SMALL CAP MOVERS: Cash-strapped FlowGroup suffers major outflows


FlowGroup (LON:FLOW) couldn’t stop the outflow of investors this week after the alternative energy group confirmed it had reached a deal to sell off its core energy supply business to a rival.

The £9.25mn sale of Flow Energy to Co-operative Energy is effectively the start of the winding up process for cash-strapped FlowGroup, which has struggled to attract extra investment recently. 

After being knocked back by lenders and investors, the company said it agreed to the sale of the business which accounted for more than 99 per cent of its revenues.

The £9.25mn sale of Flow Energy to Co-operative Energy is effectively the start of the winding up process for cash-strapped FlowGroup

The £9.25mn sale of Flow Energy to Co-operative Energy is effectively the start of the winding up process for cash-strapped FlowGroup

The £9.25mn sale of Flow Energy to Co-operative Energy is effectively the start of the winding up process for cash-strapped FlowGroup

‘The board has reluctantly concluded that the sale of Flow Energy and the subsequent closure of the remainder of the group is the only realistic course of action open to the company,’ read Tuesday’s statement.

FlowGroup’s board will ‘unanimously’ recommend that shareholders vote in favour of the proposals at an upcoming meeting. Shares lost three-quarters of their value to trade at 0.0017p come Friday.

Bulletin board favourite Pantheon Resources (LON:PANR) was another which took a pounding this week.

Results from the oil junior’s latest well onshore in Texas appeared inconsistent with pre-drill expectations, as it failed to produce oil, flowing gas and water instead. Gas is almost worthless in the US, where prices are some of the lowest in the world.

Operations had to be interrupted repeatedly during the tests, forcing the company to put the programme on hold.

The team is now reviewing whether there was a problem with the fracking programme and is also consulting with outside experts to get a better understanding of the well’s behaviour.

Plainly, investors have been spooked by this new uncertainty for the project, with the stock sliding 62.5 per cent to 18.3p across the week.

Bulletin board favourite Pantheon Resources was another which took a pounding this week after inconsistent from the oil junior's Texas wells

Bulletin board favourite Pantheon Resources was another which took a pounding this week after inconsistent from the oil junior's Texas wells

Bulletin board favourite Pantheon Resources was another which took a pounding this week after inconsistent from the oil junior’s Texas wells

There was some better news for D4T4 Solutions (LON:D4T4) though, which saw its value rise by more than a third to 142p on the back of a bullish trading update.

The data solutions provider expects to report a ‘very strong trading performance’ for the second half of the year having signed its two ‘largest ever’ contracts.

As for bookings they are also at a record level, which underpins confidence for the year ahead.

D4T4 will publish a more detailed update of its performance later this month, but it expects full-year revenue and adjusted pre-tax profits to be ahead of the comparatives for the year ended 31 March 2017.

It was a mixed week for the junior market overall, with the AIM All Share eking out a 0.8 point, or 0.1 per cent, rise across the week to 1,027.4.

The FTSE 100 was also a bit quiet this week, but still managed to notch up a gain of 70 points, almost 1 per cent, to leave it at 7,256.

Cronin Group has developed a piece of software which allows users to collect, store and process data generated from chemical experiments

Cronin Group has developed a piece of software which allows users to collect, store and process data generated from chemical experiments

Cronin Group has developed a piece of software which allows users to collect, store and process data generated from chemical experiments

Cronin Group (LON:CRON) was one of those helping the junior market to keep its head above water after the chemical technologies specialist signed deals which will see two companies trial its DigitalGlassware platform.

This is a piece of software which allows users to collect, store and process data generated from chemical experiments, and can help to increase ‘reproducibility’ – how easy it is for another scientist to replicate an experiment – and provide unique insights.

Two leading international life science reagent and chemicals manufacturers will test the software and observe its performance, which should help Cronin to get a better understanding of how the technology can help in the discovery of new drugs and chemicals.

Cronin shares had risen to 2.1p come Friday afternoon – a weekly gain of 38.7 per cent.

Congratulations were also in order for women’s fertility specialist Concepta (LON: CPT) which received the necessary certification for its manufacturing site in Doncaster.

The approval means Concepta can now start making its myLotus diagnostic test at the facility which, with its recently-installed automated production lines, should increase capacity and efficiency.

It is a ‘significant’ step for the company, which is hoping to start selling myLotus in the UK in the second half of the year once it has received a CE mark. Shares surged 28.4 per cent to 7p.

Concepta hopes to be able to start selling its myLotus products in the UK later this year

Concepta hopes to be able to start selling its myLotus products in the UK later this year

Concepta hopes to be able to start selling its myLotus products in the UK later this year

Recruitment group Nakama (LON:NAK) didn’t have the best of weeks though.

Following a strategic review, the board discovered that the firm’s Australian subsidiaries will struggle to pay A$700,000 (£383,500) tax bill due this month.

Nakama said it was looking at where it could get that money from, though it is also considering going to the Aussie tax man and asking to reschedule the payments.

As a result of the debacle, the group kicked off a review of its finances, while chief financial officer Angus Watson tendered his resignation and is stepping down with immediate effect.

More worryingly for investors, Nakama’s businesses in Australia, Singapore and London continue to lose money which is hampering the group’s overall financial position.

As a result, it said it is ‘closely monitoring [its] working capital requirements’.

The lack of profitability and threat of a fundraise saw investors bail out, with the stock down almost a quarter to 0.7p.



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