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The Gym Group upbeat after membership recovers after lockdown

Last updated: 15:14 16 Dec 2021 GMT, First published: 08:54 16 Dec 2021 GMT

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The Gym Group PLC (LSE:GYM) is looking healthy after a recovery from the lockdown.

The group, which operates 198 low cost 24/7, no contract gyms across the country, said it was trading in line with expectations.

After re-opening, it said total member numbers grew from 547,000 in February to 753,000 at the end of October. In line with seasonal norms, membership has since declined to 735,000 as at the end of November.

It is on track for its plans to open 40 new gyms in the 18 months to next December.

Chief executive Richard Darwin said: "The recovery in our membership following the reopening demonstrates the essential role gyms play in people's lives.  The market opportunity and growth potential for The Gym Group is very exciting.  Whilst we are mindful of the near-term uncertain outlook as a result of the new COVID-19 variant, we have the growth strategy, financial resources and expertise required to capitalise on those opportunities, widening access to inclusive and affordable gyms for all over the long term ."

The company's shares are up 6.89% or 15.5p at 240.5p.

2.42pm: Immotion in demand after seeing revenues surge in second half

Immotion Group PLC (AIM:IMMO), the international immersive entertainment company, is proving popular after its latest update.

Its shares are up 7.76% at 5.28p as it reported on a strong second half, with revenues up from £2.8mln in the first six months to £6.5mln.

On the back of a profitable fourth quarter so far, it expects adjusted full year earnings to be significantly ahead of the £0.6mln for the first nine months of trading.

Its location based entertainment business benefited from the end of lockdown, and it is in discussions with a number of US zoos about its VR experience Gorilla Trek after its launch at the IAAPA trade show in Florida in November.

Its home VR sales have been hit by shipping problems but it sold more than 25,000 Let's Explore Oceans Mega Packs between July and November.

1.12pm: Trackwise Designs to raise £7mln from shareholders to fund production increase

Trackwise Designs PLC (AIM:TWD) has seen its shares fall after the company, which supplies specialist products using printed circuit technology, unveiled a £7mln fundraising.

It has raised £6mln with a placing at 80p a share and is after another £1mln with an open offer to shareholders at the same price.

The funds will be used for capital expenditure and working capital.

Trackwise is currently fitting out its Stonehouse property in Gloucestershire to increase its production capacity to meet the expected demand for its harness technology products - a process of manufacturing multilayer flexible printed circuits of unlimited length.

The move is linked to a significant contract with an electric vehicle manufacturer, with a 2022 production forecast and first quarter 2022 purchase order received from the customer.

Chief executive Philip Johnston said: "2021 has been a challenging economic environment for businesses who are delivering innovation; nevertheless 2021 will be a record year for IHT sales by a considerable margin. Having received the 2022 production forecast from our [electric vehicle] customer, together with the purchase order for the first quarter 2022, and with our Stonehouse facility progressing well, we look forward to commencing production. This fundraise will enable the delivery of a step change in our IHT commercial proposition."

Trackwise shares are down 36.21% at 92.5p, still above the fundraising price.

11.38am: Audioboom (AIM:BOOM) set to record better than expected results

Investors are tuning in to Audioboom (AIM:BOOM) after the podcast company said earnings for the year would be ahead of expectations after a strong fourth quarter.

It has benefited from high advertiser demand for premium content, strong audience growth globally and the launch in November of its a global advertising marketplace Showcase.

Chief executive Stuart Last said: "We launched Showcase just six weeks ago and it is already having a positive impact on our business; we look forward to building on this initial success to grow it into a meaningful revenue stream for Audioboom (AIM:BOOM).

"We are also seeing a continuation of rapid growth in podcast listening across the network in the fourth quarter, plus high advertiser demand for our premium content. We are delivering a strong end to an already transformative year for Audioboom (AIM:BOOM) in which market expectations have been upgraded six times."

The company's shares have climbed 4.9% to 1127.7p.

10.42am: Hurricane in demand after Lancaster well news

Hurricane Energy PLC (LSE:HUR) is higher after a positive update from its Lancaster field in Scotland.

The oil and gas group said the P6 well was producing around 9,900 barrels of oil a day, and it also successfully completed the plugging and final abandonment of the Lancaster 205/21a-4z well at a cost of around US$1mln.

It added that US$2.2mln of decommissioning security (previously classified as restricted cash) had now been released back to the company and was used in part to fund the plugging activity.

As of 30 November 2021, the company had net free cash of US$127mln compared to US$99mln a month ago.

Its shares have climbed 11.73% to 4.5p.

9.59am: McBride drops after warning of higher than expected losses

McBride PLC (LSE:MCB) has admitted it will go further into the red than anticipated in October, as pricing pressures and supply problems mount.

The company, which supplies private label cleaning and hygiene products, said it now expects a half year loss of between £14mln and £17mln.

Just over two months ago the loss was forecast to be £10mln, and it said earnings would be weighted to the second half of the year.

It said that since October "raw material and packaging costs have continued to experience very significant inflationary pressures with availability continuing to impact our supply chain efficiency.  In addition, the shortage of haulage capacity and even higher fuel costs has not abated and have continued to substantially inflate distribution costs."

And it has not been able to pass on these higher costs to all its customers, hence the worse than expected outcome.

It said: "The increase in this loss compared to our previous update in October is a consequence of the ongoing rapidly rising input costs and the timing of pricing agreements.  At this stage, our wide range of outcomes is a result of pricing delays with a small number of customers and the resultant implications, which could impact short term volumes."

AJ Bell investment director Russ Mould said: “It is usually a bad sign when a company flags that profits will be more weighted toward the second-half than usual and it often implies that management has the prayer mat out and is hoping something helpful will turn up.

"In McBride’s case, something has turned up, but it is more trouble, in the form on more inflationary cost pressures, not more help...

"Costs are galloping ahead faster than the firm can get clients to pay higher prices...

“Analysts had already been expecting a full-year loss... of around £5 million but McBride’s second half really is going to have to go some to meet even those forecasts."

The company's shares are down 5.75% at 55.8p.

8.54am: Kazera Global climbs after positive update on diamond and tantalum production

Kazera Global PLC (AIM:KZG) is sparkling after a positive update on its diamond and tantalum mines.

It said diamond production for the current production cycle which ends in January was already more than 750 carats, with a target of 1,000 carats for the entire cycle. On top of that,  the Tantalite Valley mine is now in the final phase of testing, with tantalum production on schedule to commence imminently.

Despite the problems of the pandemic, it believes it has overcome the difficulties inherent in all start up mining operations.

With production increases across its business, Kazera expects to be significantly cash flow positive during 2022 which will be reinvested into resource definition and mining across the business.

Chief executive Dennis Edmonds said: "With minimal cash we have succeeded in getting both our diamond and tantalum operations into commercial production. We look forward with increased confidence to building upon that foundation in 2022.

"Apart from the material growth of revenues, we see major upsides from proving up further resources at Tantalite Valley and developing our lithium resources - a commodity in extremely high demand as the global economy continues its transition to Net Zero and increased electrification. We are also enormously excited by the opportunity to finally commence mining Heavy Mineral Sands."

Kazera shares have climbed 17.07% or 0.18p to 1.2p.

Elsewhere Surface Transforms (AIM:SCE), which makes automotive brake discs, is on the move after contract news.

It has been selected as a tier one supplier of a carbon ceramic brake disc on the forthcoming launches of three cars of an existing customer.

he lifetime value of these contract wins is more than £45mln, bringing its total order book to more than £115mln.

The first car is a limited-edition special model with start of production in late 2023 with a short series production period. The second two models (the base car and a derivative) have a start of production of mid 2024 and will be in production for at least six years. In total, these three new selections are expected to generate approximately £0.5mln of sales in 2023, increasing to approximately £4mln in 2024 and to approximately £7mln in 2025 and thereafter.

These wins were not included in any previous market guidance or analyst forecasts .

Chief executive Kevin Johnson said: "This is now the third example of demonstrating our ability to win carry-over contracts after having won the first award. We expect to win further contracts in the new financial year across our range of existing and new customers in parallel to moving into profit and operational cash generation in 2022."

Surface shares are up 16.67% or 8.5p to 59.5p.

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