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Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This will be updated through the morning.
Kingspan Group plc agreed to acquire Vicwest Inc. for $12.70 a share. Ag Growth International will buy "substantially all" of the assets of Vicwest's Westeel division.
"Given the evolution of both businesses into new product lines and markets, the board of directors of Vicwest concluded that operating a construction business and agricultural business under one umbrella is no longer the ideal structure for the long term. With this view, the board has run two coincident sale processes with key strategic buyers," CEO Colin Osborne said.
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WSP Global Inc. had $29.1-million of net earnings or 46 cents per share before adjustments in the third quarter, up $7.8-million or three cents per share from a year earlier. That was below the consensus estimate of 52 cents. But its adjusted EPS of 55 cents was slightly above Street expectations. Revenue of $537-million was ahead of the consensus call of $522-million.
Desjardins Securities analyst Benoit Poirier commented, "Looking ahead, we are encouraged by WSP's growing backlog of $1.9-billion, which represents 9.2 months of work and a 2.7 per cent increase quarter-over-quarter. We note that management remains well positioned to pursue further acquisitions, with ample flexibility given WSP's net debt to LTM EBITDA of 1.2x. From a trading perspective, we expect the shares to have a neutral to slightly positive reaction to today's results in light of healthy organic growth and steady operating metrics."
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The Second Cup Ltd. is increasing the size of a previously announced equity offering to at least $7-million, up from $5-million, as a result of positive investor response. The offering could generate as much as $8.1-million before expenses if GMP Securities exercises its agents option to acquire an additional 15 per cent of shares of the shares offered, before the closing.
Second Cup will use proceeds to fund growth and the renovate company-owned cafes in priority locations.
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Curis Resources Ltd. shareholders have passed a special resolution approving the previously announced transaction with Taseko Mines Limited, in which Taseko will acquire all of the issued and outstanding Curis common shares by way of a statutory plan of arrangement. Curis shareholders will receive 0.438 of a Taseko common share for each Curis common share held.
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Legacy Oil and Gas Inc. said it exceeded its 2014 exit rate guidance of 27,350 boe per day and "is positioned to be on track to meet its full-year production and capital expenditure guidance."
"At the beginning of 2014, Legacy set the goal of reducing the 2014 year end net debt to year end annualized funds flow from operations to 1.5 times. This goal was achieved in June 2014, based on the then prevailing strip prices, through the completion of two under levered corporate acquisitions and organic funds flow growth. This was a solid first step; however, the company continues to pursue additional initiatives to enhance the balance sheet, including budgeting annual capital spending equal to or less than annual cash flow."
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NGEx Resources Inc. said it expects to "operate at a loss for the foreseeable future."
"The company anticipates that its current financial position will provide sufficient working capital to fund its share of planned exploration and project investigation expenditures, which are discretionary, and corporate expenses for the next 12 months. As the company is an exploration company and has no sources of revenue, additional funding from equity financing, joint ventures or disposition of mineral properties and investments may be required to fund further exploration and corporate expenses," NGEx said in a statement.
"There can be no assurance that such financing will be available to the company in the amount required at any time or for any period or, if available, that it can be obtained on terms satisfactory to the company."
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HNZ Group Inc. said net income attributable to shareholders totalled $9.6-million, or $0.73 per share in the third quarter of 2014, compared to a net loss of $5.8-million, or $0.44 per share after goodwill impairment charge for the same period in 2013. The company is now debt-free, with a cash position of $7.9-million and a $125-million credit facility.
"As previously announced, our contract in Afghanistan ended on October 31, 2014. We are evaluating both selling and redeploying the associated aircraft based on industry demand. Going forward, we aim to continue improving our performance in Canada and focus our efforts on gaining offshore oil and gas support business in Asia-Pacific, Eastern Canada and Africa," the company said.
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Fortuna Silver Mines Inc. said its 2015 budgeting process is in its "final stages and management has begun implementing measures to further improve operational efficiencies and mine plans. As of the beginning of the fourth quarter, management has moved to make 20 per cent and 7 per cent reductions in the corporate and Peruvian subsidiary head counts, respectively, amounting to net annual savings of approximately $1.5-million. The company continues to work diligently to keep identifying areas where savings can be realized without hindering our ability to keep sustaining organic growth."
Its net income was $7.8-million compared with a loss of $0.3-million a year earlier and basic earnings per share were $0.06.
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Nabors Industries Ltd. said its revised third-quarter 2014 diluted earnings per share from continuing operations were $0.34, versus the $0.19 previously announced.
"The revision is due to a change in the non-cash income tax provision for the third quarter. Upon review, it was determined that the previously reported $63.3-million non-cash tax charge related to the restructuring of the company's completion and production entities in preparation for the pending transaction with C&J Energy Services should be reduced by approximately $45-million to $18.3-million."
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Rio Alto Mining Ltd. reported third-quarter 2014 net income of $21.3-million or $0.08 per share, beating Street expectations of $0.06 per share.
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Semafo Inc. announced quarterly earnings per share of 4 cents, compared to breakeven results a year ago, as gold production rose 67 per cent to 64,700 ounces.
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Guardian Capital Group Ltd. reported third-quarter 2014 earnings of $7.7-million, or $0.25 per share, beating Street estimates by $0.01.
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AuRico Gold Inc. announced that it has entered into an agreement to subscribe for 70,600,000 common shares of Carlisle Goldfields Ltd. at a price of 8 (Canadian) cents per share for total consideration of approximately $5.6-million. AuRico is also acquiring a 25 per cent stake in Carlisle's Lynn Lake Gold Camp project.
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Ag Growth International Inc. reported adjusted profit per share of $1.09 (Canadian) vs. 77 cents a year ago.
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Pan Orient Energy Corp. announced that it has entered into an agreement for the transfer of a 51 per cent direct working interest and operatorship of the East Jabung Production Sharing Contract to a wholly owned subsidiary of Talisman Energy. Pan Orient will receive an upfront cash payment of $8-million (U.S.) and a firm commitment to fund the first $10-million (U.S.) of well exploration and other costs.
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In analyst actions today involving Canadian small caps:
Canaccord Genuity downgraded Chesswood Group to "hold" from "buy" and cut its price target to $15.50 (Canadian) from $17.50.
Canaccord Genuity downgraded Manitok Energy to "hold" from "speculative buy" and cut its price target to $2.25 (Canadian) from $3.
PI Financial upgraded GoGold Resources to "buy" from "neutral" with a price target of $2 (Canadian).
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