SMALL CAP MOVERS: East Imperial toasts deal with US bottler; Real Good Food Obtains Turnaround Financing
New Zealand-based East Imperial has had a tough year but rose this week after appointing a US bottling partner to meet its growing US demand.
The “ultra-premium beverage” maker said US-based Lion Brewery would bottle its entire range, including its grapefruit tonic, Mombasa ginger beer and yuzu lemonade, from early 2023.
This will result in “significant” logistics savings and reduce the capital costs of expansion, he added, which will “be a key part” of his plans to improve profit margins while providing the flexibility necessary to respond to demand. The shares rose 14% to 2.79p.
Real Good Food was another of London’s AIM risers which soared 51% to 1.75p after receiving additional funding for its turnaround.
The food manufacturing company said the new money was provided by Hilco Private Capital for 12 months and complements its existing £6.3million facility with Leumi.
“We are delighted that new funding has been secured to support RGF’s sweeping reform which aims to reduce costs, protect revenues and preserve the intrinsic value of the group,” said Executive Chairman Mike Holt.
And financing is increasingly the main topic of small listed companies.
Deepmatter led the fallers, falling 60%, after announcing its intention to withdraw from AIM following discussions with potential shareholders and investors over long-term funding.
The digital chemistry data and software company said being a limited liability company would provide greater opportunities to raise additional capital, adding that its major shareholders agreed.
Fundraising difficulties were also the theme of Applied Graphene Materials, which said it was launching a strategic review after being unable to raise equity capital due to the difficult stock market environment. Shares fell by a fifth on the news.
Even when companies can raise funds, rebates can be punitive.
Take Osirium Technologies, which fell 32% to 2.7p following a placement in which it raised £1.53m for working capital purposes.
A specialist in cloud-based cybersecurity software, he issued 2p shares with directors for £255,000.
Healthcare diagnostic device maker Genedrive fell further, down 23% to 9.7p as annual losses worsened and revenue fell.
Sales slumped to £50,000 from £690,000 a year earlier, while the band reported a loss of £4.7million from £700,000.
David Budd, chief executive, said that despite the finances, the group had made good progress in pharmacogenetics and had the opportunity to be a leader in bringing genetic testing to acute care points.
De La Rue’s run of disappointments also continued with the noteprinter dropping 21% to 78p following another warning.
Underlying interim profits fell 46% to £9.3m, in line with previous guidance given in July, but were below full-year forecasts, which really spooked investors .
London small cap indices had a decent week despite the declines, with AIM All-Share up 0.8% to 844 and AIM 100 also up, although once again they had were comfortably outperformed by Footsie.