3.00pm: Clinigen lower as City awaits announcement of placing price
It has been a busy day for Clinigen Group PLC (LON:CLIN), which has unveiled plans to raise £80mln from investors to fund two new acquisitions as well as posting its full-year results.
Investors seemed to focus more on the fund-raising, with the shares down 9.8% at 843p.
The company is looking to raise up to £80mln by placing shares at a price that has yet to be determined.
Clinigen has also agreed to acquire CSM, a specialist European & US medicine distribution services company, see the news here: https://t.co/GfjrFiJJLw
— Clinigen Group (@Clinigen) September 27, 2018
Clinigen is paying an initial £115mln (US$150mln) for CSM Parent, a specialist provider of clinical supplies packaging, labelling, warehousing and distribution services in continental Europe and the US; the figure could rise to £183mln (US$240mln) if various performance milestones are reached.
Clinigen also announced the somewhat smaller acquisition of Swiss speciality pharma business iQone for £6.7mln in a mixture of cash and shares.
Also today, Clinigen has agreed to acquire European speciality pharmaceutical business iQone Healthcare, see the announcement here: https://t.co/WbCYv0XyoC
— Clinigen Group (@Clinigen) September 27, 2018
iQone adds the capability to Clinigen's unlicensed and commercial divisions, while also offering the group a platform to support and expand its activities in mainland Europe.
1.15pm: Halfords new long-term plan gets lukewarm reception from the market
The Capital Markets Day held by car parts and bikes flogger Halfords Group plc (LON:HFD) has not been a resounding success.
The shares were down 8.9% at 305.8p after it let investment analysts in on its plans for the next few years.
The group’s ambition is to “become a truly differentiated, service-led super specialist, well placed to thrive within a rapidly changing retail environment”.
One of the things that seems to have perturbed analysts is the announcement of an accelerated programme of investment.
Capital expenditure will increase from the prevailing guidance of roughly £40mln per year to up to £60mln per year over the medium term, with significant investment in its stores, garages and digital platforms.
As one hand giveth, so the other taketh; managed has commenced a “wide-reaching cost and capital efficiencies programme”, which it said will enable the group to fund the increase in capital expenditure from cash released from within the business over the life of the plan.
“Despite incremental investment in operating expenditure as we implement our long-term strategy, we anticipate FY20 profit before tax to be broadly flat on FY19, with mid-single-digit percentage annual growth anticipated thereafter as the plans take effect,” the company said in a stock market statement.
Halfords cuts profit forecast as shares slide https://t.co/twE8E46bbf
— Irish Times Business (@IrishTimesBiz) September 27, 2018
Meanwhile, Peel Hunt has described rumours that Halfords has tabled a bid for Evans Cycles as “very interesting strategically”.
According to the broker, Halfords has a problem attracting serious cyclists into its shops and adding the Evans chain to its portfolio could solve this.
“Of course it would all depend on price, and the CMA’s [Competition and Markets Authority] thoughts on the matter, but a cheap deal would make us think again on the rating,” the broker said.
???????? Halfords looks to prop up wobbly rival. https://t.co/8qfnZHJiB1
— Neil Saunders (@NeilRetail) September 27, 2018
Noon: Online fashion outlets en vogue
Future Group, India’s largest retail group, is to increase its stake in Indian online fashion firm Koovs PLC (LON:KOOV) to 29.99% from 16.25%.
Future Group will subscribe for the new shares at 15p a pop, raising between £9.5mln and £10.5mln for the company.
Shares in Koovs currently trade at 10.725p, up 8.9% on the day.
The strategic partnership with Future Group represents a transformational deal for the company, Koovs said, and is expected to deliver synergies across the operations from manufacturing and distribution to market reach, marketing and customer engagement.
Style is a way to say who you are ????????????@StyleFiesta painting the city with florals & making a statement with her #EverystreeturCatwalk
Show us #EverystreetURCatwalk moment and get a chance to be featured ????
Get the look: https://t.co/0ZkfCS3Q6L pic.twitter.com/ZgD9BurOyt
— Koovs.com (@myKoovs) September 27, 2018
Sector peer boohoo Group PLC (LON:BOO) was wanted after broker Peel Hunt upgraded its profit before tax forecasts after the online fashion products seller’s trading update earlier this week.
The retailer made a presentation to investment analysts yesterday and evidently made a convincing case.
“Coming up to Black Friday, management is clearly gaining confidence from a margin war chest. There’s a strong likelihood that boohoo will be one of the few retailers on our January upgrade list, although it’s the medium-term forecasts that offer more potential,” the broker said.
Peel Hunt has a target price of 300p for boohoo; the shares were up 7.6p at 220.7p.
10.30am: Dark days for WideCells but financing package offers hope
Shares in stem cell healthcare insurance plan provider WideCells Group PLC (LON:WDC) more than halved after it revealed a rescue funding package.
Under the financing deal, WideCells will issue the European High Growth Opportunities Securitization Fund convertible bonds with warrants attached in return for funding of £2.7mln.
Who are WideCells Group?
An end-to-end service solution for the stem cell industry, which drives #innovation, improved accessibility and catalyses the next important phase in the medical industry, whilst offering multiple revenue opportunities. pic.twitter.com/9jk7hEI0oK
— WideCells Group (@WideCells_Group) September 17, 2018
At the current share price, the bond issue will result, on full conversion of the bonds and the attached Warrants, in the issue of substantially more than 20% of the group's issued share capital, which means that existing shareholders will see substantial dilution.
That goes with the territory when investing in a small growth company; where bigger companies can usually survive delays and disasters (cf. BP and the Macondo well blow-out), smaller companies get knocked for six by them.
In the case of WideCells, its revenues from recently signed contracts took longer to materialise than expected, while it also incurred higher costs in investing in products and services.
New chairman Peter Presland has sanctioned a number of cost-saving initiatives and will ensure that resources are focused on growth opportunities.
Meanwhile, the funding will support the company's cash flow needs for the next 12 to 18 months.
9.30am: ZOO Digital runs into profit-taking after in-line update
ZOO Digital PLC (LON:ZOO) has been a stock market star over the last year but today’s trading update prompted plenty of profit taking.
The provider of cloud-based localisation and digital distribution services for the global entertainment industry – that’s subtitles and dubbing to thee and me – plunged 31p to 139p in the wake of a statement to be made at its annual general meeting (AGM) today but the shares are still triple the price they were a year ago.
READ: ZOO Digital: An overnight sensation ten years in the making
On the face of it, there was nothing much to frighten the horses in the AGM statement, which predicted the full-year outcome would be in line with expectations.
A go-go stock, however, often needs a statement that raises guidance in order to maintain momentum and in this case, it did not get it.
House broker finnCap took the opportunity to catch up with the meteoric share price performance to increase its target price to 180p from 130p.
“ZOO’s AGM statement gives continuing confidence in delivery of unchanged forecasts,” the broker said.
“ZOO continues to offer a more rapid and more efficient localisation services (foreign language subtitles and dubbing) creating enhanced export value to a significantly expanding pool of original content producers and distributors, who have a financial need to maximise international returns on a large sunk fixed cost. With strong forecast momentum in ZOO services, as early-stage dubbing revenue performs three times ahead of management expectations, the excitement remains palpable,” the broker said.
The excitement was less palpable to traders and while the stock may yet return to a level on or around finnCap’s target price, few are going to blame shareholders from banking profits after the year the stock has enjoyed.
Whether you're an ambitious voice artist or curious content owner, if you want to see what ZOO is all about, join us in #Berlin at the @Lmconference: https://t.co/iecm2Dsz0Q #TeamZOO #cloud #dubbing #localization pic.twitter.com/337xoh6IZz
— ZOO Digital Group (@zoodigitalgroup) September 24, 2018