Shares round-up: Lamprell, Hunting, Avacta and Novacyt
29th June 2021 13:24
by Graeme Evans from interactive investor
Two popular sectors are back in the news today, with oil plays heading south as Covid testing stocks rally.
The small fortune made by Lamprell (LSE:LAM) investors in the last tax year came with a sting in the tail today after the oil rig engineering firm revealed an urgent need for new funding,
Shares tumbled 24% to 51p due to going concern uncertainty as the business looks to secure between US$120 million and $150 million (£86-£108 million) this summer for near-term working capital and its strategic objectives for building a leading position in renewables.
Banks are working on providing facilities worth up to $90 million, but the company warned that shareholders may be tapped for the rest through a potential equity raise.
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Shares in the business, which joined the London Stock Exchange in 2008, slumped as low as 8.8p in May 2020 before staging one of the market's strongest rebounds of the pandemic.
As we revealed in April, the 459% surge for Lamprell shares in the last tax year was only bettered by Halfords in the FTSE All-Share, as oil prices rallied towards $70 a barrel on the back of the vaccine roll-out.
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Today's 2020 results, with revenues 30% higher at $338.6 million and losses narrowing to $53.4 million, have offered some encouragement as Lamprell's bid pipeline is back up to $6.5 billion on pre-pandemic levels of activity.
The company has undertaken a major transformation since 2017 and is now increasingly focused on renewables, such as structures that form the base of offshore wind turbines.
Hunting in the red
Shares also fell today in fellow energy services firm Hunting (LSE:HTG), whose perforating guns, energetics and instrumentation tools are used in the shale oil Permian Basin region of West Texas.
Severe cold weather in Texas in February and a slower-than-expected recovery for offshore drilling activity has meant it expects to post a modest underlying loss for the first half of the year, compared with UBS's forecast for a $4 million profit.
Hunting is encouraged by the increasing onshore rig count across North America, but admits that operators are showing restraint in terms of their drilling expenditure.
London-based Hunting said: “Given the stronger oil price environment, we believe that as client cash flows improve capital expenditures will also increase, leading to robust demand for the group's products and services supported by a significantly improved outlook for the industry for 2022 and beyond.”
Shares have more than doubled since September but were today 6.5p lower at 238.5p after the first-half update disappointed investors.
Success for Covid testers
One of the other big successes for investors during the 2020/21 tax year also made headlines today, with shares in diagnostics and cancer therapies firm Avacta Group (LSE:AVCT) up 6% after revealing that its AffiDX antigen lateral flow test is effective in detecting the Delta variant of Covid-19.
At one point last year, Avacta was more popular with interactive investor clients than BP and BT Group 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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The AIM-traded shares have come off the boil since jumping 1,040% in the last tax year, although they were back up 11.7p to 185.7p after a small trial showed AffiDX outperforming two lateral flow antigen tests that are commercially available in Europe.
The update came as Novacyt (LSE:NCYT) expanded its lateral flow test portfolio with the launch of two PathFlow products targeting private market opportunities. Shares initially rose 2% but were subsequently flat at 346p, compared with more than 1,100p earlier this year.
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