City round up: Surface Transforms end difficult year; Music Magpie interims; Nightcap coming off AIM
Liverpool-based carbon brakes manufacturer Surface Transforms has recorded an unaudited £20m pre-tax loss but chairman David Bundred, chairman, said years of product development, leading to a £390m order book has now shifted the focus of the business to building volume production.
“The last twelve months have been, arguably, the most difficult in the history of the Company. The operational underperformance was a particular disappointment leading to the need for an unplanned cash injection. As previously stated, the Board obviously regrets the circumstances that have led to this distressed fund raising and completely understands the frustration and anger of shareholders over the subsequent dilution.
“However, it is important to remind ourselves that the Company’s long-term sales and profit potential is unchanged. Our product works, is wanted by the marketplace, there is still only one other worldwide competitor, the market is likely to be demand constrained for at least the next 5 years, and we are continuing to install capacity that will, eventually, reach £150m sales. The Board would not be building this capacity without anticipating the detail of how we will fill it.
“The central immediate need remains that of resolving the twin problems of installing the capacity and then achieving the output from this notional capacity. Last year we made progress yet there is still much work to be done, further progress has been made in 2024 year to date and that continuing progress will be maintained,” he said.
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CEO Steve Oliver
Tech recycler and reseller musicMagpie’s unaudited interim results for the six months ended 31 May 2024 show group revenue of £53.8m (H1 2023: £61.9m), with the reduction owing to the planned conversion of the Group’s US business into a sourcing-only operation.
UK Consumer Technology outright were sales marginally up at £28.7m (H1 2023: £28.6m).
Commenting on the results, Steve Oliver, Chief Executive Officer of musicMagpie, said: “Amidst an increasingly competitive environment for second-use technology, and with consumers continuing to feel the squeeze on their wallets, the market has undoubtedly been challenging. However, our turnover remained robust in the UK, where Consumer Technology sales held firm, and Disc Media and Books showed welcome signs of stabilisation.
“We have been proactive in delivering savings to our cost base and right sizing our business. Combined with our efforts to refine and improve the way in which we buy, sell, and rent, our business is now in a stronger position and better able to capitalise on the continued growth of second-use markets. We have recently launched the buying of branded fashion items on the musicMagpie platform and intend to continue broadening our offering and further unlock the ‘world of inventory’ that sits in consumers’ households.”
The business recorded a small improvement in loss before taxation of £3.0m (H1 2023: £3.2m loss) on lower revenues and with significantly less cash investment; £0.5m improvement against H1 2023 when excluding the benefit of a sale of delinquent rental assets in the prior period.
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Cocktails at Revolution Bars
AIM listed hospitality business Nightcap plc is the latest business to delist.
The would be acquirer of Manchester-based Revolution Bars, and the owner and operator of 46 premium bars, including in Manchester and Liverpool said it just wasn’t worth being a listed company.
A review concluded that the negative factors included: the value that the current market capitalisation ascribes to the Company, the liquidity of the Ordinary Shares, the ability to raise further equity through public markets at an acceptable price and the cost of maintaining a public quotation.
Gareth Edwards, Chair of Nightcap, commented: “We have not taken this decision lightly, however, following an extensive review and deliberation to ascertain the most effective way to maximise Shareholder value in the longer term and increase the potential for the long-term success of the Company, the Board has unanimously concluded that it is in the best interests of the Company and our Shareholders to cancel our AIM admission and re-register as a private limited company.
“The Board believes that Nightcap’s current public market valuation does not reflect the underlying potential of our business or our achievements to date and that this is unlikely to change in the short-to-medium term. Since our last institutional fundraise in May 2021, we have demonstrated several times that we can access funding from non-institutional sources at a premium to our share price at the time.
“We believe that we will be able to continue to execute on our strategy as a private company and therefore we believe that a cancellation of the Company’s admission on AIM is in the best interests for Shareholders and for the future of our business as a whole.”
