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Small cap movers: Purplebricks left red faced as it pulls out of US

A look back at some of this week's more interesting stories from London's junior market

Cracking purple brick wall
Purplebricks’ flight from the US followed a similarly fumbled withdrawal from Australia in May

Online estate agent Purplebricks Group PLC (LON:PURP) was one of the biggest stories on the junior market this week after it confirmed an embarrassing retreat from the US while revealing its full-year losses had almost doubled.

Vic Darvey, who took over as boss of the AIM 100 firm after founder Michael Bruce stepped down earlier this year, said that the US business had not achieved expected levels of revenue growth and would be shut down by the end of 2019.

Purplebricks’ flight from the US followed a similarly fumbled withdrawal from the Australian market in May. Since then the share price has shed 27% of its value.

Russ Mould, investment director at AJ Bell, said Purplebricks had “paid the price” for spreading itself too thinly. However, he added that the American exit was “the correct decision” as the firm could now focus on its more established businesses in the UK and Canada.

Investors also seemed content with a ‘wait and see’ approach as, despite some volatility, the shares ended the week only 0.8% lower at 98.1p.

Looking at the wider market, the AIM All-Share was 0.5% lower at 914.7 as it underperformed its benchmark, the FTSE 100, which was up 2.1% at 7,580.

Majestic Wine PLC (LON:WINE) rose 6.2% to 273p after press reports emerged that Fortress Investment Group, owned by Japanese conglomerate SoftBank, was the frontrunner in a bidding war for its 200-store estate, which is expected to fetch around £100 million.

There was also talk that Fortress and other bidders had approached wine retailing bigwig and former Tesco executive Dan Jago about running the operation once the sale is complete.

Bidding news also gave a boost to housebuilder Telford Homes plc (LON:TEF), which jumped 11.9% to 353p after it received a takeover offer from US real estate giant CBRE.

The bid of 350p per share is an 11% premium on Telford’s close price from the day before the offer was announced.

Shale oil group TomCo Energy Plc (LON:TOM) rocketed 107% to 5.9p after receiving approval for a field test at its Holliday A Block in Utah.

Russia-focused Volga Gas PLC (LON:VGAS) was also buoyant, floating up 16.5% to 81p following a strong production report for June that showed its average production had risen by 46.6% month-on-month.

Energy storage group CAP-XX Limited (LON:CPX) surged 16.3% higher to 4.7p after it settled a court action in the US and signed a deal with North America’s largest capacitor maker CDE to licence two of its patents.

Security solutions firm Westminster Group PLC (LON:WSG) advanced 32.5% to 17.9p on news of a deal with the Gulf Aviation Academy of Bahrain to provide aviation and other specialised training services.

Pottery firm Churchill China PLC (LON:CHH) looked chipper after upgrading its guidance for the year on the back of better than expected revenues for its first half. The shares jumped 8.6% to 1,635p.

Miner Condor Gold PLC (LON:CNR) also sparkled in the week, rising 13% to 19.5p after the granting of a significant concession expanded the size of its La India project in Nicaragua by 29%.

Among the fallers, there was turbulence for African airline fastjet PLC (LON:FJET), which descended 4.5% to 1.48p as its executive Nico Bezuidenhout said he would be leaving the firm at the end of September.

Telecoms equipment maker Filtronic PLC (LON:FTC) was giving off weak signals with a trading update that predicted it would swing to a loss in its 2019 financial year, sending the shares down 7% to 8p.

A 20% drop in first-quarter revenues left spirits maker Distil PLC (LON:DIS) with a painful hangover as the shares tumbled 22.8% to 1.1p.

Prospex Oil & Gas PLC (LON:PXOG) was also stuck in the mud, plunging 24.4% to 0.1p after plugging and abandoning its Bainet-2 well in Romania.

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