It takes something to outpace a newly revealed takeover target, but Graphene NanoChem has done the trick.
Mothercare has jumped nearly 12% after the revelation of a US bid approach, but the advanced materials group is up 8.5p or almost 17% at 59p after it unveiled the first order for its graphene-enhanced oilfield chemicals.
The revenue from the initial order from Scomi Oiltools is expected to be around £1m, the company said. The deal is said to be the first bulk deployment of graphene - which conducts electricity better than copper and is 200 times stronger than steel and six times lighter - on a commercial basis, thus marking a milestone for the industry. It follows two years of testing by Scomi and its national oil company end users.
The company said the order and the framework agreement gave it confidence it could meet its 2014 market expectations and would see "subtantial increases in revenues from 2015."
Analyst Dr Mike Mitchell at Panmure Gordon said:
Investors have been waiting a long time but this morning their patience is rewarded with a major milestone for Graphene NanoChem, with the first purchase order for PlatDrill. The order, from Scomi Oiltools for use by an unnamed national oil company end-customer is part of the framework agreement, as announced on 26 November, and represents 7,800 barrels or around £1.0m at the top line. This, alongside future orders within the framework, further underpins our expectations for 2014.
While later of course than we'd originally expected, this is undoubtedly a positive step forward. We reiterate our buy recommendation, target price 150p.
