Why this AIM threesome is grabbing attention

Higher-risk small-cap growth stocks can fray the nerves. Graeme Evans explains why all eyes are on these three juniors this trading session.

Three very different AIM stocks were in the spotlight today, led by mobile payments firm Bango after a new product launch triggered a shares rally.

Bango emerged from its recent slump to jump 17% higher, but gas, electrical and building services firm Bilby was down 22% after interim results and online fashion retailer MySale lost half its value following a profits warning.

Retail tycoons Mike Ashley and Sir Philip Green were among investor casualties as MySale said disruption caused by tax changes in its biggest market of Australia would leave it with a small underlying loss for the first half.

The poor performance in MySale's peak trading period has prompted the company to accelerate plans to streamline the business and cut costs. CEO Carl Jackson said this should mean a return to growth in the second half, with the reconfigured business set to be "stronger, more efficient".

MySale  source: TradingView (*) Past performance is not a guide to future performance

Zeus Capital analyst John Wilson said the warning was a big setback after multiple periods of growth and improvements in profitability.

However, he added:

"Given swift corrective action, the well-invested tech platform and scale of the business, there should be confidence in restoring profitability quickly and returning to 5% EBITDA margins."

The company's shares are now at a record low of 17.7p, having started the year at 117p. They opened at 226p in MySale’s IPO in 2014, although a listing mistake caused many in the City to think they had been priced at 2.26p. 

Shares in Bilby were also on the back foot after half-year revenues and underlying profits fell following its decision to stop building services work for the Ministry of Defence in order to focus on more profitable contracts.

While Bilby has boosted sales visibility by expanding its blue-chip customer base, the company said the full revenues and earnings benefits from these contracts won't be seen until the next financial year. A delay in a gas installation programme will also impact this year's performance.

Shares have fallen from 109p at the start of the year to 70p, but CEO David Ellingham said operational momentum had continued into the second half of the financial year, with visible future revenues reaching £270 million.

Bango shares have also endured a difficult year, despite September's disclosure that the company's Payments business has become EBITDA positive. End User Spend (EUS) also increased by 138% year-on-year to £220 million.

Merchants including Amazon, Microsoft and Google use the Bango platform to collect payments from tens of millions of customers and gain increased marketing effectiveness and reach from data that only Bango can provide.

Bango four-hour chart  source: TradingView (*) Past performance is not a guide to future performance

Bango, which joined AIM in 2005, stepped up its development today with the launch of Bango Marketplace to enable app developers to boost the effectiveness of their marketing spend.

Developers currently invest billions of dollars a year on marketing to acquire new users, convert non-paying to paying users and enter new markets.

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Bango Marketplace will provide a new way for them to boost returns on their campaigns by allowing them to focus on high value customer segments.

CEO Ray Anderson said:

"This is an exciting phase in the rapid growth of Bango, adding a huge range of new customers for the Bango Platform, with an opportunity for significant revenue growth without materially increasing operating costs."

*Horizontal lines on charts represent levels of previous technical support and resistance.