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Friday's most followed: Viridas, Densitron Tech, HMV Group, Interserve, The Niche Group

Published: 13:33 04 May 2012 BST

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Small caps Viridas (LON:VIR) and Densitron Tech (LON:DSN) found themselves under the spotlight this afternoon after seeing their shares rally on the back of positive full year results.

Display technologies group Densitron saw its full year profits from continuing operations rise to £1.1 million in 2011 from £0.7 million in the previous year as revenues jumped 11 percent to £23.1 million, despite challenging trading conditions.

Earnings per share rose to 1.18 pence from 0.72 pence in 2010.

The company decided to double its dividend for the year to 0.6 pence on the back of the strong financial performance.

“I am delighted with the progress that the business has continued to make during the year,” said chairman of Densitron Jan Holmstrom.

“The foundations that were laid several years ago have enabled the business to develop and grow despite difficult economic conditions.”

The company also updated investors on its performance at the start of the year, saying the amount of orders booked during the first quarter was 28 percent ahead of the same period last year and that it expects to further increase its market share this year.

Densitron rallied seven percent to 9.5 pence in early deals, while Viridas advanced 6.5 percent to 0.4 pencedespite reporting a net full year loss of £400,000.

The investment group pointed out that the period included overheads from its previous operations and therefore was not representative of its current overheads base. 

Net assets stood at £2.2 million at the end of 2011, a significant uplift from £4,000 a year earlier. In January, Viridas disposed of most of its stake in Leed Resources for an additional gain of £1.5 million, which took its cash balance to £3.2 million.

The group’s main investments are currently its remaining stake in Leed and a shareholding in Brady Exploration.

Viridas said it would look into growing business through further acquisitions, but noted that cash is “particularly valuable” given the current market environment.

“In terms of strategy, we are constantly reviewing new opportunities in the natural resources sector and are seeking situations that offer scope for high returns against the background of a sensible level of risk,” said executive chairman of Viridas Nicholas Lee.

“The company is seeking to make relatively significant investments with on-going involvement and influence either by way of board representation or similar.

“Given the success of the company's strategy to date, we are extremely well placed to take advantage of interesting opportunities as they arise.”

Other notable risers included entertainment retail HMV Group (LON:HMV), which jumped 11 percent to 4.12 pence after offering investors a bullish outlook for the current financial year.

The entertainment retailer, which also showed up among the most popular searches on Google Finance, expects to post a profit of at least £10 million for the full year to end April 2013, while expectations are currently for a pre-tax loss of £5 million.

“The last year has been a difficult and challenging one for HMV and this will be reflected in our annual results,” said chief executive of HMV Simon Fox.

“However we are confident that the actions we have taken will enable us to significantly improve our profit and cash generation in the year ahead.”

Investors shrugged off the news the projected loss of £16 million for this year. On message boards, some traders opined that the full year profit target was within reach if HMV could grab GAME Group’s market share.

The results from Densitron and Viridas made the list of the most read RNS statements of the day along with the HMV update.

Other popular announcements included Interserve’s (LON:IRV) acquisition of Business Employment Services Training Limited (BEST), which provides training and development for job-seekers and employers, for £17.5 million.

The acquisitions will be funded by the group’s cash and existing debt facilities.

BEST’s pro forma annual revenues and profits are £17 million and £3 million respectively, while its gross assets are valued at £2 million.

The business operates across South and West Yorkshire, a region which employs around three million people across 100,000 companies and has an unemployment rate of 8.7 percent, which is similar to the national average. 

Interserve expects BEST to be earnings enhancing in the first full year of ownership.

“The acquisition of BEST reflects our strategy of developing as a top-tier public services provider, delivering front-line services,” said chief executive of Interserve Adrian Ringrose.

An operational update from oil and gas company The Niche Group (LON:NGP) also caught the eye of investors.

The company reported the results from wells Ciftlik-1 well and Kastal-1 onshore Turkey, which form part of its proposed takeover of Oman Resources.

Well Ciftlik-1, on licence AR/ARR/4396, was sunk 1198 metres and found gas shows while drilling, however, now gas was flowed to the surface during well tests and log interpretation suggested that there were no reservoir quality sandstones at this location.

Meanwhile, the sidetrack of the Kastal-1 well on licence AR/ARR/4395 showed significant gas shows at 200 and 410 metres before it was suspended for well control reasons. This well will most likely be abandoned with the company currently reviewing the possibility of spudding and offsetting the well from this location.

Niche added that the results of these two wells would be incorporated into an updated competent person's report, which will be issued in conjunction with the firm's anticipated reverse takeover of Oman Resources.

In March this year, Niche said that it, Oman Resources and Arar are working together to conclude, what's called the Oman transaction and the Arar transaction - which constitute a reverse takeover - as soon as practicable.


 

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