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UK TRADING UPDATE SUMMARY: PureTech, N4, Synairgen Advance Covid Work

Thu, 28th May 2020 14:49

(Alliance News) - The following is a round-up of updates by London-listed companies on the impact of the Covid-19 pandemic, issued on Wednesday and Thursday and not separately reported by Alliance News:

PureTech Health PLC - biotherapeutics - Plans to advance candidate LYT-100, whose generic name is deupirfenidone, as a treatment for serious respiratory complications that persist after a Covid-19 infection has been resolved. Complications include inflammation and fibrosis. Expects to start a global trial of LYT-100 in patients with COVID-19 in the third quarter of this year.

N4 Pharma PLC - pharmaceutical company - First phase of proof of concept work for Nuvec in Covid-19 completes on time. The plasmid DNA has been amplified enough to make sufficient material for the rest of the project and tested to make sure it marches the necessary specification. This batch of plasmid DNA has been used to express the Covid-19 spike protein that will be used as a positive control in studies. A second phase of in-vitro testing of Nuvec will start as planned in the first week of June and will last for around ten weeks. The third phase of in-vitro protein expression testing will involve a pre in-vivo study to show expression of the spike protein in target cells in a rodent target. After a fundraise in May, N4 is looking into ways of bringing forward some of this third phase to take place alongside in-vitro work.

Synairgen PLC - respiratory drug discovery and development company - Recruitment of 100 hospitalised Covid-19 patients for its clinical trial of SNG001 is complete. The trial will involve 220 patients overall, 100 in hospital and 120 at home. Results from hospital patients are due in July. SNG001 is an inhaled formulation of interferon-beta-1a.

Surgical Innovations Group PLC - minimally invasive surgery technology - Aggregate first quarter revenue around 25% below the prior year with a further drop to around 70% below the prior year level in April. This more significant 70% drop is expected to persist in the second quarter. Surgical Innovations has undertaken cash conversation measures, meaning cash balances of around GBP1.7 million were maintained as at May 1, up from GBP1.3 million at the start of 2020. Surgical Innovations said it has "sufficient liquidity to maintain its full commercial and operational capabilities, despite substantially reduced demand, for several months" and has agreed to suspend normal capital repayments of GBP75,000 per quarter on its loan facility until the end of October.

Kromek Group PLC - detection technology focused on security and medical screening - The company has been awarded an extension on its US Defense Advanced Research Projects Agency contract to "detect and identify pathogens in an urban environment". DARPA is an agency of the US Department of Defense. The base contract period completed successfully, after being initially awarded in December 2018 with the goal of developing a "vehicle-mounted biological-threat identifier". The new contract terms award Kromek up to USD5.2 million to work further on a mobile wide-area surveillance system that can detect airborne pathogens. This contract runs until June 2021.

Scholium Group PLC - rare books and fine art retailer - Trading severely disrupted by international Covid-19 restrictions in March, typically among Scholium's busiest and most profitable months. The company expects "only a small loss" for the six months ended March 31 compared to a GBP64,000 profit for half-year ended September 30. For the entire financial year, it still forecasts a profit, swinging from a small loss in financial 2019. Scholium is currently loss-making although cash balances have stayed positive and online sales, as well as sales through the post and by telephone have continued. It expects to report an interim loss for the first half of financial 2021 due to Covid-19 disruption. Retail premises are forecast to reopen in mid-June. A preliminary results statement for financial 2020 is due by the end of August.

TMT Investments PLC - venture capital focued on technology firms - Five cores holdings of Bolt, Backblaze, Depositphotos, Pipedrive and Scentbird have performed well during pandemic so far. These businesses represent around 75% of TMT's net asset value. Ride hailing app Bolt, in particular, has just raised EUR100 million through a convertible note from Naya Capital Management with a conversion cap of EUR1.7 billion - exceeding Bolt's equity valuation after its June 2019 funding round.

Bidstack Group PLC - in-game advertising - The cancellation of live sports due to Covid-19 has resulted in media buyers shifting to video gaming as an alternative, with Bidstack having "successfully secured increasing demand-side interest from multiple ad agencies." Bidstack has obtained its first US advertising bookings, along with first bookings from local agencies in South America, Africa, and Europe.

Draper Esprit PLC - venture capital focused on digital technology businesses - Gross portfolio value to be no less than GBP695 million as at March 31 financial year-end date, having been GBP594 million the year before and GP683 million on September 30. Net asset value per share is to be at least 550 pence, having been 524p a year prior and 574p on September 30. Portfolio fair value movement reflects increase over 12 months but net decline of around GBP15 million since September due to revaluation adjustments of almost GBP80 million across the portfolio due to Covid-19, offsetting gains from funding activity among portfolio companies. Executive directors defer 20% of salaries for three months and will use deferred balances to buy Draper Esprit shares, and non-executive directors defer fee increases in same period.

Tandem Group PLC - sports, leisure and mobility equipment - Covid-19 impact mixed with bicycle sales revenue year-to-date 77% above prior year. Supply chain stressed but working to replenish stocks. Online sales strong with outdoor products selling well. China supply chain issues from the early part of 2020 now resolved and "broadly back to normal". National retailer business harder hit, with customers cautious and most toy shops shut. National retailer order book around 21% behind prior year. Group revenue year-to-date just ahead of prior year, but overall order book around 3% behind, with revenue set to drop behind prior year over the summer, in part due to a limited supply of bicycles.

Epwin Group PLC - building products manufacturing - Main operating sites have been reopening in the past three weeks, and all will re-enter production by the end of the week - although at a reduced level so as to match activity to demand. Epiwin had suspended operations in March in response to Covid-19. Production is to be ramped up cautiously with recovering demand. Epwin's funding headroom has not changed, remaining at around GBP45 million and market demand has been slowly returning. Market guidance and forecasts are still withdrawn, as the virus's impact "is still too soon to quantify this at this stage".

TClarke PLC - building services - First quarter profit strong with underlying operating margin of 3% maintained on GBP70 million turnover. However, due to many of its project sites being closed in April due to the pandemic, turnover in April sank to just GBP10 million. Despite the turnover reduction, underlying operating profit its expected to be break even in the second quarter with underlying operating profit in the first half of 2020 to be around GBP2 million. TClarke has embarked on a restructuring programme expected to save around GBP4 million per year, GBP2.4 million of which will be recognised in 2020. One-off costs from restructuring have totalled GBP3 million so far. Most if not all of TClarke's sites are predicted to return to operations by the end of June. The firm has renewed and extended bank facilities and expects to comfortably pass all its covenant tests in 2020 and 2021. It plans to recommend full payment of the 3.65 pence per share dividend recommended for 2019.

EQTEC PLC - technology for waste gasification to energy projects - Work for grid connection at Billingham, UK completed and quote accepted by EQTEC with fees paid. Non-binding project finance term-sheet signed and under assessment by possible equity investors. In the US, EQTEC has delivered its detailed engineering plan for the North Folk project and received the second payment milestone invoice of EUR770,000 in May. The planning permit for a new location at the NAPA project is under process with some delays from Covid-19. The client is looking into a larger installation and a full quote has been provided. In Europe, finance for its Greek project with Agrigas has been held up by the local Greek bank's decision to prioritise Covid-19-related loans in Greece. The credit committee meeting for final approval has been rescheduled for the first week of June and a response is expected later that month. So far, 10 new commercial enquiries have been received by EQTEC in the first quarter and early in the second, with commercial offers worth around EUR120 million made by the firm in that time.

Zenith Energy Ltd - oil & gas production - Zenith's shares will be delisted from the TSX Venture Exchange at Friday's close at the company's request. Zenith has been reviewing its corporate structure in order to maximise cost control in light of the virus pandemic and expects the delisting to "materially lower administrative costs" as well as improve efficiency and save management time. As a further cost saving measure, Novum Securities has ceased to act as Zenith's corporate broker.

Kodal Minerals PLC - mineral exploration and development - Feasibility study to accompany mining licence application for Bougouni lithium project accepted Mali Ministry of Mines & Petroleum. No more technical and financial meetings are needed before licence approval, and a new mining licence area with a new permit boundary has been agreed with the Directorate Nationale de la Geologie et des Mines. Formal issuance of the final mining licence documents has yet to occur as Covid-19 restriction have hurt the government's process, with timing of delivery yet to be confirmed. Kodal's gold assets and Mali and the Ivory Coast have attracted investor interest, as well as interest from other exploration and development companies.

Zanaga Iron Ore Co Ltd - 50% owner less one share of Zanaga iron-ore project in Republic of Congo - Following the coronavirus outbreak, Zanaga's project team have implemented and expanded health and safety measures. The full lockdown in the Republic of Congo ended May 17, although a curfew is still in place along with other measures. A concept study for a possible floating, dewatering, storage and offloading port facility is complete and found that this floating port could reduce capital costs for the stage one development phase of the project by USD184 million. No change to the operating costs would result.

AFC Energy PLC - hydrogen power-generation technology - Chief Executive Adam Bond says the unintended positive effect of Covid-19 control measures on air quality have resulted in a government and industry drive towards sustainable power and transportation. Interest in the use of its HydroX-Cell(S) high-power density fuel cell system has emerged for new applications such as shipping and rail and the technology is set for an initial release in 2022. The company's internal capacity to make HydroX-Cell(S) electrodes has increased and a pilot fabrication process for making membrane electrode assemblies is currently being developed. AFC said it has "successfully scaled up to single commercial-scale fuel-cell operation".

DX Group PLC - parcel freight, courier, and logistics services provider - Operation at all DX depots and service centres have been maintained throughout UK lockdown as company considered an essential service provider. Since April 16, the firm's trading has made "a slow and steady recovery" with DX Freight and DX Express trading beating board expectations. However, revenue remains 10% to 15% below normal seasonal levels. Given the outlook for the rest of the year and this improvement, DX is forecasting a small pretax profit in the second half of its financial year ending June 27 while revenue and adjusted earnings before interest, tax, and depreciation is to beat current market forecasts. Net debt on April 25 was GBP2.0 million.

Strix Group PLC - kettle safety controls - CEO Mark Bartlett says solid start made to 2020 considering Covid-19 disruption and lingering uncertainty. Strix has put in place a number of efficiency measures and strategic initiatives aimed at limiting the pandemic's impact on the annual forecast. The firm is monitoring consumer demand as lockdown restrictions ease up. It has refinanced its debt facilities with RBS International Ltd and Bank of China to provide a GBP60 million revolving credit facility that has "improved financial flexibility" and increases medium-term headroom significantly. Strix still expects to release 14 new products in 2020, mostly in the second half.

Galantas Gold Corp - gold producer and explorer - Concentrate processing at its mine near Omagh, Northern Ireland has recommenced. Staff at the plant were furloughed and maintenance was carried out during suspension. The recommencement follows a review of government health advice on Covid-19 in the UK and Northern Ireland. Talks for a possible sale or joint venture continue. Canadian Securities Administrators have granted blanket relief for market participants for the filing of a number of documents due to the pandemic. Galantas plans to rely on this relief when it comes to its annual financial statements for 2019 and interim statements for the first quarter of 2020. The firm will publish its 2019 documents on or before June 15 and first-quarter documents on or before July 12. Its AGM has also been delayed, and a date will be announced in due course.

Bacanora Lithium PLC- lithium exploration and development - While the spread of Covid-19 has hurt the company and its partners in the Sonora lithium project in Mexico, Bacanora Lithium says it is progressing all feasible workstreams. However, engineering work has suffered delays in Asia and North America. Bacanora's Hermosillo pilot plant went into care and maintenance in March due to Covid-19 restrictions in Mexico and is expected to re-open in June once restrictions are lifted. The company's cash position stands at USD45 million with the firm insisting it "is well placed to weather the ongoing market fluctuations and continued effects of Covid-19". Although internal combustion vehicle demand has fallen, electric vehicle demand in Europe was actually 50% higher in Europe in the first quarter, and lithium demand is set to grow as automotive firms increase their spending on electric vehicle production, Bacanora notes. Cadence Minerals PLC - a lithium and rare earth assets investor and developer - notes Bacanora's update on the lithium market and Sonora. Cadence has a 30% stake in joint venture companies Mexalit and Megalit. Mexalit owns the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions that form part of the Sonora mine plan.

Anglo Pacific Group PLC - natural resources royalty and streaming company - Following a two-week April shutdown, EVBC is back in full production, while McClean Lake remains on care and maintenance. A restart date for McClean Lake is still being determined, and it is expected to make a smaller contribution in the second quarter, having accounted for around 6% of 2019 portfolio contribution. Maraca Menchen and Mantos Blancos royalties in Brazil and Chile continue as normal. The commodity price impact on group revenue has been mixed in the year so far, though the majority of prices have begun to recover from February and March.

By Anna Farley; annafarley@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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