Two FTSE AIM All-Share Small-Cap Stocks To Watch

  • Oct 02, 2019 BST
  • Team Kalkine
Two FTSE AIM All-Share Small-Cap Stocks To Watch

NQ Minerals Plc

NEX Exchange-listed NQ Minerals Plc is an Australia based exploration and mining company. In the fourth quarter of FY18, the mining company started production at its flagship Hellyer Gold Mine and estimating a decent cash-flow and profitability from Hellyer and has a portfolio of exciting exploration projects.

Interim Results: H1 FY19 (ended as on June 30, 2019)

As on September 27, 2019, the group reported its interim results for the six months ended June 30, 2019, in which the mining company recorded that the progression of the restart of operations at its Hellyer (“Hellyer”) polymetallic project and stated that it had commenced commissioning of the base metal floatation circuit in January. The results of operations reflect the inaugural six months of operations at Hellyer.

During the period under consideration, the group's realised revenue stood at £14.154m and its gross profit for the six months ended to June 30, 2019, was at £3.407m, realised from the production of 10.164 tonnes of lead, 7,341 tonnes of zinc and 46,863 tonnes of pyrite, respectively.

Also, the company reported recovery improvement continued to be realised, and the period end with the current month to date figures yielded an increase in lead recovery to 41.9%. As of September 23, the daily actual average was of 43.4%. Zinc recoveries during September have averaged to 42.2%, with a daily actual average of 46.5%.

During the six months under consideration, Tasmania Energy Metals received an investment of £300,000 from the NQ Minerals Plc, also the company is investing in an integrated facility for the treatment of rare earth metals produced at Hellyer with further exposure to metals utilized in the Electric Vehicle battery market.

At the end of June 30, 2019, NQ Minerals Plc’s debt position stood at £65.6m and reported that it is in advance stage negotiation with lending groups to refinance the acquisition and start-up debt secured over the Hellyer assets.

Brian Stockbridge | Chairman at NQ Minerals comment:

The first six months have seen exciting developments for the company with the restart of operations at the Hellyer operation and consequent sales of its concentrates generating strong revenues. The operations continue to progress well with recent months witnessing even more positive recovery improvements. The company is glad to announce that it is in advanced level negotiation to refinance its early-stage debt which reflects Hellyer's transition to an operating status with decent cash flows.

Stock performance

At the NEX Stock Exchange, shares of the NQMI have delivered a negative price return of approximately 85.71%, down by 79% on a YTD basis, and declined approximately 55% in the past three months. Shares of NQMI last traded as on September 27, 2019 and ended the session at GBX 2.25. At the September 27, 2019 closing, its shares were quoting below its 30-day, 60-day and 200-day simple moving average prices. The outstanding market capitalization of the Company stood at £7.32m with 325.27m shares outstanding.

NQ Minerals Plc Outlook

The Board and Management of the company believe firmly in the prospects of each of its assets. Hellyer has reported during its initial first six months of operations being challenging; however, the improvements realized in the third quarter of FY19 (Q3) have been favourable and continue to trend in a positive direction. These improvements will further provide an opportunity for the company to restructure its current debt facilities with a view of improving the financial position. The prospects at TEM appear promising, and the management will continue to work with them to explore value creation opportunities. The company operates at the highest standards with respect to environmental, community relations and social responsibility and will continue to explore ways of returning value to the shareholders.

Enteq Upstream Plc

AIM-listed Enteq Upstream Plc (LSE: NTQ) is a non-renewable energy company, engaged in the providing directional drilling market with high-end, segregated, strong Measurement While Drilling machinery and associated parts and components to the global oil & gas companies. As on May 18, 2012, shares of the Enteq Upstream Plc were admitted to the main market of the London Stock Exchange for trading. Hargreave Hale Ltd., Allianz Global Investors GmbH (UK) and Octopus Investments Ltd. are the major institutional investors in the company. (Source: Thomson Reuters).

Recently (as on September 10, 2019), the oil equipment and services provider jointly signed a license agreement with Shell Global Solutions (US) Inc. and Shell Global Solutions International, both subsidiaries of Royal Dutch Shell plc.  At present estimated Rotary Steerable drilling market stands at around $1bn within $10bn directional drilling sector as assumed for across the globe of Oil and Gas and which is expected to grow with a CAGR of 7%.

Financial Highlights: FY19

As on June 12, 2019, the group reported its full-year financial results for the financial year ended as on March 31, 2019:

During the year under consideration, the group’s revenue leapt up 57% to US$10.2m against $6.5m reported in the year-ago period, adjusted EBITDA surged from $0.2m to $2.5m and reported an adjusted EBITDA margin of 24%. Group's post-tax loss for the year ended March 31, 2019, narrowed to $0.1m from the post-tax loss of $0.6m recorded in the same period of the corresponding financial year.

During the period, group was not having any adjusted earnings, while it had a loss of $0.5m reported in the year-over period, and post-tax loss per share stood at 0.2c/share as compared to 1.0c/share in the previous year.

At the end of the FY19, Group’s cash balance declined to $11.9m from$15.5m reported in the year-ago period, driven by group’s targeted investment in technology, engineering and rental assets. The said investment reinforces company’s this year's growth and will support the future advancement opportunities as well.

Company has kept its investment in the engineering team unabated, both which are created in-house as well as to those which are through the targeted use of industry expert sub-contractors. The company launched a new revolutionary product line, PowerHop at the global oil industry technology show, OTC, in May 2019. The PowerHop, which includes patented technology garnered significant industry interest, and its field trials are expected to commence towards the end of the year.

Stock performance

Shares of the LSE: NTQ has handed a price return of 43.2% on a YTD basis to its shareholder, however, despite a sharp spike in the stock price over the past couple of months, shares of the NTQ are still quoting approximately 6.7% below the price of a year-ago period. In the last one month, its shares have surged approximately 10% and were up 3.77% in the previous five trading session. At the time of writing (as on October 02, 2019, at 08:54 AM GMT, before the market close), its shares were quoting at GBX 27.50 and trading flat against the previous closing level. The outstanding market capitalization of the Company stood at £17.99m with 65.49m shares are outstanding.

In the year-over time, shares of NTQ ended 18 times up, 41 times down and 193 times unchanged against its respective previous closing prices. This indicates lower liquidity in the stock. However, on account of the recent rally the stock has witnessed, at the current trading as quoted above, its shares were trading above its long-term and short-term crucial support levels, a positive technical measure for the stock. Also, the past 5-day average daily traded volume in the stock was substantially above the past 30-day average daily volume traded at the London Stock Exchange.

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