SMALL CAP MOVERS: Zoo Digital soars; Kin and Carta tumbles

Zoo Digital steamed ahead on the AIM market, closing nearly 25 per cent higher across the weekly period.

The rally comes hot off the heels of the streaming services provider signing a fresh contract with a ‘major Hollywood studio’.

Exactly which studio remains under lock and key for now, but chief executive Stuart Green’s hint towards a ‘high-profile streaming service’ sent investors into a frenzy, pushing shares to above a five-year high of 200p.

Zoo already had a healthy portfolio of entertainment studios under its belt, to which the group provides a range of technology and localisation solutions, but this latest deal presents another step up, according to Green.

This secretive client will be the second major entertainment company to use the ZOOstudio technology platform to streamline the thousands of outsourcing and localisation items that need to be considered when releasing globally targeted entertainment content.

According to Zoo’s press release, a significant number of revenue-generating projects are currently under discussion with the new client, though it noted that longer-term contracts have yet to be finalised.

But with a new streaming service seemingly being launched every other day, Zoo’s area of expertise presents boundless opportunity for client growth.

As it turns out, there was more than a bit of action in the digital segment this week.

Market research company System1 Group had a good showing on the junior market too, rallying 9 per cent on Thursday to bring its share price above 184p.

System1’s third-quarter trading update underscored a strong showing in its data and analytics revenue stream, which grew 18 per cent to £3.4million, a much-need quarterly record given the precipitous decline in consultancy revenues for the group.

Blancco Technology, meanwhile, ran up 10 per cent after the data-erasure solutions provider posted double-digit revenue growth and underlying profits of £8.4million in its Tuesday earnings call.

Turning to the wider junior stocks market, the AIM All-Share Index slightly underperformed the FTSE 350 set, falling 1.4 per cent throughout the week against the latter’s 1 per cent dip.

On the downside, Kin and Carta got slapped with a 30 per cent nosedive on Friday after the digital-transformation consultancy issued a profit warning in its latest trading update.

Citing the ‘impact of macro headwinds’, namely cautionary client spending and elongated sales cycles seen across the industry, the company now expects net revenue growth between 8 per cent and 12 per cent for the financial year compared to 38 per cent in the prior year, albeit with roughly similar operating margins.

Moving over to the industrial sectors, Star Phoenix’s re-entry into the AIM market went off with a bang with a 600 per cent rally.

The Australia-headquartered oil rig operator copped a suspension in January after removing its former auditor, prior to which its shares saw significant end-of-2022 losses.

Conroy Gold and Natural Resources also had a good week after the gold explorer announced a new discovery in the Longford-Down Massif in Ireland.

Chairman Professor Richard Conroy said it was ‘potentially a transformational event for gold exploration and development in this very large gold district’, and investors were inclined to agree, sending shares 18 per cent higher to break above 20p on Wednesday.

Buy-and-build quarried materials group SigmaRoc added 8 per cent to 57p on Thursday following a successful £30million share placing and retail offer.

Funds raised will go towards near-term strategic acquisition opportunities and four organic growth and carbon footprint reduction projects, according to SigmaRoc’s RNS statement.

There was less promising news in the energy sector, with shares in Verditek plummeting 31 per cent on Monday after the UK clean technology firm revealed its distribution agreement with roofing company Bradclad was terminated.

IGas Energy tumbled on Thursday after reporting lower production volumes resulting from equipment failures in the first half of its financial year.

Chris Hopkinson, interim executive chairman, noted the need to ‘optimise our existing onshore assets to better position ourselves for a lower carbon future’ in the group’s Thursday trading statement.

In the meantime, investors sent shares 6 per cent lower to 19.6p.

Finally, Spectral MD has largely flown under the radar in the year to date with a 1.6 per cent nudge higher. But for how much longer will it be overlooked?

A write up in the prestigious journal, Medical Technology, hailed the Dallas Texas-based group’s new approach for burn wound assessment.

Spectral uses AI and machine learning techniques to develop an imaging tool, the DeepView system, that can accurately predict the severity of burn injuries.

As the publication pointed out, one of the most critical decisions when treating burn victims is assessing how deep the burn is and whether surgery is required.

The technology under development is being adapted for use in military settings and emergency rooms to quickly and clearly assess if patients need treatment from a burn specialist or non-burn specialist.

So, this is one to watch, particularly in the context of the ongoing conflict raging on our doorstep.