Aures: The support of a Taiwanese industrialist causes Aures to soar on the stock market

(BFM Bourse) – The manufacturer of terminals for points of sale, whose cash flow situation is “very tense”, is soaring on the Paris Stock Exchange after the announcement of financial support from the Taiwanese Advantech Group.

Aures Technologies is soaring on the stock market this Monday after announcing a financial operation, giving it “a breath of fresh air”, to quote the title of the TP ICAP Midcap note on the value.

This rebound should be put into perspective with the recent collapse of the stock on the stock market, which itself is linked to a very tense financial situation. Aures shares had collapsed by more than 65% since August 24, following the announcement of financial difficulties threatening the company’s continued operations. The company had not specified to the market the extent of these tensions on its cash flow.

These announcements result from the deterioration of Aures Technologies’ operational performance. The specialist in terminals for points of sale warned at the end of August that it anticipated further losses for the 2023 financial year. To ensure its survival, the company indicated that it had initiated “very advanced” discussions with industrial partners who could provide financing. and operational synergies”.

Financial support

And so it was the Taiwanese Advantech Group that came to the aid of a bloodless Aures. In detail, the manufacturer of point-of-sale terminals announced the issue of a convertible bond, with a maturity of two years, for an amount of 3.2 million euros. It will be reserved for the Taiwanese group specializing in intelligent systems linked to the Internet of Things (IoT) present in sectors such as embedded computing, transport and environmental monitoring.

The conversion price is set at 4 euros, i.e. a price significantly higher than 1.4 euros, at the close of the session on October 13. Following the conversion, Advantech Group will hold 16.7% of the capital. Patrick Cathala, the CEO and founder of the group, would hold 28.7% of the capital post-operation compared to 34.4% pre-operation, notes TP ICAP Midcap.

For a shareholder holding 1% of the capital of Aures, the company specifies that its participation would be reduced to 0.83% after conversion of these bonds into shares.

“This injection of cash and the conversion at a price of 4 euros should reassure the market,” indicates Florent Thy-thine of TP ICAP Midcap. The reaction of the stock validates the specialist’s intuitions, the Aures Technologies stock soars by 152% this Monday afternoon to get closer to 4 euros at 3.53 euros.

A crucial operation for Aures

The operation was vital for Aures, world leader in complete hardware solutions for the “POS” (point of sale and service, retail, hotel and catering, etc.) and “KIOSK” (world of interactive terminal and integration professions). The company, listed on Euronext Paris since 1999, published last July sales down more than 20% at the end of its first half of 2023, while being evasive on the nature of the decline in its activity.

“These figures are worrying while the press release leaves no room for explanations other than mentioning a difficult market,” lamented Florent Thy-thine in a previous note devoted to the Aures group. And for the rest of the financial year, Aures has therefore indicated that it expects further losses for the current financial year, even if the drop in turnover expected for the financial year should be lower than that of the first half. Besides, stocks remained at a high level, which weighs on the group’s cash flow which is already under considerable pressure.

For TP ICAP Midcap, the group’s situation should require new operations, while the recovery of activity in the second half “seems unlikely” and therefore expects a third quarter that is still “clearly degraded” in the image of the first semester.

The research firm therefore expects to revise downwards its 2023 estimates, since a rebound in activity in the fourth is now “less and less likely”, which now changes its recommendation “under review” to waiting for “more visibility on the operational side”.

The return of investor confidence will require a recovery in Aures’ activity, recalls Florent Thy-thine. This recovery will probably involve the support of Advantech, a large group “with an interesting industrial profile for Aures” adds the specialist who imagines “that beyond the amounts raised, operational synergies will be sought”.

Sabrina Sadgui – ©2023 BFM Bourse

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