Shares in oil and gas explorer BowLeven (LSE: BLVN) had been picking up along with the firming price of oil, having gained 27% from their low on 4 February until close of play on Tuesday. But then Wednesday’s interim results knocked them back 13% to 20.1p, after the company reported a $132m loss for the six months to December 2015 (down from $81m in the first half of 2015).
But that does include a $133.5m impairment due to the downgrading of the firm’s intangible exploration assets, compared to an impairment of $76m in the same period last year, all due to the ongoing cheap-oil environment. And the company remains upbeat, pointing out that it had $108m of cash on the books at 31 December, and no debt.
By 29 March, there was approximately $100m of that left, and BowLeven should have around $40m coming in from its farmout agreement for its Etinde project in Cameroon, so it shouldn’t be facing any funding squeeze any time soon. Is BowLeven a good investment today? I’m not one for oilies in their loss-making phases myself, but I see it as one of the less risky ones.
Transformational
Shares in Learning Technologies (LSE: LTG) have shot up by 81% since a recent low on 1 December, to 37.25p. Acquisitions, including a couple announced in January, have helped, but the rise has surely been mainly in anticipation of the e-learning firm’s maiden full-year pre-tax profit.
With revenue up 33% to £19.9m in a year that has been dubbed as “transformational” by chairman Andrew Brode, that pre-tax figure came in at £1.55m compared to a loss of £127,000 a year previously. Adjusted EPS doubled to 0.756p, and the dividend was lifted by 50% to 0.15p per share, albeit for a yield of only 0.4%.
Looking forward, a “landmark” contract, in alliance with KPMG UK, to provide the UK Civil Service with learning facilities for 400,000 staff over three years could well mark a real turning point for the company.
Volatility
Shares in Circle Holdings (LSE: CIRC) have had a very erratic 12 months, reaching 57p in May 2015 before crashing as low as just 9p in January this year. As I write today they’re back up at 21.25p, though that is after a 4.5% fall on the day of the company’s 2015 full-year results.
The healthcare services group saw revenue rise by 15% to £127.8m, with EBITDA losses reduced by more than half to £4.9m — and we heard that all segments of the business, excluding Head Office, are now EBITDA positive. Chairman Michael Kirkwood CMG opines that the company is “well poised to realise its potential through a sustainable business model while generating consistent returns for our shareholders“.
He may be right, but with no profit yet and no forecasts, I’d hold off a little while longer myself before making any commitment.