Shares round-up: Avacta, Premier Foods, LoopUp, Allergy Therapeutics

The stock market may look like a sea of red today, but there are big winners in the small-cap space.

The unexpected upside of the Covid-19 crisis was shown today in updates spanning Mr Kipling cakes, video conferencing and a biotech that's now one of London's hottest stocks.

The trio of Premier Foods (LSE:PFD), LoopUp Group (LSE:LOOP) and Avacta (LSE:AVCT) provided some welcome relief for investors during an otherwise dismal session in which the FTSE 100 index fell more than 2%. Other noteworthy performances from smaller companies included Allergy Therapeutics (LSE:AGY), with shares in the Smith Kline Beecham spin-off up 15% after upgrading profits forecasts.

An update from Avacta should be well received by interactive investor clients, given that its shares ranked above BP (LSE:BP.) and BT Group (LSE:BT.A) as the third most-bought on our platform in May.

The AIM-listed stock soared from 24p in early April to more than 200p a month later after the developer of Affimer-based biotherapeutics disclosed a partnership with Cytiva — formerly GE Healthcare Life Sciences — to deliver a rapid test for Covid-19.

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Avacta today reported positive data from the first rapid strip test devices, which now need to be optimised to ensure the highest sensitivity in the final product. Avacta CEO Dr Alastair Smith said:

“This is a really positive step and we aim to have completed the optimisation very soon so that we can begin the transfer to manufacturers.”

Shares have come off the boil this month, although they surged 5% higher in the wake of the update. They were later 4% lower at 135p ahead of tomorrow morning's admission of new shares from the company's heavily oversubscribed £48 million fundraising.

Source: TradingView. Past performance is not a guide to future performance.

The 12% surge for Premier Foods came after it disclosed that trading profits for the 2020/21 financial year were running ahead of City expectations, buoyed by a 20% rise in sales for the first quarter.

Having initially benefited from the stockpiling of household “essentials” ranging from Mr Kipling cakes to McDougall's flour, Premier said the lockdown had driven demand for its sauces, gravy and baking ingredients as families found more time for cooking.

Premier added that its UK business had now delivered 11 quarters in a row of revenue growth, with its biggest brand, Mr Kipling, increasing sales last year by 4% to the highest ever level.

Shares have soared since the depths of the Covid-19 crisis, with the stock up more than 200% from its low of 18.5p in mid-March. The rally also reflects a recent landmark pensions agreement, which has the potential to significantly reduce future funding costs.

Naked Wines (LSE:WINE) had a similar story to tell after revealing that key metrics had been “positively influenced” by Covid-19 as customers stocked up on booze during lockdowns in the UK and United States.

Revenues of £203 million for the year to the end of March were up 14%, leading to a 46% reduction in its annual loss to £5.4 million. This has been followed by an 81% jump in sales in April and May, driven by higher purchase rates from repeat customers.

Chief executive Nick Devlin said the performance highlighted the favourable trends towards direct, online models such as Naked's. The shares were 7% higher at 393.5p, having risen from near 200p in early March to as high as 427p in late May.

Shares in AIM-listed remote meetings business LoopUp rose another 12% today after it said it continued to trade materially above pre Covid-19 levels. Having upgraded its guidance in early May, the Shoreditch-based company said it expects to exceed revised guidance on revenues, underlying earnings and cash generation for the 2020 financial year.

A fuller update on how it has benefited from working from home trends during the lockdown is expected by the middle of July. The stock is now at 142p, compared with 40p in March.

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AIM-listed Escape Hunt (LSE:ESC) also jumped 19% to 10p after it unveiled two remote versions of its most popular escape-the-room experiences. Players will now come together via Zoom to tackle Doctor Who: Worlds Collide and The Fourth Samurai in their own homes, helping the company's shares continue their recovery from a low of 3p in March.

Among other AIM stocks reporting positive news today, Allergy Therapeutics surged 18% to 14p after a brief update disclosed that net profits will be significantly above market hopes. Products in development by the Worthing-based immunology business include vaccines for grass, tree and house dust mite, as well as a peanut allergy vaccine at pre-clinical stage.

Revenues for the year to 30 June are expected to be at least 4% ahead of last year in constant currency terms, it said.