Altitude (ALT:AIM) chairman Peter Hallett attributes recent gains in the micro cap’s share price to the market cottoning on to the potential of two contract announcements in June and August.

Shares in the business, valued at £20 million, have soared 116% in the past week even though no public announcements have been made to the stock exchange.

Hallett pointed to two contract updates in June and August, as well as an online article published this week, as potential reasons for the share price gains.

ALTITUDE GROUP - Comparison Line Chart (Rebased to first)

In August, loss-making Altitude, which provides software-as-a-service products (SaaS) for small and medium-sized businesses (SMEs), signed a distribution deal with AI Mastermind (AIM).

US-based AIM is a buying club for SMEs which claims to be able to offer bulk discounts on services like Sage accounting software.

Under the terms of the deal, Altitude will provide AIM members with an e-commerce website and will receive a share of gross margin on orders processed through the platform.

In July, Altitude signed a similar deal with Rochester, New York-headquartered Aprinta, which provides promotional materials to businesses like self-branded stationary, mugs and torches.

Gains in market value mean the business now has a lot to prove when it reports half year results. The update is to be scheduled ‘in the third week of September’, according to Hallett.

Results published on 20 May 2016 show Altitude burned through more than £900,000 in cash in the last calendar year, versus a £1.2 million cash burn in 2014. By the year-end it held £366,000 in available cash resources.

Current assets, which is an accounting estimate of the assets a company can convert into cash within a year, was minus £1 million.

Auditors Grant Thornton signed off the accounts on a going concern basis on 10 June 2016, based on directors’ cash flow forecasts for the period to 31 December 2017.

A trading update on 15 July said the business achieved £1.8 million in cost savings during 2016 and had cancelled its planned disposal of a publishing and events unit.

Hallett purchased 135,000 shares in Altitude at 17p on 12 August 2016. Shares in Altitude today trade 33% higher at 46p.

Issue Date: 06 Sep 2016