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IDE appoints IT veteran Ian Smith to oversee strategic and operational review

A look at the day's major share price movers, including Clontarf Energy, De La Rue and Photo-Me

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Smith has an extensive track record of investing in and managing technology companies

IDE Group Holdings PLC (LON:IDE), the network, cloud and information technology managed services provider, surged on news that industry veteran Ian Smith has joined the board.

The market welcomed the news, sending the shares soaring 3p to 14p.

Smith, who led strategic change and value creation at Redstone PLC and Accumuli PLC, was previously the deputy executive chairman and chief executive officer at Castleton Technology PLC.

He is also the co-founder and chief executive officer of MXC Capital, a substantial shareholder of IDE.

He will join the board in a part-time executive capacity to lead the group's strategic and operational review.

"Whilst the situation that IDE finds itself in is disappointing, I am pleased to be able to support the company alongside other shareholders whilst it undergoes a strategic review,” said Bill Dobbie, the interim non-executive chairman of IDE Group.

Dobbie's investment vehicle, Salvators Lending, was among the shareholders – alongside MXC Capital - to subscribe for loan notes issued by IDE that raised £2mln for the company.

“Despite the poor cash performance of the business, we believe that there is marketable value in the underlying business activities and the focus will be on restoring shareholder value," Dobbie said.

1.00pm: Clontarf Energy scores top marks for honesty but few marks for financial performance

Results from Clontarf Energy PLC (LON:CLON) gave the market a jolt as the company painted a bleak picture of life for oil exploration companies.

“The shares of listed oil exploration companies are generally friendless,” the company admitted in its results statement.

“Their share prices have almost all fallen and remain in, many cases, more than 90% below their peak. It is virtually impossible to raise serious money. This in turn makes it very hard to undertake meaningful grass roots exploration. The bear market in this sector has lasted for at least seven years, with little sign of improvement,” it admitted.

Shares in the Ghana-focused explorer plunged 29.4% as its loss before tax ballooned to £2.78mln in 2017 from £199,628 in 2016.

Well, I say, Ghana-focused but as the directors said, “Almost ten years after negotiating an agreement in Ghana it has not been ratified and we do not know when it will be”.

In 2017, the explorer obtained Block 18 offshore Equatorial Guinea.

“The Equatorial Guinea block award is a positive development but it too has complications. We like our strategy of selecting good geology with politics being a secondary concern but we are considering other directions,” it told shareholders.

10.00am: De La Rue rallies as full-year results contain no new nasty suprises

De La Rue PLC (LON:DLAR) took time out from grumbling about the British passport printing gig going to a company with a foreign-sounding name to please the market with its full-year results.

Admittedly, the positive reaction to the results was likely more about no change to the outlook for the current year after the banknotes printer had lowered expectations last month.

READ: De La Rue shares fall as it drops post-Brexit passport appeal, cautions on full-year results

Revenue in the year just ended was up 7% on the previous year, which was a shade better than the “circa 6%” growth the company had pointed to last month.

Adjusted operating profit of £62.8mln was down 11% year-on-year but in line with April's guidance of “the low-to-mid £60mln range”.

The shares hardened 18p to 521p as the group confirmed the full-year dividend would be maintained at 25p.

“De La Rue’s order book excluding paper business increased 6% and the company (which manufactures speciality items such as passports, IDs and bank notes) will need these future orders to keep flowing in order to make up for losing its contract with HM’s Passport Office to design and manufacture post-Brexit identification documents,” suggested Artjom Hatsaturjants, a research analyst at Accendo Markets.

9.00am: Photo-Me warns on profits after surge in Japanese ID photos fails to materialise

The trading update from Photo-Me International PLC (LON:PHTM) started benignly enough before it got to the profit warning round about the thirteenth paragraph.

“The group continued to deliver on its growth strategy in the second half of the financial year,” the statement said.

“Good operational progress has been made in diversifying its operations, through the deployment of secure photo identification technology and the expansion of its laundry operations,” it added.

That was the good news.

The news on the financial year just ended wasn't too bad, either; for the financial year ended April 30, 2018, the board expects the group will achieve turnover growth of around 6% on the previous year on a constant currency basis.

The group's profit before tax is expected to be broadly in line with market expectations, including a one-off investment gain of £3.7mln relating to the group's shareholding in Max Sight Group Holdings Limited.

“Broadly in line” usually means “a bit below market expectations but not worryingly so”.

Things were not so hunky dory in the outlook for the current financial year.

The shares slumped to 125p from 151.4p overnight as the group warned of competitive pressures in the Japanese photo ID market. It said it would invest in a “thorough restructuring” of its Japanese subsidiary that should boost profitability in the current financial year and beyond.

The company said it expects profit before tax in the year to April 30, 2019, will be at least £44mln, including the reorganisation cost in Japan. The current consensus forecast for profit before tax is £54.1mln.

Although no final decision has yet been made, the board currently expects that it will maintain the group's existing dividend policy when it announces full-year results for the financial year just ended on July 10.

“New profit guidance for the April 2019 financial year implies an 18% downgrade to consensus forecasts, roughly in line with the share price fall today," said Russ Mould, the investment director at AJ Bell.

“Despite its name, there is more to the business than just photo booths, with the company also offering biometric identification, high-quality digital printing and unmanned laundry services.

“The problems in Japan follow a significant expansion in capacity in anticipation of a surge in demand from a new ID scheme which failed to materialise. The impact on profit is linked to the costs of restructuring its Japanese subsidiary although it is worth keeping its importance to the business in perspective; in the 12 months to 30 April 2017, Asia and the rest of the world combined, encompassing Japan, contributed less than 20% of group operating profit," Mould noted.

Proactive news headlines:

Landore Resources Limited (LON:LND) says its infill drill programme has discovered “widespread gold mineralisation” between the BAM East and BAM gold deposits at its Junior Lake property in Ontario.

Vast Resources PLC (LON:VAST) has updated investors of progress with the Baita Plai project where it plans to secure permissions to mine. The company has agreed to certain payments following meetings with the Ministry of Economy and Baita SA, the holder of the Baita Plai Head Licence, as it prepares to receive formal approval that would give Vast the right to mine.

Live Company Group PLC (LON:LVCG) has launched its BRICKLIVE Kids childcare crèche in China in the latest expansion of its BRICKLIVE brand.

Rare earths explorer Mkango Resources Ltd (LON:MKA) has boosted its cash holdings to US$8.5mln following the recent investments by Talaxis. Net losses for the quarter to March were US$1.16mln.

OptiBiotix Health PLC (LON:OPTI) said it has raised £1.5mln in an oversubscribed share placing – cash that will be used to capitalise on commercial opportunities for three key products. The company, which is developing advances that use the human microbiome to tackle obesity, high cholesterol and diabetes, is issuing the new stock at 62p, a modest discount to Tuesday's closing price.

Keywords Studios PLC (LON:KWS), the video games support services provider, has beefed up its art services offering with the acquisition of Fire Without Smoke Ltd for up to £5.2mln.

Kromek Group PLC (LON:KMK), a radiation detection technology company, has been awarded a new five-year contract renewal by an existing customer. The contract renewal is worth US$1.2mln over five years.

Redx Pharma PLC (LON:REDX) has confirmed it will restart early-stage clinical trials on its cancer drug after discussion with the regulator. The Phase I/IIa assessment of RXC004 was halted in March amid concerns the initial dosing was too high.

Cadogan Petroleum PLC (LON:CAD) told investors that it has successfully carried out a workover programme for the Blazh-Mon 3 well, which has now seen production double. The Blazh-Mon 3 well has flowed at a rate of 24 barrels of oil per day following the intervention.

Bezant Resources PLC (LON:BZT) is positioning its Mankayan copper project in the Philippines for the next upward leg in the commodity cycle, according to Peter Bird, executive chairman. The fundamentals for base metals are very encouraging and particularly for copper he believes, with global demand forecast to double by 2030.

Kore Potash PLC (LON:KP2) (ASX:KP2) has appointed Stuart Bradley Sampson as chief executive officer and director, effective from 4 June 2018. The company said Stuart Bradley Sampson, a mining engineer, has more than 25 years’ resources industry experience across numerous locations including West and Southern Africa.

Stratex International PLC (LON:STI) has appointed Bob Smeeton as its new chief financial officer. He replaces Perry Ashwood who is retiring after holding the position at the mining junior since 2005.

W Resources PLC (LON:WRES) has drawn down the second tranche of US$21.875mln from the term loan from funds managed by BlackRock, and issued warrants equal to 5% of the current fully diluted share capital.

Falcon Media House PLC (LON:FAL), the global digital media group, intends to delist its shares.

Mosman Oil And Gas Ltd (LON:MSMN) told investors that it expects GEM International Resources Inc (CVE:GI) will have its suspension lifted on the trading of its shares. The AIM-quoted junior oiler has a shareholding in GEM which has now completed financial reports and other corporate requirements necessary to resume its listing in Canada.

Alliance Pharma PLC (LON:APH), the speciality pharmaceutical company, announced that Thomas Casdagli has decided to step-down as a non-executive director of the company as of 30 May 2018 after nine years.

OPG Power Ventures PLC (LON:OPG), the developer and operator of power generation facilities in India, has advised that, effective from 29th May 2018, Ravi Gupta stepped down from his position as a non-executive director of the company,  having served 10 years on the board.

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