17th Aug 2023. 8.58am

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Regency View:


Atalaya Mining reports strong copper production

Atalaya Mining (ATYM) has released its unaudited financial results for Q2 and H1 2023.

The Spanish miner reported strong copper production of 14.2 thousand tonnes (kt) in Q2 2023, totalling 26.4 kt in H1 2023. Lower electricity prices contributed to a reduced all-in sustaining cost (AISC) of $2.89/lb Cu in Q2 2023, aligning with the FY2023 outlook of 53-55 kt copper production at AISC of $3.00-3.20/lb.

In terms of financial performance, Atalaya achieved adjusted earnings (EBITDA) of €15.7m in Q2 2023 and €40.1m in H1 2023. This improvement was attributed to better cash costs compensating for lower copper prices.

“Our operations are performing well, with production on track to achieve full year objectives” commented CEO Alberto Lavandeira.

Atalaya declared an interim dividend of US$0.05 per ordinary share and reported a strong net cash position of €68.8m.

The market’s reaction to the numbers has been broadly positive with the shares starting to carve out a bullish series of higher swing lows on the price chart.

ATYM Daily Candle Chart

ATYM Daily Candle Chart

CML Microsystems: Growth update & board changes amid acquisition talks

Chip maker, CML Microsystems (CML) provided a trading update ahead of their upcoming AGM.

The company’s new financial year has begun well, with plans for further growth and improved revenues and profits.

CML said it has been in discussions with US authorities regarding the acquisition of Microwave Technology, Inc (MwT). These discussions are progressing, and a conclusion is expected before September 30, 2023.

Ahead of the pending MwT acquisition, CML has made some changes to the Board with Nigel Clark transitioning back to his previous role as a non-exec Chair in the coming months. This change is said to align with the appointment of new independent non-executive directors to the Board.

CML said its Board is content with the company’s progress in executing its strategic plan. They are enthusiastic about the potential growth that a mix of organic expansion and acquisitions can bring.

On the price chart, CML have undergone a deep retracement in recent months, taking the shares back to an area of trend support. We continue to back CML’s long-term growth strategy and remain happy to hold the stock in our AIM Investor open positions.

CML Daily Candle Chart

CML Daily Candle Chart

Gattaca’s FY23 update highlights resilience and growth amid challenges

Gattaca (GATC) released a trading update for the full year ending July 31 (FY23).  

The specialist recruiter said net fee income (NFI) is expected to be £43.6m, a 1% decrease compared to the previous year. The NFI split between contract and permanent roles is 72% and 28% respectively. The Group’s underlying pre-tax profit for FY23 is projected to be £2.5m, surpassing expectations due to cost adjustments and the discontinuation of low-margin contracts.

While contract NFI remained relatively stable year-on-year, Gattaca’s strategic exit from low-margin contracts impacted permanent recruitment, resulting in a roughly 4% decline. The defence sector and Managed Service Provider (MSP) wins contributed to a 15% YoY growth in sector spending and a 13% growth in Mobility. Gattaca Projects also demonstrated robust growth of 56%, capitalising on the demand for Statement of Work (SOW) contracts.

Looking ahead, Gattaca said that given economic uncertainties and the Group’s focus on sustainable contract growth, the Board expects marginal profit growth for FY24.

Matthew Wragg, the CEO of Gattaca commented:

“Our progress has been impacted by the decline in the wider market, and although that is frustrating, I am pleased that we were able to continue to simplify and improve the business throughout the year and manage our cost base so as to report an improvement in profitability in the second half of the year.”

GATC Daily Candle Chart

GATC Daily Candle Chart

H&T deliver impressive half year results

H&T (HAT) saw profit before tax surge by 31% to reach £8.8m, fuelled by a robust performance in its core pawnbroking business.

The UK’s largest pawnbroker’s pledge book grew by 14%, reaching £114.6m, and retail sales saw an 11% increase, with online sales hitting record levels.

The Group’s net asset value stood at £166.8m, supported by high intrinsic value assets. While net debt increased to £17.1m due to funding requirements for the growing pledge book and inventory.

The first half marked significant progress for H&T, with growth across products, customer segments, and geographies.

H&T said its operational capabilities and store portfolio investments are setting the stage for further expansion and increased revenues. The company also increased the pace of its store refurbishment program and is actively implementing its new core IT platform to enhance operational efficiency.

“We are mindful of the impact upon our employees, suppliers, and stakeholders of persistent inflation and rising interest rates,” said Chris Gillespie, H&T’s CEO. “However, much of this cost inflation is now factored into the cost run rate. We expect a lower level of cost inflation in the second half of the year which, alongside the growing revenue momentum of the business, puts us on track to deliver record profits in 2023” he added.

H&T raised its interim dividend was by 30% to 6.5p per share, reflecting the Board’s optimism about the Group’s prospects.

HAT Daily Candle Chart

HAT Daily Candle Chart

Pan African’s robust gold production and debt reduction fuel growth prospects

Pan African Resources (PAF) recently released its preliminary operational update for the financial year ended June 30, 2023.

The update highlighted several key achievements, including targeted safety campaigns that improved the Group’s safety performance, achieving annual gold production of 175,209 ounces in line with revised guidance, and a significant reduction in the Group’s net senior debt to US$18.9m.

The Group’s all-in sustaining costs (AISC) for the period are expected to be between US$1,325/oz and US$1,350/oz.

Pan African’s statement is optimistic about its financial results for 2023 and confirms it is committed to value creation for its stakeholders through operational developments and growth projects.

CEO Cobus Loots noted, “The continuous operations at our Barberton underground mines and other improvements are now positively impacting production, with increased production expected in the year ahead.”

Pan African’s share price is yet to recover following May’s cut to production guidance, but these robust prelim’s should help stem any further selling pressure.

PAF Daily Candle Chart

PAF Daily Candle Chart

Restore trying to rebuild shareholder value

Restore’s (RST) solid performance in Records Management could not offset challenges in its Technology segment.

Revenue for the six months ended June 30 slightly decreased to £139.6m from £140.3m the previous year. Adjusted earnings (EBITDA) declined by 5% to £38.3m, with adjusted profit before tax at £15.1m after considering increased borrowing interest rates.

A non-cash write-down of £32.5m against the Datashred investment was attributed to higher cost of capital, expected service activity reduction, and changes in recycled paper pricing. This led to a statutory loss before tax of £25.9m. Despite these challenges, Restore maintained strong cash flow, with net debt shrinking to £97.9m and a leverage ratio of 1.8x, staying within target parameters.

Jamie Hopkins, Interim CEO of Restore said:

“Whilst the first half has been a difficult period, the Group remains profitable and cash generative on an adjusted basis and continues to deliver excellent service for our customers. The fundamentals of the business remain highly attractive and our core storage business and recurring service income across the Group provide a strong base from which to navigate the current economic challenges and rebuild profitability and shareholder value.”

Bargain hunters may start to step in and snap up Restore who’s share price has tumbled more than 60% since the turn of the year.

RST Daily Candle Chart

RST Daily Candle Chart


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