Small cap movers: ‘Boris bus’ maker’s bankruptcy sends Synectics into a skid

A look back at some of the more interesting stories from the junior market this week

Synectics - Small cap movers: ‘Boris bus’ maker’s bankruptcy sends Synectics into a skid
The designer of the new Routemaster, Wrightbus, went bust in September

Security software firm Synectics PLC (LON:SNX) found itself thrown off the top deck this week after the bankruptcy of the maker of the ‘Boris bus’ sent profits tumbling.

Synectics, which designs security camera systems for London’s buses, said profits for its current year will be “materially below expectations” as a result of the bankruptcy of one of its major customers, which was widely reported to be Northern Irish group Wrightbus.

The Belfast-based designer of the new double-deck Routemaster collapsed into administration in late September after last-minute rescue talks with Chinese engineering group Weichai and a firm headed by Jo Bamford, the heir to digger maker JCB, failed, causing 1,200 redundancies.

While Synectics said its other divisions had performed well in the year, the profit warning had investors scrambling to disembark as the stock plunged 18% to 145p over the week.

The AIM All-Share was down 0.1% at 890 in the week, while the FTSE 100 was 0.7% lower at 7,275.

Radio network specialist CyanConnode Holdings PLC (LON:CYAN) was giving off some bad signals after it said contract delays in India meant it was unlikely to meet its expectations for the year.

The awards had previously been held up by the Indian general election earlier this year, however, the company said it was still taking “longer than anticipated” to clinch the deals. The shares plunged 42% to 2.5p in response.

Brexit reared its head in a statement from staffing group Empresaria Group plc (LON:EMR), which slipped 2% to 49p as it said Britain’s ongoing exit from the EU and a slowdown in the German auto industry meant it no longer expected to meet its forecasts for the year.

Efforts to turn around the UK engineering business have been unsuccessful, with a full-year loss now likely after “material declines” in revenue blamed on the ongoing impact of Brexit, the insolvency of certain key clients and the early closure of major projects.

Lottery management and payments group St James House PLC (LON:SJH) crumbled 66% to 23p after its lucky numbers failed to come up.

The firm said delays in issuing prepaid cards for its new payment account service, particularly to a major client, meant that the target date for its full issue had been pushed back to January, and as a result, it did not expect an improvement in its financial performance during the second half of its current year.

Miner Galantas Gold was also on shaky ground as a temporary halt to blasting operations at its Omagh mine in Northern Ireland had the shares plumbing new depths, falling 50% to 1.8p.

There was better news in the sector for Eurasia Mining PLC (LON:EUA), which rocketed 123% to 2.4p after the company reassured investors that it was not planning any more share issues thanks to strong cash flow from its operations in Russia and £85,000 from a warrants exercise.

Thor Mining PLC (LON:THR) sparked a 25% rise to 0.3p after announcing that it had begun talks with potential investors about a second project while also expecting an initial resource estimate from the Bonya prospect in Australia.

Online fashion brand Sosandar PLC (LON:SOS) was firmly on trend, rising 25% to 20p, as it delivered a 53% rise in sales for its first half.

The womenswear retailer also said it had upped its marketing spend in an attempt to grow customer numbers and increase purchases from its “loyal and highly engaged following”.

A new permit for its Marsfontein mine added some shine to Botswana Diamonds PLC (LON:BOD), which rose 4.5% to 1.2p as it said commissioning for the site was expected to begin within the next two weeks ahead of a ramp-up in production.


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