The funding drought has been—and in many ways continues to be—the biggest bugbear of the British growth markets in 2023.
But if events of this week are anything to go by, there could be a glimmer of hope that the era of austerity is coming to an end, at least for the mining segment.
Kicking things off on Monday was Empire Metals Ltd (AIM:EEE), which secured £3 million to expand its drilling plans in Western Australia.
Empire said the placing was "significantly" oversubscribed at the strike price of 4p per share, constituting a 10% discount to the previous week’s close.
On Wednesday, Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) followed suit with a £4.5 million private placing at a 3% discounted offer of 15p.
However, the crown surely went to uranium investment company Yellow Cake PLC (AIM:YCA), the mid-cap mainstay of AIM’s top-10 set.
On Thursday, Yellow Cake sold 18.7 million new shares in another oversubscribed offering representing 9.4% of outstanding capital at 550p a share. That was for a discount of just 2%, and the £103 million fundraise was one of the biggest on the junior market this year.
In a year of disastrously desperate discounts in the upper 60% range, these negligible discounts were more or less a premium on a comparative basis.
In the biotech space, N4 Pharma PLC (AIM:N4P) suffered a 30% hit to its share price, though this was due to a £350,000 placement of 35 million new ordinary shares to fund a majority stake acquisition in Nanogenics Ltd, a company developing “complementary” lipid and peptide-based delivery technology.
Shield Therapeutics also plc jumped on the fundraising bandwagon with a $7.5 million (£6.1 million) share placing and retail offering at an 18% discount.
This was on top of a $20 million debt issuance to support its development of Accrufer, its iron deficiency treatment. Shares fell 30% pursuant to the fundraising announcement.
AIM All-Share gets the Friday feeling
The AIM All-Share Index travelled south for the better part of the week until the market bounced higher on Friday morning.
Whether pumped for the weekend or delighted by an upward revision in economic growth figures emerging from the Office of National Statistics, the index bounced off weekly lows below 724 points to reclaim the 727-point line.
According to the ONS, UK GDP increased an unrevised 0.2% in the second quarter of the year, although the estimate for the first quarter was revised up to 0.3% from 0.1%.
In output terms, growth in the latest quarter was driven by a 1.2% increase in the production sector while the household saving ratio grew by 9.1% up from 7.9% in the first quarter.
AIM still had a net negative week though, falling by 1.4% at the time of writing, compared to just 0.6% on losses for the FTSE 100 blue-chip index.
Media shares take a hit
Much of the downside on the junior market was felt in the media and entertainment sectors this week.
tinyBuild Inc also had a bit of a shocker. The video game publisher stealth horror franchise Hello Neighbour lost 40% of its value after acknowledging its struggles to obtain profitability for the rest of the financial year, having suffered huge pre-tax losses in the first half.
Sticking the video games sector, Bidstack Group PLC (AIM:BIDS, OTC:FTBGF) was also in the firing line after the in-game targeted advertising group published its interims on Friday.
With revenues and margins contracting, company shares consequently dipped by more than 40%.
Videndum PLC (LSE:VID), the production and creative solutions provider to the film industry, crashed by nearly half after disclosing the impact Hollywood strikes have had on the company.
In Videndum’s interim earnings call, the group disclosed that writers’ strikes caused interim revenues to fall by 24%, making a loss of £50 million compared to a £16.4 million profit a year earlier.
Tasty PLC (AIM:TAST) shareholders turned sour following the restaurant group’s interim results on Wednesday. Inflationary pressures have evidently hit the group hard, with labour, food and utility costs all plaguing its financials. Underlying earnings fell close to 60% to £1.1 million and revenue only lifted 0.9% to £21.7 million.
Shares slumped more than 30% as a result.
Substrate AI to buck the risk-off trend
Finally, IPOs at the lower end of the market have been a rarity in 2023, with a risk-off attitude freezing out all but the most determined entrepreneurs.
Yet Substrate Artificial Intelligence (OTCQB:SUIAF), led by Ivan Garcia, has decided to push the ‘go’ button. It is looking at an imminent listing on the Aquis Exchange and then a move ‘up’ to AIM.
Substrate is carving out a unique space in the crowded field of artificial intelligence. What sets it apart is its patented, biologically-inspired learning technology, the brainchild of co-founder and chief technology officer Bren Worth.
Limiting the downside, Substrate has acquired businesses in the areas of fintech, energy, agri-tech, human resources and health where it can apply its AI.
The beauty of this approach is that Substrate is revenue-generating – to the tune of an annual €12 million euros (£10.4 million) currently.