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Market Report: Junior market is breeding ground for sustainable, fast-growing businesses

Jamie Nimmo
Wednesday 04 November 2015 21:17 EST
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Amid all the noise surrounding AIM scandals lately – namely Globo and Quindell – it has been easy to forget that the junior market is also a breeding ground for sustainable, fast-growing businesses.

The upmarket tonic water maker Fever-Tree falls into that category. Having floated on AIM at 134p a share a year ago, the shares hit 510p, 76.5p higher after another stirring statement. This time, the company, now valued at just shy of £600m, said its annual results would be “materially ahead” of expectations – the third time Fever-Tree has upgraded profit forecasts in the past year. It was doubles gin and tonics all round for those who managed to muscle in on last year’s float.

More encouraging Chinese services data gave blue chips a leg-up, with miners leading the charge and lifting the FTSE 100 29.27 points to 6,412.88.

Sky-high passenger numbers propelled Ryanair shares to new highs, up 16 cents to €14.66. The Irish no-frills airline revealed that its crucial load factor –how full its planes are – jumped a staggering 5 per cent in October to 94 per cent. Passenger numbers rose a buoyant 15 per cent to 9.68 million.

The company put the strong performance down to cheaper tickets and its charm offensive.

It has been an especially strong quarter for airlines, underlined by the wave of profit upgrades that have sent stocks into orbit.

So high are investors’ expectations that a smaller lift in the load factor for Wizz Air caused an 81p nosedive to 1,850p.

Shares in Plethora Solutions, the AIM-listed company behind a treatment for premature ejaculation, doubled from 2.75p to 5.5p after the board recommended a buyout led by its largest investor, Jim Mellon.

The all-share offer from Regent Pacific, the multi-millionaire investor’s Hong Kong-listed group, values Plethora at £103m or 12.5p a share. That is four times the previous day’s closing price, but a 39 per cent premium to last year’s fundraising when it issued shares at 9p each. Regent will provide the funding that will allow Plethora’s spray treatment to hit pharmacy shelves next year.

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