Plant Health Care PLC (LON:PHC) shares slid 29% to 7p after saying full year revenue will miss market forecasts due to the delayed launch of a new product in the US and a prolonged drought in South Africa.
The company, which provides plant proteins to crops, said it now expects revenue for the year to be broadly flat on 2017 and “materially below” market expectations.
The launch of a new product for soy crop has been delayed until 2019 following a discussion with its US partner.
In its key market of South Africa, a long-running drought has resulted in a slower drawdown in market inventory than expected. Plant Health Care has subsequently decided to restrict sales until inventory has been worked off.
DekelOil Public Limited shares rose 9.7% to 3.375p after announcing a revised option agreement allowing it to buy an initial 43.8% stake in Tiebissou cashew processing project in Cote d'Ivoire for €6mln.
DekelOil has decided to bring forward the acquisition following the significant progress at Tiebissou since the original option was signed.
The acquisition will be settled by the issue or new ordinary shares in DekelOil at 4.5p per share, a 46.3% premium to the closing price yesterday.
11.45am: Savannah Petroleum PLC surges as it amends Seven Energy transaction
Savannah Petroleum PLC (LON:SAVP) released a well-received edition of Carry on up the Niger in which it announced a couple of acquisitions.
“Savannah Petroleum has published a positive update on the Seven Energy transaction, unveiling substantial improvements to the deal. As well as being materially cash flow and NAV [net asset value] accretive, the agreed changes deliver control of the gas value chain and a substantial cash injection upfront,” reported Mirabaud Securities Research.
Savannah is to acquire an additional 55% of Accugas, he midstream arm of Seven Energy, in a change to the transaction originally announced on 20 September.
READ Seven Energy Transaction and Operational Update
The acquisition will lift Savannah’s stake in Accugas to 75% for nil cash consideration.
“Importantly, this gives SAVP control of a key piece of regional infrastructure which acts as the gateway to energy hungry gas customers in southeast Nigeria,” Mirabud noted.
SAVP CEO: “We are delighted to announce the amendments to our Seven Energy Transaction this morning. They grant control of Accugas to Savannah, are NPV and cash flow accretive and release significant cash to Savannah” #savp #savannahpetroleum #nigeria
— Savannah Petroleum (@SavannahPetrol) December 21, 2018
Savannah will sell 25% of the Uquo gas field and Accugas to African Infrastructure Investment Managers (AIIM) for US$70m in cash, “aligning its interests across the upstream and midstream divisions at 75%”, Mirabaud explained.
“Valuation wise, the deal franks the value of Seven’s integrated gas business at US$280m (gross) – versus SAVP’s market cap of ~US$250m – implying little if any value for the Stubb Creek field or the potential in Niger. To put this in context, our risked NAV for the Niger portfolio alone stands at US$373m,” Mirabaud said.
Mirabaud is the joint broker of Savannah.
Savannah’s shares rose 11.6% on Friday morning to 27p.
10.45am: Interserve shares sink lower ... can a share price go negative?
Just when you thought Interserve PLC (LON:IRV) shares could not sink any lower … they do.
The troubled services, maintenance and building company, trying desperately not to go the way of Carillion (or the dodo), updated the market on its debt-for-equity deleveraging plan this morning and the share price reaction was initially favourable but the bears have really got their teeth into this stock.
By mid-morning, the shares, which started the year trading around a quid a pop, were down 4.2% at 10.53p, valuing a company with annual revenue of £3.2bn at less than £16mln.
READ: Jim Armitage: Time for investors to start taking back ownership in 2019
Jim Armitage at London’s Evening Standard implies that investors have taken a dislike to Interserve’s announcement that it may, in Armitage’s words, “split off its one business of real value and give it to the banks”.
The company is considering placing its building materials business, RMD Kwikform, in a separate holding company owned by the lenders.
Lenders have also agreed to defer payment due under its debt facilities to April 30.
A final form of the plan to cut debt will be announced in early 2019.
In truth, for Interserve shareholders who have been holding the stock for a year or more, the game is up and it only remains to do as much as possible to save the jobs of Interserve employees and stop the company from going under and causing knock-on disruption in the rest of the sector.
9.30am: Water Intelligence wanted after big contract win; CSF halves as delisting looms
Leak detection specialist Water Intelligence PLC (LON:WATR) found a new level on Friday after securing a significant municipal contract win in Sydney.
The shares rose 12.3% to 255p as the company said the multi-year contract is expected to contribute about US$1 million to 2019 sales.
Water Intelligence’s revenue in the first half of 2018 was US$11.8mln so the company is not over-egging it when it says it is a significant contract win.
"Despite market volatility, our fundamentals remain strong,” said Patrick DeSouza, the executive chairman of Water Intelligence.
“Demand for water infrastructure solutions will continue to grow worldwide. Full steam ahead," he declared.
#WATR Water Intelligence multiyear contract win with Sydney Municipal, reiterating very positive trading update. i’ve been a buyer yesterday making it possibly my largest position, expecting sig outperformance https://t.co/jbwepSDoXi
— Mark Spooner (@markds28) December 21, 2018
While it was full steam ahead for Water Intelligence, it was down into the abyss for CSF Group PLC (LON:CSFG), which has failed to find a new nominated adviser (Nomad) to replace Allenby Capital, which will cease to be the group’s nomad at the end of the year.
AIM’s rules insist on a company having a Nomad so trading in CSF’s shares will be suspended with effect from 2 January.
The clock will then be ticking for the company, which operates data centres in South East Asia, to find a Nomad inside a month otherwise its listing will be cancelled.
Given that the company has been turned down by a number of potential replacement Nomads, the signs are not looking good, as indicated by the share price reaction – the shares practically halved to 0.65p.
Proactive news headlines:
Keywords Studios PLC (LON:KWS) said it is trading in line with market expectations as it announced another of its typical bolt-on acquisitions - computer game marketing assets producer, Sunny Side Up Creative, which it is buying for C$5.9mln.
Advanced Oncotherapy PLC (LON:AVO) is raising £10.0mln as it presses ahead with the building of its next-generation LIGHT proton therapy system on Harley Street.
Haydale Graphene Industries PLC (LON:HAYD) has raised £1mln in additional finance through a £750,000 loan and £250,000 share subscription. The loan is a 16-month facility from the Development Bank of Wales and carries a coupon of 11%. The share subscription was priced at 20p, a discount of 21.6% to the close yesterday.
Wishbone Gold PLC (LON:WSBN) has raised a total of £300,000.00, before expenses, through a share placing with the proceeds to be used to accelerate production from the newly licensed Honduras gold facility. The AIM-listed gold trading and exploration company said its company broker, Turner Pope Investments placed 300,000,000 new ordinary shares at a price of 0.1p each.
Red Rock Resources PLC (LON:RRR) said initial exploration at the Luanshimba project in the Democratic Republic of Congo has shown promising results that suggest the presence of copper and cobalt mineralisation at depth.
Range Resources Limited (LON:RRL) (ASX:RRS) said that LandOcean Energy Services Co. Ltd has confirmed that an outstanding payment of US$2.8mln remains refundable to Range, and they will use all reasonable endeavours to arrange the payment as soon as possible. The group said its current cash position is approximately US$3.3mln.