Recent business updates: Petra Diamonds Ltd and Koovs PLC

Petra Diamonds Ltd (LON:PDL)

United Kingdom-based, Petra Diamonds Ltd is a prominent diamond mining group. The company has major operations in the Southern African region, Tanzania and Botswana.

The United Kingdom domiciled mining group is a major supplier of raw diamonds of finest quality in the global market. The company has a rich portfolio of mining assets, such as an open pit in Tanzania and three underground mines in South Africa, namely, Cullinan, Koffiefontein and Finsch. In addition, the company has exploration activities running at a consistent pace in the African region and Botswana.

The company has a solid foundation in terms of resource base of approximately 250 million carats which can help the company in continuing operations weathering out unfavourable conditions. The company emphasises on quality rather than on volumes to maximise its efficiencies and profitability.

The company aims to deploy best practices in the industry to carry out operations, strong work culture & ethics and has presence only in the member countries who are a part of The Kimberly Process (KP), a credential which is required to trade rough diamonds. The company also seeks to participate in the socio-economic development of its partnering nations and creating value for all its stakeholders. The company’s share got listed on the primary market of the London Stock Exchange on 17^th June 2005 under the ticker symbol PDL.

PDL-Recent News

On 9th December 2019, the company was asked to reduce its power load to essential levels by the electricity provider in South Africa, the Eskom as it had a shortage of capacity due to technical fault at the Medupi Power Station. The company is looking forward to halting its mining activities with immediate effect and remove all people from underground in South Africa. Only essential services such as flood prevention and ventilation and other safety services will be continued.

on 10 December 2019, the company provided with an update on load curtailment. The mining operations of the company recommenced today with a reduced load of 20 per cent (Stage 4) as mandated by the Eskom. The company aims to optimise the operations and maintain production activity with the restricted load capacity for as long as possible. However, the load curtailment can impact the company in the long run.

The company announced organisational restructuring on 15^th November 2019, with an objective of driving efficiencies in the operations of the company and to expedite the execution of the Project 2022. The company shall now have a flatter organisational structure in terms of hierarchy, and all will be under direct supervision of the Chief Executive.

PDL-Trading Update for Q1 FY20 for three months period ended 30th September 2019

The production increased by 1 per cent to 1,082,764 carats in the first quarter of 2020 and was in line with the expectations (ca. 3.8 Mcts) for the financial year 2020. The diamond prices plunged by 4 per cent on a like-for-like basis for the period as compared to the fourth quarter of the fiscal year 2019.Â

The net debt of the company was recorded at US$592.8 million as on 30th September 2019 in contrast to US$564.8 million as on 30th June 2019.The company delivered robust and consistent performance across the operations. The company’s trading performance was in line with the expectations during the period.

PDL-Stock price performance

(Source: Thomson Reuters) Daily Chart as on Dec-11-19, before the LSE market close

On 11th December 2019, while writing at 08:31 AM GMT, PDL shares were clocking a current market price of GBX 8.10 per share, up by 5.19 per cent from the previous day. The total market capitalisation of the company was hovering around £66.64 million while writing.

In the last 52 weeks, the shares of PDL have touched a new peak of GBX 46.42 on 14th January 2019 and reached the lowest price level of GBX 6.18 on 3rd October 2019. The company’s shares were trading at 31.07 per cent higher the 52-week low price mark and at 82.55 per cent lower mark from the 52-week high as can be seen in the price chart at the current trading level.

The stock’s 5-day daily average traded volume of the company was 2,817,927.20; 30 days daily average traded volume- 4,399,306.43- and 90-days daily average traded volume – 8,008,588.70. The beta of the company’s stock was recorded at 0.50, which indicated lesser volatility.

In the last three months, the shares of the company have delivered a negative return of 3.75 per cent. The company’s stock plunged by 79.56 per cent from start of the year to till date. The company’s stock has given investors 9.94 per cent of negative return in the last month.Â

Â

Koovs PLC (LON:KOOV)

UK business, Koovs has created KOOVS.COM and transformed it into a leading online western fashion portal in India. The fashion brands of garments and accessories launched by Koovs are designed and developed exclusively in London for the two-thirds majority of Indian population, which is under the age of 35 (young). The company has a social media following of more than 2.5 million followers. The company has forged a strategic partnership with Future Lifestyle Fashion Limited (FLFL), part of the Future Group, to tap immense potential in the fashion market in India. The Future Group is one of the top 10 fashion apparel companies in the world and is one of India's leading retail businesses.

The company is taking the competition to the next level in the rapidly expanding e-commerce market in India through its proprietary online technology platform KOOVS.COM. The company owns the responsibility of building and maintaining the online platform for its Brand Factory retail format and the scalability of the online portal would be analysed by Future Lifestyle Fashions Limited. Pepe Jeans and Mr Button are some of the popular brands owned by the company.

The company looks forward to amplifying the brand image of the Koovs Brand and expanding the product lines. The company focuses on creating online content which can engage the customers. The company is also emphasising on improving the applications by maximising technology to empower the customers and enhance their experience. The company is seeking to widen its customers base through extending reach.

KOOV-Trading Temporarily Suspended

On 10^th December 2019, the shares of the company have been suspended from 11:30 am, pending further announcement.

Future Lifestyle Fashion Limited didn’t fulfil its commitment to invest a further £6.5 million into the company as the company was heavily reliant on FLFL for funding, the company was disappointed and now it expects that its assets and business will be purchased from the administrator by a company endorsed by its secured creditor (Waheed Alli) to ensure business continuity.

Strand Hanson Limited, Nominated Adviser to the company has resigned with immediate effect. If his replacement is not found within the given timelines (one month), the listing of the securities on the AIM market will be cancelled.

Geoff Rowley and Jason Baker have been jointly appointed as Nominated Adviser to the Company. The business and assets of Koovs Plc were immediately purchased by SGIK 3 Investments Limited, post appointment of Nominated Adviser.

KOOV-Business performance for FY19

The company’s revenue surged to INR 590 million in the fiscal year 2019 as compared to INR 543 million in the fiscal year 2018. The company’s Adjusted EBITDA loss stood at INR1,183 million during the year, which remained flat in comparison to previous year. The company’s gross loss reduced from INR 147 million in the financial year 2018 to INR 49 million in the financial year 2019. The company’s EPS loss reduced from 8.30 pence in the financial year 2018 to loss of 5.30 pence in the financial year 2019. The company’s Gross Order Value was recorded at £12.8 million in the fiscal year 2019 as compared to £14.8 million in in the fiscal year 2018. The net sales of the company were recorded at £7.5 million in the fiscal year 2019 as compared to £9.6 million in the fiscal year 2018. The company’s trading margin increased to 18 per cent in the fiscal year 2019 as compared to 14 per cent in the fiscal year 2018.

Koovs Plc has faced challenging times in the last two years, as there were disruptions caused in India by demonetisation (2016) and the implementation of the Indian Goods and Sales Tax (GST) in July 2017, which brought down the online retail activity levels significantly and this slowdown was carried forward from the fiscal year 2018 and into the first half of the fiscal year 2019. Despite these disruptions in India, there have been some positives for Koovs Plc in the fiscal year 2019. Funds amounting to £22m were successfully injected into the business along with forging strategic relationships with both Future Lifestyle Fashion Limited and HT Media Limited