United Kingdom

SMALL CAP MOVERS: Live Company to restart touring; Ridgecrest tumbles

Monday’s easing of lockdown restrictions in England was the first of many steps towards that will ease the pressure on companies reliant on people congregating together.

One such company is Live Company, which saw its shares soar 60 per cent this week as its operational update revealed light at the end of the tunnel.

The company, best known for its BrickLive events featuring a well-known building block toy, said it is well-positioned to take advantage of the expected upturn in the sector in the second half of 2021, particularly in the UK and the US.

Touring soon: Live Company arranges the popular Lego's Bricklive events for kids

The entertainment firm said it has bookings for 15 tours globally this year, while five were postponed until 2022 and three have yet to confirm their opening schedule because of Covid.

In the first quarter of 2021, revenue is expected to come in at £500,000, of which half is from the new division Live Company Sports and Entertainment and the other from Bricklive.

If the pandemic and consequent lockdowns have been hard on Live Company, they don’t seem to have done Totally any harm, as the healthcare services provider raised earnings guidance this week.

The shares rose by more than a third after the company revealed it expects underlying earnings (EBITDA) in the financial year just ended will be substantially ahead of both management expectations and underlying EBITDA of £4million for the previous financial year.

The improved trading performance across the group is due to multiple factors but primarily as a result of the company being able to ‘respond proactively and quickly to the numerous demands for its healthcare services during the global Covid-19 pandemic’, the company said.

You don’t hear much of former chancellor of the exchequer George Osborne’s ‘march of the makers’ these days but the long-established industrial engineering company the 600 Group is probably the sort of company Osborne had in mind back in 2011 when he coined the phrase.

The engineer said this week that Covid-19 had had an exceptional impact on the business, contributing to a 20 per cent fall in revenues in the year to the end of March.

Revenues are expected to be around $50million but thanks to the implementation of operational cost savings and government assistance programmes, underlying earnings before interest and tax (EBIT) are expected to be ahead of the board’s post-pandemic expectations at around $2.5million.

The strong increase in order activity in March improved the overall order book to about $14million at the end of March, which is almost 70 per cent above the prior year. The shares ended the week 31 per cent higher.

Definitely not falling into the category of a maker is cash shell Ridgecrest, which plunged 38 per cent this week as its directors gave shareholders a reality check.

The shares had got ahead of themselves, trebling in price in January at one point, and the directors felt obliged to caution shareholders that while a reverse takeover candidate would value Ridgecrest at a premium to its net asset value, such a valuation would be at a material discount to its current market capitalisation, which currently stands at more than three times net asset value.

That pulled the rug out from under the Ridgecrest share price, although it did recover towards the end of the week.

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