SMALL CAP MOVERS: Kanabo surges amid hopes for inhaler approval

It was a bad week at the lower echelons of the property market, which made for a dour five trading days for junior stocks compared to the wider positive trend.

Purplebricks tumbled nearly 15 per cent on Friday after putting itself up for sale following a profit warning.

The online estate agency finally came to the conclusion that an alternative ownership structure would do it well and a strategic review is now underway.

Investors weighed up the promise that Kanabo’s cannabis inhaler will gain European approval

Chief executive Helena Marston conceded that the implementation of its go-to-market strategy ’caused more short-term disruption to our third-quarter performance than anticipated’, though she remains confident of a return to positive cash generation in early 2024.

For the time being, full-year revenues are expected to come in lower than expected.

Elsewhere, Home REIT, which invests in sheltered housing for the homeless, said on Thursday it received an unsolicited approach from Bluestar Group regarding a possible offer.

The shares, which have been suspended since January 23, have been hit hard as short sellers took potshots at the business, its financials and management.

On Thursday it delivered a fairly bleak assessment of current trading and prospects that will have had stomachs churning of those still holding stock.

So, Bluestar, which has until March 16 to make things formal, has plenty to ponder before finalising the bid, if one actually materialises at all.

Turning to the wider small-cap market, the AIM All-Share Index rounded the week off 0.7 per cent lower at 899.99, having moved inverse to the FTSE 100, its blue-chip benchmark, which was up 1.3 per cent in the same time period as it moved above 8,000 and into record territory.

It was a roller coaster week for investors in Creo Medical, but one that ended as a positive for both management and investors.

Having asked the City to stump up £25million via a placing of new stock at 20p, the med-tech group found resounding backing for the cash call and raked in £28.5million, which will get the group to break even.

It could still bring in a further £5.2million from an open offer of shares at the same price.

Those who subscribed at 20p are currently sitting on a 60 per cent return on that investment.

The shares, currently changing hands for 32p, are worth 99p, according the abacus rattlers at Cenkos, the corporate broker.

Among other small cap highlights was standard-listed Kanabo, which added nearly 17 per cent to 4.04p over the weekly session as investors weighed up the promise that its cannabis inhaler will gain European CE approval in the third quarter of 2023.

According to Tuesday’s business update, Kanabo’s submission has been undertaken in conjunction with its manufacturing partner, and the group hopes to be in a position to provide an update ‘in the coming months’.

Bidstack shares rallied over 10 per cent to 1.84p on Wednesday after the in-game advertising company announced the appointment of Thomas Bullen as its chief financial officer.

Chairman David Reeves noted Bullen’s ‘experience in mobile advertising technology and high-growth companies’ in the announcement.

Moving to the mining and resources segments, Mkango Resources fell over 21 per cent – though for the right reason (if that doesn’t sound contradictory).

On Monday, the rare earths specialist said it would bag £3.5million from a share offering comprising a placing and subscription of stock at 12.5p.

Funds will be used to finalise plans for the Songwe Hill project in Malawi and to start work on a magnet recycling facility in Germany.

A number of companies scored impressive double-digit gains.

Harvest Minerals received a double boost following an upbeat trading update and a positive court ruling which sent shares up 21 per cent to 9.6p in Tuesday’s mid-afternoon trading.

According to a trading update, the AIM-listed fertiliser producer reported unaudited cash of A$2.7million in 2022 compared to A$1.7million in 2021.

In a separate statement, the company said it will receive US$463,000 in damages after a Brazilian court ruled in its favour.

Technology Minerals shares were powered up by developments at its battery recycling associate, Recyclus.

Recyclus was issued with a Schedule 5 Notice by the Environment Agency as part of the permit application for its lithium-ion recycling plant in Wolverhampton, the final stage before a licence is determined. The group rounded the week off 20 per cent higher at 1.38p.

Finally, Power Metal Resources rose 7 per cent to 1.20p on a report drilling of the Berringa Gold mine project in Victoria, Australia, was going well with visible gold encountered in all three holes completed to date.

‘This is very encouraging,’ said chief executive Paul Johnson, ‘and we look forward to receipt of detailed assay data as soon as possible’.

Power Metals is working on the Berringa project as a joint venture with Red Rock Resources.

This post first appeared on Dailymail.co.uk