses on data from a phase II study, completed last year in Tbilisi, Georgia.

Obtala Limited (LON:OBT), the African focused forestry and timber trading company, has announced the appointment of Arden Partners as its nominated adviser and broker with immediate effect. The group also said Jessica Camus has stepped down as a non-executive director of the Company. with effect from today, adding that it started a process to appoint a further independent non-executive director.

Next Fifteen Communications Group Plc (LON:NFC) has acquired predictive analytics and data marketing business Planning-Inc Limited.

Rose Petroleum PLC (LON:ROSE) has expanded its footprint In the Paradox basin, in Utah, with a deal to acquire around 1,920 acres. The new acreage was secured through the December 2018 Bureau of Land Management Utah lease sale. Rose will own 75% alongside partner Rockies Standard Oil Company (RSOC).

Active Energy PLC’s (LON:AEG) has been encouraged by the “substantive nature” of discussions with potential offtake partners in Europe and Asia in recent weeks.

Tharisa plc (LON:THS) told investors it is “fully committed” to its Vision 2020 strategy though a quarterly production report today has shown a larger than expected dent in output as it works to optimise operations. The platinum metals firm produced 33,600 ounces of PGMs and 305,400 tonnes of chrome concentrate, representing a 5.9% and 10% reduction, as recovery rates declined due to the processing of tailings.

EQTEC Plc (LON:EQT), the technology solution company for waste gasification to energy projects, said it has executed final legal documentation to amend the existing secured loan facility with Cuart Investments Fund and associates initially entered into by the company on 5 July 2018. The group said it has a number of significant near term contract opportunities and has therefore agreed to amend the loan facility in order to allow the company to focus its financial resources on delivering projects within the pipeline in the near future.

US Oil & Gas PLC (USOP) has raised additional new capital through a placing of new shares. The Nevada focused explorer announced that it has sold 40,029 shares to private investors at a placing price of 30p per share, to raise US$ 15,651.

Range Resources Limited (LON:RRL), an international company with oil and gas assets and oilfield services operations in Trinidad and Indonesia, announced the appointment of Dr Mu (Robin) Luo as a non-executive director of the company with immediate effect. The group said Luo, a senior oil and gas professional with 36 years’ experience, is currently a principal development geophysicist to Inpex Corporation, leading a multi-billion Ichthys LNG project in Australia.

Obtala Limited (LON:OBT), the African focused forestry and timber trading company, has announced the appointment of Arden Partners as its nominated adviser and broker with immediate effect. The group also said Jessica Camus has stepped down as a non-executive director of the Company. with effect from today, adding that it started a process to appoint a further independent non-executive director.

OptiBiotix Health plc (LON:OPTI), the life sciences business developing compounds to tackle obesity, high cholesterol and diabetes, said that, further to its announcement of 17 December 2018, the regulatory due diligence process required for a board position has been completed for the appointment of Frédéric Narbel as managing director of OptiBiotix's prebiotic division.

Touchstone Exploration Inc. (LON:TXP) (TSX:TXP), the oil and gas exploration and production company active in the Republic of Trinidad and Tobago, said it will be holding a live online investor presentation and Q&A session for investors at 7pm on Tuesday 15 January. It added that a webcast will be recorded and made available on after the event.

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