Is Sondrel’s stint in the limelight coming back to reality?
The UK microchip small-cap was on everyone’s tongues of late for its rumoured involvement with real-life Tony Stark Elon Musk’s Neuralink brain-computer interface.
Sources told The Daily Mail in mid-February that Musk called on Sondrel to lend its highly specialised knowledge of bespoke microchip designs to Neuralink.
Unsurprisingly, this preceded an epic rally on Sondrel’s share price, but the party wasn’t as lively this week, with shares retracting 16%. Who’s the spoilsport?
For better or worse, the two words ‘Elon’ and ‘Musk’ have a lot of gravity to them, but they can often obscure genuine business fundamentals.
In Sondrel’s case, the company confirmed a £6 million debt fundraising round “to meet the group's immediate working capital requirements” and to “support it through to a positive trading cash flow position in the year ending 31 December”.
Not really bad news in any major sense, but it goes to show the potency of FOMO when there’s little else in the small-cap scene to get the juices flowing.
On the flipside, another chipmaking minnow, EnSilica PLC (AIM:ENSI), added 35% to its share price following publication of its interim results,
While operating profit was marginal, EnSilica noted numerous highlights including a tape-out milestone for the design and supply of an industrial ASIC with production revenues estimated to be worth more than $30 million over seven years.
AIM All-Share underperforms
The AIM All-Share Index fell 1.4% to 736.5 come Friday, underperforming against the FTSE 100 lead index’s less-drastic 0.5% dip.
Stocks wallowed in the mid-week due to a raft of disappointing financial results from the likes of St James’s Place and Reckitt Benckiser.
Friday saw some recovery though, helped along by the banking segment and a surprisingly strong recovery in Nationwide’s House Price Index, which showed house prices increasing 1.2% year on year in February, breaking a 12-month streak of declines while smashing market expectations of a 0.7% increase.
The small-cap index closed the month 0.5% higher- not bad, but far below the comparative Russell 2000 index in the US, which added 5.3% in the month.
More risers and fallers
Orchard Funding Group dropped a bombshell on Friday after disclosing it had “suffered an instance of fraud, arising from dealings with a fraudulent introducer and fraudulent credit agreements funded by the company as a result”.
The company has put aside £500,000 to cover the impact of these fraudulent credit agreements, which will impact year-end financials. Shares were slapped 25% lower as a result.
Falling brick demand saw Brickability Group PLC (AIM:BRCK) shares fall 14% this week.
Brickability revealed that market volumes for bricks in the UK have been significantly lower in the last 12 months, “with UK despatches for the calendar year 2023 approximately 30% lower than 2022”.
Brick imports into the UK are estimated to have fallen by 42%, said the group, with Brickability’s sales volume reflecting these market trends
United Oil & Gas topped the AIM fallers list, dropping nearly 50% after it said it conditionally raised £1 million by selling heavily discounted stock in the Jamaica-focused junior.
On the upside was Powerhouse Energy Group PLC (AIM:PHE), which roared 122% higher after signing a five-year framework agreement with National Hydrogen of Australia.
Under the agreement, Powerhouse will work with National Hydrogen on its intended roll-out of multiple hydrogen-based projects across Australia, Italy, Switzerland, and Hong Kong.
Speaking of five-year deals, itim Group plc shares soared 53% after announcing a new contract with fast-fashion retailer QUIZ.
Described as a five-year multi-million-pound deal, it marks itim’s first foray into fast fashion via an ‘omnichannel retail platform’.
Plant-based polymers innovator Itaconix PLC (AIM:ITX, OTCQB:ITXXF) drew the attention of the market after hitting record yearly revenues of US$7.9 million- up 40.6% compared to the previous year.
"We have completed another record-setting year with revenues again growing substantially," said chief executive John Shaw. "This is being driven by both new customer wins and an expanding base of recurring revenues from existing customers."
Itaconix shares rallied 36% as a result.
Lastly, OptiBiotix Health PLC (AIM:OPTI, OTC:OPBXF) led the charge in the life sciences sector with a 32% gain on its share price. This followed a strategic and commercial update noting increased sales to The Hut Group, Holland & Barrett and a Germany-based client.