Interactive Investor

Insider: Emmerson shares bought by ex-Sirius Minerals man

15th November 2021 08:47

Graeme Evans from interactive investor

Up 24% in the past week, directors are buying shares in this potash project developer. And there’s a huge purchase at another AIM stock.

A former Sirius Minerals executive and two other directors have spent a combined £50,000 backing their company to deliver a world-class potash development in Morocco.

The Emmerson (LSE:EML) share purchases by chief executive and ex-Sirius director Graham Clarke, chairman James Kelly and director Hayden Locke were made hours after a Singapore-based investment vehicle unveiled backing worth up to $46.75 million (£35 million).

An initial $6.75 million will be used to accelerate pre-construction activities at Emmerson's Khemisset potash project, which is well placed to capitalise on the growth in fertiliser consumption in Africa while being close enough to serve European markets.

A feasibility study last year highlighted Khemisset's potential to be among the world's lowest capital cost potash developments and, due to its location, one of the highest margin.

Markets have strengthened considerably since then, with prices in the key market of Brazil now over $800 a tonne and double the base case assumptions from previous studies. Potash is used to increase crop yields and improve the quality of plants, meaning it will play a central role in helping feed the world's growing population.

Clarke said the company had worked “tirelessly and through an extremely rigorous due diligence process” lasting several months to secure the strategic investment.

He added: “It is a transformational investment for Emmerson, and it is a major step to unlocking the full potential value of the world class Khemisset potash project.”

Clarke is a veteran of the potash industry and was a member of the senior executive team at Sirius Minerals, the popular retail stock bought by Anglo American (LSE:AAL) in 2020.

He oversaw all technical aspects of the Woodsmith mine during nine years with Sirius, moving the North York Moors development from concept and various phases of study and design into construction. It is regarded as one of the UK's largest and most complex underground mine schemes for a generation.

Clarke's focus is now on Morocco and preparing the Khemisset scheme for a potential construction start during the next year. 

He said the long-term strategic commitments from the group of Asia-based investors at a premium to Emmerson's current valuation was a major endorsement of the Khemisset project, which the company has owned since 2018.

Clarke said last week: “We have already formed a strong partnership with the investors who share our vision of creating a new, independent, and highly profitable and environmentally sustainable potash company.”

Their investment, which is in return for owning a stake of up to 29.9% in Emmerson, is subject to the approval of the company's shareholders at a general meeting to be held on 6 December.

On Thursday morning, Clarke is due to update existing and potential shareholders on the project via a live presentation on the Investor Meet Company platform.

interactive investor customers own 4% of the company as Emmerson's fourth-biggest shareholder. They have seen their shares jump by 34% in the past month, with the AIM-listed stock closing on Friday at 6.95p following an 22% surge since Wednesday's investment.

Clarke bought shares worth £20,000 at a price of 6.65p later that day, while Kelly acquired £10,000 at 6.74p and Locke picked up a stake of just under £20,000 at 6.5p.

Learning Technologies

Elsewhere on AIM, a non-executive director at Learning Technologies Group (LSE:LTG) has spent £250,000 increasing her stake in the digital learning and talent management business.

Leslie-Ann Reed, a chartered accountant who also sits on the boards of Bloomsbury Publishing, Induction Healthcare Group and Centaur Media, did so on Wednesday at a price of 186p a share.

Her move comes a month after the London-based company completed the acquisition of GP Strategies for $394 million (£294.1 million), a deal funded following an £85 million share placing and $305 million debt refinancing that completed in July.

The acquisition creates the world's largest specialist workforce transformation business, with revenues of £500 million and operations in at least 80 countries employing 5,000 staff. 

The deal is expected to be earnings enhancing in its first year, with GP Strategies bringing long-standing client relationships, recurring multi-year revenues and a global market presence.

Interim results posted by Learning Technologies in September showed revenues up 29% to £82.6 million after first-time contributions from three acquisitions made in the period. Recurring revenues accounted for 77% of the overall total.

Adjusted earnings lifted 20% to £22 million and led to a dividend of 0.3p a share, also up 20%. Shares closed on Friday at 188.8p, having fallen from an all-time high of 239p in September.

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