Two AIM Stocks Under Focus: AGM and RBW

Applied Graphene Materials

Applied Graphene Materials PLC (AIM: AGM) is an AIM-listed company which provides a wide range of applications with custom graphene dispersions and formats. The group is capable of high-volume graphene nanoplatelets using a continuous process, and the company owns the know-how and intellectual property behind these processes, giving it a competitive advantage. Three main segments which the group targets are - coatings, composites and polymers plus functional fluids.

The company will announce results for the fiscal year 2019 period ended 31^st July 2019 on 16^th October 2019.

AGM-Recent Development

On 9^th October 2019, the company released a small update and said that the company’s revenue and other income (unaudited) stood at £0.12 million in the fiscal year 2019. The company also incurred an EBITDA loss (unaudited) of £4.6 million. The company had net cash balances of £6.1 million by the end of the fiscal year 2019. In addition, the company got a tax credit (R&D) of £0.6 million in August 2019.

On 3rd June 2019, the company announced that it had signed a distribution agreement with Carst & Walker that will see the two companies cooperate to tap opportunities in the South African market. The exclusive agreement will extend its commercial reach into the South African chemical markets and help in introducing its proprietary product there, diversifying its markets.

AGM-Financial Highlights for H1 FY19

While revenue for the period was GBP 26,000 (2018: GBP 54,000), other income, which comprises grant income, was GBP 23,000 (2018: GBP 30,000). Against a loss on ordinary activities before tax of GBP 2,291,000 in the first half of FY 2018, a loss of GBP 2,374,000 was recognised in FY 2019. Due to ongoing costs associated with the technical input provided to commercial partners and increase in day to day costs of the business, EBITDA for the group for the period increased to a loss of GBP 2,233,000 from a loss of GBP 1,952,000 in 2018. While adjusted basic loss per share was 4.4p per share (2018: loss of 5.8p per share), basic loss per share was 4.4p per share (2018: loss of 6.4p per share). No dividend was proposed for the period, and net cash used in operations was GBP 2,173,000.

The company is a leader in the field of graphene-containing barrier coatings, and the current pipeline of active customer programmes was over 120, which provides it with a strong standing. However, due to the intensity, breadth and depth of engagement with multiple customers, the progress in the field of graphene-containing barrier coatings is not as rapid as the company would like it to be.

AGM-Share price performance

On 10th October 2019, while writing at 02:37 PM GMT, Applied Graphene Materials PLC shares were clocking a current market price of GBX 17 per share; which was less by 5.56 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £8.91 million at the time of writing.

On 22nd October 2018, the shares of AGM have touched a new peak of GBX 45.00 and reached the lowest price level of GBX 17 on 09th October 2019 in the last 52 weeks. The company’s shares were trading at 62.22 per cent lower from the 52-week high price mark and remained flat as compared to the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 25,849 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 123,730.00; 30 days daily average traded volume- 77,188.40- and 90-days daily average traded volume – 61,340.03.

The shares of the company have delivered a negative return of 32.08 per cent in the last quarter. The company’s stock plunged by 47.06 per cent from the start of the year to till date. The company’s stock has given investors 59.55 per cent of a negative return in the last year.

Rainbow Rare Earths Ltd

Rainbow Rare Earths Limited (AIM: RBW) is a mining company. The group is involved in the development and exploration of the Gakara project. This project is one of the leading rare earth projects globally and the only African producing mine. The company's subsidiaries include Rainbow Burundi SPRL and Rainbow International Resources Limited.

RBW-Operating Update Q3 FY2019

RBW has secured a new funding agreement with Pella Ventures (its largest shareholder), of an unsecured 12-month loan for US$0.7m in order to function as a bridge for RBW’s operations. In addition to this, RBW has agreed to pause any further tranches under the existing equity drawdown facility, the Lind Partners. The new funds will be used for general corporate purposes, while Rainbow considers the most appropriate and efficient structure required to finance Rainbow’s proposed new fleet and mining areas but is intended to convert it into equity, along with interest at 15% per annum, due to the course on equivalent terms agreed with any new investors.

RBW now plans to purchase specialist mining trucks to cope with these conditions. Due to the reduced operating conditions, RBW only sold 100 tonnes of concentrate, but produced 347 tonnes; however, due to timing, only 100 tonnes were exported in Q3.

RBW-Financial highlights for FY19

On 9^th October 2019, the company released its results for the fiscal year 2019 period ended 30^th June 2019. The company’s concentrate sold stood at 850 tonnes in fiscal year 2019 as against 475 tonnes in fiscal year 2018. The concentrate exported by the company was recorded at 750 tonnes in the fiscal year 2019 as against 575 tonnes in the fiscal year 2018. The company’s revenue was recorded at US$1.5 million for the financial year 2019. The company’s production costs were recorded at US$3.1 million for the financial year 2019. The company’s administration expenses (inclusive of corporate and head office costs) were recorded lower at US$1.4 million in the financial year 2019 due to cost optimisations from US$2.0 million in financial year 2018. The company’s EBITDA (adjusted) loss was recorded at US$3.4 million for the fiscal year 2019. The company made less share-based payments in fiscal year 2019 amounting to approximately US$0.1 million as against US$0.7 million in financial year 2018. The company managed to generate finance income of US$0.4 million in the financial year 2019 due to gains on foreign exchange movements as compared to US$0.3 million in the financial year 2018. The company incurred finance costs of US$2.6 million in the fiscal year 2019 as against US$0.1 million in the fiscal year 2018. The company’s borrowings were recorded at US$1.6 million in the fiscal year 2019 as against US$0.8 million in the fiscal year 2018. The company had cash balances of US$119,000 in the fiscal year 2019 as against US$354,000 in the fiscal year 2018.

RBW-Share price performance

On 10th October 2019, while writing at 02:44 PM GMT, Rainbow Rare Earths Ltd shares were clocking a current market price of GBX 2.69 per share; which was more by 2.67 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £9.87 million at the time of writing.

On 22nd October 2018, the shares of RBW have touched a new peak of GBX 10 and reached the lowest price level of GBX 1.55 on 04th April 2019 in the last 52 weeks. The company’s shares were trading at 73.10 per cent lower from the 52-week high price mark and 73.54 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 204,447 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 1,026,132.80; 30 days daily average traded volume- 712,298.23- and 90-days daily average traded volume – 2,617,265.99.

The shares of the company have delivered a negative return of 11.93 per cent in the last quarter. The company’s stock plunged by 38.35 per cent from the start of the year to till date. The company’s stock has given investors 73.87 per cent of a negative return in the last year.