Quadrise PLC (AIM:QED) is primed for “transformational earnings and upside potential” as its various commercial trials advance, that’s the view of VSA Capital which has repeated a ‘buy’ recommendation for the AIM-quoted share.
The broker’s comments come after Quadrise today confirm it had raised a further £2 million via a retail share offer, which amidst high investor demand was doubled from an initial target of £1 million.
This oversubscribed offer meant that Quadrise will see gross proceeds reach £6.53 million, as the retail offer adds to a previously closed placing and a direct share subscription – with all new shares sold at
Funded to revenue
The proceeds are expected to allow Quadrise to maintain its strong momentum towards commerciality for its cleaner fuels products MSAR and BioMSAR, by allowing it to keep working on four key projects in parallel.
Currently advancing are the 3-way marine fuel vessel trials between Quadrise, MSC and Cargill, a power generator trial in Panama with partner Sparkle, engine testing of new prototype 100% biofuel fuels (bioMSAR Zero), and, in Utah, the Asphalt Ridge venture with Valkor.
Plus, a separate fuel trial is in the planning in Morocco, as a prerequisite to a commercial fuel supply deal.
With the injection of capital in place, Quadrise expects to be able to support each venture in parallel to bring each from trial to commerciality.
Strongest position
VSA Capital analyst Oliver O'Donnell highlighted that the injection of capital will help Quadrise support recent progress, and reckoned that preparations for the MSC shipping trial (arguably the most impactful in the pipeline) should be completed in the first quarter, and will see production start in batches during the second quarter – opening up talks over a longer-term partnership.
“The start of preparations for the MSC trial and the Valkor milestone have translated into strong share price performance. The stock price is up 61.4% on a one-year basis, although the placing has led to a pullback from the recent peak above 6p,” the analyst said in a note.
“The balance sheet is in its strongest position since 2021 and with first revenues due this year, QED is well-positioned to maintain momentum towards commercial revenues and ultimately profitability.
“Timelines remain subject to the outcome of successful trials and commercial negotiations; however, the scale of the internal markets QED is targeting continues to indicate transformational earnings and upside potential.”