Riverstone Energy Ltd has sparked up after selling its one-third stake in ILX Holdings III, a Houston based joint venture with Ridgewood Energy focused on oil projects in the Gulf of Mexico.
The sale is to its partner for an estimated US$172mln in cash, a 23% premium to Riverstone’s valuation at the end of last year.
The move bolsters Riverstone’s balance sheet and boosts its move towards a low carbon investment portfolio.
Riverstone chairman Richard Hayden said: “The proceeds .. provide additional funds to accelerate our investments in decarbonisation and low-carbon power generation. It also provides improved liquidity to support board approved share repurchases. As of 30 June 2021, pro forma for this sale, Riverstone holds total cash of US$221mln [and] US$86mln of freely marketable securities and US$6mln of securities subject to a lock-up.
“We believe that our focus on originating and executing investments that support the portfolio’s focus on decarbonisation and low-carbon power generation themes will provide Riverstone shareholders with access to a unique set of opportunities that generate strong financial returns while having a positive impact on climate change.
“The board and investment manager are committed to maximising value from Riverstone’s oil and gas assets to support returns to shareholders and continued investment in low carbon energy assets. With a stronger balance sheet, subject to market conditions, capital needs for the current portfolio and the new investment opportunities, the board will continue the board authorised buyback program on the open market when shares are trading below intrinsic value and may also consider tender offers and dividends in the future.”
Riverstone shares are up 8.75% or 28p at 348p.
11.56am: Volution benefits from strong housing market and demand for better air quality
And the trend continues.
The ventilation products group, whose brands include Vent-Axia and Airtech, said it had benefited from a strong housing market, householders spending more time at home and greater awareness of the importance of indoor air quality.
It said it had maintained its margins despite supply chain issues and pricing pressures.
It said: “As has been well publicised, there have been substantial inflationary pressures impacting the industry through the second half of the year. We have also seen these inflationary impacts, with our key input materials and inbound freight costs sharply increasing. We have largely mitigated this cost pressure, with our strong trade brands and pricing power allowing price increases such that we expect full year adjusted operating margin to be broadly in line with the 21% or so delivered in the first half of the year.”
Its recent acquisitions are performing well and added: “Increasing awareness of the importance of indoor air quality, coupled with ever tightening regulations relating to energy efficiency and carbon reduction from buildings, will continue to provide supportive long-term tailwinds for our business.”
Its shares are up 5.08% or 23p at 476p.
10.52am: Morgan Sindall builds up a good rise after positive update
It’s becoming a bit of a trend.
The construction and regeneration group said that since its last update in April, trading had remained strong with all divisions performing well.
So half year profits were expected to come in at GBP53mln, up 238% on the first half last year and 46% better than the comparative pre-pandemic period in 2019.
The news has lifted its shares by 13% or 275p to 2390p.
10.04am: IDE falls as it starts review of struggling networking business
And this has prompted it to look at shaking up its business.
Its full year results show a fall in revenues from GBP28.2mln to GBP24.1mln with a loss before tax of GBP21.6mln, compared to a GBP10.9mln profit.
Within that, its IT managed services business saw revenue and margin growth with strong momentum.
But its Connect business, which operates in a congested market for networking and connectivity, has seen pressures on both revenues and margins.
So it is looking at how to resolve this issue.
It said: “Given that the group results reflect the very different levels of performance across two distinct business sectors we have commenced a full review of our operations.
“This review is focussed on growing momentum within our managed services business while we decide how best to return value to our shareholders in the networking and connectivity arena, which may or may not include the divestment of the Connect business. This review is ongoing and is a priority for the board and management team..
“We have built a strong base to support a period of sustained growth and we are exploring organic and acquisitive methods to accelerate this development.”
The market has responded by marking down IDE’s shares by 7.9% to 0.88p.
9.21am: Restore rejects bid from software group Marlowe
Services and software group Marlowe PLC (AIM:MRL) has made an approach regarding a possible 530p a share offer for the business, valuing Restore at GBP743mln. It comprises 71p in cash and the rest in new Marlowe shares. The precise terms will be set if a firm bid is made
This is apparently the second approach from Marlowe, with the first towards the end of June pitched at 515p a share and smartly rejected.
And it has not taken long for Restore to dismiss the new deal as well.
Marlowe chief executive Alex Dacre was extolling the benefits of the move, saying: “We believe the combination of Marlowe and Restore is strategically compelling and will deliver value for all shareholders.
“Marlowe and Restore share the same corporate DNA and channels to market, and we believe that bringing our businesses together will create a leading business-critical services group delivering a comprehensive range of services and software, spanning the compliance and information management sectors, with an addressable market of GBP9bn.
Combining Marlowe and Restore represents a transformational opportunity for our customers and shareholders, reinvigorating the Restore strategy and shareholder returns, deepening and broadening our service offering, and creating a business of scale that will deliver significant further growth”.
Restore however do not see it like that.
It said the first bid significantly undervalued the company and its prospects, and the second was not really a material improvement.
And it added: “The board remains highly confident in Restore’s standalone prospects through its clearly articulated strategy to generate significant shareholder value through sustained organic growth, material margin improvement through scale, synergy and operational efficiency and the substantial acquisition opportunities that exist in the markets in which it operates. The board does not believe that the combination of Marlowe and Restore is strategically compelling.”
In the market Restore’s shares have jumped 65p or 15.48% to 485p.
Since this is well below the Marlowe offer, it appears the market believes the bid might succeed.
Marlowe shares meanwhile have dipped 4p to 860p.
The company, the developer of a blood test for the early detection of a majority of the different forms of lung cancer, has signed a collaboration agreement with Portugal’s FairJourney Biologics.
Cizzle chairman Allan Syms said: “FairJourney Biologics is a recognised leader in its field and will be an important partner in our strategy to commercialise as quickly as possible our CIZ1B biomarker test for the early-stage detection of lung cancer.”