Numis Corporation was one of the week’s big movers after the broker announced it won’t be around on AIM much longer after agreeing to be taken over in a £385million all-cash deal tabled by Deutsche Bank.
AIM-listed Numis is one of the businesses that is largely unseen but pivotal to the smooth running of the small- and mid-cap sector of the equity market, raising money for these companies as well as providing advice and M&A support.
Although the announcement didn’t say this, life is tough for the likes of Numis right now.
Fundraising activity is on the floor and the number of new firms coming to the market is at an all-time low.
This was reflected in Numis’ recent trading update, which revealed a 14 per cent fall in revenues to £64million in the first half.
So difficult is it out there that Numis’ smaller rivals finnCap and Cenkos recently agreed to what can only be called a defensive merger.
Deutsche Bank’s knock-out 350p a share bid values Numis at around where it was during the 2021 fundraising binge.
Unsurprisingly, the shares sailed 67 per cent or 137p higher to 341p post announcement.
Numis wasn’t the only AIM constituent to declare a delisting.
Asimilar Group plc saw its share price collapse 30 per cent on Monday after returning from a three-week trading hiatus.
It will be short lived though, given news that the small-cap tech investor intends to cancel its AIM listing (though it will maintain a quote on AQSE).
The decision comes as the company seeks to reduce operating costs and take advantage of a market regime that is better suited for an investment company.
Software group Smoove may also be about to join the growing docket of small-caps ditching the junior market in favour of a take-private approach.
Smoove confirmed that it is in early discussions with Australian electronic conveyancing platform PEXA Group about a possible cash offer. Shares bounced 28 per cent higher to 44.9p on the news.
Moving across to the consumer sector, something of a resurgence story is fermenting at Naked Wines.
Needless to say, Naked Wines was on thin ice leading into 2023.
The online wine merchant’s market valuation took an 80 per cent battering come December 31, propelled by a less-than-rosy trading update in the middle of the year.
Profit before tax was well down, cash reserves had halved and there was a sense among management that the group had lost sight of its goals.
Chief executive Nick Devlin didn’t try to pass the buck, stating at the time: ‘We have driven volume of new members at the expense of quality and in the UK, in particular, have allowed our market positioning to shift to become the lowest price online player – which is not consistent with our ambition to be the world’s leading quality online wine platform.’
Cue a targeted cost-cutting regime, a reduction in bloated inventory levels, onboarding of former chief executive Rowan Gormley as an advisor, a pivot to profit over growth, and an admission from Devlin that ‘we have made mistakes’, and Naked Wines is still in the wine game, with investors responding positively to this week’s trading statement.
Profit for the full-year ending April 3 is expected to be at the top end of guidance, showing, in Devlin’s view, that ‘our pivot to profit is on track’.
As a result, Naked Wines shares surged 13 per cent to 118p on Thursday, and while there was a correction back to 113p on Friday, it was still a top performer among the AIM-listed retail and consumer set.
James Fisher & Sons, the provider of specialist services to the shipping, oil and gas sectors, also navigated out of its recent doldrums as investors welcomed a new £210million lending facility.
Fisher has been selling off parts of the business to get its debt down and said it will continue with disposals to deleverage further. Shares bounced 14 per cent higher to 322.5p by the close of the week.
Pensana was a top mover in the primary industries. Shares in the rare earths developer rebounded 40 per cent higher to 33p on Friday after the company revealed that major shareholders M&G Investment Management and Angola’s sovereign wealth fund have agreed to invest a further US$10million to increase their combined holdings to 38.6 per cent.
Chairman Paul Atherley said the pair’s additional investment ‘reflects their confidence in our strategy and growth prospects’, and their request to participate in future equity raises ‘a clear endorsement of our business, demonstrating long-term alignment with our goals’.
The AIM All-Share Index trended downwards for most of the week, bottoming out at 819 on Wednesday.
But an early-Friday bounce saw a reversal above 826, essentially resulting in a flat trade for the five-day period.
