SMALL CAP MOVERS: Arcadia's empire turns to AIM rescuers to survive


Arcadia’s high street empire looks likely to end up in the hands of two of the AIM’s runaway retail success stories.

Boohoo has confirmed it is in exclusive discussions with administrators Deloitte to buy the Dorothy Perkins, Wallis and Burton brands, days after it emerged that rival ASOS was the frontrunner to rescue Topshop, Topman, Miss Selfridge and HIIT.

Boohoo is willing to pay around £25million slice of the failed Philip Green empire, while Asos may hand over £250million, although it’s fighting a bidding war against fellow e-commerce giant Shein and potentially JD Sports after Next pulled out.

Boohoo is in exclusive discussions to buy the Dorothy Perkins, Wallis and Burton brands

Boohoo is in exclusive discussions to buy the Dorothy Perkins, Wallis and Burton brands

It’s bad news for the UK high street because the two AIM firms are pure-play online retailers. So, brick and mortar stores are excluded from negotiations, mirroring boohoo’s £55million deal to acquire the last vestiges of Debenhams.

Arcadia folded with an estimated £350million pension black hole, and the potential loss of 13,000 jobs.

Turning to matters far less depressing – IPOs are back in fashion.

Doctor Martens, Deliveroo and Moonpig look set to break the UK logjam – with some even bigger floats expected in the US imminently, including Bumble and DoorDash.

On AIM too there seems to be a revival of interest in new issues. Virgin Wines which has reportedly hired an investment bank ahead of a £100million stock market debut, while we have three listings scheduled for early February.

‘The capital markets have been a fertile source of finance for businesses of all sizes over the last 12 months,’ said Christopher Raggett, co-head of corporate finance at boutique investment bank, finnCap.

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‘We expect to see more IPOs in the early part of this year as entrepreneurs from businesses of all sizes take advantage of the ability to fuel their growth in a supportive environment.’

Turning to the wider market, the AIM All-Share dropped 2.9 per cent to 1,160 this week. Still it outperformed the FTSE 100, which slid 3.6 per cent to 6,449.

Among the risers, Getech Group soared 114 per cent to 30p after entering two new partnerships with H2 Green and SGN Group that will see the software firm participating to the construction of a national network of hydrogen generation, storage and retail hubs.

In the pharma sector, Genedrive zoomed up 71 per cent to 71p after revealing its Covid-19 tests will be sold in the US and Europe by partner Beckman Coulter Life Sciences, which is creating a new sales channel in the American market for the diagnostics firm.

Oiler Jersey Oil and Gas gushed 41 per cent higher to 160p on the back of a significant uplift in contingent resources at the Buchan project in the North Sea, now expected to be 126million barrels of oil from 82million estimated previously.

Elsewhere, Nightcap climbed 37 per cent to 18p after media coverage turned investors’ attention to the cocktail bars owner, which has floated earlier this month with a £4million IPO.

Moving on, Journeo headed 33 per cent higher to 75p after it secured a one-year contract extension to provide CCTV and other information technology systems to First Bus UK.

Among the fallers, Asiamet Resources tumbled 39 per cent to 2p after terminating a deal to sell its subsidiary Indokal, the owner of the BKM copper project in Indonesia, because buyer PT WIN was late with payments.

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Meanwhile, insolvency litigation financing firm Manolete Partners dived 32 per cent to 200p after admitting new case enquiries are expected to remain low because the UK government’s financial support has avoided several company insolvencies since the start of the pandemic.

Solar panels producer Verditek plunged 28 per cent to 4p after admitting the pandemic is hitting its potential to make more sales as customers are more cautious, with ‘minimal’ revenues recognised in 2020.

Talking about weak trading, Real Good Food lost 18 per cent of flavour to 3p on the back of a weak interim performance after the cake decorations producer was hit by the closure of restaurants and consumer outlets.

Finally, supplier of advanced composite material kits Velocity Composites slid 13 per cent to 17p after full-year loss before tax ballooned five-fold to £3million due to the Covid-19 hit on its target markets, which include the aerospace sector.

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